Pasikulam Development Trust Vs CIT (Exemptions) (ITAT Chennai)
Summary: The Income Tax Appellate Tribunal, Chennai, in Pasikulam Development Trust Vs CIT (Exemptions), held that structured education imparted through an Agama/Vedic Patashala constitutes an educational and charitable activity within the meaning of Section 2(15) of the Income-tax Act, 1961, and cannot be classified as religious merely because the curriculum includes Vedic and Agama scriptures. The Tribunal set aside the Commissioner of Income Tax (Exemptions), Chennai’s order dated 29 September 2025 rejecting the trust’s application for approval under Section 80G(5), and directed approval with effect from 26 March 2025.
The assessee was a public charitable trust running the Jagadguru Sri Chandrasekarendra Saraswathi Sivagama Patasala, imparting instruction in Agama/Siva Agama and preserving traditional Vedic educational systems. Its stated objects included relief of the poor, education and advancement of general public utility. The trust had previously obtained registration under Section 12A/12AA and provisional approval under Section 80G. Its application in Form No. 10AB dated 26 March 2025 was rejected on two grounds: that it was filed beyond the prescribed limitation period under the earlier approval framework, and that teaching Vedic/Agama texts was religious rather than charitable, attracting Explanation 3 to Section 80G.
The Tribunal considered the decisions in Raja Veda Kavya Patasala Vs CIT and Vyasa Vidya Mandiram Vs CIT(E), which recognised structured Vedic and Sanskrit instruction as education rather than inherently religious activity. It held that the teaching of traditional scriptures through an organised educational institution does not automatically amount to worship or religious observance. The Revenue had not established that the trust existed wholly or substantially for religious purposes or for the benefit of a particular religious community or caste. Consequently, the rejection based on Explanation 3 to Section 80G was unsustainable.
On limitation, the Tribunal followed Aalayam Vs CIT(E) and held that the application filed after 1 October 2024 should be considered under clause (iv)(B) of the first proviso to Section 80G(5), introduced by the Finance Act, 2024. As the trust had already commenced its activities and the genuineness of those activities was not disputed, the Tribunal directed the CIT(E) to grant prospective approval under Section 80G from 26 March 2025. The assessee’s appeal was allowed.
List of Cases Discussed:
1. Vyasa Vidya Mandiram Vs CIT(E), Chennai (ITAT Chennai); ITA Nos. 1286 & 1287/Chny/2025; 09/03/2026. Followed. The Tribunal relied upon the decision recognising structured Sanskrit and Vedic educational programmes as charitable education under Section 2(15), holding that such activities do not automatically acquire a religious character.
2. Aalayam Vs CIT(E), Chennai (ITAT Chennai); ITA No. 1012/Chny/2025; 25/07/2025. Followed on limitation. The Tribunal applied the decision concerning the treatment of Section 80G applications under clause (iv)(B) of the first proviso following the Finance Act, 2024 amendment.
3. Raja Veda Kavya Patasala Vs CIT (ITAT Chennai); ITA Nos. 349 to 352/Mds/2011; 11/11/2011. Followed. The Tribunal relied on the finding that teaching the Vedas through an educational institution cannot automatically be characterised as religious education, supporting registration and Section 80G approval.
4. Kasyapa Veda Research Foundation Vs CIT (ITAT Cochin). Distinguished. The CIT(E) had relied upon this decision to treat Vedic instruction as religious. The Tribunal held that the decision was distinguishable in light of the reasoning adopted in Vyasa Vidya Mandiram.
5. Sole Trustee, Lok Shikshana Trust Vs CIT (Supreme Court); 101 ITR 234. Distinguished in the precedent discussed. The decision’s test of systematic instruction was considered in evaluating whether organised Vedic and Sanskrit teaching constituted education.
FULL TEXT OF THE ORDER OF ITAT CHENNAI
The present appeal has been preferred by the assessee challenging the order dated 29.09.2025 passed by the Commissioner of Income Tax (Exemptions), Chennai [hereinafter referred to as “the Ld. CIT(E)”] u/s. 80G(5) of the Income Tax Act, 1961 (“the Act”). By the said order, the Ld.CIT(E) rejected the assessee’s application in Form No.10AB seeking approval u/s. 80G of the Act.
