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2024 (3) TMI 816 - ITAT RAJKOTRegistration u/s 80G(5)(vi) - CIT(E) rejected the application filed on the ground that the assessee / applicant has mentioned in Form 10AB that two of the objects of the assessee are “religious” in nature - CIT(E) observed that the assessee / applicant in Form No. 10AB has mentioned that it has incurred expenditure of religious nature and was of the view that Section 80G of the Act specifies that there is no provision for application of fund for any purposes other than a “charitable purpose” - HELD THAT:- Explanation 3 to Section 80G(5) suggests that the termed “charitable purpose” does not include any purpose, the “whole or substantially the whole” of which is of a religious nature. This implies that some part of the activities of a trust are permitted to be of a religious nature Sub-Section (5B) provides that an institution or fund which incurs expenditure, during any previous year, which is of a religious nature for an amount not exceeding 5% of it’s total income in that previous year, shall be deemed to be a institution or fund to which the provisions of this section apply. Further, notably sub-Section 5B starts with the words “Notwithstanding anything contained in Clause (ii) of sub-Section (5) and Explanation 3”. Therefore, on plain reading of sub-Section (5B) to Section 80G, it is evident that if any institution or fund incurs any expenditure which is of a religious nature for an amount not exceeding 5% of it’s total income, in that previous year shall be deemed to be an institution or fund to which the provisions of this section apply. In the instant facts, we observe that Ld. CIT(E) has relied upon only two out of ten objects to show that the assessee is a religious trust. CIT(E) has not made any specific observations as to whether less than 5% of the total income has been spent by the assessee towards religious purposes. Accordingly, in the interest of justice, the matter is being restored to the file of 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 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, in accordance with law. Appeal of the assessee is allowed for statistical purposes.
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