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2024 Supreme(Online)(ITAT) 1148
INCOME TAX APPELLATE TRIBUNAL (AHMEDABAD BENCH)
MRS. ANNAPURNA GUPTA, ACM, SHRI T.R. SENTHIL KUMAR, JM
ARYAGRAM VIRASAT FOUNDATION AHMEDABAD – Appellant
Versus
THE CIT(EXEMPTION) AHMEDABAD – Respondent
ITA No. 1103/Ahd/2024
For the Appellant: Shri Devan Kapadia, AR
For the Respondent: Shri V. Nandakumar, CIT-DR
Objects of a trust do not qualify as religious solely based on references to scriptures, as the aim must be charitable without benefiting a specific religious community.
Headnote:(A) Income Tax Act, 1961 - Section 80G(5) - Denial of approval under section 80G(5) on grounds that the objects of the trust are religious - The Court held that the objects, aimed at promoting a way of living per Ancient Indian Shastras, do not qualify as religious in nature; thus, approval must be granted. (Paras 4, 10, 11, 16)
(B) Denial of application - The ld. CIT (Exemption)’s reasoning based solely on the trustees' religion was found to be flawed, as religious character must derive from the objects rather than trustee affiliation. (Paras 10, 12, 13)
(C) Evaluation criteria for approval - It was reiterated that an institution or fund must not serve any particular religious community for approval under Section 80G. (Paras 3, 8, 15)
| Table of Content |
|---|
| 1. background of the appeal and rejection of approval. (Para 1 , 3 , 4) |
| 2. assessment of the appellant's grounds against the cit's reasoning. (Para 2 , 5 , 6 , 7) |
| 3. discussion of the interpretational issues regarding religious vs charitable purposes. (Para 8 , 10 , 11) |
| 4. court's finding on the nature of the trust and justification for granting approval. (Para 12 , 13 , 14 , 15 , 16) |
| 5. final orders and directions given by the court (Para 17) |
आदेश/ORDER
PER ANNAPURNA GUPTA, ACCOUNTANT MEMBER:
Present appeal has been filed by the assessee against the order of the learned Commissioner of Income-tax (Exemption), Ahmedabad [hereinafter referred to as"CIT(Exemption)" for short]dated 28.03.2024 denying the assessee grant of approval under Section 80G (5) of the Income-tax Act, 1961 [hereinafter referred to as "the Act" for short].
2. The grounds raised are as under:-
“1. The CIT (Exemption), Ahmedabad has erred in rejecting the appellant's application filed for approval under clause (ii) of first proviso to section 80G(5) of the Income Tax Act, 1961 as well as provisional approval granted u/s 80G(5) of the Act by wrongly deeming objects of the appellant as religious in nature ignoring the fact that no single penny paisa has been spent on activities of the trust which is religious in nature.
2. The CIT (Exemption), Ahmedabad has erred in misinterpreting the spirit and intent of clause (iii) of First Proviso to Section 80G (5) while applying it to present case by dismissing the application filed vide clause (iii) of First Proviso to Section 80G (5) without considering the fact that inclusion of word "Ancient Indian Shastras and Scriptures” in object clause by no stretch of imagination be considered religious in nature.
3. The CIT (Exemption), Ahmedabad has erred in his approach by considering object of the institution wholly and substantially religious in nature on the basis of religion of directors of the appellant.
4. The CIT (Exemption), Ahmedabad has erred by rejecting application without considering settled judicial pronouncements and submission and/or supporting evidences in which it is clearly explained as to how the objects of the applicant cannot be interpreted as religious.
5. The appellant seeks a fair and impartial evaluation of its application for approval under clause (iii) of first proviso to section 80G (5), taking into consideration the genuine intentions and good faith efforts of the appellant. The rejection of the application by the CIT (Exemption), Ahmedabad without due consideration, violates the principles of natural justice and causes unnecessary hardship on the part of the appellant.
6. On the facts and merits of the case appellant craves for admission of additional evidences in the interest of natural justice and equity.”
3. The preliminary facts relating to the issue are that the assessee had been granted provisional approval/s 80G(5) in Form No. 10AC issued on 24.05.2022 ,in terms of clause (iv) of first proviso to sub- section (5) of Section 80G of the Act for the period commencing from 24.05.2022 to AY 2025-26. Thereafter, on 29.09.2023, the assessee filed Form No. 10AB seeking final approval under Section 80G (5) of the Act in terms of sub-clause (iii) thereof. It is this application of the assessee which was rejected by the ld. CIT (Exemption), and the order of the ld. CIT (Exemption) reveals that it was rejected in terms of Section 80G (5)(iii)/5B of the Act, finding its objects to be religious in nature.
4. We have gone through the order of the ld. CIT (Exemption) and also heard both the parties before us; and we hold that the order of the ld. CIT (Exemption) denying approval to the assessee is not sustainable in law. The reason being very simple, that the assessee had explained in detail as to how its object was not religious and duly supported it with decisions of various judicial authorities, and the Ld.CIT(E) did not point out any infirmity in the same. On the contrary, surprisingly, the
