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Facts
The assessee, Shri Ananadabava Sedarat Seva Sanstha Jamnagar, applied for approval under Section 80G(5)(iii) of the Income Tax Act, 1961. The CIT(E) rejected the application, asserting that the trust was not purely charitable, its objects were religious, and it had violated conditions of Section 80G(5) due to religious expenditures exceeding 5% of total income. The assessee contended its activities were not purely religious and religious expenses were within limits, and further amended its trust deed during the appeal.
Held
The Tribunal set aside the CIT(E)'s order and remitted the matter back for fresh consideration. It directed the CIT(E) to provide the assessee an opportunity to submit its amended constitution and then adjudicate the application for 80G approval afresh on merits, after granting due opportunity to the assessee.
Key Issues
Whether the trust's objects are purely charitable or religious, and if its religious expenditures exceed the prescribed limits, thereby affecting its eligibility for 80G approval under the Income Tax Act, 1961.
Sections Cited
80G(5)(iii), 80G(5), 12A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, RAJKOT BENCH, RAJKOT
Before: DR. ARJUN LAL SAINI & SHRI DINESH MOHAN SINHA
आदेश / O R D E R PER DINESH MOHAN SINHA, JM:
1. Captioned appeal filed by assessee pertaining to Assessment Year 2024-25, is directed against order passed by Commissioner of Income Tax (Exemption), vide order dated 25/12/2024 on the application for approval, u/s. 80G(5)(iii) of the Income Tax Act, 1961.
2. Grounds of Appeal 1.The grounds of appeal mentioned hereunder are without prejudice to one another. 2.The order passed by the learned Commissioner of Income-tax (Exemption), Ahmedabad [hereinafter referred to as the "CIT(E)"] u/s. 80G(5)(iii) of the Income Tax Act, 1961 is bad in law and on facts. 3.The learned CIT(E) erred on facts as also in law rejecting the application registration u/s.80G(5)(iii) of the Act on the alleged ground that the appellant has violated main condition of subsection (5) of the section 80G i.e. the object of trust is not a purely charitable trust and hence not entitled to get approval u/s.80G(5) of the Act. The learned CIT(E) may kindly be directed to grant registration u/s. 80G(5)(iii) of the Act. 4.Your Honour's appellant craves leave to add, to amend, alter, or withdraw any or more grounds of appeal on or before the hearing of appeal.
A. I Mahant Mayaprashadji Ram Guru Ramprashadji is running Anandabava Sadavrat seva sanstha run independently as per prevailing tradition. The aim and purpose of this Anandabava Sadavrata Seva sanstha is to do services (to do seva) of public and society without any differences of caste and customs and accordingly to give the help to the poor person, support-less persons and orphan and disabled, miseries person.
An application for approval under clause (iii) of first proviso to sub- section (5) of section 80G of the I.T. Act, 1961 filed in Form no. 10AB electronically.
4.
Date of application for 27.06.2024 registration or approval in Section code:80G(5)(iii)
FORM 10AB and section code, Date of provisional approval. 19.01.2023 Section/sub- Clause (iv) of first proviso to sub- section/clause/sub- section (5) of section 80G clause/proviso in which provisional registration is being granted Assessment year or years for From19.01.2023 TO AY 2025-26. which the trust or institution is provisionally approved
With reference to notices issued by this office. The assessee has filed submissions on 04.10.2024, along with undermentioned detail/documents
Copy of trust deed and certificate of registration with Charity Commissioner along with Free English Translation Copy of Audited Report along with audited Financial Statements for F.Y. 2020-21 to F.Y. 2022-23 Copy of provision and final registration certificate for registration u/s. 12A in Form no. 10AC Copy of application for provision registration certificate for registration u/s.80G in Form no. 10AB Copy of provisional financial statement for FY 2023-24 to submit expenditure incurred towards religious objects of the Trust in the last three years.
Sr. F.Y. Total Income/ Receipts Religious Religious NO. expenditur expenditure e percentage Income as per Income Total Income & received in expenditure corpus fund A/c
2022- 11,283,321/- 29,69,101/- 14,252,422/- 83,726/- 0.59% 23
2021- 14,132,832/- 12,79,445/- 15,412,277/- 1,60,184/- 1.04% 22 3. 2020- 12,892,762/ 32,88,122/- 16,180,884/- 1,55,960/- 0.96% 21
Considering the replay filed by the assessee the Ld. CIT(E) was of the view, the applicant has violated existing main condition of sub-section (5) of section 80G of the Act i.e. it is not a purely charitable trust. Also it has violated the provisions of clause (ii) of sub-section (5) of Section 80Gof the Income Tax Act, 1961and hence the applicant is not entitled to get approval u/s. 80G(5) of the Income Tax Act therefore the present application filed in Form 10AB is liable to be rejected. Looking to the above facts, the present application filed in Form No.10AB for approval under clause (iii) of first proviso to section 80G(5) of the Act is rejected and the provisional approval also stands cancelled.
That the assessee filed an appeal against the order dated 25/12/2024 before this tribunal. During the course AR submitted that the assessee is public charitable trust and temples are not belong to particular religious community and all the activity is not religious in nature. The learned AR also placed on record a paper book containg all relevant record relating to trust the AR also relied on judgement. 7.1 The AR submitted that the expenditure on religious expense nature is less than 5%. The Ld. AR also submitted that the assessee trust has got amendment in the memorandum of trust all objectionable clause has been deleted. The AR further prayed for an opportunity to place amended object before Ld. CIT(Exemption). 7.2 On the contrary DR for revenue submitted that the object of the Trust are religious in nature. However, the DR does not object the prayer of assessee regarding submission of amended constitution.
We have heard the matter and perused the available record and also perused the paper book. We note that the assessee trust working since long and applied for approval under clause 80G(5)(iii) in Form NO. 10AB. that the Ld. CIT(Exemption) has objected to certain clause of the constitution of the trust stating that some of the objects are religious in nature and the trust has incurred expenses for religious purposes before us the assessee has placed all documents related to trust. We further note that the objection of the CIT(Exemption) is that the object of the assessee trust are religious in nature. The expense incurred on religious activity is more than 5% of total income of Trust. However, the contention of the assessee is that the expenses of religious are less than 5% of total amount. All relevant documents in form of receipt payment accounts balance sheet and audit report were submitted before us. That during the pendency of the appeal the assessee has got amended the object of the trust and assessee further prayed for an opportunity to submit the amended object of the constitution. Considering the facts and circumstance of the case. We are of the view that assessee should be granted an opportunity to the assessee to submit the amended constitution. With the above observation we restore the matter back to the file of CIT(E), the order of the CIT dated 25/12/2024 is set aside. we direct CIT(Exemption) to take into consideration the amended object of the trust and adjudicate the issue afresh on merit after giving due opportunity to the assessee. The appeal of the assessee is allowed, only for statistical purposes in the above terms.
In result the appeal filed by the assessee is allow for statistical purposes.
Order pronounced in the open court on 21-10-2025.