Navsari Modh Vanik Panch Vs CIT (ITAT Surat)
Income Tax Appellate Tribunal (ITAT) Surat bench has referred back the case of Navsari Modh Vanik Panch to the Commissioner of Income-tax (Exemptions) [CIT(E)], Ahmedabad, for a re-evaluation of its application for approval under Section 80G(5) of the Income Tax Act, 1961. The trust’s appeal stemmed from the CIT(E)’s rejection of its application, citing the trust’s purported religious nature.
The Navsari Modh Vanik Panch, a trust established in 1953, asserted its engagement in charitable activities, including poverty alleviation, medical and educational aid, and the upliftment of the underprivileged, without discrimination based on caste, creed, or religion. The assessee-trust is registered with the Charity Commissioner and holds valid registration under Section 12A/12AB of the Act, having previously received provisional registration valid until Assessment Year (AY) 2025-26.
Following the introduction of new provisions by the Finance Act, 2020, the assessee-trust filed a fresh application for regular approval under Section 80G(5). However, the CIT(E) rejected this application, concluding that the trust was not purely charitable and thus ineligible for the approval.
During the ITAT proceedings, the authorised representative (AR) for the assessee contended that the trust’s objectives and activities were duly scrutinised and accepted when its Section 12A/12AB registration was granted. The AR highlighted that under Rule 11AA(2)(g) of the Income Tax Rules, the CIT(E) is primarily tasked with verifying compliance with prescribed conditions, specifically examining expenditure incurred for religious activities in the three preceding financial years.