2. The relevant facts, in brief, are that the assessee is a public charitable trust established under a Trust Deed dated 03.12.2020 and registered with the Sub-Registrar, Selaiyur, Chennai (Registration No.151 of 2000/16). As per Form No.10AB, the objects of the trust include (i) relief of the poor, (ii) education, and (iii) advancement of any other object of general public utility. The trust runs an institution known as “Jagadguru Sri Chandrasekarendra Saraswathi Sivagama Patasala”, through which it imparts education in Agama/Siva Agama and seeks to preserve traditional Vedic systems of learning and ancient heritage transmitted through oral tradition and memorisation. The assessee had earlier been granted registration u/s. 12A/12AA vide order dated 24.09.2021 (Form No.10AC, valid for AY 2022-23 to AY 2026-27) and was also granted provisional approval u/s. 80G on 03.08.2022 (valid up to AY 2025-26).
3. The assessee subsequently submitted an application in Form No.10AB dated 26.03.2025 seeking approval under clause (ii) of the first proviso to section 80G(5) of the Act. However, by the impugned order dated 29.09.2025, the Ld. CIT(E) rejected the application primarily on two grounds: (a) that the application was required to have been filed on or before 30.09.2024 and, since it was filed under sub-clause (ii) instead of clause (iii) of the first proviso to section 80G(5), it was barred by limitation; and (b) that the assessee’s objects are religious in nature and, by virtue of Explanation 3 to section 80G, the trust does not qualify as being established for a “charitable purpose” and is therefore ineligible for approval u/s. 80G. In reaching this conclusion, reliance was placed on the decision of the ITAT, Cochin Bench in Kasyapa Veda Research Foundation v. CIT.
4. Being aggrieved by the said order, the assessee has preferred the present appeal. The grounds, though differently framed, essentially contend that the Ld.CIT(E) erred in characterising the assessee’s activities as “religious” or “religious-cum-charitable”. It is submitted that the activity of running the Agama/Siva Agama Patashala constitutes “education” within the meaning of section 2(15) of the Act and therefore falls within the ambit of charitable purpose. It is further urged that the principle of substance over form has not been properly appreciated, that the interpretation adopted in relation to the scope of “education” is unduly restrictive and contrary to law, and that the impugned order was passed without affording an effective opportunity of hearing. The assessee also challenges the rejection on the ground of limitation as being unsustainable.
5. The Ld. Authorised Representative (“ld. AR”) for the assessee reiterated the grounds of appeal and submitted that the sole activity presently undertaken by the trust is imparting structured education through its Patashala, which is purely educational in nature. It was argued that the mere fact that the curriculum includes Agama / Vedic texts does not render the activity religious, and that dissemination of Vedic knowledge and philosophy cannot be confined to or identified with any specific religion. The ld. AR contended that the reliance placed by the Ld. CIT(E) on Kasyapa Veda Research Foundation is misplaced and inapplicable to the facts of the present case.
In support of his contentions, strong reliance was placed on the following decisions of Co-ordinate Benches of this Tribunal:
(a) Raja Veda Kavya Patasala v. CIT (ITAT, Chennai – ITA Nos. 349 to 352/Mds/2011 dated 11.11.2011);
(b) Vyasa Vidya Mandiram v. CIT(E), Chennai (ITAT, Chennai – ITA Nos. 1286 & 1287/Chny/2025 dated 09.03.2026); and
(c) Aalayam v. CIT(E), Chennai (ITAT, Chennai – ITA No. 1012/Chny/2025 dated 25.07.2025), relied upon particularly on the issue of limitation in ITA No. 3981/CHNY/2025.
It was further submitted that the issue is no longer res integra, having been consistently decided in favour of similarly placed assessees by the aforesaid decisions, especially in Vyasa Vidya Mandiram (supra), which also arose from an order passed by the very same Ld. CIT(E), Chennai and involved an identical activity of imparting Vedic/Sanskrit education.
On the issue of limitation, the ld. AR submitted that the Form No.10AB application, having been filed after 01.10.2024, ought to be construed as one falling under clause (iv)(B) of the first proviso to section 80G(5) of the Act, as introduced by the Finance Act, 2024, which permits an existing trust that has commenced activities to apply for approval at any time after commencement. It was therefore contended that the rejection of the application on the ground of limitation is legally untenable, as already held by this Tribunal in Aalayam (supra).
