2021 (12) TMI 980 - AT - Income Tax

Rejection of certification u/s 80G - Charitable object u/s 2(15) - HELD THAT - As gone through the objects of the assesse-trust and noted that these objects include the following to provide platform to the member of the association for educational activities, to remove wrong traditions and discrimination with women illiteracy etc., to promote bhajan and dharma, to promote education among new students to organize programme of national integrity, to organize programme of blood donation, eye donation camp to help every creature at the time of natural calamities or man-made calamities in the area of Union Territory of Daman Diu. We note that just because in the objects of the trust, it is mentioned that assessee-trust may celebrate Ganesh Utsav, Janmastami, Navaratri, Diwali, New Year, Holi does not mean that it is engaged in religious activities. These are the normal functions in the society and everybody celebrate them, hence it does not mean that the assessee-trust has established only to celebrate Ganesh, Janmastami, Jalaram Jayanti, Navratri, Diwali, New Year and Holi. For example, on the occasion when the new charitable activities are started by the trust, the peoples of the trust pray lord Ganeshji, and that does not mean that trust is engaged in religious activities. To pray lord Ganeshji and to celebrate these normal functions are kind of a routine activities of human being - these are not the main objects. We note that main objects of the trust are to promote education, sports, to promote national integrity, to organize blood donation, eye donation to help every creature at the time of natural calamities and man-made calamities. These are objects which are charitable purpose and hence the assessee-trust deserves certificate under section 80G(5) of the Act, therefore we direct the ld. CIT(E) to grant the certificate under section 80G(5) of the Act in accordance with law. - Decided in favour of assessee.

Summary

Issues:
1. Rejection of application for registration u/s 80G(5) without issuing a show cause notice.
2. Denial of approval under section 80G(5) due to religious nature of trust objects.
3. Non-submission of financial documents for approval under section 80G(5).

Analysis:
1. The appeal was against the order of the Commissioner of Income Tax (Exemption) rejecting the application for registration under section 80G(5) without issuing a show cause notice. The assessee contended that the rejection was based on the religious nature of some trust objects without allowing an explanation. The grounds of appeal highlighted this procedural error.

2. The Commissioner rejected the application citing religious objects in the trust's Memorandum of Association and Rules and Regulations. However, the Tribunal observed that the trust's main objectives were charitable, focusing on education, national integrity, blood donation, and disaster relief. Celebrating festivals like Ganesh Utsav and Diwali did not indicate religious activities. The Tribunal directed the Commissioner to grant the certificate under section 80G(5) as the trust's activities aligned with charitable purposes.

3. Additionally, the Commissioner denied approval under section 80G(5) due to the non-submission of financial documents like receipt and payment accounts, income and expenditure accounts, and audited accounts for the financial year 2018-19. Despite this, the Tribunal focused on the charitable nature of the trust's activities and granted the appeal, emphasizing the importance of fulfilling the conditions of section 80G(5) for approval.

In conclusion, the Tribunal allowed the appeal, emphasizing that the trust's charitable objectives outweighed any perceived religious nature in its activities. The judgment highlighted the need for procedural fairness in the registration process and the importance of aligning trust activities with the requirements of section 80G(5) for approval.