Shree Bhandari Gnyati Mandal Vs CIT (Exemption)
Income Tax Appellate Tribunal (ITAT) Ahmedabad bench has set aside an order by the Commissioner of Income Tax (Exemption) (CIT(E)) that denied Section 80G registration to Shree Bhandari Gnyati Mandal. The case, involving an application for approval under Section 80G(5)(iii) of the Income Tax Act, 1961, has been sent back to the CIT(E) for fresh consideration and detailed verification of the trust’s financial activities.
The appeal, filed by Shree Bhandari Gnyati Mandal, contested the CIT(E)’s decision to reject their 80G application. The primary reason for the denial was that Object No. 3 of the trust’s stated objectives was considered “partly religious” in nature. The CIT(E) held that Section 80G(5) mandates a trust to be established solely for charitable purposes, a condition it deemed unfulfilled due to the composite nature of the object.
During the ITAT proceedings, the counsel for Shree Bhandari Gnyati Mandal argued that the trust had not incurred any expenditure on religious purposes, did not manage any religious establishment, and had not received income for such purposes. It was further submitted that the trust primarily serves members of the “Bhandari Community,” identified as a notified backward community, aligning with Explanation 1 of Section 80G of the Act. The assessee’s representative highlighted that the CIT(E) had failed to address these specific submissions during the initial review.
