Trust Granted Registration Under Section 12AB Cannot Be Denied Section 80G Approval On Same Objects
Issue
Whether approval under Section 80G (Section 133 of the Income-tax Act, 2025) can be denied to a charitable-cum-religious trust that is already registered under Section 12AB (Section 332 of the Income-tax Act, 2025) on the ground of religious objects, when its expenditure on religious/spiritual activities is within the statutory limits prescribed under Explanation (3) to Section 80G.
Facts
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Registration Status: The assessee-trust was granted registration under Section 12AB of the Income-tax Act, 1961, after the tax authorities analyzed its objects and treated it as a religious-cum-charitable trust.
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Application under Section 80G: Following its registration under Section 12AB, the trust filed an application seeking approval under Section 80G for donations received.
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Rejection by CIT(E): The Commissioner of Income-tax (Exemption) [CIT(E)] rejected the Section 80G application on the ground that the trust’s objects expressly included religious purposes and its activities were carried out in furtherance of those religious-cum-charitable objects.
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Quantum of Religious Expenditure: On review of the expenditure, it was established that less than 5% of the total donations received by the trust were spent on spiritual knowledge and satsang expenses.
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Compliance with Statutory Limits: The expenditure incurred on religious/spiritual purposes was well within the permissible norms provided under Explanation (3) to Section 80G of the Act.
Decision
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Objects Already Evaluated: The Income Tax Appellate Tribunal held that once registration under Section 12AB has been granted after analyzing the objects of the trust, approval under Section 80G cannot be denied on the basis of the very same objects unless there is a specific violation of the conditions prescribed under Section 12AB or Section 80G.
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Adherence to Expenditure Limits: Since the trust’s expenditure toward religious and spiritual activities was less than 5% of total donations, it fully satisfied the statutory limit prescribed under Explanation (3) to Section 80G.
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Direction to Grant Approval: The CIT(E) was directed to grant registration/approval under Section 80G to the assessee-trust. The appeal was decided in favor of the assessee [Para 8].
Key Takeaways
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Consistency Between Section 12AB and Section 80G: Once the tax authorities accept the objects of a trust and grant registration under Section 12AB, they cannot re-examine and reject an application under Section 80G based on those same objects without demonstrating a specific statutory breach.
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Impact of Explanation (3) to Section 80G: A charitable trust having composite religious-cum-charitable objects remains eligible for Section 80G approval as long as its expenditure on religious purposes does not exceed the prescribed threshold (i.e., 5% of total income/donations).
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Equivalence under Income-tax Act, 2025: The principle governing registration under Section 12AB and approval under Section 80G of the 1961 Act applies correspondingly to Section 332 and Section 133 under the Income-tax Act, 2025.
IN THE ITAT DELHI BENCH ‘F’
Radha Swami Satsang Dinod
v.
Commissioner of Income-tax (Exemption)*
Vimal Kumar, Judicial Member
and S. Rifaur Rahman, Accountant Member
and S. Rifaur Rahman, Accountant Member
IT Appeal No. 4223 (Delhi) of 2026
AUGUST 12, 2026
Dr. Kapil Goel, Adv. for the Appellant. Yashvendra Singh, CIT-DR for the Respondent.
ORDER
S. Rifaur Rahman, Accountant Member. – The assessee has filed appeal against the order of the learned Commissioner of Income Tax (Exemption), Chandigarh [“ld. CIT(E)”, for short] dated 19.02.2026 u/s 80G of the Income Tax Act, 1961 (for short ‘the Act’).
