Institutions with religious activities qualify for Section 80G

Institutions with religious activities qualify for Section 80G registration if religious expenditure is under 5%.

Issue

Whether an institution engaged in religious activities remains eligible for approval under Section 80G if its religious expenditure does not exceed 5% of its total income pursuant to the deeming fiction under Section 80G(5B) [Section 133 of Income-tax Act, 2025].

Facts

The assessee-institution submitted an application seeking renewal of its approval under Section 80G of the Income-tax Act, 1961.
The CIT(E) rejected the application on the primary grounds that the assessee was engaged in running and maintaining a temple, as well as conducting religious ceremonies and rituals.
The CIT(E) held that Section 80G(5) registration is strictly restricted to entities operating solely for public charitable purposes.
The CIT(E) further held that evaluating the 5% threshold for religious expenditure was unnecessary for entities that are purely religious or religious-cum-charitable in nature.

Decision

Section 80G(5B) establishes a deeming fiction allowing institutions with religious activities to remain eligible for Section 80G deduction, provided their religious expenditure does not exceed 5% of total income in that previous year.
The tribunal rejected the CIT(E)’s conclusion that Section 80G(5) applies exclusively to purely charitable trusts and confirmed that the 5% religious expenditure threshold must be evaluated.
Since the CIT(E) failed to provide financial workings or computation demonstrating a breach of Section 80G(5B), the matter was remanded back to the CIT(E) for fresh adjudication.
The CIT(E) was directed to grant the renewal of approval under Section 80G if, upon verification, the assessee’s religious expenditure does not exceed the 5% limit and all other legal conditions are satisfied.

Key Takeaways

Deeming Fiction Scope: Institutions conducting religious activities are not automatically disqualified from Section 80G benefits if their religious expenses remain within the 5% ceiling of total income.
Mandatory Fact-Finding: Tax authorities cannot arbitrarily reject Section 80G applications without providing concrete financial workings and evidence proving religious expenditure exceeded the statutory limit.
Dual-Purpose Eligibility: A religious-cum-charitable trust remains eligible for approval subject to compliance with the specific numeric threshold set out under Section 80G(5B) [Section 133 of the Income-tax Act, 2025].

IN THE ITAT AGRA BENCH ‘DB’

Sankat Mochan Hanuman Mandir

Commissioner of Income-tax (Exemption)^*

Sunil Kumar Singh, Judicial Member
and BRAJESH KUMAR SINGH, Accountant Member

IT Appeal No. 301 (Agr) of 2026
[Assessment year 2026-27]

AUGUST 19, 2026

Subhash Jain, CA for the Appellant. Smt. Sangeeta Yadav, CIT DR for the Respondent.

ORDER

Brajesh Kumar Singh, Accountant Member.- This appeal is directed against the impugned order dated 24.03.2026 passed by the Ld. CIT (E) rejecting the assessee’s application seeking renewal of approval u/s 80G of the Income-tax Act, 1961(hereinafter referred as the “Act”).

2. Brief facts of the case: The assessee filed an application seeking renewal of approval u/s 80G of the Act. A show cause notice dated 09.03.2026 was issued by the Ld. CIT (E) to the assessee seeking clarification on the following points.

The application and documents submitted by the assessee have been examined. On perusal of the trust deed, activity reports, financial statements and other materials placed on record, it is observed that the assessee is primarily engaged in activities related to running and maintenance of a temple and conducting religious ceremonies and rituals.

As per the provisions of Section 80G(5) of the Income-tax Act, 1961, read with the applicable rules, approval under Section 80G cannot be granted to institutions or funds if they are expressed to be for the benefit of any particular religious community or caste, or where the activities are predominantly religious in nature.

In the present case, the activities carried out by the assessee appear to be religious in nature, including but not limited to the management of temple premises, organization of religious events, and performance of rituals associated with the said temple. Accordingly, it appears that the assessee is engaged in religious activities which may not qualify for approval/renewal under Section 80G of the Income-tax Act, 1961

In view of the above facts, it is proposed to reject the application for renewal of approval under Section 80G filed by the assessee.

You are hereby requested to show cause as to why the application for renewal of approval under Section 80G should not be rejected on the above-mentioned grounds. You may file your written submissions along with supporting documentary evidence, if any, to substantiate your claim that the activities of the institution are charitable in nature and are eligible for approval under Section 80G.

