Daan Amrut Foundation, Ahmedabad V. The CIT(Exemption), Ahmedabad

ITA 202/AHD/2023

AI Insights

The case involves Daan Amrut Foundation appealing against the decision of the CIT(Exemption), which rejected their application for approval under section 80G(5) of the Income-tax Act, 1961. The CIT(Exemption) had denied the application based on the foundation's involvement in religious activities, as indicated in their Memorandum of Association (MOA) and the application forms. The Tribunal noted procedural lapses and the need for a thorough re-examination of the foundation's activities and their compliance with the statutory requirements for 80G(5) approval.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 113089 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-08-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 06-08-2023
• Assessment Year: misc
• Appeal Filed On: 30-03-2023
• Other Referred Cases: Upper Ganges Sugar Mills Ltd. v. CIT, Hiralal Bhagwati v. CIT, ACIT v. Surat City Gymkhana, Kaila Devi Temple Trust v. CIT(E), Umaid Charitable Trust v. UOI, Nazareth Hospital Society v. DCIT (E), Santshreshtha Gajajan Maharaj v. CIT(E)
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Gift; Charitable institution; Principle of natural justice
• Section: 80G; 12A

Judgement Text

Daan Amrut Foundation v. The CIT(E) ITA no. 202/Ahd/2023 THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “C” BENCH, AHMEDABAD Before: Shri Ramit Kochar, Accountant Member And Ms. Madhumita Roy, Judicial Member Daan A mrut Found ation, 4/A, Ra mya App ts, Opp. Ketav Petrol Pu mp, Ambawadi, Ah me dab ad, Gujarat PAN: AA JCD4654M (Appellant) v. The CIT(Exemption) , Roo m No . 609, Flo or 6, Aay akar Bhawan, Vejalpur m , Near Sachin To wer, 1 00 Ft. Road, An andn agar- Prahaladnag ar Road, Ah medabad-38 0015, Gujarat (Respond ent) Asses see b y : M s. Sh runjal Shah, A.R. Revenue by : Shri Kamlesh Makw ana, CIT-D. R . Date of hearing : 07-08 -2 023 Date of pronouncement : 10-08 -2 023 आदेश /ORDER PER : RAMIT KOCHAR, ACCOUNTANT MEMBER:- This appeal bearing ITA No. 202/Ahd/2023 for Assessment Year: N.A. filed by the assessee arises from the order dated 20 th March, 2023 (DIN & Notice No. ITBA/EXM/F/EXM45/2022-23/1050968270(1) passed by ld. ITA No. 202/Ahd/2023 Assessment Year : N.A. Daan Amrut Foundation v. The CIT(E) ITA no. 202/Ahd/2023 2 Commissioner of Income-tax (Exemption), Ahmedabad(hereinafter called “ the CIT(E)”) , rejecting application filed by the assessee in Form no. 10AB for grant of approval u/s. 80G(5) of the Income-tax Act, 1961(hereinafter called “the Act”). 2. The grounds of appeal raised by assessee in memo of appeal filed with Income-Tax Appellate Tribunal, Ahmedabad in ITA No. 202/Ahd/2023 for assessment year:N.A., reads as under:- “1) The Ld. CIT(Exemptions) has erred in law and on facts by not granting exemption under s. 80G to the Appellants without considering that none of the objects of the Appellant company fall within Explanation 3 to Section 80G. 2) The Ld. CIT(Exemptions) has erred in law and on facts by not granting exemption under s. 80G to the Appellants merely because Row 3 of Form 10AB states that the trust is Charitable cum Religious and Row 5 of Form 10AB mentioned religious as one of the many purposes of the Appellant without considering the MOA evidences the trust to be solely constituted for charitable purposes. 3) The Ld. CIT(Exemptions) has erred in law and on facts by not granting exemption under s. 80G without considering that s.80G(5B) permits expenditure for religious purpose for upto 5%. 4) The Ld. CIT(Exemptions) has erred in law and on facts by not granting exemption under s. 80G by not considering that Courts have consistently held that it is the dominant object of the trust which is important and contribution and expenditure incurred by the Appellant trust has to be viewed in light of the objects with which charitable trust in question was constituted. 5) The Ld. CIT(Exemptions) has erred in law and on facts by not granting exemption under s. 80G without considering that the Daan Amrut Foundation v. The CIT(E) ITA no. 202/Ahd/2023 3 expenditure incurred till date is solely for charitable purposes being medical help to animals, printing books for education and to help the underprivileged. 6) The Ld. CIT(Exemptions) has erred in law and on facts by relying on the judgment of the SC in the case of Upper Ganges Mills vs CIT 227 ITR 226 when the facts of the said case are not relevant to the case of the Appellants. 