Yugnirman Gaytri Parivar Vadnagar, Mehsana V. CIT(Exemption), Ahmedabad

ITA 225/AHD/2019

AI Insights

The case involves Yug Nirman Gayatri Parivar, a religious trust, which appealed against the decision of the CIT (Exemption), Ahmedabad, rejecting their application for a certificate under section 80G of the Income Tax Act, 1961. The rejection was based on the grounds that the trust had incurred religious expenses exceeding 5% of its total receipts, as per section 80G(5B) of the Act. The trust contested this decision, arguing that the CIT (Exemption) had incorrectly calculated the percentage of religious expenses to total income. The Tribunal found merit in the trust's argument and remanded the case for a fresh evaluation.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 131383 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-04-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 26-03-2023
• Assessment Year: misc
• Appeal Filed On: 13-02-2019
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 80G; 12AA

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “B” BENCH Before: Ms. Annapurna Gupta, Accountant Member And Shri Siddhartha Nautiyal, Judicial Member Yug Nir man Gayatri Parivar, Pith Bank of Baro da Vadn agar, Mehsana-38435 5 Sabark antha-3 8300 1 PAN: AAAT Y6078N (Appellant) Vs CIT (Exemption), A’bad (Resp ondent) Asses see b y : None Revenue by : Shri S udhendu Das, CIT-D. R. Date of hearing : 27-03 -2 023 Date of pronouncement : 19-04 -2 023 आदेश/ORDER PER : SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER:- This is an appeal filed by the assessee against the order of the ld. Commissioner of Income Tax (Exemption), Ahmedabad, in proceeding u/s. 80G(5)(vi) of the Act vide order dated 27/12/2018. 2. The assessee has raised the following grounds of appeal:- ITA No. 225/Ahd/2019 Assessment Year : NA I.T.A No. 225/Ahd/2019 A.Y. N.A. Page No. Yugnirman Gaytri Parivar vs. CIT (Exemption) 2 “1 The Commissioner of Income Tax(Exemption) Ahmedabad has erred in Law and on fact and also in law in rejecting application U/S 80G(5) of the Income Tax Act, 1961. 2 Your appellant crave, leave to add, alter, & or to emend modify substitute all or any ground of appeal before final hearing if necessity so arise.” 3. The brief facts of the case are that the assessee is a religious trust registered under the Bombay Public Trust Act, 1950 and has been engaged in carrying out charitable activities. The assessee applied for 12AA certificate which was granted to the assessee on 22-11-2018 by CIT(Exemption), Ahmedabad. The assessee also applied for 80G certificate on 01-06-2018, which was rejected by CIT(Exemption), Ahmedabad on the ground that the trust had made expenses more than 5% of its total receipts, which are of religious nature and therefore the application of the assessee was liable to be rejected in terms of section 80G(5B) of the Act. 4. The assessee is in appeal before us against the aforesaid order passed by CIT(Exemption), Ahmedabad rejecting the application of the assessee for grant of deduction under section 80G of the Act. The basic contention of the assessee before us is that CIT(Exemption), Ahmedabad has erred in rejecting the application of the assessee on an incorrect appreciation of facts, in the instance set of facts. The counsel for the assessee pointed out that during the previous year 2017-18 under consideration, the total income of the assessee was 33,67,741/- and the total “Pujari/religious” expenses incurred during the year were 5,600/ - which only comes to 1.67% of the total income of the assessee during the year under consideration. However, CIT(Exemption), Ahmedabad has incorrectly noted that the total income of I.T.A No. 225/Ahd/2019 A.Y. N.A. Page No. Yugnirman Gaytri Parivar vs. CIT (Exemption) 3 the assessee during the previous years was 36,471/- as against “Pujari/religious” expenses incurred during the year of 5,600/ - and therefore he held that the religious expenses incurred by the assessee during the year under consideration, being more than 5% of the total income, are in violation of section 80G(5B) of the Act. The counsel for the assessee pointed out that the CIT(Exemption), Ahmedabad dismissed the application of the assessee on an incorrect presumption of facts and hence the order of the CIT(Exemption), Ahmedabad rejecting the application of granting registration under section 80G of the Act is liable to be set aside. Further, the counsel for the assessee also relied upon various decisions, including the decisions passed by Ahmedabad ITAT to contend that ITAT in various cases have held that where the assessee trust is a non-secular trust, then expenses termed as Pooja expenses are not of religious nature at all. In response, DR placed reliance on the observations made by CIT(Exemption), Ahmedabad in the order passed by him while rejecting the application of the assessee. 5. We have heard the rival contentions and perused the material on record. We observe that ostensibly, in the instant facts, CIT(Exemption), Ahmedabad has rejected the claim of the assessee on an incorrect presumption of fact that during the year under consideration, the religious expenses incurred by the assessee was more than 5% of the total income, and therefore the application of the assessee is liable to be rejected in terms of section 80G(5B) of the Act. The counsel for the assessee has submitted that during the year under consideration, the religious expenses/poojari expenses were only to the tune of 1.67% of the total income and CIT(Exemption), Ahmedabad has taken an incorrect figure of “total income” I.T.A No. 225/Ahd/2019 A.Y. N.A. Page No. Yugnirman Gaytri Parivar vs. CIT (Exemption) 4 for working out the percentage of religious/Poojari expenses. Therefore, looking into the facts of the instant case, since apparently CIT(Exemption) Ahmedabad dismissed the application of the assessee on an incorrect presumption of facts as to the figure of total income of assessee trust, the matter is being set aside to the file of CIT(Exemption), Ahmedabad for de novo consideration of the application of the assessee, after giving due opportunity of hearing to the assessee to present the correct facts and decide the case on merits. 6. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 19-04-2023 Sd/- Sd/- (ANNAPURNA GUPTA) (SIDDHARTHA NAUTIYAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad : Dated 19/04/2023 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 6. Guard file. By order/ आदेश से, उप/सहायक पंजीकार आयकर अपील य अ धकरण, अहमदाबाद