2.1 The assessee filed its reply on 12.03.2026. The Ld. CIT (E) on perusal of reply noted that the objects and the activities of the assessee being in the nature of religious purposes do not qualify the eligibility criteria of section 80G (5) of the Act and they were in violation of section 80G (5) (ii) and Explanation 3 to section 80G of the Act. Thereafter, the Ld. CIT (E) quoted the relevant provisions of section 80 G and noted that section 11 of the Act allows exemption for income derived from property held under trust wholly for charitable or religious purposes whereas in section 80G (5) of the Act the deduction is allowable only for charitable purposes and the trust which is also established for religious purposes is out of scope of section 80G (5) of the Act. The Ld. CIT (E) further noted that section 80G (5) of the Act starts with the wordings only if it is established in India for a charitable purpose and also section 80G(5B) of the Act allows the benefit of religious expenditure up to 5% which is established for purely charitable in nature.

2.2 The Ld. CIT (E) also noted that it is an undisputed fact that public charitable trusts have 3 categories i.e. “charitable purposes”, “religious purposes” and “religious cum charitable purposes.” The Ld. CIT (E) further observed that out of the 3 categories, only the first category was eligible for registration u/s 80G (5) of the Act. It was further held that determination of religious expenditure up to 5% was not required in cases which are either purely religious in nature or religious cum charitable. The Ld. CIT (E) further noted that in this case, the assessee was also found in violation of section 80G (5) of the Act. The Ld. CIT (E) finally held that the objects and activities of the trust being in the nature of religious purposes do not qualify the eligibility criteria of 80(5) of the Act and they were in violation of section 80G (5)(ii) and Explanation 3 to section 80G of the Act and section 80G (5B) of the Act. Accordingly, the application of the assessee filed for renewal of approval u/s 80G (5)(ii) of the Act was rejected by the Ld. CIT (E).

3. Aggrieved with the said order, the assessee in appeal before us on the following grounds of appeal:

On the facts and circumstances of the case and in law, the learned CIT(E) has erred in characterising the Appellant as an entity primarily engaged in temple management and religious activities and thereby rejecting the application for renewal of approval under Section 80G(5] of the Income Tax Act, 1961, without appreciating that over 78.70/o of the Appellant’s total consolidated income of Rs.1,01,14,186/- for Fy 2024- 25 is derived from Government grants for a recognised Vedic educational institution and a State Government-supported animal ‘welfare centre, that the expenditure directly attributable to temple/religious activities is only Rs. 65,960/- being less than 0.65% of total receipts, and that the impugned finding is perverse for being contrary to the consolidated audited accounts, activity reports, and documentary evidence placed on record”

On the facts and circumstances of the case and in law, the learned CIT(E) has erred in misapplying Section 80G(5B) and Explanation 3 to Section 80G of the income Tax Act, 1,961,by holding the Appellant ineligible on account of religious activities without undertaking the requisite factual exercise of determining whether such expenditure exceeds 5% of total income as mandated by Section 80G(5B), without applying the correct test under Explanation 3 that disqualification arises only where the whole or substantially the whole of the purposes are of a religious nature, and further erred in treating Section 80G(5B) – which is a beneficial deeming provision conferring eligibility – as a provision capable of being “violated”, when on the undisputed figures the Appellant’s religious expenditure of Rs. 65,960/- constitutes only 0.65% of total receipts, well within the 5% statutory threshold.

On the facts and circumstances of the case and in law, the learned CITI(E) has erred in rejecting the application for renewal of approval under Section 80G[5] while simultaneously, on the very same date of 24.03.2026, granting a fresh renewal of registration to the Appellant under Section 12AB (URN: AADTS4645Q25BP01,, valid AY 2027-28 to 2036-37) vide Form No 10AD bearing DIN ITBA/EXM/lEXM44/2025-26/1087833275(1), thereby creating an irreconcilable internal contradiction inasmuch as both provisions are governed by the same definition of “charitable purpose” under section 2(15) of the Act, and also erred in failing to renew the prior section 80G approval (Registration No. AADTS4645QF20072, effective 24.09.2021) in the absence of any material change in the objects, activities, management, or financial affairs of the Appellant, in violation of the principle of consistency binding on the Revenue.

