Tribunal Upholds Exemption for Religious Society under Section 80G despite Revenue Challenge

The High Court upheld the Tribunal's decision to grant exemption under section 80G to a society registered for religious and charitable purposes, despite the Revenue's argument that the expenditure on religious activities was less than 5% of total income. The Court found the Tribunal's ruling based on factual records to be valid, dismissing the Revenue's appeal and affirming the society's entitlement to benefits under section 80G.

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Issues Involved:
The judgment deals with the issue of renewal of registration of a trust under section 80G of the Income Tax Act, challenged by the Revenue based on the amount of expenditure incurred towards religious activities being less than 5% of the total income.

Summary:
The respondent, a society registered for religious and charitable purposes, sought renewal of registration under section 80G in 2009, which was refused by the Revenue. The Tribunal, after considering the income and expenditure accounts, found that the expenditure towards religious activities was less than 5% of the total income for two consecutive years. Consequently, the Tribunal allowed the appeal and directed the grant of exemption under section 80G to the assessee. The Revenue appealed against this decision.

The Revenue argued that the plea regarding expenditure for religious purposes being less than 5% was raised for the first time before the appellate authority, requesting a remand for further investigation. On the other hand, the assessee contended that the plea was raised before the CIT, and the appellate authority was justified in considering it based on the records provided. The appellate authority's finding was factual and not disputed, hence no fresh inquiry was warranted.

The High Court observed that the society was registered under the Societies Registration Act for religious and charitable activities, holding registration under sections 12AA and 80G. The CIT's refusal to renew registration based on religious activities alone was found to be without merit, as the expenditure towards religious activities was below 5% of the total income, entitling the trust to benefits under section 80G. The Tribunal's decision was based on undisputed records and did not warrant interference. Consequently, the High Court dismissed the appeal, upholding the Tribunal's order.

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