Jay Bhawani Mandhani Charitable Trust Vs CIT (Exemption) (ITAT Surat)
The Income Tax Appellate Tribunal (ITAT) Surat bench has overturned an order by the Commissioner of Income-tax (Exemption), Ahmedabad, granting Jay Bhawani Mandhani Charitable Trust approval under Section 80G(5)(iii) of the Income-tax Act. The CIT(E) had initially rejected the trust’s application, citing that its objects were religious in nature and thus violated the conditions for 80G approval.
The dispute centered on Clause 4(13) of the trust deed. The CIT(E) contended that this clause, which mentioned “building temples, maintaining them and performing all kinds of spiritual and religious activities,” indicated the trust was not solely established for charitable purposes. This, in the CIT(E)’s view, contravened the main conditions of Section 80G(5) of the Act, which mandates that a trust must be established exclusively for charitable purposes to qualify for approval. The CIT(E) also noted that the trust had not provided sufficient evidence of the removal or amendment of this religious object.
In support of his decision, the CIT(E) referenced judicial precedents, including the cases of Yug Chetna Parmarth Trust, 44 taxmann.com 446 (Agra – Trib.) and OM Tapovan Charitable Trust vs. CIT(E), ITA No.175/Ahd/2023 (Ahd – Trib.). He also cited the Supreme Court’s decision in Director of Secondary Education vs. Pushpendra Kumar, AIR 1998 SC 2230, to emphasize that the trust was deemed a “religious-cum-charitable” entity and thus ineligible for 80G approval.
