NA vs. ARI DHODIA GNAYATI PANCH,NAVSARIVS.CIT(EXEMPTION), AHMEDABAD

The captioned appeal has been filed by the assessee against the order passed by the Ld. Commissioner of Income Tax (Exemption), Ahmedabad (hereinafter referred to as the ‘Ld. CIT (E)’ for short), vide order dated 26.12.2024, rejecting the application filed by the assessee in Form No. 10AB for approval u/s 80G(5)(iii) of the Income-tax Act, 1961 (hereinafter referred to as “the Act” for short).

The brief facts of the case are that the assessee had filed an application in Form No. 10AB on 27.06.2024 seeking approval u/s 80G(5)(iii) of the Act. Upon examination of the objects of the trust as set out in its instrument of creation, the Ld. CIT(E) observed that the objects were religious in nature, thereby categorising the assessee as a composite trust, i.e., a religious-cum-charitable trust. On this basis, the Ld. CIT(E) rejected the assessee’s application for approval u/s 80G(5) of the Act, holding that the assessee did not satisfy the principal condition prescribed therein, i.e. the assessee-trust should be a purely charitable trust.

Aggrieved by the order of the Ld. CIT(E), the assessee filed the preset appeal before the Tribunal.

At the outset, we note that in response to the show-cause notice (SCN) dated 03.12.2024 issued by the Ld. CIT(E), the assessee neither filed any submission nor sought any adjournment. Consequently, the Ld. CIT(E) rejected the assessee’s application on the ground that the objects as contained in the instrument of creation are religious in nature, thereby categorising the assessee as a composite trust, i.e., a religious-cum-charitable trust. Before us, the Ld. AR submitted that although one of the objects of the trust is of a religious-cum- charitable nature, the trust is primarily engaged in charitable activities. It was further submitted that, if an opportunity is granted, the assessee would place on record the necessary documentary evidence in support of its charitable activities before the Ld. CIT(E). On the other hand, the Ld. Departmental Representative (DR) contended that the assessee-trust/institution is required to furnish the requisite details, explanations, and submissions before the Ld. CIT(E) for proper examination.