Anjuman-E-Himayath-E-Islam Vs CIT (ITAT Chennai)
The appeal before the Tribunal arose from the rejection of approval under Section 80G(5) of the Income-tax Act, 1961 by the Commissioner of Income Tax (Exemptions), Chennai. The assessee, a long-established society founded in 1894–95, has been engaged in educational, social, and welfare activities for over a century. It operates educational institutions and undertakes charitable initiatives. The assessee had already been granted registration under Section 12AB for the relevant assessment years and had previously enjoyed approval under Section 80G for earlier years, with no change in its objects, activities, or expenditure pattern.
The Commissioner denied approval on the ground that the assessee had religious objects and was engaged in religious activities. This conclusion was partly based on material sourced from Google searches and public domain information. The assessee challenged this decision, arguing that its dominant objectives were educational and charitable, as reflected in its Memorandum of Association, which included promoting education, social upliftment, and welfare of orphans and destitute children. It was also contended that reliance on unverified material without providing an opportunity to respond violated principles of natural justice.
The assessee further argued that even if some expenditure was religious in nature, Section 80G(5B) permits such expenditure up to 5% of total income without affecting eligibility. Data submitted showed that religious expenditure ranged between 1.703% and 2.375% in recent years, well within the statutory limit. Judicial precedents were cited to support the position that incidental religious expenditure does not disqualify a charitable institution from obtaining approval under Section 80G.
