Dr Hadgawar Smarak Society Vs CIT (Exemptions) (ITAT Delhi)
Delhi ITAT: Hindu Religious Activities Alone Cannot Deny 12AB/80G Approval; Activities for Public at Large Are Charitable – 5% Religious Expenditure Permitted
The Delhi ITAT set aside the CIT(E)’s orders rejecting/curtailing the Society’s registration under section 12AB and approval under section 80G on the ground that its activities were predominantly religious. The CIT(E) had treated the Society as a religious entity and denied section 80G approval, relying upon Upper Ganges Sugar Mills Ltd. v. CIT.
The Tribunal noted that while the Society conducted certain Hindu religious activities such as Hanuman Chalisa every Tuesday, Sunder Kand on Saturdays, Hanuman Jayanti and Janmashtami, this was only one part of its activities. It also celebrated Ambedkar Jayanti, Maharana Pratap Jayanti, Mother’s Day, Environment Day, Tagore Jayanti, Kargil Vijay Diwas, Republic Day and Independence Day, besides conducting plantation and blood-donation camps and running a library.
The ITAT held that these activities were substantially secular, meant for the public at large and directed towards harmony, national integration and community service. It also found that most of the Society’s objects were charitable and, significantly, the Society had earlier been granted section 80G approval on the very same objects in 2018, besides registration under section 12A/12AB.
The Tribunal further emphasised that the law itself provides that expenditure on religious activities up to 5% of total income is to be ignored for section 80G purposes. Therefore, without examining the Society’s financials and the actual quantum of religious expenditure, the authorities could not conclude merely from a description of some religious activities that its predominant character was religious.
Accordingly, the ITAT held that the CIT(E) had erroneously exceeded jurisdiction in rejecting the registration and approval. The appeals were allowed, the impugned orders were set aside, and the CIT(E) was directed to grant the section 12AB registration and section 80G approval within four weeks.
Cases Discussed
- Upper Ganges Sugar Mills Ltd. Vs. CIT (SC), (1997) 93 Taxman 645 (SC)
FULL TEXT OF THE ORDER OF ITAT DELHI
These appeals preferred by the Assessee against the order dated 12.12.2025 & 01.01.2026 of the Commissioner of Income-tax, Exemption, Chandigarh (hereinafter referred as ‘Competent Authority’) against the rejection of renewal of registration u/s 12AB(1)(b)(ii) and consequent cancellation of approval under Section 80G of the Act for AY: 2025-26.
2. On hearing both sides we find that primarily the contention of assesse is that though assesse has been granted the registration u/s 12AB(1)(b) of the Act but the same has been granted as religious entity and that the approval u/s 80G has been rejected holding that assesse is engaged in religious activity. Ld. DR has submitted that the objectives of assessee are religious and indicate benefit to particular religious community.
3. We find that order of registration u/s 12AB(1)(b) of the Act doesn’t say much as to why registration only as religious activity oriented entity has been given but as we have examined the order of ld. Competent Authority u/s 80G(5)(ii) of the Act, we find that on the basis of response of the assesse dated 24.11.2025 ld. Competent authority has concluded that the activity of the assesse are religious in nature and relying judgment of Hon’ble Supreme Court in Upper Ganges Sugar Mills Ltd. Vs. CIT, (1997) 93 Taxman 645 (SC) has declined the approval.
4. We find from the impugned order that assesse has provided narration about the activities wherein though some activities peculiar of Hindu faith are mentioned like recitation of Hanuman Chalisa on every Tuesday & Sunder Kand on Saturday or Hanuman jayanti, celebration of Janmashtmi, at the same time the activities including celebration of Ambedkar Jayanti, Maharana Pratap Jayanti, Mothers Day, Environment day, Ravindra Nath Tagore Jayanti, Chandrashekhar Azad Jayanti, Kargil Vijay Diwas,Republic Day, Independence Day, Children’s Day and organization of activities like plantation and blood donation camps and running a renovation library, are also cited.
5. Now, we find that the activities are quite secular in nature and are for the benefit of public at large and indicate the effort of society to promote harmony, national integration and community services.
6. In this context, as we also examined the Memorandum objectives of society and we find that most of the objects are charitable in nature. At the same time, we find that on the same set off objects assesse was granted approval u/s 80G(5)(vi) of the Act vide order dated 31.10.2018 and assessee’s registration u/s 12A was also granted under the new regime.
7. Thus, we find that ld. Tax authorities have fallen in error in holding that assessee’s predominant activities are religious in nature, while the law as now stands settled and codified by amendment in the Act is that expenditure of religious activities are up to 5% of the total income shall be ignored. However, without examining financials, such conclusion could not have been drawn merely on the basis of assessee’s response wherein assesse had disclosed the activities carried out during the year.
8. Thus, we are of the considered view that ld. Competent authority, erroneously exceeded jurisdiction to reject the registration and approval as sought by assesse u/s 12AB(1)(b)(ii) and Section 80G respectively. The corresponding grounds are sustained.
The appeals are allowed and the impugned orders are set aside. Ld. Competent Authority is directed to issue the registration and approval within the period of 4 weeks.
Order pronounced in the open court on 07.08.2026.
