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.
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.