7) The Appellant craves leave to add, amend, alter, edit, delete, modify, withdraw, change or substitute all or any of the grounds of appeal at the time of or before the hearing of this appeal.” 3. The brief facts of the case are that the assessee filed an application for approval of the institution u/s. 80G(5) of the Act in Form No. 10AB electronically, on 29 th September, 2022. The ld. CIT(Exemption) issued notice’s asking assessee to furnish detailed note of the activities actually carried out by the assessee as well as certain details/documents as are mentioned in the said notices, in order to conduct an enquiry into genuineness of the activities of the assessee as well to enquire whether the assessee complies with all the mandatory requirements as are stipulated in the 1961 Act read with Income-tax Rules, 1962. The assessee submitted certain details/ documents in response to notices issued by ld. CIT(Exemption) , and the ld. CIT(Exemption) observed that the assessee in para/row 3 of the application filed in Form 10AB for seeking approval u/s. 80G(5) of the 1961 Act, has stated nature of activities as “Religious cum charitable’ and further in para/row 5 of the said Form 10AB, the assessee has mentioned one of objects as per the Memorandum of Association (MOA)/ instrument for creation of the institution as “Religious”. The ld. Daan Amrut Foundation v. The CIT(E) ITA no. 202/Ahd/2023 4 CIT(Exemption) observed from the Memorandum of Association (MOA)/ instrument of creation of the institution of the assessee that some of the objects are religious in nature, which is reproduced as under:- “........ 6) To provide, support religious places renovation, historic places renovations/preservation, and similar causes. .....” The ld. CIT(Exemption) was of the view that approval under Section 80G(5) applies only to any donation to any institution or fund referred to in sub- clause (iv) of clause (a) of sub-section (2) only if it is established in India for a charitable purpose and if it also fulfills other conditions mentioned therein. The ld. CIT(Exemption) also referred to the provisions of Section 80G(5)(ii) of the Act which stipulates that the instrument under which the institution or fund is constituted does not, or the rules governing the institution or fund do not ,contain any provisions for the transfer or application at any time of the whole or any part of the income or assets of the institution or fund for any purpose other than a charitable purpose and section 80G(5)(iii) of the Act stipulates that the institution or fund is not expressed to be for the benefit of any particular religious community or caste. The ld. CIT(Exemption) referred to provisions of section 80G(2)(a)(iv) of the Act and observed that it is applicable to the institution or fund established in India for charitable purpose, and there is no provision for transfer or application of fund for any purposes other than charitable purposes. The ld. CIT(E) also referred to provisions of Section 80G(5B) which prescribe that notwithstanding any Daan Amrut Foundation v. The CIT(E) ITA no. 202/Ahd/2023 5 thing contained in clause (ii) of sub-section (5) and Explanation 3 , an institution or fund which incurs expenditure , during any previous year, which is of religious nature for an amount not exceeding 5% of its total income in that previous year shall be deemed to be an institution or fund to which the provisions of this section applied. The ld. CIT(Exemption) refers to the judgment and order of Hon’ble Supreme Court in the case of Upper Ganges Sugar Mills Ltd. v. CIT, reported in 93 Taxman 645 , wherein the Hon’ble Supreme Court held as under:- “8. Section 80G applies to donations to any institution or fund established in India 'for a charitable purpose'.' Charitable purpose, for the purposes of the section, does not include any purpose the whole or substantially the whole of which is of a religious nature'. [Emphasis supplied] Explanation 3, which uses this phraseology, takes note of the fact that an institution or fund established for a charitable purpose may have a number of objects. If any one of these objects is wholly, or substantially wholly, of a religious character, the institution or fund falls outside the scope of section 80G and a donation to it does not secure the advantage of the deduction that it gives. 