6. The Ld. Departmental Representative (“ld. DR”), on the other hand, supported the impugned order of the Ld. CIT(E). It was submitted that the activities of the assessee trust, involving an Agama / Siva Agama Patashala and propagation of the Vedas, are inherently religious in nature and that instruction in Vedic texts amounts to religious teaching. Accordingly, it was argued that the Ld. CIT(E) rightly rejected the application both on merits as well as on the ground of limitation.
7. We have heard the rival submissions, perused the order of the Ld. CIT(E), and examined the material available on record as well as the judicial precedents relied upon. The primary issue that arises for our consideration is whether the activity of imparting instruction in Agama / Vedic scriptures through a Patashala run by the assessee trust constitutes a “religious” activity or falls within the scope of “education” and is therefore “charitable” within the meaning of section 2(15) of the Act. The determination of this question is crucial for deciding the assessee’s eligibility for approval u/s. 80G, insofar as the characterization of the activity impacts the statutory requirements.
8. At the outset, it is a settled position of law that while considering an application for approval u/s. 80G, the competent authority is required to examine only the objects of the trust and the genuineness of its activities. The authority is not expected to undertake a detailed assessment of income or application thereof as in assessment proceedings. In the present case, there is no dispute regarding the genuineness of the activities carried on by the assessee; the rejection is based solely on the conclusion that the teaching of Vedic/Agama texts is religious in character and on the issue of limitation.
9. Reference may first be made to the decision of the Co-ordinate Bench of this Tribunal in Raja Veda Kavya Patasala v. CIT (supra). In that case, the trust was engaged in imparting training in Vedabhushanam, Veda Vichakshana and Ghanam, apart from teaching subjects such as Sanskrit, English, Tamil, Mathematics and Social Science. Registration u/s. 12AA as well as approval u/s. 80G had been denied on the premise that teaching of the Vedas constituted religious education. This Tribunal, upon consideration of the matter, held that it would not be correct to characterise the teaching of Rig Veda, Sama Veda, Yajur Veda, etc. as purely religious in nature. It observed that the Vedas, composed by ancient Rishis, comprise hymns and verses explaining the interrelationship between man and nature and encompass knowledge relating to science, astrology, medicine and pedagogy. The Tribunal further noted that the term “Padasala” itself denotes an educational institution. The decision of the Hon’ble Supreme Court in Sole Trustee, Lok Shikshana Trust v. CIT (101 ITR 234) was distinguished, and directions were issued to grant registration u/s. 12AA and approval u/s. 80G.
10. The aforesaid view has been reiterated and elaborated upon in Vyasa Vidya Mandiram v. CIT(E), Chennai (supra), a case arising from an order passed by the very same Ld. CIT(E) and involving an institution engaged in promoting Samskritam and conducting structured Sanskrit and Vedic educational programmes. After an extensive review of judicial precedents, this Tribunal held, inter alia, as follows:
(a) propagation of Vedic thought and philosophy cannot be attributed to any specific religion, as it pertains more to a way of life, and Hinduism is often regarded as a way of life rather than a religion in the strict sense;
(b) the conduct of structured courses with prescribed curriculum, attendance requirements, examinations and evaluation constitutes “education” within the meaning of section 2(15), even in the absence of affiliation to any university, satisfying the test of systematic instruction laid down in Lok Shikshana Trust (supra);
(c) the mere fact that nominal fees are collected, and that any surplus is ploughed back into the institution without distribution of profits, does not alter the charitable character of the activity;
(d) Explanation 3 to section 80G is not attracted unless the institution is shown to exist wholly or substantially for religious purposes, and the burden of establishing such predominance lies on the Revenue; and
(e) the decision in Kasyapa Veda Research Foundation (supra) is distinguishable, particularly in view of its own observations recognising the universal nature of Vedic teachings.
On the basis of the aforesaid reasoning, this Tribunal in Vyasa Vidya Mandiram (supra) set aside the orders of the Ld. CIT(E) and directed grant of registration u/s. 12AB and approval u/s. 80G, holding that structured Vedic/Sanskrit education amounts to “education” and is not religious in character.
