TMI Blog2024 (3) TMI 816X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 tota ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... charitable purpose and if it fulfils other conditions mentioned therein. The provisions of sec 80G(5)(ii) of the Act, stipulates that the instrument under which the institution or fund is constituted does not, or the rules governing the institution or fund do not, contain any provision for the transfer or application at any time of the whole or any part of the income or assets of the institution or fund for any purpose other than a charitable purpose and the sec 80G(5)(iii) of the Act stipulates that the institution or fund is not expressed to be for the 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 subsection (5) and Explanation 3, an institution or fund which incurs expenditure, during any previous year, which is of a religious nature for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r substantially the whole of which is of a religious nature, and this has not been seriously disputed. Therefore, in our view, the Trust and the donation by the assesses to it fall outside the scope of section 80G. The above referred provisions of sec 80G of the Act make it amply clear that the applicant/assessee has to be established only for charitable purposes and there is no transfer or application of funds for any purposes, other than a charitable purpose, subject to concession granted to the extent to the extent of 5% of total income as per sec 80G(5B) of the Act. It is not the case, that the provisions of sec 80G(5GB) of the Act is applicable to any trust/fund established for any purposes other than charitable purpose, i.e. religious or charitable cum religious purposes. Similar law has been laid down by the Hon'ble ITAT Agra in the case of Yug Chetna Parmarth Trust, reported in 44 taxmann.com 446, wherein the Hon'ble Tribunal has held as under. Section 80G(5B) is also not in contravention of provisions of section 80G(5) of the IT Act because it clarifies the position that the assessee trust when incurred expenditure on religious activities, which is less than 5% of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the benefit of Section 80G(5) of the Act should not be denied to the assessee. Further, the Counsel for the assessee drew our attention to the decision of Pune ITAT in the case Shri Sant Zolebaba Sansthan Chikhali vs. CIT(E) in ITA No. 381/Pun/2021 vide order dated 12.05.2022 in which the ITAT observed that Explanation 3 to Section 80G states that charitable purpose does not include any purpose the whole or substantially the whole of which is of a religious nature, which means that at least some part of the activities of the trust, which are of a religious nature, are permitted. Further, the ITAT observed that this fact is further fortified by sub-Section (5B) of Section 80G which provides that an institution / fund which incurs expenditure which is of a religious nature not exceeding 5% of it s total income shall be deemed to be an institution or fund to which the provisions of this section apply. 6. In response, Ld. D.R. placed reliance on the observations made by the Ld. CIT(E) in the order. The Ld. D.R. submitted that even if one of the objects of the trust is wholly religious in nature, then irrespective of the quantum of expenditure incurred by the applicant on such religio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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