On the facts and circumstances of the case and in law, the learned CIT (E) has erred in treating the activities of the Appellant’s Vedic educational institution -affiliated to Maharshi Sandipani Rashtriya Veda Sanskrit Shiksha Board establishe6 ‘by the Ministry of Education, Government of India, recognised by the Association of Indian Universities, imparting both Vedic and modern subjects to 55-62 residential students annually through 11 staff members and funded by recurring Government grants -as “religious” rather than “educational” activities within the meaning of Section 2 (15) of the Income Tax Act, 1961″

On the facts and circumstances of the case and in law, and without prejudice to the foregoing grounds, the learned CIT[E] has erred in rejecting the,Appellant’s application for renewal of approval under Section 80G (5) even assuming some portion of its activities is of a religious nature, inasmuch as the entire religious expenditure of the Appellant being Rs. 65,960/- constitutes less than 1% of total receipt of Rs. 1,01,14,1861- for FY 2024-25, which is well within the 5% threshold prescribed under Section 80G (5B) of the Income Tax Act, 1961, by virtue whereof the Appellant is statutorily deemed eligible for approval under Section 80G, and the impugned order rejecting the application without giving effect to this deeming provision is legally untenable.

On the facts and circumstances of the case and in Iaw, the order is passed in violation of Principle of Natural Justice and is liable to be quashed”

On tire facts and circumstances of the case and in law, the Ld. ” Commissioner of Income Tax (Exemptions), Bhopal erred in rejecting to the application for approval u/s 80G(5) even registration under Section 12AB(1)(b) was granted on 16.03.2026 recognizing the appellant as a genuine charitable institution, while the two being complementary provisions under the same new registration regime introduced by the Finance Act, 2020″

on the facts and circumstances of the case and in law, Ld.” CIT(Exemption], Bhopal erred in adopting an unduly restrictive and hyper-technical interpretation of section B0G[5J so as to defeat the object of the provision, which is to incentivize public donations to genuine charitable institutions, contrary to the well-settled principle that provisions granting exemption to charitable and welfare organisations are beneficial provisions and must be interpreted liberally in favour of the assessee.

On the facts and circumstances of the case and in law, the Ld.” CIT (Exemption), Bhopal erred in passing the impugned order without examining and recording any findings on the Appellant’s actual chantable activities, financial management, genuineness of objects, and compliance with the substantive eligibility conditions prescribed under Section 80G (5) of the Act, thereby rendering the impugned order a non-speaking and legally infirm order.

10, That the appropriate order for granting justice and relief be passed.

11.

That the appellant craves leave to add, amend, alter, delete all or to modify any of above grounds and to pursue any other or further grounds as may be required.

4. At the time of hearing, the Ld. AR filed a written submission. The relevant extracts of the same are reproduced as under:

“Appeal against Order dated 24.03.2026 (Form No. 10AD) rejecting renewal of approval under Section 80G (5) of the Income Tax Act, 1961

A. Background and Nature of the Appellant

1. The Appellant-Shri Sankat Mochan Hanuman Mandir (Samiti) – is a registered society incorporated on 09.06.1994 under the Madhya Pradesh Societies Registration Act bearing Registration No. 26248, having its office at Village Awan, Tehsil Raghogarh, District Guna, Madhya Pradesh.

2. The Appellant is a multi-activity institution currently running THREE distinct units:

(a) Acharya Vachaspati Shukla Sanskrit Ved Vidyalaya, Awan a government-aided Vedic educational institution affiliated to Maharshi Sandipani Rashtriya Veda Sanskrit Shiksha Board, Ujjain (established by the Ministry of Education, Gol), providing FREE RESIDENTIAL EDUCATION to approximately 55-62 students annually;

(b) Dayodaya Pashu Samvardhan Paryavaran Kendra (Gaushala). Awan- an animal welfare centre receiving State Government grants from M.P. Gopalan Board, Bhopal; and

(c) Shri Sankat Mochan Hanuman Mandir – a temple open to the general public without any restriction of caste, creed, sex, or religion, in addition to which Incidental socio-religious activities are conducted.

3. Appellant is also registered with the Ministry of Corporate Affairs, Government of India for CSR activities, bearing CSR Registration No. CSR00017488 dated 11.11.2021, and holds a prior Section 80G (5) approval vide Form No. 10AC dated 24.09.2021 (URN: AADTS4645QF20072), valid for AY 2022-23 to AY 2026-27.

