Swami Samarth Adhyatmik Sanshodhan Sanstha Vs CIT (Exemptions) (ITAT Pune)
The assessee, Swami Samarth Adhyatmik Sanshodhan Sanstha, filed an appeal against the order dated 16.11.2024 of the Commissioner of Income Tax (Exemption), Pune [CIT(E)], rejecting its application under clause (iii) of the first proviso to section 80G(5) of the Income Tax Act, 1961, which relates to approval for donations eligible for tax deduction. The CIT(E) had initially issued notices through the ITBA portal, pointing out discrepancies in the assessee’s submission, including incomplete donor details, the commercial nature of income from magazine advertisements, insufficient information regarding activities, beneficiaries, and lack of supporting evidence such as bills or photographs.
The assessee responded to the notices and clarified its activities. However, the CIT(E) rejected the application on the grounds that the trust’s objects and activities were primarily religious in nature, including religious education, temple construction, rituals, bhajans, kirtans, and festivals. CIT(E) relied on section 80G(5)(ii) and Explanation 3, which exclude purposes that are wholly or substantially religious from qualifying as “charitable” for 80G exemption, and concluded that the trust did not meet the statutory requirements.
The assessee contended before the Tribunal that the CIT(E) mischaracterized its activities. The trust holds a valid registration under section 12A, and most activities are charitable in nature, benefiting the public without preference to any particular religion or caste. Only minor portions of income are intended for religious purposes. The trust’s activities include health treatment through spiritual work, philosophical research, yoga and meditation centers, educational initiatives like Gurukuls and Sanskrit pathshalas, cow shelters, research centers, publications, rural development, tree plantation, and social welfare projects. Religious activities cited by CIT(E) constituted only a small fraction of overall work.
