Trust Activities Not Found Wholly Religious: ITAT says Free Feeding, Education is Charitable, Orders Reconsideration of 12AB & 80G Applications [Read Order]
The bench said that treating the trust as wholly religious, without detailed reasoning or examination of supplementary documents, was unjustified
Education is Charitable
Education is Charitable
The Income Tax Appellate Tribunal ( ITAT ), Bangalore Bench, has set aside the order of the Commissioner of Income Tax (Exemptions) [CIT(E)] which had classified Charitable Trust as a religious trust and denied it approval under Section 80G of the Income Tax Act.
The Tribunal held that the trust’s activities, such as free feeding (Dasoha), providing education, healthcare, agricultural awareness, and other welfare measures, were predominantly charitable in nature and not wholly religious. It directed the CIT(E) to reconsider the trust’s applications for registration under Section 12AB and approval under Section 80G afresh.
The appellant-trust, Shri Sadguru Nirupadeshwara Nitya Dasoha Charitable Trust, originally constituted in 2009 and supplemented with a fresh deed in 2020, carries objectives such as free feeding of the poor, construction of hospitals, promotion of education, hostels for students, women and child welfare, environmental protection, and rural development.
Though the CIT(E) had granted registration under Section 12AB treating it as a religious trust and simultaneously rejected its 80G application, the Tribunal noted that the authority had overlooked the supplementary deed and the activity reports.
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The assessee produced evidence that it had engaged in charitable works such as community hall construction, running hospitals, organizing awareness programmes for farmers, providing washrooms and shelters to the public, and supporting education for backward communities. Importantly, its audited accounts did not reflect religious expenditure.
The bench of Waseem Ahmed (AM) and Keshav Dubey( JM) observed that treating the trust as wholly religious, without detailed reasoning or examination of supplementary documents, was unjustified. It held that while the trust may have some religious elements, its core activities were charitable and extended to all people irrespective of caste, creed, or religion.
The ITAT found that the CIT(E) failed to give cogent reasons for rejecting the 80G application solely on the ground of the 12AB classification.
Also, the tribunal, observing that substantial justice must prevail over technicalities, condoned a 162-day delay in filing the appeal, attributing it to bona fide circumstances related to compliance management and transition between consultants.
Accordingly, the bench remitted both matters 12AB registration and 80G approval to the CIT(E) for fresh consideration, directing that the trust deed, supplementary deed, financials, and activity reports be properly examined. It also instructed that reasonable opportunity of hearing be given to the assessee during the fresh proceedings.
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