TaxTMI 
TaxTMI 
TaxTMI 
2025 (10) TMI 411
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.... as "the Act"], whereby the assessee's application in Form No. 10AB for approval under section 80G was rejected and the provisional approval earlier granted was cancelled. Facts of the Case 2. The assessee, a trust registered trust, filed application in Form No. 10AB on 28.06.2024 seeking approval under section 80G(5)(iii) of the Act. The learned CIT(E) had earlier granted provisional approval under section 80G(5) vide order dated 22.04.2023, valid for A.Y. 2023-24 to A.Y. 2026-27. During the course of processing the application, the CIT(E) examined the trust deed of the assessee and observed that one of the objects (object clause 12) refers to "providing Dharmashala facilities for pilgrims (Dharmik Yatralu), food, lodging, and clothe....
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.... law. 2. In law and on the facts and in the circumstances of the case of appellant, the Id. CIT (Exemption), Ahmedabad has erred in rejecting application for registration of the trust u/s. 80G(5) of the Income Tax Act, 1961 on the basis of incorrect reasons/observations. [2.1] In law and on the facts and in the circumstances of the case of appellant, the Id. CIT (Exemption), Ahmedabad has erred in not granting registration u/s 80G(5) of the Act to the appellant on the basis that the appellant has not provided the requisite details even when the appellant has duly filed all the necessary replies in response to notice issued by ld CITE). 3. The appellant craves leave to add, alter or amend and/or withdraw any ground....
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....n the basis of the same set of objects and facts. It was thus argued that once the assessee has been accepted as a charitable institution under section 12AB, the learned CIT(E) should not have denied approval under section 80G(5) by treating one of the ancillary objects as religious. 8. On the other hand, the learned Departmental Representative (DR) supported the impugned order of the learned CIT (Exemption). 9. We have considered the rival submissions and perused the orders of the lower authority. The issue before us is whether the assessee trust is eligible for approval under section 80G(5) of the Act. 10. Section 80G(5)(ii) requires that the institution or fund should be established in India for "charitable purpose only" and not....
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....bject which the CIT(E) has treated as religious. The AR also highlighted that the assessee has already been granted registration under section 12AB(1)(b) by the same CIT(E) on 26.12.2024 on the basis of identical facts and objects. This clearly shows that the trust has been accepted as a charitable institution under section 12AB, which is a more fundamental registration than approval under section 80G. 14. We have considered the judicial precedents relied on by the CIT(E). In case of Om Tapovan Charitable Trust v. CIT(E), Ahmedabad (ITA No. 175/Ahd/2023), the Co-ordinate Bench found that the trust deed itself contained dominant and substantial religious objects, and the assessee had failed to show that its activities were wholly charitab....
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....ritable. 16. From the above analysis, it is evident that the reliance placed by the CIT(E) on precedents is either factually distinguishable or, in the case of Upper Ganges, actually supports the assessee. 17. We also note the contention of the learned CIT(E) that section 80G(5B) is merely a clarificatory provision and does not override the main condition prescribed in section 80G(5). While it is correct that section 80G(5B) does not dilute the basic requirement that the institution must be established for charitable purposes, the said provision was consciously enacted by the Legislature to recognize the practical reality that certain institutions may, in the course of their charitable existence, incur a very small portion of expendit....