Religious trust classification requires recorded material and a speaking order; registration and 80G refusal were remanded.

A trust cannot be classified as religious for registration and approval purposes without recorded material, confrontation of adverse material, and a reasoned speaking order based on its objects and activities. Here, the assessee was running educational institutions and had long been treated as charitable, while the record disclosed no material showing that its objects or activities were confined to a particular community. The classification under section 12AB as a religious trust, and the consequential refusal of approval under section 80G(5), were therefore not sustained and were sent back for fresh examination. The delay in filing the appeals was also accepted as sufficiently explained and was condoned.

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Issues: (i) Whether the delay of 262 days in filing the appeals deserved condonation. (ii) Whether the registration granted under section 12AB treating the assessee as a religious trust, and the consequential rejection of approval under section 80G(5), were sustainable.

Issue (i): Whether the delay of 262 days in filing the appeals deserved condonation.

Analysis: The delay was explained by the assessee's late discovery, through audit and management transition, that the registration had been granted treating it as a religious trust, which also affected eligibility for approval under section 80G(5). The explanation was accepted as showing sufficient cause, and the appeals were admitted.

Conclusion: The delay was condoned in favour of the assessee.

Issue (ii): Whether the registration granted under section 12AB treating the assessee as a religious trust, and the consequential rejection of approval under section 80G(5), were sustainable.

Analysis: The assessee was found to be running educational institutions and had long been treated as a charitable institution. The record contained no material or reasoned finding showing that its objects or activities were in nature or confined to a particular community. The order also did not disclose any confrontation of adverse material or a speaking basis for classifying the assessee as a religious trust. In these circumstances, the classification and the consequential refusal of approval under section 80G(5) could not be sustained without reconsideration of the relevant material and a hearing to the assessee.

Conclusion: The matter was remanded to the Commissioner for fresh examination and a speaking order, with reconsideration of both registration and approval issues.

Final Conclusion: The appeals were allowed for statistical purposes, and the impugned matters were restored for fresh adjudication after affording the assessee an opportunity of hearing.

Ratio Decidendi: A trust cannot be classified as religious for registration and approval purposes without recorded material, confrontation of adverse material, and a reasoned speaking order based on its objects and activities.

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