TaxTMI 
TaxTMI 
2025 (11) TMI 732
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....r section 80G(5)(iii) of the Income Tax Act, 1961 [hereinafter referred to as "the Act"] and, in consequence, cancelled the earlier provisional approval granted. 2. Condonation of Delay 2.1 At the threshold, there is a delay of 135 days in filing the present appeal. The assessee moved a condonation application supported by an affidavit of Shri Divyesh Patel, Trustee of the assessee Trust. In the affidavit, it is explained that the impugned order was transmitted to the email account of the assessee's erstwhile consultant who did not share or communicate the same to the trustees. The assessee remained under a bona fide belief that the matter concerning 80G approval was being attended to by the said consultant. Subsequently, upon an inqu....
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....s Form 10AB, the learned CIT(E) issued notices calling for information. The record reflects a sequence of notices and responses in the year 2024, namely a notice dated 11.07.2024, a reminder dated 13.08.2024, a further reminder dated 08.10.2024, and a final notice dated 18.10.2024. Replies were eventually placed on record including the assessee's reply dated 22.10.2024. 3.3 The learned CIT(E) noted that, for Financial Year 2021-22, the assessee reported total income of Rs. 77,239/- and, out of its charitable outgoings, it incurred Rs. 20,000/- toward food preparation on various occasions and Rs. 34,500/- toward floor mats distributed to persons undertaking Narmada Parikrama. According to the CIT(E), this activity constituted expenditure ....
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....nted to a religious activity and therefore could not be accepted as charitable. He further noted that the judicial precedents relied upon by the assessee were distinguishable on facts, as they related to Gift Tax cases or trusts with specific community-based objects, and thus were not applicable to the assessee's situation. Noting that in FY 2021-22 the assessee spent Rs. 54,500/- in total, comprising Rs. 20,000/- on food preparation and Rs. 34,500/- on floor mats for Narmada Parikrama pilgrims, the CIT(E) concluded that the assessee had incurred religious expenditure exceeding 5% of total income, thereby violating section 80G(5B). On this reasoning, the CIT(E) held the assessee to be ineligible for approval under section 80G and ordered th....
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....for religious purposes. The AR emphasised that the Trust Deed of the assessee does not contain any object of religious nature. The objects clearly provide that the trust will work for welfare of mankind without discrimination of caste, creed, or religion. The expenditure in question was not applied toward any temple, religious ritual, or propagation of religion, but rather to alleviate hardship of the poor during pilgrimage. The AR strongly contended that the learned CIT(E) erred in treating the distribution of mats as "religious activity" without properly appreciating the dominant charitable intent. 4. The learned Departmental Representative, on the other hand, relied upon the findings recorded by the learned CIT(E) in the impugned orde....
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.... does not contain any object of religious nature. The stated objects are to carry out activities for the welfare of mankind at large, without distinction of caste, creed or religion. There is no allegation or material on record to suggest that the assessee has engaged in religious propagation, performance of rituals, or application of its income for upkeep or maintenance of any temple or religious institution. The impugned expenditure was directed only to alleviate the hardship of pilgrims by providing mats, in the same way as it had incurred expenditure on food preparation for the needy. Both activities were in the nature of welfare and relief measures. 5.3 The restrictive provision of section 80G(5B) has to be applied in its proper con....
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....is relevant to appreciate that Parikrama in the Indian tradition is often undertaken as a cultural and spiritual journey reflecting faith and endurance and not confined merely to a ritual of religion. Viewed in that spirit, the assessee's act of distributing mats to participants was intended to provide comfort and relief to persons engaged in such a cultural-spiritual practice, and not to promote or propagate any religion. On application of the dominant purpose test, the expenditure, when seen in the larger perspective of the assessee's declared objects and overall activities, clearly assumes the character of charitable relief and cannot be classified as religious. 5.6 In this background, we find that the learned CIT(E) erred in treating....