SHREE MODHESHWARI DEVSTHAN TRUST AHMEDABAD,AHMEDABAD V. THE CIT(EXEMPTION), AHMEDABAD

ITA 145/AHD/2025

AI Insights

The case involves Shree Modeshwari Devsthan Trust, which appealed against the decision of the Commissioner of Income Tax (Exemption) rejecting their application for final approval under Section 80G(5) of the Income-tax Act, 1961. The CIT(Exemption) had rejected the application on the grounds that the Trust's objects were predominantly religious, thus violating Section 80G(5)(ii). The Tribunal found that the CIT(Exemption) had not specifically determined whether the expenditure on religious activities exceeded 5% of the total income, which is permissible under the Act. Consequently, the Tribunal remanded the case for further examination of this specific issue.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 838008 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-02-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 21-01-2025
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R P RASTOGI
• Assessee Lawyers: S N DIVATIA
• Keywords: Set aside; Charitable institution

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, Ahmedabad BEFORE DR. B.R.R. KUMAR, VICE-PRESIDENT Ms SUCHITRA KAMBLE, JUDICIAL MEMBER ITA No.145/Ahd/2025 (Assessment Year: NA) Shree Modeshwari Devsthan Trust Ahmedabad, New vidya vihar Society, Nr. Ramji Mandir, Ranip, Ahmedabad-382480. [PAN : AAWTS1528 D] Vs. The Commissioner of Income Tax (Exemption), Ahmedabad. (Appellant) .. (Respondent) Appellant by : Shri S N Divatia, with Shri Samir Vora, AR Respondent by: Shri R P Rastogi, CIT. DR Date of Hearing 17.02.2026 Date of Pronouncement 20.02.2026 O R D E R PER DR. B.R.R. KUMAR, VICE-PRESIDENT:- This appeal has been filed by the Assessee against the order dated 30.12.2024 passed by the Commissioner of Income-Tax (Exemption), (“the CIT(E) in short), whereby rejecting the application filed in Form 10AB seeking approval under Section 80G(5) of the Income-tax Act, 1961 (“the Act”). 2. The assessee has raised the following grounds of appeal: 1. The CIT(Exemption) has erred in law and in facts by rejecting application filed in Form 10AB of the Act vide Acknowledgment No.6670981803010124 seeking approval under clause (iii) of first proviso to Section 80G(5) and thereby cancelling the provisional approval granted in Form AC valid from 11.03.2023 to AY 2025-26. 2. It is therefore, prayed that the order passed by CIT(Exemption) rejecting Application may pleas be set aside and final approval u/s.80G may be granted for the sake of justice and equity. Printed from counselvise.com ITA No. 145/Ahd/2025 Asst. Year : NA - 2– 3. Your appellant craves reserves his right to add, amend, alter, and/or withdraw any ground of appeal at the time of hearing of the appeal. 3. The assessee Trust filed an application in Form 10AB seeking final approval under Section 80G(5). The CIT(Exemption) rejected the application on the ground that the Trust’s objects are predominantly religious in nature, thereby treating it as a composite trust and holding that it violates Section 80G(5)(ii). The CIT(E) relied on clauses relating to establishment and maintenance of temples, installation of idols, celebration of religious festivals, and other spiritual activities. The relevant extract of the order is reproduced as under: 8. The reply of the applicant dated 16.12.2024 is considered; however, the same is not found acceptable. To begin with, on perusal of the objects of the applicant as stipulated in the instrument of creation of the Trust, it is observed that following objective of the instrument are religious in nature which put the applicant under the category of composite trust i.e. Religious-cum-charitable trust. The English version of the object is reproduced as under for ready reference: (4) Objectives (8) Authorized and canteen for boarding, lodging, dining arrangements for devotees coming to the temple, establish, performing and run pooja tiniya. (9) Celebrating Patotsav and other Holy festivals and events every year. (10) For the celebration of Holy events and festivals in temple of Modheshwari Mataji and to ensure it can be celebrated without any kind of doubt and if necessary also make arrangement for Alayadu fund. (13) Serving or assisting Sadhus