SUDHARMA PRACHAR MANDAL,AHMEDABAD V. THE CIT(EXEMPTION), AHMEDABAD

ITA 1304/AHD/2025

AI Insights

The case involves Sudharma Prachar Mandal, a trust, appealing against the decision of the Commissioner of Income Tax (Exemption), Ahmedabad, which denied them approval under section 80G(5) of the Income Tax Act. The denial was based on the grounds that the trust was engaged in activities related to religious centers and literature, which contravened the provisions of section 80G(5)(ii) and Explanation 3 to section 80G. The tribunal found that the CIT(E) had not adequately considered whether the trust had exceeded the permissible limit of 5% expenditure on religious activities and directed a re-examination of this aspect.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 774043 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-09-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 09-06-2025
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R P RASTOGI
• Keywords: Opportunity of being heard; Charitable institution
• Section: 80G

Judgement Text

"A आयकर अपील य अ धकरण, अहमदाबाद \u0014यायपीठ , अहमदाबाद । IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, AHMEDABAD ] BEFORE SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER And SHRI NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER आयकर अपील सं./ITA No. 1304/AHD/2025 िनधा\u0005रण वष\u0005/Asstt. Year: NA Sudharma Prachar Mandal, 6, “Nehal”, Near Jain Upashray, Near Commerce College Six Roads, Navrangpura, Ahmedabad - 380009. Gujarat PAN: AAETS2050E बनामVs . The Commissioner of Income Tax (Exemption), Ahmedabad. (अपीलाथ\u0018 /Appellant ( \u0019\u001aयथ\u0018 /Respondent) Assessee by : None Revenue by : Shri R P Rastogi, CIT.DR सुनवाई की तारीख/Date of Hearing : 25/08/2025 घोषणा की तारीख /Date of Pronouncement: 10/09/2025 आदेश/O R D E R PER NARENDRA PRASAD SINHA, AM: This appeal is filed by the assessee against the order passed by the Commissioner of Income Tax (Exemption) Ahmedabad, (in short “the CIT(E)”) dated 27.12.2024, in the proceedings u/s. 80G(5) of the Act. 2. There was delay of 101 days in filing of this appeal. The assessee has filed a condonation application along with affidavit of Shri Mayank Printed from counselvise.com ITA No.1304/Ahd/2025 Asst. Year NA Sudharma Prachar Mandal vs. CIT(E) 2 Jashwantlal Shah, trustee of the assessee-trust and explained the reason for the delay. It is submitted that the delay was for the reason that the trustees were stationed in Mumbai whereas the activities of the trust were carried on in Ahmedabad and there was a delay in coordination regarding the future course of action after receipt of Ld. CIT(E)’s order. The trustee had to travel from Mumbai to discuss the matter with the lawyers and in the process there was this delay. It was submitted that the assessee was engaged in charitable activities and the delay was not deliberate. Considering the explanation of the assessee, the delay in filing the appeal is condoned. 3. The assessee has taken the following grounds of appeal: “1. The Ld. CIT (Exemption) erred on facts and in law in not granting approval u/s.80G(5) despite approval u/s.12AA granted to the appellant. 2. The Ld. CIT (Exemption) erred on facts and in law in not granting approval u/s.80G(5) on the ground that appellant is engaged in religious activities even though no such activity is reported in the audited accounts by the Auditors.” 4. None appeared on behalf of the assessee on the date of hearing. We have heard the Ld. CIT-DR who explained that the Ld. CIT(E) had rejected the application of the assessee for approval u/s 80G(5) of the Act on the ground that the assessee-trust was not purely charitable trust. He explained that the Ld. CIT(E) had referred to certain objectives of the trust wherein reference to construction, maintenance and financial help to religious centres, assistance to organizations/institution carrying on such activities, printing and publishing religious books and literature etc. was made and on that basis he had held that provision of section 80G(5)(ii) and Explanation 3 to section 80G was contravened. Therefore, the Ld. CIT(E) had held that the assessee Printed from counselvise.com ITA No.1304/Ahd/2025 Asst. Year NA Sudharma Prachar Mandal vs. CIT(E) 3 had violated the provision of section 80G(5)(ii) of the Act and was not entitled to get approval u/s 80G(5) of the Act. The Ld. CIT-DR, therefore, supported the order of the Ld. CIT(E). 