B. Financial Profile – Decisive Evidence of Charitable Character

1. The consolidated audited accounts for FY 2024-25 (Audit Date: 23.09.2025; UDIN: 25406186BMIXYM3074; Firm: Dinesh Nema & Associates, CA, Guna) disclose Total Income of Rs. 1,01,14,186/-. Of this:

– Rs. 57,95,951/-(57.3%) – received from Maharshi Sandipani Rashtriya Veda Vidya Pratisthan (Ministry of Education, Gol body) for teacher salaries, student maintenance, and contingent grants;

– Rs. 21,65,881/- (21.4%) received from M.P. Gopalan Board, Bhopal (State Government body) for animal welfare/Gaushala activities;

– Together: 78.7% of total income is from Government grants directly for charitable/educational/animal welfare purposes.

2. Against total expenditure of Rs. 83,92,809/-, the ONLY head classified as Religious is the Bhog Fund Expenditure of the Mandir amounting to Rs. 65,960/-, which constitutes a mere 0.65% of total income well within the 5% statutory threshold under Section 80G(5B).

C. The Impugned Order and Its Fundamental Infirmities

1. The CIT(Exemptions), Bhopal, vide impugned order dated 24.03.2026 (Form No. 10AD), rejected the Appellant’s renewal application under Section 80G (5) on the grounds that the Appellant is ‘primarily engaged in temple management and religious ceremonies’, and that the Appellant is in violation of Section 80G(5)(ii), Explanation 3, and Section 80G(5B).

2. The impugned order is fundamentally flawed on the following counts:

(i) It is factually perverse – contradicted by overwhelming audited evidence;

(ii) It misapplies and misreads Section 80G(5B), treating a beneficial deeming provision as if it were a provision that the Appellant had ‘violated’;

(iii) It suffers from an irreconcilable internal contradiction – the same authority on the same date granted Section 12AB renewal, recognising the Appellant as a genuine charitable institution;

(iv) It erroneously characterises Vedic education as a religious activity;

(v) It is a non-speaking order passed in violation of principles of natural justice;

(vi) It reads in conditions not prescribed by the statute.

PART II-RELEVANT STATUTORY PROVISIONS

1. Section 80G (5):

The approval under Section 80G (5) is available to any institution or fund established in India for a charitable purpose. The institution must not be for the benefit of a particular religious community, must maintain regular accounts, and must not have instruments providing for application of income for non-charitable purposes.

2. Explanation 3 to Section 80G:

‘Charitable purpose’ does not include any purpose the WHOLE OR SUBSTANTIALLY THE WHOLE of which is of a religious nature. Importantly, it does NOT exclude institutions where only an incidental portion of activities is religious.

3. Section 80G(5B) [Critical Deeming Provision):

‘Notwithstanding anything contained in clause (ii) of sub-section (5) and Explanation 3, an institution or fund which incurs expenditure, during any previous year, which is of a religious nature for an amount NOT EXCEEDING FIVE PER CENT of its total income in that previous year shall be DEEMED to be an institution or fund to which the provisions of this section apply.’

The non-obstante clause overrides both the Section 80G (5) (ii) requirement and Explanation 3 making this a mandatory deeming once the 5% threshold test is satisfied.

PART III-ARGUMENTS ON GROUNDS OF APPEAL

Ground No. 1- Erroneous Characterisation of the Appellant as Primarily Religious -The Finding is Factually Perverse and Unsustainable

1. The Ld. CIT(E) has characterised the Appellant as an entity ‘primarily engaged in temple management and religious activities’. This finding is directly and conclusively contradicted by the consolidated audited accounts and Government records on file.

