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TMI Blog2024 (5) TMI 495X X X X Extracts X X X X X X X X Extracts X X X X ..... religious activities, on perusal of the audited financial statements, more particularly from the Income Expenditure account for the periods, submitted as a part of paper book and also as submitted to Ld. CIT(E), it is not emanating that the assessee trust had incurred any expenditure on religious activities. No show cause notice was issued to the assessee before rejecting the application u/s 80G by Ld. CIT(E). The show cause notice holds immense significance in income tax proceedings, ensuring procedural fairness and safeguarding the rights of taxpayers. There are many judicial pronouncements which have reinforced the indispensability of this notice, emphasizing that orders issued without its adherence may be deemed invalid. On perusal of f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 12A of the Income Tax Act, 1961 vide Form 10AC dated 07.04.2022. 3.1 As per the application of registration u/s 12A of the Act in Form 10AB, the objects of the assessee are Education, Medical Relief and Advancement of any other object of general public utility (Clause 5 of form 10AB) 3.2 As per the translated copy of the Trust deed, the objects of the assessee trust are categorised in six heads namely Educational, Cultural, Social, Health Subjective, Rural development and Religious. Total numbers of objects are 46 out of which only 4 objects are of religious in nature. 3.3 The assessee trust was granted provisional registration u/s 80G on 07.04.2022 in Form 10AC. The application for regular registration u/s 80G (5) was filed by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he effect of judgement of Hon'ble Supreme Court in case of Upper Gange Sugar Mills Ltd. and further to nullify the rigors of provision of Section 80G(5)(ii) r.w. Explanation 3 of the said section and the same is born out from the reading of CBDT Circular No.779 dated 14.09.1999 explaining provision contained in Section 80G(5B). 5.3 During the course of hearing, we asked whether any show cause notice was issued by Ld. CIT(E) to the assessee before rejecting the application for registration u/s 80G(5), to which the counsel for the assessee replied that no such notice was issued before passing the order of rejection. 6. On the other hand, Ld. DR relied on the order of rejection by Ld.CIT(E) and requested to uphold the same. 7. We have c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wholly, of a religious character, the institution or fund falls outside the scope of section 80G and a donation to it does not secure the advantage of the deduction that it gives." 7.4 The judgement of Hon'ble Supreme Court in case of Upper Gange Sugar Mills Ltd. Vs. CIT (supra) is pronounced on 04-08-1997 i.e. before insertion of section 80G(5B) i.e. w.e.f. 01-04-2000. 7.5 CBDT Circular No.779, dated September 14, 1999 clarifies the intention of amending section 80G. Para 33.2 of the said circular clearly has explained the intent. Ld. CIT(E) has not taken into consideration the said circular before passing the order of rejection. For the sake of clarity the same is reproduced here - 33.2 In order to mitigate hardship to such funds or i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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