Shree Adya Katyayani Shakti Peeth Mandir Trust vs CIT(Exemptions)

“1 . That the wort hy CIT(Exemp tions), Del hi is unj usti fied i n r ejecting the application off the appellant for is r egistration unde r Cl ause (ii) of first proviso to sub-secti on (5 ) of section 80G of the Income Tax Act, 1961. 2. That t he appellant crav es leave to add, a mend, alter or substi tute any o r all grounds of appe al bef ore or at the time o f hearing. ”

“6 . The appl icant itself has stated t hat i t is engaged i n bot h charitable and religious acti viti es. Followi ng are i ts mai n religi o us obj ective:

1.

To maintai n and up keep existi ng temples.

2.

To maintain vari ous tem ples a nd mai ntain the dignity of the deiti es. Thus it is inc ur ri ng expens es on temple mai nt aini ng and on sewadar which is clearly reli gious.

7.

In the pres ent case , the applicant has i nc urred reli gio us expenditure, exce edi ng 5% o f its total receipts. Since applicant is engaged i n rel igious ac tivities , it is not eli gible for approv al u/s 80G of IT Act.

8.

In light of above, the a ppl icati on fil ed i n Form 10AB for grant of appr oval u/s 80G is hereby reject ed.”

“3 . Ld. Counsel for t he assess ee has s ubmit ted that without exami ni ng t he fi nancials of the assesse e ld. Presc ribed aut hority has co ncl uded about r eli gious activities being c onducted by the assess ee while that is not the case. It was submitted that after decision of Upper Ganges Sugar Mills Ltd. Vs. CIT (s upra) t here has bee n amendment in t he Act, and our attenti on was drawn to sub-secti o n (5 B) of S ec tion 80G ins erted by Fi nanc e Act, 1994 w.e.f 01.04.1994 whic h provides that whe rei n instituti ons make expe nditure i n the rel evant year, which is of religi ous nat ure for an amount not exc eedi ng 5% of its total i ncome in that previous year then, for t he previ ous year, the insti tuti on shall be deeme d exempted u/s 80G. L d. Counsel rel ied decisions in CIT (Exemptions) Vs. Tuls hishyam Mandir Society, Junagadh (2026) (6 ) TMI 832 – Gujarat High Court; and Co ordi nat e B enc h decisi on i n S hri 108 Gupti SagarD ham Jai n Soci ety Vs. CIT (Exem pti on), Cha ndi gar h vide ITA No.7551/Del/2 025 dat ed 26.05.2026; a nd Coordi nat e B ench decision i n Shri Baba Balakpuri Ji Charitable Soci ety Vs. ITO Exemption vide ITA No. 5833/Del /2025 order 1 8.02.2026; Anj uman-E-Himayat h-EIslam Vs. CIT, Exemp ti on, Che nnai vide ITA No . 3951/Chny/2 025 dated 10.04.2026; and Shree Modes hwari Dvs than S ociety A hmedaba d Vs. CIT (Exempti on) vide ITA No . 145/Ahd/2025; and B hatidha mSeva S ociety Vs. CIT (Exemptio n) vide ITA No. 33/AHD/2025 dated 08.01.2026; and S ri Guru Nanak Devji Religious And Charitabl e Soci et y Vs. CIT (Exempti ons ) vide ITA No. 3 84/CTK/2018 dated 24.05.2021 to co ntend that H on’bl e Del hi Hi gh C ourts and Coordi nate B enches have consiste ntly taken a view tha t if t he religious expenditure a re withi n the st atuto ry limit, approval u/s 80G of the Ac t c annot be deni ed.

3.1

Ld. D R v ehemently s upporte d the impugned order of ld. CIT(E).

4.