2. The FINANCIAL PROFILE of the Appellant for FY 2024-25 establishes beyond doubt:

Head of Expenditure	2024-25 (Rs.)	2023-24 (Rs.)	2022-23 (Rs.)	2021-22 (Rs.)
A.RELIGIOUS EXPENSES
Bhog Fund Expenditure (Shri Sankat 65,960 Mochan Hanuman Mandir)	65,960	64,094	58,800	73,032
Sub-Total (A) – Religious	65,960	64,094	58,800	73,032
% Religious Expenditure to Total Income	0.65%	0.58%	0.66%	0.89%
B. CHARITABLE EXPENSES
Salary Expenses – All Units	44,95,115	42.36,128	26,53,646	28,07,389
Student Maintenance Expenses (Sanskrit Vidyalaya)	17,04,042	18,52,069	16,21,784	10,03,329
Bhusa Purchase Animal Feed (Gaushala)	16,01,135	12,85,847	11,37,292	6,06,071
Sub-Total (B) – Charitable	83,26,849	81,42,094	60,52,000	47,77,419
% Charitable Expenditure to Total Income	82.33%	73.17%	68.31%	57.99%
GRAND TOTAL (A + B)	83,92,809	82,06,188	61,10,800	48,50,451
TOTAL INCOME All Units Combined	1,01,14,186	1,11,27,404	88,59,354	82,38,058

3. The above table demonstrates, across FOUR consecutive financial years, that religious expenditure has NEVER exceeded 0.89% of total income, while charitable expenditure has consistently constituted over 57% to 82% of total income.

4. The Ld. CIT(E) has not examined the consolidated audited accounts, activity reports of the Vidyalaya and Gaushala, Government grant certificates, or the CSR registration – all of which were placed on record. The detailed reply dated 12.03.2026 was summarily dismissed in a single line as ‘not acceptable’ without any factual or legal engagement.

5. It is settled law per the Hon’ble Supreme Court in CIT v. Surat Art Silk Cloth Manufacturers Association [1980] 121 ITR 1 (SC) – that the dominant or primary purpose of an institution must be examined from the TOTALITY OF ITS ACTIVITIES and not from its name or incidental activities. When 78.7% of income arises from Government-recognised charitable activities but only 0.65% is expended on religious activities, the Appellant’s dominant character is incontrovertibly charitable. [Paper Book Pg. 366-416]

6. The Ld. CIT(E) has adopted the impermissible approach of judging the institution by its name ‘Hanuman Mandir’ while ignoring the substantive educational and animal welfare activities conducted under its umbrella. This is precisely the approach condemned by the Supreme Court in Surat Art Silk.

4.1 Further, the Ld. AR in the written submission made the following prayer:

“In view of the foregoing facts, submissions, consolidated audited accounts, and judicial precedents, the Appellant most respectfully prays that this Hon’ble Tribunal may be pleased to:

(a) QUASH AND SET ASIDE the impugned order dated 24.03.2026 passed in Form No. 10AD by the Ld. CIT(Exemptions), Bhopal (DIN: ITBA/EXM/F/EXM45/2025-26/1087834666(1)); and

(b) DIRECT the grant of renewal of approval under Section 80G(5) of the Income Tax Act, 1961 in favour of the Appellant; and/or

(c) In the ALTERNATIVE, SET ASIDE the impugned order and REMIT the matter to the Ld. CIT(Exemptions) with specific directions to: (i) examine the actual religious expenditure as a percentage of total income and record a categorical finding on the applicability of Section 80G(5B); (ii) examine and record findings on the charitable character and activities of the Vidyalaya and Gaushala; (iii) examine whether the substantive eligibility conditions under Section 80G(5) are satisfied; and (iv) pass a fresh speaking order after affording the Appellant a reasonable opportunity of being heard; and

(d) GRANT such other and further relief as this Hon’ble Tribunal may deem fit and proper in the facts and circumstances of the present case.”

5. On the other hand, the Ld. CIT DR supported the order of the ld. CIT (E).

6. We have heard both the parties and perused the material on record. In this regard, we notice that the Ld. CIT (E) while discussing the various provisions relating to grant of registration u/s 80G(5) of the Act rejected the application of the assessee on the ground that the assessee was primarily engaged in activities related to running and maintenance of a temple and conducting religious ceremonies and rituals. The ld. CIT (E) further held that only public charitable trusts having “charitable purposes” was eligible for registration u/s 80G (5) of the Act and that determination of religious expenditure up to 5% was not required in cases which are either purely religious in nature or religious cum charitable as in the case of the assessee. The Ld. CIT (E) further noted that in this case, the assessee was also found to be in violation of section 80G (5B) of the Act.