9. The judgment of this Court in Addl CIT v. Surat Art Silk Cloth Mfg. Association(1980) 121 ITR 1/(1979) 2 Taxman 501 , cited by the learned counsel for the assessee, was delivered with reference to the true meaning of the words’ not involving the carrying on of any activity for profit ‘ occurring at the end of the definition of ‘charitable purposes’ in Section 2(15) of the Act. This Court said that if the primary or dominant purposes of the trust was charitable , another object which by itself may not be charitable but which was merely ancillary or incidental to the primary or dominant purposes would not prevent the trust or the institution from being a valid charity. The judgment is of no assistance in construing Explanation 3 of Section 80G. Daan Amrut Foundation v. The CIT(E) ITA no. 202/Ahd/2023 6 10. To reiterate , Explanation 3 does not require the ascertainment of whether the whole or substantially the whole of the institution or fund’s charitable purpose is of a religious nature. If it did , it would read differently . It requires the ascertainment of whether there is one purpose within the institution or fund’s overall charitable purpose which is wholly or substantially wholly , of religious nature. There is little doubt that clause 2(h) of the trust deed which permits the trustees to support prayer halls and places of worship sets out a purpose the whole or substantially the whole of which is of religious nature , and this has not been seriously disputed . Therefore, in our view, the Trust and the donation by the assessee to it fall outside the scope of section 80G. ” The ld. CIT(E) held that Section 80G approval can be granted to the assessee/applicant who has to established for charitable purposes and there is no transfer or application of funds for any purpose , other than a charitable purpose, subject to concession granted to the extent of 5% of total income as per Section 80G(5B) of the 1961 Act. The ld. CIT(E) observed that Provision of Section 80G(5) approval cannot be granted to a trust/fund established for any purposes other than charitable purpose, i.e. religious or charitable cum religious purposes. The ld. CIT(E) referred to the decision of ITAT, Agra Bench in the case of Yug Chetna Parmarth Trust, reported in 44 taxmann.com 446 . The ld. CIT(E) observed that the assessee has itself accepted that some of its objects are religious in nature, and hence it was held by ld. CIT(E) that the assessee is not entitled to get approval u/s 80G(5) of the 1961 Act , and hence ld. CIT(E) rejected the application filed by the assessee in Form No. 10AB for grant of approval u/s 80G(5). 4. Aggrieved by the decision of ld. CIT(Exemption) rejecting the assessee’s application in Form No. 10AB for grant of approval u/s 80G(5), Daan Amrut Foundation v. The CIT(E) ITA no. 202/Ahd/2023 7 the assessee is in appeal before the Tribunal. Before the Tribunal, the ld. counsel for the assessee Ms. Shrunjal Shah, Advocate opened arguments and submitted that the assessee company was incorporated on 26.07.2022, u/s 8 of the Companies Act, 2013. It was submitted that the assessee has made an application under clause (iv) of the first proviso to Section 80G(5) in Form No. 10A on 8 th August, 2022 with ld. CIT(E), for grant of provisional approval u/s. 80G(5) of the Act. It was submitted that the provisional approval was granted by department on 15 th August, 2022, effective from 15.08.2022 to assessment year 2025-26. Subsequently, on 29 th September, 2022, an application was filed in Form No. 10AB for grant of approval u/s 80G(5), under clause (iii) of the first proviso to Section 80G(5). Notice/questionnaire was issued on 12-12-2022 by ld. CIT(Exemption) seeking details which was replied by the assessee on 15 th December, 2022. It was submitted that further notice was issued on 5 th January, 2023 by ld. CIT(E) for compliance on 12.01.2023 on the grounds that part details were submitted by the assessee in response to the earlier notice dated 12.12.2022 , which notice dated 05.01.2023 was also replied by the assessee on 07 th January, 2023, wherein the assessee has stated that it has filed all details in response to the earlier notice dated 12.12.2022, and still if any further details/clarifications are required , the assessee may accordingly be notified. It was submitted by ld. Counsel for the assessee that again notice was issued by ld. CIT(E) on 4 th February, 2023 in which once again all the details were called by ld. CIT(E) which were earlier called on 12.12.2022, which was also replied by the assessee on 13 th February, 2023. It was submitted that this notice/questionnaire dated 04.02.2023 was merely a duplication of earlier notice/questionnaire dated 12.12.2022. It was submitted that order Daan Amrut Foundation v. The CIT(E) ITA no. 202/Ahd/2023 8 was passed by the ld. CIT(Exemption) rejecting the application