Appr eciati ng the c ont ention and after perus al of mat erial on recor d we ar e of the c onsider ed vi ew t hat ld. Presc ribed authori ty has nowhere analysed fi nancials of the assess ee to draw i nfer ence with regard to the activities of the assess ee being rel igi ous i n nature and only on the basis of obj ec tives i n t he memor andum of association such a c oncl usi on has been drawn. In this regard, we are o f t he considered vie w that memorandum of ass ociati on contai ni ng articles wi th regard t o o bjects and sc ope of acti vities are generally framed keeping in mind the l ong term perspec ti ve of the S oci ety and such instituti ons try to incl ude and extend t hei r activities to all spheres of chari table ac tivi ties and also for the reason to avoid s eeki ng a mendments i n the objectives .

4.1

Thus, wi thout actually indicati ng as to w hat activities of rel igious natur e have been taken up by instituti on, mer ely o n the basis of r efere nce to some o bjectives, menti oned in the obj ective doc uments , which may be reli gio us too, the deni al of appr oval i s not j ustified. More so, when it is the c ase of re newal of appr oval and wherei n it is merely necessary to exami ne t he fi nanci als of imme diately previ ous years to allege expendit ure w ere made on religious activities.

5.

In the case of assessee our atte ntion has been dr awn to t he total computati on of income and fi na ncials and reports for year endi ng 31.03.2 021 to 31.03.2025 availabl e at pa ge No. 40-101 of the paper book a nd t he same show that actually no expenditure on alle ged reli gio us activities has been i ncurred . R ather, i t is establ is hed that the S ociety m aintai ned two s et of financials, one for Baba Banda Singh Bahadur Public School and anot her for remai ni ng activities of the Soci ety and the fi na ncials of the appli cant Soci ety do not s how any e xpenditure was made for r el igious pur poses. The decisi ons relied by the ld. C ouns el with regard to benefit of sub-secti on (5 B) of S ec tion 80G of the Ac t c ertai nly deserves to be relied by us.

6.

Further, havi ng per used the B ye Laws o f assessee made avail able at pa ge 14-39 of the PB and whic h are also repr oduce d i n the impugned order , we ar e of the considered view that assessee sufficiently establ ishes tha t ther e is actually no case o f alle ged r eligi ous activities. The same reflect that the pri mary obj ect is to enhance cohesion be tween differ ent communi ti es, to work for establishing reli gio us sentiment i n Indian children and to p r omote their allegi anc e towards Indi an culture. Further they have objective of runni ng hosp ital whil e k eepi ng itse lf a way from all political activities in ev ery ma nner. Thus , witho ut doubt pri ma ry obj ec tives of the s ociety ar e c haritable i n nature and only because it ref ers to c onstruction or mai nt enance of Mandir & Gurud wara or other plac es of pi l gri mage does not make its activity reli gious i n nature as ther e is no thi ng that whil e constr ucti ng these plac es of worship or ma naging these places of wors hip or places of pilgrimage ther e is any i ndicati on of discrimination of t he beneficiaries on the basis of their pers onal rel i gion. More s o when places of wors hip of differe nt faiths are to be run along w ith educational institutio ns an medical faciliti es, there cannot be jus tifi cation to allege t hat assessee before us is engaged i n reli gious activit y.

7.

We are of the considered view that ld. Tax aut horities whil e e xami ning the sco pe of r eligi ous activities in context to gra nt of benefit of appro val u/s 80G(5 )(ii) of the Act should be circums pect to the pr edominant and actual intenti on of the appl icant i nstit uti on, as r eli gions hav e i n their f oundation a philosophy of larger benefit to all forms of life and character building of i ndividuals. Thus ev ery religi ous ac tivity c annot be looked with culpability t o de ny approval. R eligi on is a way of l ife intr insically li nked to the s ocietal i ntegrati on and peace and also di gnity of an individual. It is only when t here is an indicati on that int ention of a religio us activity is to segr ega te and benefit p eopl e on the basis of caste, creed, or their way of l ife or religious sentiment, or to prop agate parti cul ar religi ous belie f to excl usion of ot her or proselytisati on t hen certai nl y t he objec tiv e of establ is hi ng or maintai ni ng a ny r el igious i nstit ution or place of worship and pil gimages, will make said reli gi ous activity, a prohi bited activity, to deny appr oval. The activity, t hough emanati ng out of religi ous ord er cannot be alleged to be religi ous activity, while the c ol our actually is s ecular. A distinction must al ways be m ade bet ween a prac tice whic h is religious and a prac tice in regard to a matter which i s purel y secular a nd has no element of religiosity associated wi th it.

