C L SHAH CHARITABLE TRUST,VADODARA V. THE CIT(EXEMPTION), AHMEDABAD

ITA 337/AHD/2025

AI Insights

The case involves C.L. Shah Charitable Trust appealing against the decision of the Commissioner of Income Tax (Exemption), who had rejected their application for final approval under Section 80G of the Income Tax Act, 1961. The rejection was based on the grounds that the trust had exceeded the permissible limit of 5% for religious expenditures and had not justified a loan of Rs. 10 lakhs given to Shri Pancheshwar Mahadev Trust. The Tribunal found merit in the assessee's request for a remand to clarify these issues, considering the possibility of accounting errors and the need for a detailed examination of the trust's financial activities.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 776142 (ITAT-AHMEDABAD)
• Duration Of Justice: 7 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-09-2025
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: misc
• Appeal Filed On: 13-02-2025
• Laws Referred To: Income Tax Act, 1961
• Court: TRIBUNAL
• Department Lawyers: RIGNESH DAS
• Assessee Lawyers: RANGOLI GADA
• Keywords: Charitable institution
• Section: 80G

Judgement Text

" आयकर अपीलीय अिधकरण, अहमदाबाद \u0012ायपीठ “सी“, अहमदाबाद । IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, AHMEDABAD \u0016ी संजय गग\u001a, \u0012ाियक सद\u001b एवं \u0016ीमित अ पूण\u001a गु\"ा, लेखा सद\u001b क े सम&। ] ] Before Shri Sanjay Garg, Judicial Member And Smt. Annapurna Gupta, Accountant Member आयकर अपील सं /ITA No.337/Ahd/2025 िनधा \u000fरण वष\u000f /Assessment Year : N.A. C.L. Shah Charitable Trust A-1, Ganga Jamna Society Opp. Golden Siler Apt. Subhanpura Vaodara – 390 023 बनाम/ v/s. The CIT (Exemption) Ahmedabad – 380 015 \u0013थायी लेखा सं./PAN: AAATC 5225 F (अपीलाथ)/ Appellant) (*+ यथ)/ Respondent) Assessee by : Ms. Rangoli GADA, AR Revenue by : Shri Rignesh Das, CIT-DR सुनवाई की तारीख/Date of Hearing : 08/09/2025 घोषणा की तारीख /Date of Pronouncement: 15/09/2025 आदेश/O R D E R Per Sanjay Garg, Judicial Member: The present appeal has been preferred by the assessee against the order of the Learned Commissioner of Income Tax (Exemption), Ahmedabad [hereinafter referred to as ‘CIT(E)’] dated 28/12/2024. 2. The assessee, in this appeal, is aggrieved by the order of the CIT(E) in rejecting the application of the assessee for regular/final approval under clause (iii) of first proviso to sub-section (5) of Section 80G of the Income Tax Act, 1961 (in short “the Act”) Printed from counselvise.com ITA No.337/Ahd/2025 C.L. Shah Charitable Trust vs. The CIT (Exemption) 2 2.1. The Ld.CIT(E) rejected the application of the assessee observing that from the accounts of the assessee, it revealed that the assessee has incurred religious expenditure, over and above, the permissible limit of 5% in violation of the provisions of sub-section (5B) of section 80G of the Act. The Ld.CIT(E) has further observed that on perusal of the accounts of the assessee for Financial Years (FYs) 2021-22, 2022-23 & 2023-24, revealed that the assessee- trust had also given an amount of Rs.10 lakhs as loan to Shri Pancheshwar Mahadev Trust, for which the assessee has not submitted any justification regarding the purpose for which such advance has been given since last three years. He concluded that the assessee had incurred expenditure on religious purpose more than the prescribed limit in violation of clause (ii) of Section 80G(5) of the Act. He, therefore, rejected the application of the assessee for final approval u/s.80G(5) of the Act. 3. Before us, the Ld. Counsel for the assessee has submitted that the ld.CIT(E) got the impression from the accounts of the assessee that the assessee had incurred expenditure on religious purpose more than the prescribed limit. She has submitted that the Accountant of the assessee has wrongly mentioned the head of expenditure as donation for religious, whereas, the donation made by the assessee was not for any religious purpose, rather for charitable purposes. That it was a case of accounting mistake only. She has requested that the assessee has a fair case on merits. She has submitted that the matter may be remanded to the CIT(E), so that the Ld.CIT(E) can be apprised about the true and correct facts of the case. 4. The ld.DR, on the other hand, has relied upon the findings of the Ld.CIT(E). Printed from counselvise.com ITA No.337/Ahd/2025 C.L. Shah Charitable Trust vs. The CIT (Exemption) 3 5. Considering the rival submissions, in our view, the interests of justice will be well served, if the assessee is given an opportunity to present its case before the Ld.CIT(E) and to demonstrate that the alleged expenditure on account of donation for religious purpose was, in fact, not for religious purpose and further to explain the purpose of loan of Rs.10 lakhs given in last three financial years to Shri Pancheshwar Mahadev Trust. The assessee will furnish all the requisite details/documents and explain its case before the Ld.CIT(E) and the Ld.CIT(E), after considering the same, will decide the application of the assessee afresh within six months from the date of receipt of copy of this order. 6. In the result, the appeal of the assessee is treated as allowed for statistical purposes. Order pronounced in the Open Court on 15 /09/2025. Sd/- Sd/- ( Smt. Annapurna Gupta ) Accountant Member ( Sanjay Garg) Judicial Member अहमदाबाद/Ahmedabad, िदनांक/Dated 15 /09/2025 टी.सी.नायर, व.िन.स./T.C. NAIR, Sr. PS आदेश की #ितिलिप अ$ेिषत/Copy of the Order forwarded to : 1. अपीलाथ% / The Appellant 2. #&थ% / The Respondent. 3. संबंिधत आयकर आयु' / Concerned CIT 4. आयकर आयु' ) अपील ( / The CIT(E)- Ahmedabad 5. िवभागीय #ितिनिध , अिधकरण अपीलीय आयकर , अहमदाबाद/DR,ITAT, Ahmedabad. 6. गाड\u000f फाईल / Guard file. आदेशानुसार/ BY ORDER, स&ािपत #ित //True Copy// सहायक पंजीकार (Asstt. Registrar) आयकर अपीलीय अिधकरण, ITAT, Ahmedabad Printed from counselvise.com "