SRI MARUTI RAGHAVENDRA SEVA SAMITHI,COIMBATORE vs. CIT EXEMPTIONS, CHENNAI

However, the ld. CIT (Exemption) has not accepted the same for the following reasons:- ‘’iv) As per the provisions of the Income Tax Act, 1961, a trust seeking registration u/s. 80G(5) of the Act, has to be a public charitable trust and not a religious trust or religious cum charitable. v) The CIT(E) can grant registration only based on the application filed by the applicant in Form 10AB. The System also process the application based on the application filed by the applicant. Processing of application and granting of approval are carried in ITBA and there is no functionality available in the system to change the nature of trust and objects mentioned in Form 10AB other than applied in the application filed in Form 10AB and grant approval. vi) It is further noticed that the assessee trust has applied on 29.09.2023 seeking registration u/s 12AB in Form 10AB u/s 12A(1)(ac)(iii) of the Act as 'Religious cum Charitable' trust only and not as Charitable trust. vii) Further, the facts and the circumstances of the case laws referred by the applicant is not similar to the instant case. The applicant has not spent any amount towards any of its objects in the F.Y.2022-23 and no bifurcation of any projected expenses are furnished by the applicant in order to establish that the expenses incurred towards religious objects would be restricted to 5% of the total income of the trust. Further, there is no clause in the trust deed, quoted by the applicant, mentioning that the expenses towards religious objects will be restricted to 5% of the total income of the trust as specified in the section 80G(5B) of the Act viii) Since there is no specific clause in its trust deed restricting the religious expenses to 5% as per the provisions of section 80G(5B) of the Act and also part of its objects in the trust deed are religious in nature, the trust cannot be treated as Charitable. Apart from the above, the approval u/s 80G can be granted only to a Charitable trust. Since the assessee trust is Religious cum Charitable trust, it is not eligible for approval u/s 80G of the Act. ix) In view of the above, the application in Form No. 10AB filed by the applicant on 22.09.2023 cannot be processed’’.

Further, the appellant filed the appeal against the order of the ld. CIT(E) dated 22.03.2024 before us.

At the outset, Ld. Counsel for the appellant submitted that Ld. CIT(E) has passed the impugned order without assigning proper reason and justification. Ld. Counsel for the appellant further stated that the impugned order has been passed without application of mind.

The Ld. Counsel for the assessee in sum and substance argued the same points as raised in the grounds of appeal

We have heard the rival submission and perused the impugned order and find that the ld. CIT(E) of the Act could have considered the application filed in form 10AB ignoring the incidental five objects to the main objects which are wrongly find mentioned in clause 2(b) to 2(f) of the Trust deed. Accordingly the impugned order is set aside and the appeal is restored back to the file of the ld. CIT (E) for adjudication of the application filed in form 10AB afresh after ignoring the objects mentioned in clause 2(b) to 2(f) of the deed after affording proper opportunity of hearing to the assessee. The assessee is also directed to assist the ld. CIT(E) in fresh adjudication. The ld. CIT(E) shall be at liberty to proceed with the disposal of the application filed in form 10AB.

In the result, appeal filed by the assessee is allowed for statistical purpose. Order pronounced in the open court on 21st August, 2024 at Chennai.