11. When the principles laid down in the above decisions are applied to the facts of the present case, the issue is clearly covered in favour of the assessee. The assessee-trust is running a Patashala imparting structured instruction in Agama/Vedic texts, while simultaneously preserving traditional Vedic educational systems and ancient heritage. In substance, this activity constitutes imparting of education and falls within the ambit of “charitable purpose” u/s. 2(15) of the Act. The restrictive approach adopted by the Ld. CIT(E), treating such educational activity as religious in nature for the purposes of section 80G, fails to appreciate the settled legal position that dissemination of Vedic knowledge is not per se attributable to any particular religion and that teaching of Vedic texts—being essentially recitation and structured learning of Sanskrit compositions—does not amount to worship or religious observance. The reliance placed on Kasyapa Veda Research Foundation (supra) is, therefore, misplaced in view of the authoritative distinction drawn in Vyasa Vidya Mandiram (supra).
12. We further find no material on record to indicate that the assessee-trust exists for the benefit of any particular religious community or caste, or that its objects are wholly or substantially religious so as to attract Explanation 3 to section 80G. On the contrary, the stated objects—relief of the poor, education, and advancement of any other object of general public utility—are ex facie charitable in nature. The dominant activity of the assessee is clearly educational. The Ld. CIT(E) also failed to apply the principle of “substance over form”, which, if properly applied, leads to the inescapable conclusion that the assessee’s activities are charitable and not religious in character.
13. In view of the foregoing discussion and respectfully following the decisions of the Co-ordinate Benches in Raja Veda Kavya Patasala (supra) and Vyasa Vidya Mandiram (supra), we hold that the activities carried on by the assessee-trust are charitable in nature and fall within the ambit of “education” as defined u/s. 2(15) of the Act, and cannot be regarded as religious. The imparting of instruction in Agama/Vedic texts through the Patashala run by the assessee is, in substance, an educational exercise and does not assume the character of religious activity. This conclusion, which affirms that the assessee’s objects and activities are educational in nature, forms the basis for examining its eligibility for approval u/s. 80G, which we now proceed to consider.
14. Insofar as the rejection of approval u/s. 80G on the ground that the assessee is engaged in religious activities is concerned, the said reasoning cannot be sustained in view of our finding hereinabove that the assessee’s activities are charitable and not religious in nature. Consequently, Explanation 3 to section 80G is not attracted, and denial of approval on this ground is untenable.
15. With regard to the rejection of the application u/s. 80G on the ground of limitation, we note that the assessee filed Form No.10AB on 26.03.2025, i.e., after 01.10.2024, the date on which clause (iv) of the first proviso to section 80G(5), inserted by the Finance Act, 2024, came into effect. The said clause (iv) enables a trust or institution that has already commenced its activities to seek approval u/s. 80G at any time after such commencement, and operates independently of the earlier regime under clause (iii). A similar issue was considered by a Co-ordinate Bench of this Tribunal in Aalayam v. CIT(E), Chennai (ITA No.1012/Chny/2025 dated 25.07.2025), wherein an application was rejected as time-barred under the earlier framework prescribed by CBDT Circular No.7/2024 dated 25.04.2024. The Tribunal held that since the rejection order was passed after the insertion of clause (iv), the application ought to be considered under clause (iv)(B) of the first proviso to section 80G(5) and decided in accordance with law. Respectfully following the said decision, and considering that in the present case the application was filed after 01.10.2024 and the assessee had already commenced its activities (having earlier been granted provisional approval u/s. 80G valid up to AY 2025–26 and being actively engaged in running the Patashala), we hold that the application dated 26.03.2025 is liable to be treated as one filed under clause (iv)(B) of the first proviso to section 80G(5). Accordingly, the rejection of the application on the ground of limitation cannot be sustained.
16. Once the application is treated as having been filed under clause (iv)(B) of the first proviso to section 80G(5), and the objection regarding the religious nature having already been rejected in paragraph 14 above, with the genuineness of the assessee’s activities not being in dispute, no further impediment remains for grant of approval. Since clause (iv)(B) contemplates approval in respect of institutions that have already commenced their activities, such approval shall operate prospectively. Accordingly, the impugned order dated 29.09.2025 is set aside, and the Ld. CIT(E) is directed to grant approval to the assessee-trust u/s. 80G of the Act by treating the application in Form No.10AB dated 26.03.2025 as one filed under clause (iv)(B) of the first proviso to section 80G(5), with effect from 26.03.2025.
17. In the result, the appeal filed by the assessee in ITA No.3981/CHNY/2025 is allowed in the terms indicated above.
Order pronounced in the open court on the 06th day of July 2026 in Chennai.
