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Facts
The assessee, Mata Barahi Mandir Trust, applied for exemption under section 80G of the Income-tax Act, 1961. The application was rejected by the Commissioner of Income-tax (Exemptions) on the grounds that the expenses incurred on charity were very low compared to the total expenses, and a significant portion of the expenses were for running the temple itself. The assessee failed to provide satisfactory explanations or evidence to support their claim for exemption.
Held
The Tribunal noted that the assessee failed to appear for hearings and did not present any material to demonstrate its charitable activities. The CIT's finding that only a small amount was spent on charity (less than 5% of total expenses) and that the majority of expenses were for maintaining the temple was considered. The Tribunal affirmed the CIT's order, stating that the conditions for exemption under Section 80G(5B) were not met.
Key Issues
Whether the assessee trust is eligible for exemption under Section 80G when its charitable expenses are disproportionately low compared to its total expenses for maintaining the religious institution.
Sections Cited
80G(5)(vi), 80G, 80G(5B)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH “E”: NEW DELHI
Before: SHRI KUL BHARAT & DR. B.R.R. KUMAR
O R D E R PER KUL BHARAT, JM:
This appeal, by the assessee, is directed against the order of the learned Commissioner of Income-tax (Exemptions), New Delhi, dated 27.02.2019 passed under section 80G(5)(vi) of the Income-tax Act, 1961 (hereinafter referred to as the “Act”), rejecting assessee’s application for grant of exemption u/s 80G of the Act.
At the time of hearing no one attended the proceedings. It is seen from the records that no one has been attending the proceedings since 22.09.2022. It is transpired from the records that on 21.6.2022 one Shri Ashok Kumar attending the proceedings. Thereafter, no one appeared on behalf of the assessee. Under these
The assessee filed an application seeking exemption u/s 80G of the Act on 23.08.2018 in form no. 10G. The said application was rejected by the learned Commissioner (Exemption). Aggrieved against this the assessee came up in appeal before this Tribunal.
4. Learned DR submitted that there is no merit in the appeal of the assessee as the assessee failed to satisfactorily explain before the learned CIT(Exemption) about the objects of the society. He submitted that the learned Commissioner (Exemption) has given a finding of fact that a very small amount was spent on so called charity by the assessee.
We find that learned CIT(Exemption) rejected the assessee’s application for exemption u/s 80G of the Act by observing in para 3.1, 4 & 5 of his order has observed as under:
“3.1 Reply of the applicant was considered but not found to be tenable because as per the submission made by the applicant it is found that during the assessment year 2018-19 the applicant has received an amount of Rs. 1 ,68,530/. which is reflecting as "Receipt from temple offering it is also found that the applicant is running a temple and the expenses booked by the applicant in income and expenditure account are majority of expenses incurred to run and maintain the temple complex. Only an amount of Rs. 15, 400/- 15 spent on charity (Education, Medical & Poor Girl Marriage) out of total expense of 2 ,04,948/. It is very clearly that the expenses incurred by the applicant on religious activities (maintaining and running temple) are more than 5% of the total expenses incurred.
As per section 8OG(5B) inserted by Finance Act 1999 states that notwithstanding anything contained in clause 9ii) of sub section (5) and explanation 3, an institution or a firm which incurs expenditure during
3 previous year, which is of religious nature for an amount not exceeding five percent of its total income in the previous year shall be deemed to be an Institution or firm to which the provisions of this section apply. 5. Hence as per the proviso of law stated above, exemption u / s 80G cannot be granted to the applicant, therefore, the application dated 23.08.2018 seeking exemption u / s 80G is hereby rejected.”
The assessee has not filed any material demonstrating the activities carried out by the assessee. In the absence of such evidence we do not see any reason to interfere in the order of learned CIT(Exemption), rejecting the assessee’s application for exemption u/s 80G of the Act. We hereby affirm the order of learned CIT(Exemption).
Consequently, assessee’s appeal stands dismissed.
Order pronounced in open court on 02.01.2024.