6.1 In this regard, to appreciate the legal position regarding the requirement of charitable activities as per this section as noted by the Ld. CIT (E) and the exception carved out by way of section 80 G(5B) of the Act regarding the requirement of charitable activities in the case of an institution or fund which incurs expenditure during any previous year, which is of a religious nature for an amount not exceeding 5% of its total income in that previous year so as to become eligible for deduction u/s 80G of the Act, the relevant provisions of section 80G (1), clause (i) and (ii) of 80G (1), sub section 5 of 80G and sub clause (iv) of clause (a) of sub section 2 of 80G of the Act, 80G(5B) of the Act and the Explanation 3 to section 80G are reproduced as under:

“Deduction in respect of donations to certain funds, charitable institutions, etc.

80G. (1) In computing the total income of an assessee, there shall be deducted, in accordance with and subject to the provisions of this section,—

(i) In a case where the aggregate of the sums specified in sub section (2) includes any sum or sums of the nature specified in ..; and

(ii) in any other case, an amount equal to fifty per cent of the aggregate of the sums specified in sub-section (2).

(2) The sums referred to in sub-section (1) shall be the following, namely :—

(a) any sums paid by the assessee in the previous year as donations to—

…….

(iv) any other fund or any institution to which this section applies; or

(5) This section applies to donations to any institution or fund referred to in subclause (iv) of clause (a) of sub-section (2), only if it is established in India for a charitable purpose and if it fulfils the following conditions, namely :—

(ii) 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;

(5B) Notwithstanding anything contained in clause (ii) of sub-section (5) and Explanation 3, an institution or fund which incurs expenditure, during any previous year, which is of a religious nature for an amount not exceeding five per cent of its total income in that previous year shall be deemed to be an institution or fund to which the provisions of this section apply.

Explanation 3.—In this section, “charitable purpose” does not include any purpose the whole or substantially the whole of which is of a religious nature.”

6.2 As per Explanation 3 to section 80G of the Act, “charitable purpose” does not include any purpose the whole or substantially the whole of which is religious in nature. However, section 80G(5B) referring to clause (ii) of sub section 5 and Explanation 3 to section 80G states that notwithstanding anything contained in clause (ii) of sub section 5 and Explanation 3 to section 80G wherein an institution or fund which incurred expenditure during any previous year, which is of a religious nature for an amount not exceeding 5% of its total income in that previous year shall be deemed to be in institution or fund to which the provision of the section apply i.e. it will be eligible for deduction u/s 80G of the Act. Thus, section 80G(5B) creates a deeming fiction that even in a case of an institution or fund which is engaged in activities of a religious nature but incurs expenditure for an amount not exceeding 5% of its total income in that previous year shall be deemed to be an institution or fund which will be eligible for deduction u/s 80G of the Act. Thus, the assessee will also be eligible for deduction u/s 80G of the Act provided it does not violate the provision of section 80G(5B) of the Act.

6.3 Therefore, in view of the above discussion we are of the considered view that the observation of the Ld. CIT (E) that only an institution or fund will be eligible for registration u/s 80G (5) of the Act if it was only for “charitable purposes” and that determination of religious expenditure up to 5% was not required in cases which are either purely religious in nature or religious cum charitable is not acceptable. At the cost of the repetition, we make it clear that an institution or fund will be eligible for registration u/s 80G (5) of the Act if its expenditure does not exceed 5% of the total income which is of a religious nature as provided in section 80G(5B) of the Act. However, as noted above, the Ld. CIT (E) has not given the working regarding his finding that the assessee in the present case is also found in violation of section 80G(5B) of the Act i.e. it has incurred expenditure during the previous year which is of a religious nature for an amount exceeding 5% of its total income, whereas the assessee submits that it has incurred expenditure during the 4 previous years which is of a religious nature for an amount not exceeding 5% of its total income. This factual position requires verification.

6.4 In view of the above factual position, we set aside the impugned order of the Ld. CIT (E) and restore the matter back to his file for fresh adjudication keeping in view the above observations with a direction that the Ld. CIT (E) will grant renewal of approval u/s 80G of the Act to the assessee, if he comes to a finding that the assessee has not incurred expenditure during the previous year which is of a religious nature for an amount exceeding 5% of its total income subject to satisfaction of other condition(s) and in accordance with law. Grounds nos. 1 to 9 of the appeal are allowed for statistical purposes.

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