of assessee on 20 th March, 2023. The ld. counsel for the assessee drew our attention to the order passed by the ld. CIT(Exemption). It was stated that two different orders were passed by ld. CIT(Exemption) on the same date viz. 20 th March, 2023 with two different DIN & Notice No. , firstly ITBA/EXM/F/EXM45 / 2022-23/ 1050967825(1) dated 20.03.2023 and secondly with DIN & Notice No. ITBA/EXM/F/EXM45/2022-23/1050968270(1) dated 20.03.2023. It was submitted that these two orders are verbatim same except that in one order there is reference to notice/questionnaire dated 04.02.2023 issued by ld. CIT(E) and in the second order there is reference to notices dated 12.12.2022(questionnaire) and 05.01.2023 issued by ld. CIT(E) , but these two orders rejecting application for the assessee for grant of approval u/s 80G(5) are verbatim same. It was submitted by ld. Counsel for the assessee that the ld. CIT(Exemption) relied on the judgment and order of Hon’ble Supreme Court in the case of Upper Ganges Sugar Mills Ltd.( supra) to deny approval to the assessee u/s. 80G. Our attention was drawn to para 6 of the object clause of Memorandum of Association(MOA). Our attention was drawn to sub-section 5B of Section 80G. It was submitted that the assesse is a newly incorporated company u/s 8 of the Companies Act, 2013 , and was incorporated on 26.07.2022. Our attention was drawn to page 23 and 42A of the Paper Book where details of expenses incurred as well bank statements are placed, and it was submitted that the assesse has not carried out any religious activities nor any religious activities for the benefit of any religious community were carried out by the assessee. It was submitted that the assesse raised some donations from the promoters, and granted donation for welfare of the animals. It was submitted that ld. CIT(E) can verify the Daan Amrut Foundation v. The CIT(E) ITA no. 202/Ahd/2023 9 accounts as well activities of the assesse, in order to see the genuineness of the activities of the assesse for charitable purposes. Our attention was drawn to the provisions of section 2(15) of the Act, and it was submitted that the assessee is a charitable organization entitled for approval under section 80G(5). Our attention was drawn to Explanation 3 to section 80G(5) . It was submitted that the assessee can incur expenditure for religious purposes, the expenses up to 5% of the income which is permitted u/s 80F(5B). It was also submitted that registration u/s. 12A is already granted and once the Department has granted approval u/s. 12A , then approval u/s 80G cannot be denied. Reference was drawn to the judgment and order of Hon’ble Gujarat High Court in the case of Hiralal Bhagwati v.CIT SCA 1820 of 1989 (Guj HC) , as well to the judgment and order of Hon’ble Supreme Court in the case of ACIT v. Surat City Gymkhana SLP 4305 of 2022. She also relied upon the order of ITAT in the case of Kaila Devi Temple Trust v. CIT(E) 2017 SCC online ITAT 16460. It was submitted that approval u/s. 80G cannot be denied to the assessee. The ld. counsel for the assessee also relied upon the judgment and order of Hon’ble Rajasthan High Court in the case of Umaid Charitable Trust v. UOI and Others in S.B. Civil Writ Petition 5060/2006. It was submitted by ld. Counsel for the assesse that this judgment and order of Hon’ble Rajasthan High Court in the case of Umaid Charitable Trust(supra) has duly considered the decision of Hon’ble Supreme Court in the case of Upper Ganges Super Mills Ltd.(supra) and held that approval u/s. 80G is required to be granted if the objects are not wholly and/or substantially of religious nature. She drew our attention to various clauses of Memorandum of Association(MOA) , and submitted that there is no object clause which is wholly or substantially religious of nature Daan Amrut Foundation v. The CIT(E) ITA no. 202/Ahd/2023 10 and hence the assessee is entitled for approval u/s. 80G. It was submitted that expenditure to the tune of 5% of the income can be incurred for religious purpose as per Section 80G(5B) and hence it cannot be said that the assessee cannot incur any expenditure for any religious activities as expenditure up to 5% is allowed by law itself. Our attention was also drawn to the Order of ITAT, Allahabad Bench, Allahabad, in the case of Nazareth Hospital Society v. DCIT (E) ITA No. 165/ALLD/2018 and also order of Pune ITAT in the case of Santshreshtha Gajajan Maharaj v. CIT(E) , in ITA No. 2004/Pun/2019 , and it was submitted that expenditure can be incurred only for the specified object as per object clause