Religious character and tax-deduction registration: non-exclusive religious objects do not bar registration when charitable activities predominate.

Whether a trust is excluded from tax-deduction registration under the religious-character exclusion turns on whether its objects are wholly or substantially religious; the tribunal applied the predominant-purpose test and distinguished charitable objects (relief of the poor, education, medical relief, preservation, public utility, yoga) from religious activities. Because the deed contains a non-discrimination clause and financial records show predominant welfare and charitable expenditure, the religious-objects clause did not render the trust wholly or substantially religious, and registration for deduction was directed to be granted.

---

---

Issues: Whether the presence of clause 5(h) in the trust deed (religious activities such as running a mandir, dharamshala, satsang bhawan, gaushala, bhandara, kattha, parvachans) renders the Trust's objects "wholly or substantially the whole of which is of a religious nature" within the meaning of Explanation 3 to Section 80G of the Income-tax Act, 1961 and thus disentitles the Trust from registration under Section 80G for A.Y. 2023-24.

Analysis: The Trust deed shows multiple objects including relief of the poor, education, medical relief, yoga, preservation of environment and monuments, and advancement of public utility, alongside clause 5(h) relating to certain religious activities. The deed contains an explicit non-discrimination provision making benefits open to all irrespective of caste, creed, religion, race or gender. Financial records indicate expenditure on welfare activities (medical camps, cow feed, schools and related expenses) and do not demonstrate that religious activities are the Trust's sole or overriding purpose. Precedent and statutory context distinguish objects that are charitable (including yoga, relief of the poor, education, medical relief, preservation activities) from objects that are "wholly or substantially" religious. Where religious activities are not exclusive, discriminatory, or shown to be predominant, Explanation 3 to Section 80G does not apply and registration should not be denied on that ground.

Conclusion: Clause 5(h) does not make the Trust's objects wholly or substantially religious in nature; registration under Section 80G of the Income-tax Act, 1961 is to be granted. The appeal is allowed in favour of the assessee.

Ratio Decidendi: Explanation 3 to Section 80G excludes institutions only where their objects are shown to be wholly or substantially of a religious nature; the presence of non-discriminatory charitable objects and evidence of predominant charitable activities means a trust is not excluded merely because it also undertakes some religious activities.

---