TaxTMI 
TaxTMI 
2025 (6) TMI 1129
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....me-tax Act, 1961[hereinafter referred to as "the Act"]. Facts of the Case 2. The assessee is a public charitable trust created by a trust deed dated 26.05.1905. The trust filed an application in Form No. 10AB on 28.06.2024 seeking approval under section 80G(5)(iii) of the Act. The trust had already been granted provisional approval from 31.05.2021, which was valid up to A.Y. 2024-25. During the course of proceedings, the Learned CIT(Exemption) issued a letter dated 17.09.2024 calling for details, which were furnished by the assessee vide reply dated 02.10.2024. Subsequently, a show cause notice dated 25.11.2024 was issued, wherein it was observed that certain object clauses in the trust deed were indicative of a religious purpose. The ass....
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....ax Act, 1961. 3. The Ld. Commissioner of Income Tax (Exemption) Ahmedabad has considered charitable objects and activities as the religious objects and rejected the application. 4. As Rejection order passed by the Ld. Commissioner of Income Tax (Exemption) Ahmedabad is against the provisions of procedure of approval and Explanation 3 of Section 80G(5). As per the procedure, the genuineness of the activities and conditions i to v are to be verified as mentioned in the rejection order also. The Ld. Commissioner of Income Tax (Exemption) Ahmedabad is not supposed to verify the objects clause of the trust deed while granting the approval U/s 80G(5), when the application has been is made under clause (ii) or clause (iii) [or sub-clause (B) o....
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....s open to all sections of the society without any restriction based on caste or creed. ii. The assessee contends that the CIT(Exemption) has erroneously interpreted certain terms such as "katha", "shastri", "purani", "vedic", "puranic", and "aitihasik" as indicative of religious activity, without appreciating that these terms relate to Indian knowledge systems, culture, and literature. It is argued that the use of these terms, in their true context, relates to historical narration, philosophical discourse, and literary exposition, and does not involve any ritual, pooja, archana, or worship. iii. The assessee has placed on record the audited financial statements and activity reports (pages 78-113 of the paper book) to demonstrate that: ....
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....O(E), Bangalore - ITA No. 1085/Bang/2022 has been cited in support, where it was held that Vedic knowledge is not religious in nature, but a way of life and source of knowledge, thereby qualifying as charitable activity. vii. The assessee has submitted that although a detailed reply was filed on 27.11.2024, explaining the nature of the trust's activities and enclosing supporting material, the CIT(E) has summarily stated that the reply is "not acceptable", without assigning any specific reasons. Further, the CIT(E) has not dealt with or discussed the financial records and activity reports submitted by the assessee and has arrived at the conclusion purely on the plain reading of select clauses in the trust deed, thereby violating principles....
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....d by the assessee, as well as the impugned order passed by the CIT(Exemption). Upon a thorough examination of the impugned order dated 14.12.2024, we find some material deficiencies and procedural lapses in the approach adopted by the CIT(Exemption) in rejecting the assessee's application for approval under section 80G(5)(iii) of the Act. 8. To begin with, it is seen that the assessee had furnished a detailed reply dated 27.11.2024 in response to the show cause notice issued by the CIT(Exemption), wherein the nature of the trust's activities, the interpretation of its object clause, and the absence of any religious activity or expenditure were specifically explained. The said reply was accompanied by supporting documentation including ....
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....ection 80G(5B), as well as references to certain judicial decisions, there is no attempt to correlate these legal provisions with the facts of the case, particularly the financial data and actual activities of the trust. The CIT(Exemption) has not dealt with the judicial precedents relied upon by the assessee. The entire decision-making appears to rest on a mechanical application of legal text without factual evaluation. In our considered view, such an approach renders the order legally unsustainable. 10. The role of the CIT(Exemption) under section 80G(5) is not limited to a textual reading of the trust deed, but extends to verifying the genuineness of activities, the manner in which the funds are applied, and whether the institution is e....