Trust Expenditure to not Exceed 5% of Income for Religious Purposes: ITAT Remands Matter to CIT(E) [Read Order]
The ITAT has remanded a matter wherein the religious expenditure is not verified to have crossed the statutory limit of 5% of the total income. The matter has been remanded to the CIT(E).
The Income Tax Appellate Tribunal (ITAT), Ahmedabad Bench, remanded the matter to the Commissioner of Income Tax (Exemption) [CIT(E)] to verify whether trust expenditure has exceeded the 5% of income limit for religious purposes.
The CIT(E) had rejected the application which sought final approval, holding that the trust is religious which violates Section 80G(5)(ii). The CIT(E) relied on clauses relating to maintenance of temples, installation of idols, celebration of religious festivals, etc. The assessee then appealed to the ITAT.
The counsel for the assessee contended that activities and expenditure on religious activities was negligible.
The tribunal observed that the CIT(Exemption) rejected the application solely on the ground that the objects of the trust are religious in nature. However, no such statement has been recorded which demonstrates that the assessee has exceeded the 5% of total income through expenditure incurred on religious activities, as per Section 80G(5B).
It was therefore held that the matter would be remanded to the CIT(E) for the limited purpose of examining whether the religious expenditure incurred exceeds the prescribed limit of 5% and reconsider the application accordingly.
The appeal was allowed by Suchitra Kamble (Judicial Member) and Dr. B.R.R. Kumar (Vice President) for statistical purposes.
Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
