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Income Tax Appellate Tribunal, “A” BENCH, AHMEDABAD
Before: SMT. ANNAPURNA GUPTA & SHRI SIDDHARTHA NAUTIYAL
PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER:
This appeal has been filed by the Assessee against the order passed by the Ld. Commissioner of Income Tax (Exemption), (in short “Ld. CIT(E)”), Ahmedabad in DIN & Notice No. ITBA/EXM/F/EXM45/2022- 23/1050852942(1) vide order dated 16.03.2023.
The Assessee has taken the following grounds of appeal:-
“1. That the Ld. CIT(E) has erred in law and fact by rejecting the application for the approval under section 80G(5) of the Act vide his order dated 16/3/2023 and therefore the ld. CIT(E) is to be directed to grant approval under section 80G12AB of the Act.
2. That your appellant craves a leave to add, alter or amend any grounds at the time of hearing.”
The brief facts of the case are that the assessee / applicant filed application for approval of trust under Section 80G(5) of the Act in Form Pranam Charitable Trust vs. CIT(E) Asst.Year –N.A. - 2– 10AB on 02.09.2022. On perusal of application filed by the applicant, assessee, the CIT(E) observed that in Form No. 10AB, the assessee has mentioned nature of activities as “religious cum charitable”. Further, in Para / Row 5 of Form 10AB, the assessee has mentioned one of the objects as “religious”. Further Ld. CIT(E) reproduced certain objects of the trust deed and observed that some of the objects are “religious” in nature. Accordingly, Ld. CIT(E) rejected the application for grant of approval for deduction under Section 80G(5) of the Act on the ground that this section is applicable only to such institution or funds which are established in India for charitable purposes. Further, CIT(E) held that the applicant / assessee has itself accepted that some objects of the Trust are religious in nature. Therefore, the applicant / assessee is not entitled to get approval under Section 80G(5) of the Act.
The assessee / applicant is in appeal before us against the above order passed by Ld. CIT(E) rejecting the application of the assessee. Before us, the Counsel for the assessee submitted as per copy of the Trust Deed, the activities of the applicant trust are primarily “charitable” in nature and not religious in character. Further, the Counsel for the assessee / applicant submitted that the assessee trust has not incurred 5% of it’s total income towards religious activities. However, Ld. CIT(E) has without analysis of the above facts i.e. whether the activities of the trust are charitable in nature and further without analyzing the fact whether the assessee has incurred more than 5% of it’s total income for religious purposes has summarily dismissed the application for grant of deduction under Section 80G of the Act. The counsel for the assessee submitted that the Ld. CIT(E) has very selectively cited a few of the objects of the assessee trust to come to the conclusion that the assessee is carrying out religious activity and further did not even analyze whether the assessee trust Pranam Charitable Trust vs. CIT(E) Asst.Year –N.A. - 3– had incurred expenditure of a religious nature exceeding 5% of it’s total income. Accordingly, the Counsel for the assessee submitted that the order passed by Ld. CIT(E) was passed a summary manner, without appreciating the facts of the assessee / applicant’s case.
In response, Ld. D.R. placed reliance on the observations made by the Ld. CIT(E) in it’s order dated 16.03.2023.
We have heard the rival contentions and perused the material on record. The applicant / assessee has produced before us copy of the trust deed and it would be useful to reproduce relevant extracts of the objects of the trust for ready reference:-
“6. Objects of the Trust: The trust shall be secular, non - political i.e. the objects of the trust shall be without any discrimination of caste, creed or religion. The trust shall carry on social and charitable activities in the interest of general public. Following activities are included in the objects of the trust. The charitable objects shall not be limited by the activities given hereunder:- (i) To extend help of food, clothing, medicines and/or necessities of life either in cash or in kind or in form of interest free loan to the needy person and to those who are victims of natural and manmade calamities, aged, weak, unfounded or mentally or physically abused people and to recover the said interest free loan given as above and to establish and administer the institution for the same. (ii) Keeping in mind the of genera! public, to establish and administer cattle rearing centre, care of seek animal, petting of and provide food and hay to human helpful animal and to establish and administer the institution for the same. (iii) To provide medical aid in the form of cash or medicines, injections and/or medical equipments and for this purpose to establish, donate or administer clinics, hospitals, health centers and yogashram. (iv) To arrange for religious and/or formal educational seminar or to help in its arrangement.
Pranam Charitable Trust vs. CIT(E) Asst.Year –N.A. - 4–
(v) To donate to the Institution working for animals and/or birds and to donate for religious solemnization and to help to donate for food and Journey of saint. (vi) To arrange for "Aahar - Vihar of Sadhu – Saint (vii) To arrange for lecture meetings of Sadhu Saint and for that to arrange for Upashray and maintain the same. (viii) To arrange and manage Dharmik Educational School le Gyanshala and to educate the students for Dharmik Education and to inspire them with the help of the Donors. (ix) Education Related: � To provide books, equipments and to help in cash by way of scholarship or loan useful for education of any kind to students. � To establish hostel for students and administer the same. � To establish and administer the institution for any kind of study. � To organize cultural activities such as seminars, Dramas, Garba etc. � To publish necessary books, periodicals, magazines for promoting education. � To set up and to run institutions for all types of research work and also to run separate research units in trust's institution. And also buy a plot of land or to take it on lease and make the construction to take it for the proper use for the objects of the trust. (x) To give direct and indirect financial aid to middle class people whose economic condition is poor. (xi) To set up funds for one or more objects of the trust and to utilize such funds for such purposes. (xii) To help other trusts or institutions for the similar objects of the trust. (xiii) To assist in the activities of other trusts or institutions for the application of objects of trust. (xiv) To do any activities related to medicinal research (xv) The objects of this trust have been described as 'Charitable Purposes' for the purpose of Income-Tax along with any amendment. The Pranam Charitable Trust vs. CIT(E) Asst.Year –N.A. - 5– income of the trust would be applied according to Income Tax Act, 1961 so that trust remains eligible for deduction u/s 80G and section 11 of the Act.”
On perusal of the objects of the assessee / applicant trust, it is observed that the objects are largely charitable in nature and only a few of the objects are of religious in nature. However, while dismissing application for grant of deduction under Section80G(5) of the Act, the CIT(E) has cited only few of the objects of the trust to come to the conclusion that the assessee / applicant trust, being “religious” in nature is not entitled for grant of deduction under Section 80G of the Act. Further, on perusal of the order passed by Ld. CIT(E), it is also evident that Ld. CIT(E) has also not carried out the necessary analysis to ascertain whether the assessee / applicant trust had incurred more than 5% of it’s total income towards religious activities. Accordingly, looking into the instant facts, the objects of the trust and the fact that Ld. CIT(E) had summarily dismissed the application filed by the applicant / assessee trust, in the interest of justice, the matter is being restored to the file of the Ld. CIT(E) to call for the necessary details and carry out the required analysis and pass order in accordance with law.
In the result, the appeal of the assessee is allowed for statistical purposes. This Order pronounced in Open Court on 10/04/2024