Smasta Gurjar Kshatriya Kadiya Samaj Navsari Vs CIT (ITAT Ahmedabad)
Income Tax Appellate Tribunal (ITAT) Ahmedabad bench has set aside an order by the Commissioner of Income Tax (Exemption) (CIT(E)) that rejected the application for 80G(5) approval submitted by Smasta Gurjar Kshatriya Kadiya Samaj Navsari. The Tribunal remanded the matter back to the CIT(E) for fresh consideration, emphasizing that the presence of a religious object in a trust’s deed does not automatically disqualify it from 80G exemption if its expenditure on religious purposes remains below 5% of its total income.
The assessee’s appeal contested the CIT(E)’s ex-parte rejection of their Form 10AB application for 80G(5) approval. The CIT(E) had denied the approval primarily on the ground that one of the trust’s specific objects indicated activities aimed at “religious purposes,” which was deemed a violation of Clause (ii) of Section 80G(5) of the Income Tax Act. The CIT(E) concluded that the trust was not established “wholly for charitable purposes,” a prerequisite for 80G registration.
During the ITAT proceedings, the counsel for Smasta Gurjar Kshatriya Kadiya Samaj Navsari argued that the trust had mixed objects, with the majority being charitable. They highlighted that the trust already held Section 12A registration. It was submitted that the CIT(E) had relied solely on Object No. 9 out of eleven objects to classify the trust as religious. The assessee contended that when read in conjunction with other charitable objectives, the mere inclusion of the word “religious” in one clause should not define the entire trust as having “religious objects.”
