SHREE GOVARDHAN SEVA TRUST,VADODARA V. THE CIT(EXEMPTION), AHMEDABAD

ITA 2106/AHD/2024

AI Insights

The case involves the Shree Govardhan Seva Trust appealing against the decision of the Commissioner of Income Tax (Exemption), who denied the Trust's application for approval under section 80G(5) of the Income Tax Act, 1961. The denial was based on the grounds that the Trust engaged in activities of a religious nature, which are not considered charitable under the Act. The Trust argued that these activities did not exceed 5% of its total income, referencing section 80G(5B) of the Act, which allows for such activities if they are minimal. The Tribunal found that the Commissioner had not adequately considered this provision and directed a re-evaluation of the Trust's application.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 717707 (ITAT-AHMEDABAD)
• Duration Of Justice: 7 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-08-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: misc
• Appeal Filed On: 16-12-2024
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RIGNESH DAS
• Assessee Lawyers: BIREN SHAH
• Keywords: Charitable institution
• Section: 80G

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, AHMEDABAD BEFORE: SMT. ANNAPURNA GUPTA, ACCOUNTANT MEMBER AND SHRI T.R. SENTHIL KUMAR, JUDICIAL MEMBER आयकर अपील सं./I.T.A. No. 2106/Ahd/2024 (िनधा[रण वष[ / Assessment Year : NA) Shri Govardhan Seva Trust 61, Urmi Society, Alkapuri, Productivity Road, Vadodara – 390007, Gujarat बनाम/ Vs. The Commissioner of Income Tax (Exemption) 609, Floor-6, Aayakar Bhavan (Vejalpur), Nr. Sachin Tower, 100 Foot Road, Anandnagar- Prahladnagar Road, Ahmedabad Öथायी लेखा सं./जीआइआर सं./PAN/GIR No. : AABTS2181D (Appellant) .. (Respondent) अपीलाथȸ ओर से /Appellant by : Shri Biren Shah, AR Ĥ×यथȸ कȧ ओर से/Respondent by : Shri Rignesh Das, CIT.DR Date of Hearing 03/06/2025 Date of Pronouncement 14/08/2025 (आदेश)/ORDER PER SMT. ANNAPURNA GUPTA, AM: The present appeal has been filed by the assessee against the order of the Ld. Commissioner of Income Tax (Exemption), (hereinafter referred to as “CIT(E)”), Ahmedabad dated 29.09.2024, denying grant of approval under section 80G(5) of the Income Tax Act, 1961 (hereinafter referred to as the “Act”). Printed from counselvise.com ITA No. 2106/Ahd/2024 [Shree Govardhan Seva Trust vs. CIT(E)] - 2 – 2. The appeal of the assessee is delayed for filing by 16 days. The Ld. Counsel for the assessee orally stated before us that initially the trustees were not aware of passing of the order being unfamiliar with the use of technology, the order being served on email, but, however, as soon as they were informed by their counsel of the order by the Ld. CIT(E), the assessee immediately took pro-active steps and filed appeal before us, though by a slight delay of 16 days. 3. Ld. DR though objected to the condonation of delay, but considering the smallness of the delay and further taking note of the fact that the assessee does not benefit by not filing appeal before us but is in fact highly prejudiced by the order passed by Ld.CIT(E) denying grant of approval u/s 80G of the Act, in the interest of justice, we consider it fit to condone the delay. Order was pronounced in the open Court. 4. The facts of the case reveal that the assessee had filed an application for approval under Clause (3) of the 1st Proviso to Subsection (5) of Section 80G of the Act in Form No.10AB, which was denied by the Ld. CIT(E) noting that the objects of the assessee trust did not fulfill the condition required by law, of the fund or institution being established only for the purpose of carrying out charitable activities. He noted that the assessee was also indulging in certain religious activities and accordingly, noting Explanation (3) to Section 80G of the Act which excluded Printed from counselvise.com ITA No. 2106/Ahd/2024 [Shree Govardhan Seva Trust vs. CIT(E)] - 3 – any purpose wholly or substantially of religious nature from the character of charitable purpose, he rejected