and the income of the institution/fund can be applied for charitable purposes as stated in the object clause , as provided under section 11(1)(a) of the Act. The assessee also submitted that undertakings were given before ld. CIT(Exemption) as were required by ld. CIT(E), and further that the assessee is also willing to give undertaking that the assessee will not engage itself in any religious activities and its expenditure towards religious activities shall not exceed 5% as permitted vide provisions of section 80G(5B). Thus, it was submitted by ld. counsel for the assessee that the assessee undertakes not to engage in any religious activities and to confine itself with only charitable activities, for which it is ready to give undertaking before ld. CIT(E) to the satisfaction of the ld. CIT(E). 4b. The ld. Departmental Representative on the other hand submitted that the ld. CIT(Exemption) has observed from the application filed by the assessee itself that the assessee is engaged in both the activities i.e. religious-cum- charitable activities. It was submitted that assessee has received donations from various persons but no receipts were given. The ld. Departmental Daan Amrut Foundation v. The CIT(E) ITA no. 202/Ahd/2023 11 Representative submitted that the assesse is allowed to incur expenses towards religious activities to the tune of upto 5% of its income. The Departmental Representative prayed that the matter can be restored back to the file of the ld. CIT(Exemption) for re-consideration of the assessee’s application afresh. 4c. The ld. counsel for the assessee submitted in rejoinder that the assessee has given donation of Rs. 79,200/- to Shree Ambawadi Shwetambar Murtipujak Jain Sangh , which was for the benefit of animals and there was no religious activities undertaken by the assessee and the assessee is willing to produce all the documents and details to prove that no religious activities was carried on by the assessee . It was submitted by ld. Counsel for the assesse that the assessee is willing to file undertaking before the ld. CIT(Exemption) that its expenditure towards religious activities shall not exceed 5%. Further, the ld. counsel for the assessee prayed that the matter may not be restored back to the file of ld. CIT(Exemption) for re-doing entire exercise afresh w.r.t. grant of approval u/s 80G(5), and rather the Tribunal should grant the approval to the assesse u/s 80G(5). 5. We have considered rival contentions and perused the material on record.We have observed that the assessee is a company registered u/s 8 of the Companies Act, 2013 , on 26.07.2022. The assessee main objects as laid down in Memorandum of Association , reads as under: “1. to promote arts, commerce, education , charity , protection of the environment, climate, change initiatives , sports, science, research , social welfare , healthcare, animal welfare , literature, religion(all religions), Daan Amrut Foundation v. The CIT(E) ITA no. 202/Ahd/2023 12 2. To provide and arrange reliefs and supports and guidance to the poor and needy and deserving students and other persons in general , irrespective of any considerations of sex, class, caste , community and/or religion. 3. To accept grants, donations , presents , gifts etc. from the parents of the students and from others and to deal with the same for the purpose of the trust. 4. To arrange , organize , publish books and participate in lectures , seminars, debates , fairs and conferences etc. for the diffusion of knowledge and for promotion of education. 5. To secure and maintain the movable and immovable properties for achieving the said objects. 6. To provide , support religious places renovation , historic places renovations/preservation, and similar causes. 7. To promote overall development of the child, education , co- curricular activities and leveraging the concept of New Education Policy of India. 