TaxTMI 
TaxTMI 
2025 (11) TMI 905
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.... for registration under section 80G of the Income Tax Act, 1961 (hereinafter referred to as "the Act"). 2. The brief facts of the case are that the assessee, Jayashree Gopallalji Haveli Charitable Trust, Ujalvav, filed an application in Form No. 10AB on 09.06.2024 before the Commissioner of Income Tax (Exemptions), Ahmedabad, seeking approval under clause (iii) of the first proviso to subsection (5) of section 80G of the Income-tax Act, 1961 (the "Act"). During the course of proceedings, the CIT (Exemptions) observed that, as per section 80G(5) of the Act, approval can be granted only to institutions or funds established in India for charitable purposes, and Explanation 3 specifically excludes any institution or fund whose purpose or obj....
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....e Tax [2001] 119 Taxman 251 (AP) to support its claim. The CIT (Exemptions), however, rejected the contention of the assessee holding that sub-section (5B) of section 80G merely clarifies that an institution established solely for charitable purposes may incur religious expenditure not exceeding five percent of its total income, but it does not authorize the existence of religious objects in the trust deed itself. It was further held that the decision relied upon by the assessee stood overruled by the Supreme Court in Upper Ganges Sugar Mills Ltd. (supra). Reliance was also placed on the decisions of Yug Chetna Parmarth Trust v. CIT (Exemptions) [2014] 44 taxmann.com 446 (Agra - Trib.) and Om Tapovan Charitable Trust v. CIT (Exemptions), IT....
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....us in nature. The learned counsel for the assessee contended that this finding of the learned CIT(E) is wholly misconceived and contrary to the material on record. It was pointed out that Object No. 1 merely refers to the construction of a haveli in accordance with a particular architectural pattern and does not involve or propagate any particular faith, belief, or ritualistic practice. Object No. 2, on the other hand, relates to the carrying out of charitable activities for the general welfare of society. Neither of the two objects makes any reference to the promotion or advancement of a specific religion. The inclusion of a culturally inspired or spiritually motivated objective does not by itself render the trust a religious one. The ld. ....
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....ther contended that the learned CIT(E) failed to appreciate that the registration under section 12A(1)(ac) continues to operate as valid evidence of the charitable nature of the appellant's objects and activities. Once such registration has been granted, the CIT(E) cannot, at the stage of considering an application under section 80G, sit in judgment over the same set of objects and activities to hold that they are religious in nature, unless there is specific evidence to that effect. The action of the CIT(E) in rejecting the application without issuing any specific show-cause notice on the classification of expenses or providing a reasonable opportunity to the appellant to respond to the proposed grounds of rejection amounts to a violation ....
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.... than the permissible five percent of its total income on religious purposes. In this regard, we find guidance from the coordinate bench decisions of the Ahmedabad Tribunal in Shree Smasta Gurjar Kshatriya Kadiya Samaj Navsari v. CIT (Exemptions) [2025] 174 taxmann.com 1117 (Ahmedabad - Trib.) [26-05-2025], wherein it was held that before rejecting an application for approval under section 80G on the ground that certain activities are religious, the Commissioner (Exemptions) must first examine whether the assessee has breached the five percent threshold prescribed under section 80G(5B). In the absence of such verification, the matter deserves to be remanded for fresh consideration. Similarly, in Prayatna Charitable Trust v. CIT (Exemptions)....