8.

In fact , t o our mi nd, si nce the Act does not defi ne ‘reli gio us activit y’, thus while examini ng t he application of approval u/s 80G, to s atisfy if the assessee is enga ged or not, in religio us acti vity, the Essential Reli gious Pra ctices (ERP) test, doctri ne settled by the Ho n’ble Supreme Court of India in 1954 dur ing the S hi rur Mutt case AIR 1954 SC 282, to deci de which religious rituals and activiti es recei ve pr otection under A rticles 25 and 26 of the Constituti on, shoul d broadly be the par ameters to exami ne if the said activit y is religious , so as t o d eny t he appr oval of benefi t of section 80G of t he Act. It is onl y in case of expenses on ER P are mad e, then t hat should be exami ned to establish that the pr edomi nant objective is reli gio us activity. Activities like establishi ng and runni ng hos pital, educati onal institutions, pl aces of rehabilitation of bovi ne or other ani mals, Dharams hala, maintai ni ng ameniti es at religious places of wors hip o r pilgrima ges, and such l ike pub lic utility activiti es, if are taken up by any i nstitutio n, trust or s ociety , which also s erv es any place of wors hip, by performing essential practices of a reli gio n, then what is material is to e xamine wha t i s t he predomi nant obj ec t and p roportionality of expendit ur es.

9.

In the light of afor esaid, discussion made by us , we find that ld. CIT(E) has given a very narrow inte rpretation to scope of Secti on 80G, and has thus err oneously dismissed the applicati on o f the as sess ee. We thus, allow the appeal of the assessee. The ld. C IT(E) is directed t o grant the a ppr oval, in a pe riod of 4 weeks from receipt of this order.”

“10.

Furt her, the Hon’ble Punjab & Haryana Hi gh C our t i n the case of Ya dvi ndra Public Schoo l Associati on (s upra) had relied on the decision of Hon’ble S upr em e Court in the case of A nanda S ocial & Educati onal Trust case . We observed t hat t he similar view was expr essed by the vari ous courts that at the time of granting r egistration, ld. CIT(E) has to satisfy hims elf on the obj ects of t he tr ust and ge nui neness of the activities, he cannot extend hims elf t o t he shoes of t he As sessing Officer . A t this stage if any ac tivities carried on by an i nstituti o n which is chari tabl e i n nature and its activities are genui ne, unl ess ther e is any devia tion which are not considered to be c haritable , the rel evant exp enditure to the extent of non-charitable activiti es, t he same can be disallowed at assessment st age. In the pres ent case, lo oki ng at t he subst antial activi ties carried on by the assessee to impar t t he educati on merely on certain deviati on of funds to other i ns tituti on which are interest bearing funds, that itself cannot be the r eas on to rej ect the registration. The compet ent authori ty has to v erify only c haritable o bjects and its activities in ter ms of c ase objects to gra nt registr ati on and shoul d not i ndul ge in findi ng reas ons to rej ect the appli cations for grant of registrati on. Ther efore, in o ur co nsidered vi ew the ass essee has b een granted regist ratio n over the years and it deserves to be granted registrati on t heref ore, we direct the l d. C IT(E) to grant r egi stration and if t here is any deviati on, the Assessi ng Officer may be direc ted to do the needful at the assessment stage. Ther efor e, we ar e i ncline d to direct accordi ngly.

11.

The other app eal r ela tes to regis trati on u/s 80G whic h were denied for the reasons that the a ppl ication for registration u/s 12AB was denied. Since, we are directed to grant the registr ati on u/s 12AB, we di rect t he ld. CIT(E) to evaluate the grant of regis trati on u/s 80G as per la w. In t he resul t, the appeal filed by the assess ee is allo wed as per above t er ms .”