TaxTMI 
TaxTMI 
2025 (9) TMI 1708
X X X X Extracts X X X X
X X X X Extracts X X X X
....ppeal: "1. The learned Commissioner of Income tax (Exemption) Ahmedabad [CIT(exemp] has erred both in law and in fact in rejecting application of appellant in Form 10AB filed seeking approval under section 80G(5) of the income tax Act, 1961 and cancelling provisional approval granted on erroneous grounds that appellant Trust was not a purely charitable Trust and that the appellant had violated provisions of clause (ii) of sub-section (5) of section 80G of the Act. The order so passed is against the facts and - sanction of law. It be so held now. 2. The ld CIT(Exemp) further erred in law and on facts in not appreciating that the objects of appellant were charitable and not religious hence was registered on the basis of such....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d approval under section 80G(5) of the IT Act be directed to be granted as claimed. 7. The appellant craves leave to add, alter, modify or delete any of the grounds at the time of hearing." 3. The brief facts of the case are that the Commissioner of Income Tax (Exemptions), Ahmedabad, passed an order rejecting the application filed by the assessee, Prayatna Charitable Trust, in Form No. 10AB seeking registration under section 80G(5)(iii) of the Income Tax Act, 1961 (Act), and simultaneously cancelled its provisional registration granted earlier on 12.02.2022. The application was for approval under clause (iii) of the first proviso to section 80G(5) of the Act for the period from 12.02.2022 to A.Y. 2024-25. The CIT (Exemptions) w....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Act, regardless of actual religious expenditure. Accordingly, the Commissioner held that the assessee trust violated the conditions laid down in section 80G(5)(ii) and Explanation 3, and was therefore not eligible for registration. CIT (Exemptions) rejected the application filed in Form 10AB and cancelled the provisional registration granted earlier to Prayatna Charitable Trust. 4. The assessee is in appeal before us against the order passed by CIT (Exemptions). Before us, the ld. counsel for the assessee submitted that the CIT (Exemptions), Ahmedabad, had erred in holding that object no. 11 of the Trust Deed was religious in nature. It was submitted that the CIT (Exemptions) had misinterpreted the object, which in fact pertained to org....
X X X X Extracts X X X X
X X X X Extracts X X X X
...., so long as the expenditure on religious activities did not exceed 5% of total income. The ld. counsel for the assessee submitted that the CIT (Exemptions) had erred in relying on the decision in Om Tapovan Charitable Trust, as the facts in that case were distinguishable-the trust there had explicit objects relating to performance of religious ceremonies like havans and yagnas, whereas no such activities were contemplated by the assessee trust in the present case. Finally, the assessee pointed out that the assessee already held valid registration under section 12A of the Act, which confirmed its charitable status, and therefore the denial of approval under section 80G of the Act was not sustainable. 5. In response, Ld. Ld. DR placed rel....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d that where Commissioner (Exemption) rejected application of assessee-trust for approval under section 80G(5) on ground that assessee-trust had spent more than 5 per cent of its total income on religious purposes, since Commissioner (Exemption) had not provided any opportunity to assessee to explain nature of event expenses, matter was to be remanded back to his file for fresh consideration. In the case of Vismruti Social and Charitable Trust vs. Commissioner of Income-tax (Exemption) [2025] 172 taxmann.com 582 (Ahmedabad-Trib.)[22-01- 2025], ITAT held that where CIT (Exemption) rejected application of assessee-trust for grant of registration under section 80G on ground that two objects of trust were religious in nature, since CIT (Exempti....
X X X X Extracts X X X X
X X X X Extracts X X X X
....gious practices. It has also been contended that no part of the trust's income has been applied toward religious activities, and the applicability of section 80G(5B) was not adequately considered by the CIT (Exemptions). In view of these contentions and the judicial pronouncements relied upon, we find it appropriate to set aside the impugned order passed by the CIT (Exemptions), Ahmedabad, and restore the matter to his file for fresh adjudication after affording due opportunity to the assessee. The CIT (Exemptions) shall re-examine the nature of the impugned object in the light of the explanation provided by the assessee and relevant judicial precedents including the decision of the Bangalore Bench in Shroutta Vinan Gurukulam vs. ITO (E....