assessee’s application seeking approval u/s.80G(5) of the Act. 5. During the course of hearing before us, Ld. Counsel for the assessee pointed out that in terms of the provisions of Section 80G(5B) of the Act, any fund or institution incurring expenditure of religious nature not exceeding 5% of its total income, shall be deemed to be an institution carrying out charitable activities. He pointed out that the Ld. CIT(E) had also noted this Section introduced in the Statute w.e.f. 01.04.2000 at para 2 of his order. Ld. Counsel for the assessee contended that in the proceedings before the Ld. CIT(E) three notices were issued to the assessee, two of which, were complied with. In response to the 3rd notice dated 24.09.2024, the assessee had stated to the Ld. CIT(E) that none of its activities, identified by the Ld. CIT(E) as being religious in nature, were actually of the said nature. He contended that the trustees had even filed an affidavit to this effect to the Ld. CIT(E) but the same could not be filed before him in time and in the meanwhile, the Ld. CIT(E) passed his order on 29.09.2024. He contended that the assesee on 2nd October, 2024 submitted this response to the last notice issued to it on 24.09.2024, but, the Ld. CIT(E) in the meanwhile had passed his order refusing to grant approval to the assessee u/s.80G(5) of the Act. His contention, therefore, was that the order had been passed without hearing the assessee and that the assessee was capable of demonstrating and Printed from counselvise.com ITA No. 2106/Ahd/2024 [Shree Govardhan Seva Trust vs. CIT(E)] - 4 – establishing with facts, that they were no religious activities being carried out by the assessee and if any they did not exceed 5% of the total income of the assessee trust and hence, therefore, the assessee was to be treated as existing for only charitable purpose in terms of Section 80G(5B) of the Act. In this regard, he filed a screenshot of the view response to the notice issued to the assessee on 24.09.2024 submitting its response on 2nd October, 2024 from its portal, containing the record of the present proceeding. Ld. Counsel for the assessee contended that the matter, therefore, needed to be re-considered by the Ld. CIT(E) and prayed, therefore, for restoration of assesee’s application to the file of the Ld. CIT(E). 6. Ld. DR, though, vehemently objected to the same, he was however unable to controvert the contention of the Ld. Counsel for the assessee that against the last notice issued to the assessee, the Ld. CIT(E) had passed order before waiting for the response of the assessee and that in any case, the nature of the assessee’s objects and activities being religious in nature had not been examined in terms of the provisions of Section 80G(5B) of the Act by the Ld. CIT(E). 7. In view of the above, therefore, we agree with the Ld. Counsel for the assessee that the assessee’s application seeking approval u/s.80G(5) of the Act needs to be re-considered by the Ld. CIT(E). The Ld. CIT(E) is directed to give due opportunity of Printed from counselvise.com ITA No. 2106/Ahd/2024 [Shree Govardhan Seva Trust vs. CIT(E)] - 5 – hearing to the assessee before arriving at his conclusion that the assessee’s objects and activities were partly religious in nature more particularly in the light of the provisions of Section 80G(5B) of the Act and its interpretation by various judicial authorities. 8. In the result, appeal filed by the assessee is allowed for statistical purposes. This Order pronounced on 14/08/2025 Sd/- Sd/- (T.R. SENTHIL KUMAR) (ANNAPURNA GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER Ahmedabad; Dated 14/08/2025 S. K. SINHA True Copy आदेश कȧ Ĥितिलǒप अĒेǒषत/Copy of the Order forwarded to : 1. अपीलाथȸ / The Appellant 2. Ĥ×यथȸ / The Respondent. 3. संबंिधत आयकर आयुƠ / Concerned CIT 4. आयकर आयुƠ(अपील) / The CIT(A)- 5. ǒवभागीय Ĥितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड[ फाईल / Guard file. आदेशानुसार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad Printed from counselvise.com "