8. To do all such other things as are incidental and conducive to the attainment of the above objects or any other object of general public utility.” The assessee filed an application in Form No. 10A for grant of provisional approval u/s 80G(5) with department, on 08.08.2022. The provisional approval was granted by department on 15.08.2022 under clause(iv) of first proviso to sub-section (5) of Section 80G, for the period 15.08.2022 to assessment year 2025-26. The assessee filed an application in Form No. Daan Amrut Foundation v. The CIT(E) ITA no. 202/Ahd/2023 13 10AB on 29.09.2022 for grant of approval under clause (iv) of the first proviso to sub-section (5) of Section 80G. The ld. CIT(E) issued notice/questionnaire dated 12.12.2022 asking for various details/documents/ clarification from the assessee , in order to satisfy itself with the genuineness of the activities of the assessee company as also to meet the requirements of Section 80G read with Rule 11AA(1) and 11AA(2) of the 1962 Rules. The assessee duly filed reply on 15.12.2022 . The ld. CIT(E) again issued notice dated 05.01.2023 stating that the assessee has given part reply/documents/details, and the assessee was asked to furnish the remaining documents/details/replies. The assessee replied on 07.01.2023 stating that it has given all replies to the notice/questionnaire dated 12.12.2022 issued by ld. CIT(E) , and the assessee submitted that it should be informed as to which reply has not been given by it to the earlier notice/questionnaire dated 12.12.2022. Instead of show-causing the assessee as to the remaining part reply etc. which as per ld. CIT(E) was not replied by the assessee to the earlier notice/questionnaire dated 12.12.2022 or the issues which ld. CIT(E) was not satisfied with, the fresh notice/questionnaire was issued by ld. CIT(E) on 04.02.2023 asking assessee again to furnish all the details. The assessee again replied to the fresh notice/questionnaire dated 04.02.2023 , vide reply dated 13.02.2023 wherein the assessee again submitted reply to all the queries raised by ld. CIT(E). Thereafter , two separate orders were passed by ld. CIT(E) both dated 20.03.2023, verbatim , which rejected the assessee’s application in Form No.10AB for grant of approval u/s 80G(5), with separate DIN’s (separate DIN’s mentioned in preceding para’s of this order-para4/page-8). The ld. CIT(E) rejected the application in Form No. 10AB for grant of approval u/s 80G(5) mainly on the grounds that the Daan Amrut Foundation v. The CIT(E) ITA no. 202/Ahd/2023 14 assessee’s object no. 6 refers to activities which are religious in nature. The object clause no. 6 reads as under : 6. To provide , support religious places renovation , historic places renovations/preservation, and similar causes. The ld. CIT(E) was of the view that once the objects as are contained in the object clause permits carrying on of religious activities, the assessee cannot be allowed approval u/s 80G(5) as approval u/s 80G(5) can only be granted to the institutions which are established for charitable purposes, for which reliance was placed by ld. CIT(E) on the judgment and order of Hon’ble Supreme Court in the case of Upper Ganges Sugar Mills Limited(supra). There is one more clause in the object clause in the MOA of the assessee which permits carrying on the religious activities, viz. clause 1, which reads as under: “1. to promote arts, commerce, education , charity , protection of the environment, climate, change initiatives , sports, science, research , social welfare , healthcare, animal welfare , literature, religion(all religions),” The ld. CIT(E) had also observed that the assessee has itself admitted in its application filed with department for grant of approval u/s 80G(5), that its activities are Charitable Cum Religious. Thus, it is the assessee’s own admission that it is engaged in religious activities, which debars it to get approval u/s 80G(5). The assessee has claimed before us that the assessee is not carrying on any activities which are religious in nature and it did not intend to carry out any activities which are religious in nature. It is also the say of the ld. Counsel for the assessee that the law permits to incur expenditure upto 5% of the income for religious activities, by referring to Daan Amrut Foundation v. The CIT(E) ITA no. 202/Ahd/2023 15 provision of Section 80G(5B) which starts with non-obstante clause, and it is submitted that in such cases, the assessee would not be considered carrying out religious activities and there will be no bar in granting approval u/s 80G(5) provided other conditions are met. It is the say of the ld. counsel for the assessee that it is willing to give undertaking before ld. CIT(E) or to meet other directions/conditions which ld. CIT(E) may stipulate , that it will not engage itself with the activities which are religious in nature and it will undertake not to violate any conditions as are stipulated in Act/Rules w.r.t. grant of approval u/s 80G(5). The assessee has relied upon the judgment and order of Hon’ble Rajasthan High Court in the case of Umaid Charitable Trust(supra) to contend that approval u/s 80G will not be denied where the predominant object is not religious in nature. It is stated that Hon’ble