9911796707
TMI Blog2024 (6) TMI 1047X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(E), he has also not asked for any specific details in connection with religious expenses incurred by the assessee. Accordingly, in the interest of justice, the matter is being restored to the file of Ld. CIT(E) for de-novo consideration after analyzing whether less than 5% of the total income has been incurred by the assessee trust towards religious activities. In case it is found that the less than 5% of the total income has been incurred as expenditure by the applicant trust towards religious purposes, then benefit of Section 80G(5) of the Act may be granted to the assessee if other conditions are satisfied, in accordance with law. Appeal of the assessee is allowed for statistical purposes. - SMT. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplication filed by the assessee on the ground that the assessee / applicant has mentioned in Form 10AB (at Paragraph / Row 27 of the said application) that it had incurred certain expenses which are religious in nature, as per the following details:- F.Y. Total Receipts Religious expenses % of Religious expenses to total receipts 2020 2,44,060 36,800 15.08 4. Accordingly, as per the CIT(E) the assessee / applicant in Form No. 10AB has specifically mentioned that it has incurred expenditure which is religious in nature and such religious expenses incurred by the assessee amounted to Rs. 15.08% of it s total receipts. The CIT(E) was of the view that Section 80G of the Act specifies that there is no provision for application of fund for any p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he benefit of any particular religious community or caste. The plain reading of said provisions of the Act makes it evident that the provisions of sec 80G(2)(a)(iv) of the Act is applicable only to such institution or fund which is established in India for Charitable purposes, there is no provision for transfer or application of fund for any purposes other than a charitable purpose. However, the sec 80G(5B) of the Act further prescribes that notwithstanding anything contained in clause (ii) of sub-section (5) and Explanation 3, an institution or fund which incurs expenditure, during any previous year, which is of a religious nature for an amount not exceeding five per cent of its total income in that previous year shall be deemed to be an i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly ancillary or incidental to the primary or dominant purpose would not prevent the trust or the institution from being a valid charity. The judgment is of no assistance in construing Explanation 3 of section 80G. 10. To reiterate, 'Explanation 3 does not require the ascertainment of whether the whole or substantially the whole of the institution or fund's charitable purpose is of a religious nature. If it did, it would read differently. It requires the ascertainment of whether there is one purpose within the institution or fund's overall charitable purpose which is wholly, or substantially wholly, of a religious nature. There is little doubt that clause 2(h) of the trust deed which permits the trustees to support prayer halls a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ove facts, the present application filed in Form No. 10AB for the approval u/s. 80G(5) of the I.T. Act, 1961, is rejected . 5. The assessee is in appeal before against the aforesaid order passed by CIT(E). 6. Before us, the Counsel for the assessee submitted that the assessee has not incurred any expenses which are religious in nature. The Counsel for the assessee drew our attention to show-cause notice dated 05.01.2023 and submitted that the aforesaid show-cause notice issued by Ld. CIT(E) is very vague in nature and does not specify on which basis the application filed by the assessee / applicant is sought to be rejected. The Counsel for the assessee submitted that the assessee has filed the relevant Trust Deed (submitted at Page 5-13 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ord. 9. In the instant facts, we observe that the Ld. CIT(E) has not asked for any specific details in the show-cause notice, while rejecting the application made by the assessee / applicant. Further, in the show-cause notice issued by Ld. CIT(E), he has also not asked for any specific details in connection with religious expenses incurred by the assessee. Accordingly, in the interest of justice, the matter is being restored to the file of Ld. CIT(E) for de-novo consideration after analyzing whether less than 5% of the total income has been incurred by the assessee trust towards religious activities. In case it is found that the less than 5% of the total income has been incurred as expenditure by the applicant trust towards religious purpos ..... X X X X Extracts X X X X X X X X Extracts X X X X
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