TaxTMI 
TaxTMI 
2025 (7) TMI 1984
X X X X Extracts X X X X
X X X X Extracts X X X X
....r passed u/s. 80G(5) of the Act by the ld. Commissioner of Income-tax (Exemption), Ahmedabad is bad in law and invalid. 2. The ld. CIT(Exemption) erred on facts as also in law in rejecting application for regular approval u/s. 80G(5) of the Act, though the purpose of the trust is not in violation of the provisions of Explanation-3 and clause (ii) of sub-section (5) of section 80G of the Act. 3. The ld. CIT(Exemption.) erred on facts as also in law in rejecting application for regular approval u/s. 80G(5) of the Act, without considering submission made in prescribed manner. 4. The Appellant prays that the order of the ld. CIT(Exemption) may kindly be set aside and regular approval u/s. 80G(5) may kindly be accorded. 5. The grounds of are without prejudice to one another. 6. Your Honour's appellant craves leave to add, to amend, alter, vary and / or withdraw any one or more grounds of appeal on/or before hearing of appeal." 3. Brief facts qua the issue are that the assessee filed an application for approval under Clause (iii) of first proviso to Section 5 of Section 80G of the Act in Form No. 10AB. However, after going through the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ant of approval under section 80G of Income Tax Act 1961. Further, you are requested to note that in case of non compliance/part compliance of said notice, the matter will be decided on the basis of facts/material available on record Please note that this is a final opportunity and no requests for adjournment will be entertained"" 4. In response to the above show-cause notice the assessee submitted it's reply before the Ld. CIT(E). However, Ld. CIT(E) rejected the above reply of the assessee and observed that the question about how there is no violation of the main condition of the section 80G(5) of the Act which put bar for granting approval to a "Religious" or a "Religious-cum-charitable" trust, remains un-answered and accordingly the present applicant has to be decided based on material available on record. To begin with, on perusal of the objects of the applicant as stipulated in the instrument of creation, it is observed that the objectives/objects of the applicant are also religious in nature which put the applicant under the category of composite trust that is, Religious-cum-charitable trust. The object under dispute were re-produced as under: (c) Spirit....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d whose instrument of constitution or rule there under permit for transfer or application at any time the whole or any part of its income or assets for any purpose other than a charitable purpose and also it is clear violation of Explanation 3 to sec. 80G of the Act which clarifies that charitable purpose does not include any purpose the whole or substantially the whole of which is religious in nature and as the above referred objects are composite/religious in nature accordingly, present application falls outside the scope of section 80G of the Act. Moreover, the provisions of section 80G(5B) of the Act is not applicable to any institution/fund established for any purposes other than charitable purpose, i.e., religious or charitable-cum-religious purposes. The ld. CIT(E) noticed that similar law has been laid down by the Hon'ble ITAT Agra in the case of Yug Chetna Parmarth Trust, reported in 44 taxmann.com 446. 8. Thus, Ld.CIT(E) observed that in light of above discussion and having regard to provisions of Section 2(15), Section 80G(5), Section 80G(5B) and Explanation 3 to Section 80G(5) of the Act, the following is inferred: (i) Section 80G(5) of the Act applies t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....oticed that the applicant has violated existing main condition of sub-section (5) of section 80G, Explanation (3) to section 80G of the Act and clause (ii) of sub-section (5) of section 80G of the Act and hence the applicant is not entitled to get approval u/s 80G(5) of the Income Tax Act therefore the application filed in Form 10AB was rejected by Ld. CIT(E). 9. Aggrieved by the order of the Ld. CIT(E), the assessee is in appeal before us. 10. Shri Rajendra Singhal, Ld. Counsel for the assessee, argued that the undisputed and relevant facts are that the appellant trust has been created on 25/11/2013 and registered in the office of the Charity Commissioner of Gujarat. The trust has been created for a number of objects including social, cultural, medical, educational, human upliftment through spirituality, animal welfare etc. Only activity of the trust is running two schools since 2013 to till date, namely Bhagyodaya Academy - Primary and Bhagyodaya Academy - Secondary in Jam Kandorana Village, in backward region Saurashtra. The Photos related to the activities were also produced before the Bench. After verification of objects and activities, the Ld. CIT(E) has granted regular....
X X X X Extracts X X X X
X X X X Extracts X X X X
....regarding development of human society and regarding research and development. 2) It will do activities for the conduct of better family, good virtues. Simple living, better society with good qualities and it will publish matter regarding this. 3) It will conduct activities against bad qualities, bad habits and addiction to protect the society and humans from those. As well as it will arrange programs for anti-addiction and anti-drug activities. 4) To establish shelters for old handicapped, weak, widow, blinds, deaf, dumb, mentally retarders and start ease centres for those. 5) As the part of women empowerment, establish and manage courses and centres for tailoring, cutting, fitting, designing, dress materials etc. 6) To run annakshetra. to eliminate social ill systems, to remove dowry system, to handle marriage bureau, to arrange samuhlagna and to receive donations and gifts regarding the same. To prepare the backward and tribal class economically, start and handle professional and educational Services. 7) To carry funeral of any dead body of living being, including funeral of unknown persons. 8) To distribute required....
