2021 (5) TMI 81 - AT - Income Tax

Denial of approval U/s 80G(5)(vi) - aims and objectives of the assessee as religious in nature - assessee moved an application in Form 10G for grant of approval U/s 80G - assessee Trust was created on 19/10/1964 and is registered U/s 12AA of the Act since 01/03/1976 - HELD THAT - Trust established Geeta Bhawan to provide accommodation to Sadhus, Saints and Priests for the propagation and dissemination of Dharmik Shiksha. From the aforesaid object, it is very much clear that the accommodation was provided to those persons who were propagating and disseminating Dharmik Shiksha in the society as a whole and not to a particular community or religion. Moreover, the said persons are also not related to a particular religion or community of the society - it cannot be said that the objects of the assessee were religious in nature. Moreover, the assessee had been granted registration U/s 12AA of the Act since 01/03/1976, only after considering this fact that the objects of the assessee Trust were charitable in nature. In the present case, it is not brought on record that the said registration granted to the assessee was set aside, therefore, if there is no change in the objects of the assessee Trust which were considered to be charitable while granting registration U/s 12AA of the Act then it cannot be said that the same objects were not charitable in nature while granting approval U/s 80G. Thus we are of the view that the ld. CIT(E) was not justified in rejecting the application of the assessee moved for grant of approval U/s 80G - Decided in favour of assessee.

Summary

Issues:
Denial of approval U/s 80G(5)(vi) of the Income Tax Act, 1961 based on religious nature of aims and objectives.

Analysis:
The appeal was filed against the denial of approval U/s 80G of the Act by the Ld. CIT(E) due to the religious nature of the aims and objectives of the assessee Trust. The assessee Trust, established in 1964 and registered U/s 12AA of the Act, applied for approval U/s 80G in 2018. The Ld. CIT(E) raised queries and ultimately rejected the application, considering the aims and objectives as religious, citing legal precedents. The assessee contended that the objectives were not specific to any religion but aimed at accommodating individuals from various backgrounds for knowledge dissemination. The assessee cited relevant case laws and argued against the decision based on the nature of the objects.

Regarding the Ld. CIT(E)'s reliance on legal precedents like the Upper Ganges Sugar Mills Ltd. case, the assessee argued that the circumstances were different as there was no specific religious object in their case. The Ld. CIT-DR supported the denial of approval, emphasizing the religious nature of the Trust's objectives. The ITAT, after considering the submissions and records, found that the accommodation provided by the Trust was for individuals propagating knowledge without religious bias. The ITAT noted that the Trust had been granted registration as charitable under U/s 12AA of the Act, indicating the charitable nature of its activities. Therefore, the ITAT held that the denial of approval U/s 80G was unjustified, directing the Ld. CIT(E) to grant approval to the assessee Trust.

In conclusion, the ITAT allowed the appeal of the assessee, emphasizing that the aims and objectives of the Trust were charitable in nature, focusing on knowledge dissemination without religious affiliation. The judgment highlighted the importance of considering the overall charitable nature of the organization's activities while granting approvals under different sections of the Income Tax Act.