Tribunal grants condonation for late appeal filing due to religious expenditure exceeding 5% of total income

The Tribunal granted condonation of delay for an appeal filed 12 days late. It found that the rejection of approval under section 80G of the Income-tax Act, 1961, based on religious expenditure by the assessee-society, was not in line with the provisions allowing religious expenditure not exceeding 5% of total income. The Tribunal directed the Commissioner to reconsider the approval in accordance with section 80G(5B) and withdraw it if religious expenditure exceeded 5% of total income in any previous year. The appeal was allowed for statistical purposes, with the case remitted for re-examination by the Commissioner.

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Issues:
1. Delay in filing the appeal and condonation of delay.
2. Rejection of approval under section 80G of the Income-tax Act, 1961 based on religious nature of expenditure.
3. Interpretation of section 80G(5B) regarding expenditure not exceeding 5% of total income for approval.

Analysis:
1. The appeal was filed with a delay of 12 days, and the assessee requested condonation of the delay. The Tribunal found sufficient cause for the delay and granted condonation, admitting the appeal.

2. The rejection of approval under section 80G was based on the nature of the expenditure related to establishing places of worship and prayer halls by the assessee-society. The Commissioner contended that any religious object in the deed would disentitle the assessee for approval under section 80G. However, the Tribunal noted that the Commissioner did not consider the provisions of section 80G(5)(i) which allow for religious expenditure not exceeding 5% of total income to be deemed eligible for approval.

3. The Tribunal analyzed section 80G(5B) of the Act which states that when an institution incurs expenditure not exceeding 5% of its total income of a religious nature, it shall be deemed eligible for approval under section 80G. The Tribunal observed that the Commissioner did not examine the actual expenditure incurred by the assessee in the previous year. Therefore, the Tribunal set aside the Commissioner's order and remitted the issue for re-examination. The Commissioner was directed to reconsider the matter in light of section 80G(5B) and decide accordingly, with the provision to withdraw approval if expenditure exceeded 5% of total income in any previous year.

4. The Tribunal allowed the appeal for statistical purposes, emphasizing the need for a fresh examination by the Commissioner regarding the approval under section 80G. The order was pronounced on June 12, 2015, in Chennai.

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