2022 (10) TMI 252 - AT - Income Tax

Deduction u/s 80G - denial of registration on the ground of religious activities - Running Charitable activities besides - Registration u/s 12A has been granted to the assessee society under the head Religious Activities . - HELD THAT - In the eventuality the assessee can show the facts to the satisfaction of the CIT(E), the assessee may have a case otherwise, to our understanding the assessee in view of the changed circumstances by virtue of the order dated 24.09.2021 in the case of a Trust which is created on 06.09.1989 may need to file a fresh application seeking 80G registration. In the decision rendered by the Hon'ble Gujrat High Court in CIT Vs Aravindbhai Maniar Charitable Foundation 2015 (1) TMI 109 - GUJARAT HIGH COURT 80G registration immediately after 12AA registration was sought and the direction given therein was in the background of the fact that it was a new Trust. In the facts as considered by the Co-ordinate Bench in the case of Shri Kaila Devi Temple Trust 2017 (10) TMI 241 - ITAT JAIPUR we have seen that no doubt there were religious ceremonies and expenditure on maintenance of the temple premises, however, at the same time Shri Kaila Devi Temple was also running schools, hospitals etc. which were found to be charitable in nature. Similarly in the case of Shiv Mandir Devsttan Panch Committee Sanstan 2012 (11) TMI 352 - ITAT NAGPUR the fact pleaded on record was that the assessee was carrying on yoga training, tailoring training and free distribution of opticals to the poor and needy people. The building was required for training yoga etc. Food distribution to the needy and poor being called as maha Prasad was a fact argued. Temple was open to everybody without caste and creed. In the facts of the present case, we find that no such submission in regard to the charitable nature of activities carried out is available on record. It need be emphasized that the trust has been in existence from 06.09.1989 and is not a brand new trust incapable of demonstrating the facts required to be considered. Accordingly, we find that on facts, the decisions relied upon are distinguishable. In view thereof, in terms of the above directions, the appeal is remanded back in terms of the prayer of the parties. Appeal of the assessee is allowed for statistical purposes.

Summary

Issues:
1. Condonation of delay in filing the appeal.
2. Rejection of application for registration under Section 80G.
3. Consideration of activities as religious in nature.
4. Granting registration as a charitable society.

Issue 1: Condonation of delay in filing the appeal:
The appeal was initially challenged due to a delay of 93 days in filing. The President of the assessee Society explained the delay citing travel disruptions during the nationwide lockdown. The Tribunal, considering the affidavit and the Supreme Court's decision extending the period of limitation, condoned the delay as it did not confer any undue advantage to the assessee.

Issue 2: Rejection of application for registration under Section 80G:
The appeal contested the rejection of registration under Section 80G based on the primarily religious nature of the activities. The Tribunal noted that more than 80% of the assets and expenses were religious in nature, making the applicant a religious organization primarily. Citing legal provisions and judicial precedents, the rejection was upheld, emphasizing that religious activities do not qualify as charitable under the Income Tax Act.

Issue 3: Consideration of activities as religious in nature:
The assessee argued that the Trust's activities were not solely religious but included charitable aspects like relief for the poor, education, and medical relief. The Tribunal observed that the Trust had initially mentioned itself as religious during registration. However, a subsequent application highlighted charitable activities, leading to a request for remand for fresh consideration based on changed circumstances and compliance with statutory limits.

Issue 4: Granting registration as a charitable society:
The Tribunal considered the aims and objects of the Trust for charitable registration. While registration as a charitable society was granted, the Tribunal emphasized the need for the assessee to demonstrate charitable activities to comply with statutory requirements. The Tribunal distinguished previous cases where charitable aspects were evident, unlike the present case, necessitating a fresh application for 80G registration.

In conclusion, the appeal was remanded back for reconsideration in light of the changed circumstances and the requirement to demonstrate charitable activities to qualify for registration under Section 80G.