Ayyappa Samithi Vs CIT (Exemption) (ITAT Delhi Bench)
A Temple Does Not Automatically Ring the Death Bell for Approval u/s 80G: Five-Per-Cent Test Requires Proper Arithmetic
Background: Shree Ayyappa Samithi was a trust carrying on charitable as well as religious activities. One of its activities involved running & maintaining Shree Dharma Sastha Temple at Delhi.
The Trust filed an application in Form No. 10AB on 30.09.2025 seeking approval u/s 80G. Such approval would enable eligible donors to claim deduction in respect of donations made to the institution, subject to the applicable statutory conditions.
The CIT (Exemption), Delhi rejected the application by order dated 08.03.2026. According to him, the Trust was engaged in religious activities, maintained a temple & had incurred religious expenditure exceeding 5% of its total receipts.
On that basis, the CIT(E) concluded that the institution was not eligible for approval u/s 80G.
The Trust challenged the rejection before the Delhi Tribunal.
Trust Disputes the Five-Per-Cent Finding
The Trust did not deny that it maintained a temple or incurred expenditure of a religious nature. Its case was that it undertook a combination of charitable & religious activities, & its religious expenditure did not cross the permissible 5% threshold.
According to the Trust, the financial statements demonstrated that the expenditure incurred for religious purposes during the relevant period was within the prescribed limit. The CIT(E) had failed to examine the accounts in their correct perspective before concluding otherwise.
