Court Directs Independent Review of Trust Renewal Application

The court directed the Commissioner to review the renewal application of the trust independently of the earlier refusal, considering the provisions of sub-section (5B) of Section 80G. The court found merit in the petitioner's argument that the mere inclusion of temple construction in the trust deed should not be the sole basis for rejection, emphasizing the ratio between total income and expenditure on religious activities each year. No costs were awarded in this case.

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Issues: Challenge to refusal of renewal of exemption under Section 80G based on inclusion of construction of temples in trust deed and lack of actual construction. Interpretation of Section 80G and consideration of expenditure for religious purposes.

In this case, the petitioner challenged the order refusing renewal of exemption under Section 80G due to the inclusion of construction of temples in the trust deed, despite no actual construction or expenditure on religious activities. The petitioner argued that the principal activity of the trust should be considered, and the mere inclusion of temple construction should not be the sole criteria for rejection. Reference was made to the amendment in Section 80G, specifically sub-section (5B) inserted by the Finance Act, 1999, which allowed exemption if expenditure on religious activities did not exceed 5% of total income. The petitioner contended that the Commissioner should consider the ratio between total income and expenditure on religious purposes each year, and registration should only be refused if more than 5% of total income was spent on religious activities.

The petitioner requested the court to direct the Commissioner to reconsider the trust's registration for renewal from 1.4.2000 onwards, unaffected by the previous refusal for the assessment year 1995-2000, in line with sub-section (5B) of Section 80G. The court found merit in the petitioner's arguments and disposed of the writ petition by directing the Commissioner to review the renewal application from 1.4.2000 independently of the earlier order, considering the provisions of sub-section (5B) of Section 80G. The court did not award any costs in this matter.

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