Religious-cum-charitable trust loses section 80G approval when religious objects and spending exceed the statutory limit.

Approval under section 80G(5) is confined to institutions established for charitable purposes, and religious objects or activities do not fall within the statutory concept of charitable purpose. Explanation 3 to section 80G excludes purposes wholly or substantially of a religious nature, while section 80G(5B) permits religious expenditure only up to 5% of total income in the relevant previous year. A trust described as religious-cum-charitable, with religious objects in its memorandum and admitted religious expenditure of 7.95% of total income, falls outside the scope of approval under section 80G(5).

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Issues: Whether a trust whose objects include religious activities and which incurs religious expenditure exceeding 5% of total income in a previous year is entitled to approval under section 80G(5) of the Income-tax Act, 1961.

Analysis: Approval under section 80G(5) is available only to institutions established for charitable purposes. The statutory definition of charitable purpose under section 2(15) does not extend to religious objects or activities, and Explanation 3 to section 80G excludes purposes wholly or substantially of a religious nature. Section 80G(5B) permits religious expenditure only up to 5% of total income in the relevant previous year. On the facts, the trust's memorandum included religious objects, the trust itself described its nature as religious-cum-charitable, and the admitted religious expenditure for the relevant year was 7.95% of total income.

Conclusion: The trust was not entitled to approval under section 80G(5), as it was a composite trust with religious objects and religious expenditure above the statutory threshold.

Ratio Decidendi: A trust that has a religious purpose forming part of its overall objects, and that incurs religious expenditure beyond the 5% limit prescribed by section 80G(5B), falls outside the scope of approval under section 80G(5).

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