Shree Saurashtra Patel Seva Mandal Education Trust Vs CIT (ITAT Ahmedabad)
Income Tax Appellate Tribunal (ITAT) Ahmedabad bench has upheld the decision of the Commissioner of Income Tax (Exemptions) [CIT(E)] to deny Section 80G registration to Shree Saurashtra Patel Seva Mandal Education Trust. The denial stems from the trust’s failure to adequately explain and justify donations made to other trusts, which the tax authorities deemed inconsistent with its primary educational objectives.
The case involved an appeal filed by Shree Saurashtra Patel Seva Mandal Education Trust against the CIT(E)’s order dated September 28, 2024. The trust, primarily an educational institution operating schools, had applied for registration under Section 80G(5) of the Income Tax Act, 1961, which allows donors to claim deductions for contributions made to approved charitable institutions.
During the scrutiny of the application, the CIT(E) identified that the trust had incurred an expenditure of Rs. 58,05,555, which was initially perceived as being of a religious nature and exceeded the 5% threshold of its total income for the year ended March 31, 2021. The CIT(E) also noted that the trust was already registered under Section 10(23C)(vi), which applies to educational institutions existing solely for educational purposes. A perusal of the trust deed further revealed that its objects were not exclusively for educational purposes, leading to a show cause notice being issued on September 23, 2024.
