Sanatan Dharm Venkuth Dhamsewa Samiti Vs CIT (Exemptions) (ITAT Chandigarh)
Summary: The Income Tax Appellate Tribunal, Chandigarh Bench, considered a bunch of 24 appeals filed by assessee-trusts against separate but substantively identical orders of the Commissioner of Income Tax (Exemptions), Chandigarh, denying approval under Section 80G of the Income-tax Act, 1961. The common ground for denial was that the trusts were engaged in religious activities.
The first common ground raised by the assessee-trusts concerned the approach adopted by the CIT(E) under Explanation 3 to Section 80G. The CIT(E), after referring to certain objects of the respective trusts, had held that charitable purpose does not include a purpose the whole or substantially the whole of which is religious in nature. The Tribunal, however, noted that no factual examination of the financial statements had been undertaken and that the conclusion was not based on actual facts.
The Tribunal particularly noted Section 80G(5B), which contains a non-obstante clause and provides for continuation of satisfaction of the requirements of Section 80G(5) where expenditure of a religious nature in a previous year does not exceed five per cent of the trust’s total income for that year. According to the Tribunal, no such exercise had been carried out in the impugned orders and no corresponding finding had been brought on record. The Tribunal also observed that, apparently, the issue had not been confronted to the assessees.
