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2019 (3) TMI 1111 - AT - Income TaxGrant renewal for approval U/s. 80G(5) denied - trust has not carried out activities which entitle it s for recognition U/s. 80G(5) as per object of the trust - charitable activity or not? - exclusive religious activities - HELD THAT - The assessee cannot get the benefit of registration under section 80G(5) of the Act if it s activities wholly or substantially the wholly are of religious nature. However, in this regard, we note that the Ld. CIT has not brought any specific instances suggesting that the activities of the assessee are religious in nature. We also note that the assessee has been getting the registration under section 80G(5) of the Act right from the year 1993 to the year 31st March 2006 on the same kind of activities. It is also an undisputed fact that there was no change in the objects and the activities of the trust. Therefore we are of the opinion that the assessee deserves the registration under section 80G(5) of the Act as per the rule of consistency in view of the judgment of Hon ble. Supreme Court in the case of Radhasoami satsang 1991 (11) TMI 2 - SUPREME COURT - Decided in favour of assessee.
Issues Involved:
1. Whether the trust deserves renewal of approval under section 80G(5) of the Income-tax Act, 1961. Detailed Analysis: Issue 1: Rejection of Renewal for Approval under Section 80G(5) The primary issue raised by the assessee is that the Commissioner of Income Tax (CIT) erred in not granting the renewal of registration under section 80G(5) of the Income Tax Act, 1961. The assessee trust, engaged in spiritual activities such as the celebration of festivals and coordination of spiritual gatherings, was previously registered under section 12AA and held a valid registration under section 80G(5) until March 31, 2006. The trust applied for renewal on July 16, 2007, but the CIT rejected the application, citing that the trust's objects were mixed, covering both religious and charitable activities, and thus, did not qualify for the certificate under section 80G(5) as per Explanation 3 to section 80G of the Act. Assessee's Argument: The assessee argued that there had been no change in the trust's objects or activities since its initial registration. The trust had consistently been granted registration under section 12A since March 20, 1989, and under section 80G(5) from March 31, 1993, to March 31, 2006. The assessee cited several judicial precedents to support their claim that the denial of renewal was erroneous. They referenced decisions where trusts with mixed objects (religious and charitable) were granted registration under section 80G(5), emphasizing the principle of consistency. Notable cases included Jamiya Hamidiya Anjumane Himayatul Millat Trust v. CIT and Arya Sanstha v. CIT, where the courts ruled in favor of the assessee trusts, granting them the necessary approvals despite mixed objects. Revenue's Argument: The Department Representative (DR) supported the CIT's decision, arguing that the trust's activities were substantially religious, thus disqualifying it from receiving the benefits under section 80G(5). Tribunal's Findings: The Tribunal noted that the CIT had not provided specific instances showing that the trust's activities were wholly or substantially religious in nature. It was also observed that the trust had been granted registration under section 80G(5) consistently from 1993 to 2006 without any change in its objects or activities. The Tribunal emphasized the principle of consistency, citing the Supreme Court's judgment in Radhasoami Satsang, which held that in the absence of any material change, the revenue should not take a different view in subsequent years if a fundamental aspect had been consistently accepted in the past. Conclusion: The Tribunal reversed the CIT's order and directed the CIT to grant the registration certificate under section 80G(5) to the assessee trust. The appeal of the assessee was allowed in its entirety, establishing that the trust deserved the renewal of approval under section 80G(5) based on the principle of consistency and the lack of evidence showing that its activities were predominantly religious. Order Pronouncement: The order was pronounced in open court on March 11, 2019, allowing the appeal of the assessee.
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