2025 (6) TMI 1940 - AT - Income Tax

Educational Trust loses section 80G(5) registration appeal for religious expenditures exceeding 5% limit

ITAT Ahmedabad dismissed the Educational Trust's appeal challenging denial of section 80G(5) registration. The CIT(E) had rejected registration finding ... Rejection of registration u/s. 80G(5) - CIT(E) found that the assessee had incurred expenditure of religious nature which is more than 5% of its total income primarily donations to other trusts and funds - HELD THAT:- As assessee could not explain the donations made to the other Trusts and how they are relating to charitable purpose. In support of the same, the assessee has not filed any details or Paper Book either before the Ld. CIT(E) or before this Tribunal. In the absence of the same, the grounds raised by the assessee are devoid of merits and liable to be dismissed. Appeal filed by the Assessee is hereby dismissed. The Appellate Tribunal (ITAT Ahmedabad) dismissed the assessee's appeal against the Commissioner of Income Tax [Exemption] order dated 28.09.2024, which denied registration under section 80G(5) of the Income Tax Act, 1961. The assessee, an Educational Trust running schools and registered under section 10(23C)(vi), sought 80G registration. The CIT(E) found that the assessee incurred expenditures of a religious nature exceeding 5% of its total income for the year ending 31-03-2021, primarily donations totaling Rs. 58,05,555 to other trusts and funds. The CIT(E) held that such activities were not exclusively educational, violating section 10(23C)(vi), and thus the Trust's activities were 'not genuine,' justifying denial of 80G registration.The assessee contended the donations were not religious or caste/community-specific and maintained its sole educational purpose. However, the assessee failed to provide documentary evidence or satisfactory explanation linking the donations to charitable purposes. The Tribunal emphasized that 'in the absence of the same, the grounds raised by the assessee are devoid of merits and liable to be dismissed,' thereby upholding the CIT(E)'s order and dismissing the appeal.