X X X X Extracts X X X X
X X X X Extracts X X X X
....turopathy, biochemical, yunaani, magnetism, acupuncture, acupressure for the treatment of people. 4) Hospitals, clinics, treatment camps, panchkarma centres, research centres, vaysthaapan Kendra, dirghayu Kendra. punsanvanan Kendra could be established and managed. 5) The trust will accept any income legally receivable to any organizations handled by this trust i.e., hospitals. Clinics, maternity homes. Nursing homes etc. 6) To give treatment to patients at very low rate and to purchase any vehicles for such organization and to avail mobile clinics. 7) To prepare the projects for medical services and work according to the projects prepared by - the co-operative. Government. Proprietary organization, company or firm. Medical stores for low cost medicines could be established and handled. 8) To arrange camps for medical protection, exhibition of forest medicines, treatment camp, suvarnaprashan camp, and anti-addiction. 9) The treatment will be done by green, fresh and dry medical vegetation's swaras, kavath, churna, vati. guti. avleh. tail, ghrut, malam and fresh honey. As well as to establish and handle the medical vegetation....
X X X X Extracts X X X X
X X X X Extracts X X X X
....To avail better quality of milk. ghee, butter, curd, gaumutra. cow dunk etc. by developing and maintaining the gaushala. To conduct activities of animal pity by stopping the animal slaughter. 6) To avail the facility of clinic, hospitals for old and handicapped animals and birds. To avail the mobile clinics for the same. 7) To conduct the environmental activities by developing the fertilizers from the cow or buffalo's dunk and their urine and by running gas plants. F. Educational : 1) This trust will do all the educational works related to motivate the society, to remove the darkness of ignorance and to scatter the light of knowledge. 2) This trust will establish, handle and manage nursery, play house. Balwadi, Ghodiyaghar, Anganwadi, mother and children development centres. 3) This trust will establish and manage Gujarati medium and English medium playhouses, nursery, LKG, HKG. pre-primary school, primary school, middle school, high school, higher secondary school and many types of colleges. 4) This trust will establish and manage industrial schools, agricultural school and college, laboratory. workshop, library, r....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s for higher education such as M.Phil. Ph.D., P.D.F. etc. and it will be able to be helpful to the Students pursuing such higher courses. As well as it will help these students in the research work. 16) Activities like technical, management and self-employment would be helped by this trust. It will do all the activities for agricultural development and maintenance, it will provide knowledge of different languages and conduct the courses for such languages." 12. On the other hand, the Ld. CIT-DR for the Revenue, stated that the trust has certain spiritual objectives, like spirit of God, Satsang, Bhaktidham, Muktidham etc, which are religious in nature. Therefore, the assessee- trust is not entitled to approval under Section 80G(5)(iii) of the Act. The Ld. CIT-DR also relied on the findings of the Ld. CIT(E) which we have narrated above. 13. We have heard the rival contentions, perused the material on record and duly considered facts of the case in the light of the applicable legal position. We note that since commencement of activities, assessee's activity is only running of schools, which is charitable activity, not a religious activity. The assessee's had never carr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ge of God. 3. To establish and maintain SantKutir, Yoga Kutir, meditation centre, silence, praanayam Kendra. yogasan Kendra. 4. To establish and maintain libraries for spiritual books, literature, magazines and pamphlets. To establish and manage centres for DivyaJivan and to handle the higher spiritual activities that are helpful to society and human in real sense. 5. To establish and maintain Bhaktidham, Muktidham, Vaidik Sanskar Kendra YagnaShaala, DivyaJivan Kendra, Jal Kendra, Ann Kshetra and Dharmashala. 16. We note that after carefully considering the above object, we find that the object 5(D) is not an exclusive or overriding object. Assessee's trust has other objects towards educational, medical, yoga, social, cultural, gaushala, as well as spiritual. None of the object is religious as well as for benefit of an exclusive religious community or caste. We note that the object 5(D) under consideration begins with a non-obstante clause "WITHOUT DISCRIMINATIONS OF RELIGION OR CAST". This non-obstante clause provides that it shall uphold its enforceability over later part of the object, even if that is contradictory to it. Hence, the object is not a ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....mple cannot be regarded as for the advancement support or propagation of a particular religion and granted the approval under section 80G of the I.T. Act. The Hon'ble ITAT Bangalore Bench in M/s Sri Channamallikarjuna Trust Committee Gangavathi v CIT (E) - ITA No 1829/Bang/2018 (order dated 4.5.2022) explained the difference between charitable purpose and religious purpose and held as under: "13. In sections 11, 12 & 13, a distinction has been drawn between 'charitable purpose' and 'religious purposes', but there is no definition of the term 'religious purpose' in the Act. Generally interpreted, it would encompass within its fold all institutions or funds, which are for the advancement, support or propagation of a religion and its tenets. How religion is to be understood in the context of the Act, has been examined in the case of Dawoodi Bhora Jamat (supra). If the benefit of religious endowments too ensures for the benefit of the public, then the religious trusts/endowments too will be entitled to the exemption provided by section 11 of the Act. A religious trust could be 'public' or 'private'. Section 13(1)(a) bars exemption to any....