ITAT Surat Judgments — February 2026

The Tribunal noted that the assessee produced additional evidence of capital contribution from members and utilization for plot acquisition, which were not examined by the lower authorities. The Tribunal found that the CIT(A) passed the order without granting adequate opportunity and hence, set aside the order.

The Tribunal noted that the CIT(E) had not specifically determined if the expenditure on religious activities exceeded 5% of the total income, which is a key condition under Section 80G(5B). Therefore, the matter was remanded back to the CIT(E) for a fresh consideration.

The Tribunal noted that the assessee did not file submissions before the CIT(E) and the CIT(E) rejected the application ex-parte. The Tribunal restored the matter to the CIT(E) for fresh consideration, allowing the assessee an opportunity to present its case and documentary evidence.

The Tribunal held that the notice under section 148, though dated March 31, 2021, was actually issued on April 1, 2021. As per amended provisions effective from April 1, 2021, and considering Supreme Court directions, the notice should have been treated under section 148A(b), followed by an order under section 148A(d). Since this procedure was not followed, the notice was quashed, and the reassessment order was set aside.

The Tribunal held that the assessee had provided various documents, including cash books and ledgers, to explain the source of investment. The CIT(A) had not considered the agricultural income of the assessee to the extent of Rs. 9,66,000, which was part of the explanation. Therefore, the assessee successfully explained the entire amount of the investment.

The Tribunal held that while Section 80G(5B) allows for some expenses on religious activities if less than 5% of gross receipts, it does not override Section 80G(5)(iii) which prohibits institutions established for the benefit of any particular religion. As the assessee's trust deed expressly contained religious objects, it was ineligible for approval.

The Tribunal held that the details and submissions filed by the assessee were not properly considered by the lower authorities. Therefore, the matter was remanded back to the AO for proper adjudication of the issues on merits.