and Sandhvis and all such work. (17) To carry out all the necessary activities for the overall development of the temple, to build and run wadis, halls so as to be useful in the celebration and social functions of the society. (18) To organise get together for instilling spiritual knowledge without any kind of discrimination, celebrating religious events, organise Sneh Sammelan, Mass marriage, group Yagna, establishing Community Hall. (19) to organise Religious events like Bhagavat Saptah, Ramayan Katha, Mahabharata Katha, Sunderakand, Bhajans, Satsang programs, Dayaro and related dramas. (20) to establish Temples, Dharmashala, Ram Parayana, Gardens for the spiritual development of the people. Printed from counselvise.com ITA No. 145/Ahd/2025 Asst. Year : NA - 3– (21) To conduct foreign tours for the members of the Executive Committee to advocate for the preservation of the religious, linguistic and cultural heritage of the region and other countries. (22) to establish idols of Sri Shankar Bhagwan, Goddess Ambe Ma, Hanumanji, Ganpatidada and God of all religion Devs without caste discrimination and Conducting Arapana, Sevapuja, Bhaktibhava, festivals, lectures and related development activities by hiring people and paying them remuneration. On plain reading of the above objects, it is evident that the objects are religious in nature since it mandates “to establish run and maintain temples, install idols of various gods, celebrating religious festivals and many other religious activities” apart from other activities and hence, it clearly contravenes main condition of 80G(5) of the Act. In respect of details of activities submitted by the applicant on 16.11.2024, the trust has undertaken several activities for the growth and belief of Kuldevi Shree Modeshwari M i.e Chaitra Havan, Patotsav, Annakut and navratri. Hence, it can be seen that the applicant is involved mainly in Religious activity. 4. Aggrieved by the said order, the assessee is in appeal before the Tribunal. 5. The Ld. Counsel for the assessee contended that the objects and activities were duly explained and that expenditure on religious activities was negligible. It was further submitted that the CIT(E) failed to properly consider the explanations and materials placed on record. 6. We have heard the rival submissions and perused the material available on record. In the present case, we observe that the learned CIT(Exemption) rejected the application solely on the ground that the objects of the Trust are religious in nature. However, the learned CIT(Exemption) has not recorded any specific finding as to whether the expenditure incurred by the assessee towards religious activities exceeds 5% of the total income, as contemplated under Section 80G(5B) of the Act. As per the statute, a trust is permitted to incur expenditure up to 5% of its total income for religious purposes. Therefore, the relevant aspect to be examined was whether the assessee had exceeded the statutory limit of 5% on religious expenses, as stipulated under the provisions of the Act. Having considered the facts on record, we are of the view that the interest of justice would be served by remanding the matter to the learned Printed from counselvise.com ITA No. 145/Ahd/2025 Asst. Year : NA - 4– CIT(Exemption) for the limited purpose of examining whether the religious expenditure incurred by the assessee-trust exceeds the prescribed limit of 5% and accordingly reconsider the application of the assessee in accordance with law. The assessee is directed to comply with the notices issued by the authorities and shall not seek unnecessary adjournments. 7. In the result, the appeal filed by the assessee is allowed for statistical purposes. The order is pronounced in the open Court on 20.02.2026. Sd/- (SUCHITRA KAMBLE) Sd/- (DR. B.R.R. KUMAR) JUDICIAL MEMBER VICE-PRESIDENT (True Copy) Ahmedabad; Dated 20.02.2026 **mv आदेश की Ůितिलिप अŤेिषत/Copy of the Order forwarded to : 1. अपीलाथŎ / The Appellant 2. ŮȑथŎ / The Respondent. 3. संबंिधत आयकर आयुƅ / Concerned CIT 4. आयकर आयुƅ(अपील) / The CIT(A)- 5. िवभागीय Ůितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाडŊ फाईल / Guard file. आदेशानुसार/ BY ORDER, True Copy सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad Printed from counselvise.com "