KALAVATIBEN BHOGILAL SHAH CHARITABLE TRUST,BANASKANTHA V. THE CIT(EXEMPTION), AHMEDABAD

ITA 111/AHD/2025

AI Insights

The case involves the Kalavatiben Bhogilal Shah Charitable Trust appealing against the decision of the CIT(Exemption), Ahmedabad, which rejected their application for approval under Section 80G(5) of the Income Tax Act, 1961. The trust argued that the CIT(Exemption) erred in law and on facts by not appreciating the charitable nature of the trust's objects and misinterpreting the provisions of Section 80G(5). The CIT(Exemption) had rejected the application based on the perceived religious nature of one of the trust's objects, despite the predominantly charitable activities. The Tribunal found that the CIT(Exemption) had not considered the evidence provided by the trust in their initial application and thus remanded the case for a fresh evaluation.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 297929 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V. NANDAKUMAR
• Assessee Lawyers: MEHUL THAKKAR
• Keywords: Principle of natural justice; Charitable institution
• Section: 80G

Judgement Text

"THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “B” BENCH Before Dr. BRR Kumar, Vice President And Ms. Suchitra Kamble, Judicial Member Kalavatiben Bhogilal Shah Charitable Trust, 3rd Floor Greenpark Complex, Near Gayatri Mandir Deesa Banaskantha PAN: AADTK7772L (Appellant) Vs The CIT(Exemption), Ahmedabad (Respondent) Assessee by: Shri Mehul Thakkar, A.R. Revenue by: Shri V. Nandakumar, CIT-D.R. Date of hearing : 16-04-2025 Date of pronouncement : 22-04-2025 आदेश/ORDER Per Suchitra Kamble, Judicial Member: This is an appeal filed against the order dated 22-11-2024 passed by CIT(Exemption), Ahmedabad for assessment year N.A. 2. The grounds of appeal are as under:- “1. The Learned Commissioner of Income Tax (Exemptions), Ahmedabad, erred in law and on facts by rejecting the appellant's application under Section 80G(5) of the Income Tax Act, 1961, without appropriately appreciating the charitable nature of the trust's objects. 2. The rejection of the application based on the alleged religious nature of one object, despite the predominantly charitable and public benefit-oriented nature of the trust's activities, is arbitrary, unjust, and contrary to the provisions of Section 80G of the Act. 3. The Learned CIT(Exemptions) failed to consider that the promotion and maintenance of places such as Dharmshalas, community halls, hospitals, and educational campuses in ITA No. 111/Ahd/2025 Assessment Year N.A. I.T.A No. 111/Ahd/2025 Kalavatiben Bhogilal Shah Charitable Trust, A.Y. N.A. 2 abandoned or religious areas also serve a charitable purpose benefiting the public at large, irrespective of religion. 4. The Learned CIT(Exemptions) misinterpreted the provisions of Section 80G(5), ignoring the trust's charitable intent and its activities' larger benefit to society, leading to an unjust conclusion. 5. The Ld. CIT-Exemption, Ahmedabad has erred in interpreting the legislative intent underlying the provision of Section 80G(5B) of the Income Tax Act, 1961. The said provision was inserted by Finance Act, 1999 with a view to extend eligibility for approval under section 80G(5) to trusts or institution predominantly engaged in charitable activities. According to this provision, eligibility for the approval under section 80G(5) is extended to trust or institution predominantly engaged in charitable activities provided their expenditure on religious activities does not exceed 5% of their income during the relevant previous year. The appellant trust conforms to this criterion as it has not incurred any expenditure towards religious activity. 6. The appellant prays that the Hon'ble Tribunal grant approval under Section 80G(5) of the Act by holding that the appellant trust is eligible for such approval, and/or pass such further orders as deemed just and proper in the interest of justice. 7. The appellant craves leave to add, alter or delete any ground either before or in the course of hearing of the appeal.” 3. The facts of the case are that the applicant is a Public Charitable Trust and the activities of the trust are charitable within the meaning of section 2(15) of the I.T. Act. The applicant trust filed the application in Form 10AB on 23.08.2024 for approval u/s. 80G(5) of the Income Tax Act, 1961. Notices were issued from time to time requesting to furnish details/documents. The CIT(E) rejected the application of the applicant vide order dated 22-11-2024. Aggrieved by the order of the CIT(E), the applicant trust filed appeal before the Tribunal. 4. At the outset, the Ld. A.R. submitted that the CIT(E) has rejected the application for approval u/s. 80G of the Act of the assessee without considering the evidence which has already been filed along original Form 10AB application on 23.08.2024. Therefore, I.T.A No. 111/Ahd/2025 Kalavatiben Bhogilal Shah Charitable Trust, A.Y. N.A. 3 Ld. A.R. submitted that the matter may be remanded to then CIT(E) for proper adjudication. The CIT-D.R. relied upon the order of the CIT(E). 5. We have heard both the parties and perused all the relevant record. It is pertinent to note that the CIT(E) has not at all considered the evidence filed by the applicant trust. Hence, it will be appropriate to remand the matter to the file of the CIT(E) for consideration of the application afresh and to pass an order by taking into consideration the evidences filed by the applicant trust. The applicant trust be given opportunity of hearing by following principles of natural justice. 6. In the result, the appeal of the applicant trust is allowed for statistical purposes. Order pronounced in the open court on 22-04-2025 Sd/- Sd/- (Dr. BRR Kumar) (Suchitra Kamble) Vice President Judicial Member Ahmedabad : Dated 22/04/2025 आदेश क\u0006 \u0007\bत ल प अ\u000fे 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\u0012य अ\u0013धकरण, अहमदाबाद "