2026 (3) TMI 271

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.... 2. The assessee has raised the following grounds of appeal: 1.1 The learned CIT(Exemption) erred in law and on facts in rejecting the appellants application for registration under section 80G of the Income Tax Act, 1961 by order dated 30.08.2024. 1.2 The learned CIT(Exemption) erred in cancelling both the provisional registration and regular application under section 80G merely on the basis of interpretation of Object No.8 of the trust deed without examining the actual activities of the trust. (a) Not considering that the trust operates an old age home serving approximately 40 individuals from diverse backgrounds (b) Not examining whether any actual religious expenditure exceeded the 5% limit under Sect....

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....ture. The CIT(E) relied on object no.8 of the trust deed, thereby treating it as a composite trust i.e Religious-cum-Charitable trust and holding that it violates Section 80G(5) of the Act. The relevant extract of the order is reproduced as under: 8. the above reply of the applicant dated 30.07.2024 is considered However, the same is not found acceptable To begin with on perusal of the reply of the applicant it is observed that the applicant has erred in reading the show-cause notice dated 24.07 2024 and has tried to emphasized on activities been undertaken which are not religious and has tried to convince that the present application doesn't violates the condition specified in clause (ii) of sub-section (5) of section 80G of t....

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....purposes. Whereas, the above referred provisions of sec. 80G of the Act makes it amply clear that the applicant/assessee has to be established only for charitable purposes and there is no transfer or application of funds for any purposes other than a charitable purpose, subject to concession granted under Sec 80G(58) of the Act. 4. Aggrieved by the said order, the assessee is in appeal before the Tribunal. 5. Before us, the learned counsel for the assessee submitted that the learned CIT(E) has drawn adverse conclusion only on the basis object no.8 of the Trust Deed, whereas the remaining objects are purely charitable in nature. It was further submitted that Section 80G(5B) of the Act specifically provides that where a trust incurs exp....