Umiya Mataji Ishver Ramji Annakshetra Trust Vs CIT (Exemption) (ITAT Rajkot)
The Income Tax Appellate Tribunal, Rajkot dealt with an appeal against the rejection of an application filed in Form 10AB seeking approval under Section 80G(5)(iii) of the Income-tax Act, 1961. The application had been rejected by the Commissioner of Income Tax (Exemption), Ahmedabad, on the ground that the assessee trust was not a purely charitable trust and had violated Section 80G(5)(ii), as some of its objects were religious in nature. The authority treated the trust as a religious-cum-charitable trust and held that such trusts are not eligible for approval under Section 80G.
The assessee trust had applied for approval under the first proviso to Section 80G(5). During the proceedings, the Commissioner examined the objects of the trust and issued show-cause notices, noting that several objects related to religious activities such as organising religious festivals, maintaining religious places, spreading religious spirit, and devotional activities. The Commissioner held that Section 80G applies only to institutions established for charitable purposes and that even a single religious object disentitles a trust from approval. It was further held that Section 80G(5B) only clarifies the extent of permissible religious expenditure and does not permit trusts with religious objects to claim approval. Accordingly, the application was rejected.
