Prayatna Charitable Trust Vs CIT (Exemption) (ITAT Ahmedabad)
No Religious Spend, Only Moral Upliftment- Mere Religious Wording in Objects Not Fatal – ITAT Remands 80G Approval Case
Background
Assessee Trust applied in Form 10AB for approval under Section 80G(5). Provisional approval was earlier granted u/s 80G on 12.02.2022. CIT(E), Ahmedabad rejected the application & cancelled provisional approval (18.12.2024), holding that one object (Object No. 11) was religious in nature (activities like Gyanyagna, Kirtan, Pravachan).
CIT(E)’s Findings
- A trust must be solely charitable to qualify under section 80G(5).
- Presence of even a single religious object disqualifies it.
- Section 80G(5B) (permitting ≤5% religious expenditure) does not override the requirement of “charitable only”.
- Relied on ITAT Agra & Ahmedabad rulings (Yug Chetna Parmarth Trust, Om Tapovan Charitable Trust).
Assessee’s Arguments
- Object No. 11 was misinterpreted – it referred to knowledge camps, spiritual lectures & value-based programs, not religious rituals.
- “Gyan Yagna” means knowledge-sharing workshop, not Havan.
- No funds ever applied to religious activities (audited accounts placed on record).
- Already registered u/s 12A – confirming charitable status.
- Relied on ITAT precedents: Shroutta Vinan Gurukulam (Bangalore ITAT) – Vedic knowledge programs not religious.
Gurukrupa Foundation, Vaishnav Sangh, Rajnibhai Kanada Memorial Foundation, Vismruti Trust (Ahmedabad ITAT, 2025) – mere presence of a religious object not fatal; matter must be examined under 80G(5B) with 5% expenditure threshold.
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