Shree Laxmi Narayan Divya Dham vs CIT Exemption Delhi

PER MANISH AGARWAL, A.M.:

The present appeal is filed by assessee against the order dated 11.03.2026 passed by Ld. Commissioner of Income Tax (Exemption), Delhi [“Ld. CIT(E)”] u/s 80G(5) of the Income Tax Act, 1961 [“the Act”] pertaining to Assessment Year 2026-27.

Brief facts of the case are that the assessee in terms of the application filed on 30.09.2025 in Form 10AB requested for grant of registration u/s 80G of the Act. Ld.CIT(E) observed that the assessee has incurred expenses in FYs 2021-22, 2022-23 and 2023-24 for religious activities which is more than 5% of the prescribed limit and therefore, rejected the registration u/s 80G of the Act though registration u/s 12AB was granted in terms of the separate order dated 14.02.2026.

Aggrieved by the said order, the assessee is in appeal before the Tribunal by taking various Grounds of appeal mentioned in the appeal memo.

Since all the Grounds of appeal are with respect to the rejection of the registration u/s 80G of the Act therefore, they are taken together for consideration.

Heard the contentions of both the parties at length and perused the material available on record. On perusal of the order of rejection, it is observed that though ld. CIT(E) has stated that the assessee has filed reply in response to the show cause notice issued wherein assessee was asked to explain as to why the registration should not be rejected as it has spent more than 5% of its income in religious activities in the last three FYs i.e. in FYs 2021-22, 2022-23 and 2023-24. The claim of the assessee was that CIT(E) has failed to appreciate the nature of expenses which were incurred for free distribution of meal under the head “langar and bhog” expenses and all the details of such expenses including cost of raw material like, cooking fuel and other expenses for preparation of food were claimed and necessary details were also filed. As per ld. AR, the food was distributed free of cost to under-privileged individuals on daily basis without making any discrimination of their cast and creed and therefore, clarified this activity as charitable activity and requested for grant of registration u/s 80G of the Act.

As observed above, ld. CIT(E) has failed to examine all the details filed by the assessee and in summary manner, has rejected the claim by observing that assessee has applied more than 5% of its income for religious purposes. Before us, the assessee has filed copy of reply and other details filed in response to the show cause notice issued by ld. CIT(E) which were not considered before rejection of the application for registration u/s 80G of the Act. Considering the overall facts, we remand the issue back to the file of ld. CIT(E) wit the direction to examine the nature of expenses incurred as claimed by the assessee on the free distribution of food and if the contention of the assessee is found correct, the registration u/s 80G of the Act be granted. With these directions, all the Grounds of appeal raised by the assessee are allowed for statistical purposes.

In the result, appeal of the assessee is allowed for statistical purposes.