Vismruti Social And Charitable Trust Vs CIT (Exemption) (ITAT Ahmedabad)
ITAT Ahmedabad restored matter of registration under section 80G(5)(iii) of the Income Tax Act to the file of CIT(E) for verification that expenditure on religious activities was within the threshold limit of 5% as specified under section 80G(5) of the Act.
Facts- The assessee/applicant filed an application for approval of trust under section 80G(5)(iii) of the Act. CIT(E) held that the applicant trust had violated the provisions of the Income Tax Act by including religious objectives, and therefore, it is not eligible for approval under Section 80G(5). As a result, CIT(E) rejected the application for approval filed in Form 10AB by the applicant trust and the provisional approval granted earlier was also cancelled.
Being aggrieved, assessee has preferred the present appeal.
Conclusion- Held that CIT(E) had only cited two of the objects out of various objects of the assessee/applicant trust come to conclusion that the applicant trust could not be granted registration since two of its objects were of a religious in nature. However, we observe that there were several other objects of the trust, which were not taken into consideration by Ld. CIT(E) while dismissing the application of for grant of registration under section 80G(5) of the Act. Further, the assessee had also specifically submitted that it’s expenditure on religious activities was within the threshold limit of 5% as specified under section 80G(5) of the Act, however Ld. CIT(E) did not call for the necessary details with regards to expenditure incurred by the assessee on religious purposes to ascertain whether the expenditure incurred by the assessee was falling within the 5% exemption limit provided under section 80G(5) of the Act. In light of the above observations, the matter is restored to the file of Ld. CIT(E) to consider the grant of registration under Section 80G of the Act afresh and to carry out necessary verification whether the assessee/applicant trust has expended / utilized less than 5% of it’s total income towards “religious purposes”. If that be the case, the assessee/applicant trust may be granted registration, in accordance with law.
