Thakur Satyanarayan Kapuria Vs CIT (Exemptions) (ITAT Chandigarh)
80G Registration Denied on Ground of Religious Activities Set Aside; Predominant Charitable Objects Established – ITAT Chandigarh
The ITAT Chandigarh allowed the assessee’s appeal for AY 2025-26 & set aside the rejection of approval u/s 80G(5)(iii) by CIT(E), holding that the Trust cannot be treated as existing solely or substantially for religious purposes.
In this case, the CIT(E) rejected the application for 80G registration on the footing that the Trust was engaged in religious activities, relying on Explanation 3 to section 80G & the Supreme Court decision in Upper Ganges Sugar Mills. The rejection was based on the premise that even one religious object disentitles a trust from 80G approval.
The Tribunal examined the objects of the Trust & noted that several objects were clearly charitable in nature, including education, medical relief, yoga & welfare activities for the public at large. It was also noted that the Trust was already granted registration u/s 12A, recognising its charitable character.
On facts, the ITAT relied on actual expenditure pattern, which showed that substantial expenditure was incurred on charitable activities, such as medical camps (including annual eye camps), while expenditure on temple maintenance & religious functions was comparatively minor. For instance, in multiple years, charitable expenditure far exceeded temple-related expenses.
The Tribunal held that CIT(E) failed to appreciate the predominance test & wrongly concluded that the Trust was religious in nature merely because it also maintained a temple. Incidental religious activities do not override the dominant charitable purpose.
Accordingly, holding that the Trust was not hit by Explanation 3 to section 80G, the ITAT directed CIT(E) to grant approval u/s 80G(5)(iii). The appeal was allowed in full.
FULL TEXT OF THE ORDER OF ITAT CHANDIGARH
The assessee is in appeal before the Tribunal against the order of the ld. Commissioner of Income Tax (Exemptions) [in short ‘the CIT (E)’] dated 29.11.2024.
