SHRI VARDHAMAN STHANAKVASI JAIN SANGH TRUST,BHARUCH V. CIT(EXEMPTION), AHMEDABAD

ITA 81/SRT/2025

AI Insights

The case involves Shri Vardhman Sthanakvasi Jain Sangh Trust appealing against the decision of the Commissioner of Income Tax (Exemption), Ahmedabad, which dismissed their application for approval under Section 80G of the Income Tax Act, 1961. The dismissal was based on the grounds that the trust had incurred expenses on religious activities exceeding 5% of the total income over the last three years. The trust argued that the expenses were charitable, incurred on religious occasions, and did not serve religious purposes directly. The tribunal decided to restore the matter to the CIT(E) for further examination of the nature of the expenses.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 708719 (ITAT-SURAT)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-07-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AASHISH POPHARE
• Assessee Lawyers: KAMLESH BHATT
• Keywords: Cancellation of registration
• Section: 12AA; 12; 80G

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH, SURAT (HYBRID HEARING) BEFORE SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER & SHRI BIJAYANANDA PRUSETH, ACCOUNTANT MEMBER I.T.A. No. 81/SRT/2025 (Assessment Year: N.A.) Shri Vardhman Sthanakvasi Jain Sangh Trust, Opp. Ginwala School, Piraman Naka, Ankleshwar, Bharuch-393001 Vs. Commissioner of Income Tax (Exemption), Ahmedabad [PAN No.AAATS8444E] (Appellant) .. (Respondent) Appellant by : Shri Kamlesh Bhatt, C.A. Respondent by: Shri Aashish Pophare, CIT DR Date of Hearing 07.07.2025 Date of Pronouncement 15.07.2025 O R D E R PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER: This appeal has been filed by the Assessee against the order passed by the Ld. Commissioner of Income Tax (Exemption), (in short “Ld. CIT(E)”), Ahmedabad vide order dated 25.11.2024. 2. The assessee has raised the following grounds of appeal: “1. In view of the facts and circumstances of the case the Ld. CIT(Exemption), erred in law and in facts, in not cancelling the registration of the Appellant U/s. 12 AB of The Income Tax Act, 1961 and hence Your Appellant prays that the impugned order of the cancellation of registration of the appellant U/s. 12AA of be quashed and the Ld. CIT(Exemption) be directed to grant the registration to the appellant U/s. 12AA of The Act.” 3. The brief facts of the case are that the assessee filed application for approval under Section 80G of the Act in Form No. 10AB. However, Ld. ITA No.81/Srt/2025 Shri Vardhman Sthanakvasi Jain Sangh Trust vs. CIT(E) Asst. Year –N.A. - 2– CIT(E) dismissed the application on the ground that the assessee / applicant trust has incurred expenses on religious activities, in excess of 5% of the total income in the last three years. 4. The assessee is in appeal before us against the aforesaid order passed by Ld. CIT(E). Before us, the Counsel for the assessee submitted that Ld. CIT(E) failed to appreciate that the assessee has engaged purely in providing charitable services like distribution of food to the poor, medical check-up of stray animals, reimbursement of travelling expenses of people having low income etc. It was submitted before us that Ld. CIT(E) erred in not appreciating that these expenses were not for religious purposes but were essentially charitable expenses which was incurred by the assessee / applicant trust on religious “occasions”. The assessee incurred charitable expenses like food distribution to needy people, medical check-up of stray animals etc. on various religious occasions like Chaturmas Expenses, Vihar Sewa Expenses, Mahavir Jayanti Expenses, Tap Mahotsav Expenses etc. but the expenses, it was submitted before us, were purely charitable in nature, and merely because they were incurred on religious occasions would not, by itself take away their charitable character. 5. In response, Ld. DR placed reliance on the observations made by Ld. CIT(E) in his order. 6. We have heard the rival contentions and perused the material on record. ITA No.81/Srt/2025 Shri Vardhman Sthanakvasi Jain Sangh Trust vs. CIT(E) Asst. Year –N.A. - 3– 7. On going through the facts of the instant case, we are of the considered view that in the interest of justice, the matter may be restored to the file of Ld. CIT(E) and the assessee / applicant trust would be at liberty to submit necessary proof to show that the expenses are purely charitable in nature and that expenses incurred by the assessee / applicant trust are not in excess of 5% of it’s total income. 8. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced under proviso to Rule 34 of ITAT Rules, 1963 on 15/07/2025 Sd/- Sd/- (BIJAYANANDA PRUSETH) (SIDDHARTHA NAUTIYAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 15/07/2025 TANMAY, Sr. PS TRUE COPY 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, सूरत / DR, ITAT, Surat 6. गाडŊ फाईल / Guard file. आदेशानुसार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपीलीय अिधकरण, सूरत/ ITAT, Surat 1. Date of dictation 14.07.2025 2. Date on which the typed draft is placed before the Dictating Member 15.07.2025 3. Other Member………………… 4. Date on which the approved draft comes to the Sr.P.S./P.S 15.07.2025 5. Date on which the fair order is placed before the Dictating Member for pronouncement 15.07.2025 6. Date on which the fair order comes back to the Sr.P.S./P.S 15.07.2025 7. Date on which the file goes to the Bench Clerk 15.07.2025 8. Date on which the file goes to the Head Clerk…………………………………... 9. The date on which the file goes to the Assistant Registrar for signature on the order…………………….. 10. Date of Dispatch of the Order…………………………………… "