Rajasthan High Court has duly considered the judgment and order of Hon’ble Supreme Court in the case of Upper Ganges Sugar Mills Limited(supra). We have observed that there was no clause in the object clause which permitted activities which are religious in nature in the case of Umaid Charitable Trust(supra), while in the case of the assessee, there are clauses (1) and (6) which permits the carrying on activities which are religious in nature. It is the say of the ld. Counsel for the assessee that these activities are not for the benefit of any particular religious community or caste. It is strenuously argued by ld. Counsel for the assessee that the assessee’s activities are charitable in nature. We have observed that ld. CIT(E) has not showcaused to the assessee that he is relying on clause (6) of the object clause of the MOA and also on the application filed by assessee where in it is mentioned that the activities of the assessee are Religious cum charitable in nature(Para/ row 3 of Form No. 10AB) and Religious(para/row Daan Amrut Foundation v. The CIT(E) ITA no. 202/Ahd/2023 16 5 of Form No. 10AB), to reject the assessee’s application for approval u/s 80G(5), and principles of natural justice are clearly breached. Adherence to principles of natural justice and fair hearing is the most essential ingredients of efficient and robust judicial delivery system. Merely issuing questionnaire and thereafter condemning assessee without confronting and granting opportunity to the assessee to explain its stand, defeats the very principles of natural justice . Nobody should be condemned un-heard. Further, it is observed that the ld. CIT(E) is required to call for such documents or information from the assessee and make such inquiries as he think necessary to satisfy itself about the genuineness of the activities of such institution and the fulfillment of all the stipulated conditions as are mandated in the Act and /or Rules.These inquires requires investigation of the facts and the law is then required to be applied to proven facts , to arrive at the decision on merits in accordance with law . The ld. CIT(E) has not conducted proper inquiries in the instant case before rejecting the application filed by the assessee for grant of approval u/s 80G(5), and principles of natural justice are also clearly breached. The assessee on its part is also required to submit all details/clarification/ documents etc. to enable ld. CIT(E) to take decision in accordance with law on merit before granting approval u/s 80G(5).No doubt, there are clauses in the object clause in MOA viz. clause 1 and 6 , which permits the carrying on activities which are religious in nature, and the assessee case is prima-facie hit by the judgment and order of Hon’ble Supreme Court in the case of Upper Ganges Sugar Mills Limited(supra), but to arrive at the decision in the instant case of the assessee that these objects in MOA are wholly , or substantially wholly , of a religious nature, requires inquiry by ld. CIT(E). Thus, keeping in view totality of facts and Daan Amrut Foundation v. The CIT(E) ITA no. 202/Ahd/2023 17 circumstances of the case, and in our considered view , interest of justice will be best sub-served, if the order of ld. CIT(E) is set aside and matter is restored back to the file of ld. CIT(E) for adjudication afresh of the application filed by the assessee in Form No. 10AB on 29.09.2022 for grant of approval u/s 80G(5) , on merit in accordance with law. We clarify that we have not commented on the merits of the issue, and all the contentions are kept open. The ld. CIT(E) will readjudicate afresh the application dated 29.09.2022 filed by the assesse in Form No. 10AB for grant of approval u/s 80G(5) , on merits in accordance with law, uninfluenced by any of our observations in this order. The assessee is directed to file necessary details/clarifications/documents etc. as may be called by ld. CIT(E) to enable ld. CIT(E) to adjudicate afresh application in Form No. 10AB dated 29.09.2022 filed by the assessee for grant of approval u/s 80G(5) of the 1961 Act. Thus, in nut-shell the appeal of the assessee is allowed for statistical purposes. We order accordingly. Order pronounced in the open court on 10-08-2023 at Ahmedabad, Gujarat. Sd/- Sd/- (MADHUMITA ROY) (RAMIT KOCHAR) JUDICIAL MEMBER ACCOUNTANT MEMBER Ahmedabad : Dated 10/08/2023 आदेश क त ल प अ े षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad Daan Amrut Foundation v. The CIT(E) ITA no. 202/Ahd/2023 18 6. Guard file. By order/ आदेश से, उप/सहायक पंजीकार आयकर अपील य अ धकरण, अहमदाबाद