5. We have considered the facts of the case and submissions of the Ld. CIT-DR. The Ld. CIT(E) had considered some of the objectives of the trust wherein reference to construction, maintenance and financial help to religious centres, assistance to organizations/institution carrying on such activities, printing and publishing religious books and literature etc. was made and on that basis he had held that provision of section 80G(5)(ii) and Explanation 3 to section 80G was contravened. The Explanation 3 to section 80G defines “charitable purpose” as not to include any purpose the whole or substantially the whole of which, is of a religious nature. A mere mention of construction, maintenance, financial help to religious centres, assistance to organizations/institution carrying on such activities, printing and publishing religious books and literature etc. in the objects, does make the object of the trust wholly or substantially wholly as religious in nature. Therefore, the action of the Ld. CIT(E) in rejecting the application of the assessee on this basis alone cannot be held as correct. 6. The provision of Section 80G(5)(ii) of the Act, on which reliance has been placed by the Ld. CIT(E) to deny the approval reads as under: (5) This section applies to donations to any institution or fund referred to in sub- clause (iv) of clause (a) of sub-section (2), only if it is established in India for a charitable purpose and if it fulfils the following conditions, namely :— ….. (ii) the instrument under which the institution or fund is constituted does not, or the rules governing the institution or fund do not, contain any provision for the Printed from counselvise.com ITA No.1304/Ahd/2025 Asst. Year NA Sudharma Prachar Mandal vs. CIT(E) 4 transfer or application at any time of the whole or any part of the income or assets of the institution or fund for any purpose other than a charitable purpose; No finding has been given by the Ld. CIT(E) that any clause in the instrument stipulated that any income or asset of the trust will be transferred for other than charitable purposes. Further, as per the provisions of section 80G(5B) of the Act, the assessee was entitled to incur up to 5% of the expenditure on religious activities. In order to incur such expense, it was imperative that mention of certain religious activity would be there in the objectives of the trust. What was relevant to consider was whether the assessee had incurred any expenditure in excess of the permissible limit of 5% on the religious activities. No findings in this regard has been given in the order of the Ld. CIT(E). We, therefore, deem it proper to set-aside the matter to the file of Ld. CIT(E) with a direction to examine whether the assessee had incurred any expenditure on religious activities beyond the permissible limit of 5%. If not, the assessee should be allowed approval u/s.80G(5) of the Act, after ensuring that all other conditions as stipulated u/s. 80G(5) of the Act are complied. The assessee may also be allowed an opportunity of being heard in the matter. 7. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the Open Court on 10th September, 2025 at Ahmedabad. Sd/- Sd/- Sd/- Sd (SIDDHARTHA NAUTIYAL) JUDICIAL MEMBER (NARENDRA PRASAD SINHA) ACCOUNTANT MEMBER (True Copy) अहमदाबाद/Ahmedabad, \bदनांक/Dated 10/09/2025 Printed from counselvise.com ITA No.1304/Ahd/2025 Asst. Year NA Sudharma Prachar Mandal vs. CIT(E) 5 , Sr. PS आदेश क \u0019 त!ल\"प अ#े\"षत/Copy of the Order forwarded to : 1. अपीलाथ\u0018 / The Appellant 2. \u0019\u001aयथ\u0018 / The Respondent. 3. संबं धत आयकर आयु(त / Concerned CIT 4. आयकर आयु(त ) अपील ( / The CIT(A)-(NFAC) 5. \"वभागीय \u0019 त न ध , आयकर अपील य अ धकरण , राजोकट/DR,ITAT, Ahmedabad, 6. गाड3 फाईल / Guard file. आदेशानुसार/ BY ORDER, स या\u000eपत \u0012\u0013त //True Copy// सहायक पंजीकार (Asstt. Registrar) आयकर अपील य अ धकरण, ITAT, Ahmedabad Printed from counselvise.com "