2. Aggrieved with the above order, the assessee is in appeal before us raising the following grounds of appeal:
“A) That Ld. CIT Exemption vide impugned order passed us 80G of the Act (1961 Act) erred in not granting the registration to applicant assessee u/s80G of 1961 Act and erred in rejecting the appellant’s application based on untenable/arbitrary /irrational reasoning/grounds;
B) That Ld. CIT Exemption vide impugned order passed us 80G of the Act (1961 Act) erred in not granting the registration to applicant assessee u/s 80G of 1961 Act without appreciating that already in past from various years assessee has been granted registration u/s 80G on very same objects/activities treating it as eligible person, so impugned rejection is against doctrine of consistency;
C) That Ld. CIT Exemption vide impugned order passed us 80G of the Act (1961 Act) erred in not granting the registration to applicant assessee u/s 80G of 1961 Act without appreciating that assessee activities benefit public at large and are not restricted any one community;
D) That Ld. CIT Exemption vide impugned order passed us 80G of the Act (1961 Act) erred in not granting the registration to applicant assessee u/s 80G of 1961 Act without appreciating that assessee is no where given any valid/requisite “SCN” before said rejection being quasi-judicial proceedings;
E) That Ld. CIT Exemption vide impugned order passed us 80G of the Act (1961 Act) erred in not granting the registration to applicant assessee u/s 80G of 1961 Act without appreciating that assessee’s objects/activities do clearly qualify as eligible for registration u/s 80G, being accepted in series of regular assessment orders passed u/s 143(3);
F) That Ld. CIT Exemption vide impugned order passed us 80G of the Act (1961 Act) erred in not granting the registration of applicant assessee u/s 80G of 1961 Act transgressing/going beyond the well settled scope of permissible examination u/s 80G of 1961 Act at registration stage where only restricted examination can be taken;
G) That Ld. CIT Exemption vide impugned order passed us 80G of the Act (1961 Act) erred in not granting the registration to applicant assessee u/s 80G of 1961 Act without appreciating that similar assessees have been treated as charitable organization u/s 2(15)/sec 11/80G of 1961 Act in series of binding judicial precedents;”
3. Brief facts of the case are that the assessee filed an application for registration u/s 80G (ii) of the act on 29.09.2025. In Form 10AB filed for the above purpose, assessee has filed relevant supporting documents. After considering the above application and relevant documents, the ld. CIT(E) noticed that the assessee is engaged in religious activities and its activities are religious-cum-charitable, observed that religious is one of the principal objects of the trust. In this regard, ld. CIT(E) reproduced the receipts and payment account for the year end on 31st March, 2025 and 31st March, 2024 at page 5 and 6 of the impugned order. She observed that the object of the assessee are not confined exclusively to charitable purposes but expressly include religious object and the activities carried out are also formed in furtherance of such religious objects. With the above observations, she has analyzed the provisions of section 80G(5) of the Act and Explanation-(3) to the section 80G of the Act, came to the conclusion that the trust cannot said to be established for charitable purposes of which includes any purposes/object, the whole or substantial, the whole of which is of the religious nature. Ld. CIT(E) rejected the application filed by the assessee for registration u/s 80G(5)(ii) of the Act for the reason that it is engaged in religious activities which cannot be considered to be for charitable purposes and she has heavily relied on the decision of Hon’ble Supreme Court in the case of Upper Ganges Sugar Mills Ltd. v. CIT 227 ITR 578 (SC).
4. Aggrieved with the above order, the assessee is in appeal before us.
5. At the time of hearing, ld. AR of the assessee has filed the written arguments is as under:
‘ “i) 01.09.1989: The assessee trust was founded on this date by Param Sant Tara Chand ji Maharaj for public charitable purposes vide trust deed dated 01.09.1989; (objects of trust included: to spread and impart the knowledge of spiritual meditation amongst human beings for their welfare and upliftment, mental and/or physical, irrespective of age, sex, cast, creed or religion” (refer trust deed enclosed with paper book) amongst other objects;
(ii) 13.09.1989: It was registered with sub registrar Bhiwani (Haryana)
(iii) 17.11.1989: Sec 12A registration granted by competent authority Rohtak;
(iv) 13.02.2006: Assessee was granted registration u/s 80G vide order of CIT Hisar
(v) 07.11.2008: Assessee was granted registration u/s 80G vide order of CIT Hisar
(vi) 24.09.2021: Registration u/s80G was granted for AY 2022-23 to AY 2026-2027:
(vii) 25.01.2021: Scrutiny Asstt. for AY 2018-19 completed at Nil income accepting assessee status as eligible charitable organization (this order has attained finality and is never disturbed)
(viii) 23.02.2024: Scrutiny Asstt. order passed u/s 143(3)/144B for AY 2022-23 where after detailed and elaborate examination assessee is found to be charitable organization eligible for benefit u/s 11 being engaged in spirituality and social work: (this order has attained finality and is never disturbed)
(ix) 06.03.2025: Scrutiny Asstt order passed u/s 143(3)/144B for AY 2023-24 where after detailed and elaborate examination assessee is found to be charitable organization eligible for benefit u/s 11 being engaged in spirituality and social work;
(x) 19.02.2026; Registration u/s 12A was granted to assessee (albeit under religious head) for AY 2027-2028 to AY 2031-2032; (ADMITTEDLY ASSESSEE IS HAVING VALID AND EXISTING REGISTRATION U/S 12A)
(xi) 19.02.2026: Impugned order passed u/s 80G(5)(ii) by CIT (Exemption) Chandigarh rejecting assessee registration application which is mainly based on reason that (a) assessee filled religious in form 10AB and since assessce incurs spiritual and satsang expenses: This is treated to religious object and religious activity by CIT(E) Chandigarh to hold assessee is engaged in religious activity barred under explanation3 to sec 80G (page 6 to 8) para 4-conclusion of impugned rejection order”
4 In view of the above discussions, the present application of the applicant filed in Form 10AB u/s 80G(5)(ii) of the Act is rejected as applicant is clearly engaged in religious activities which cannot be considered to be for charitable purposes as per the provisions of section 80G(5) of the Income-tax Act. Accordingly, the application filed by the applicant for approval u/s 80G of the Act is hereby disposed of as rejected, which rejection and consequent lack of approval shall supersede/cancel any approval granted u/s 80G of the Act by any authority at any earlier time.
2. Undisputed and admitted fact: (a) That assessee is having operative registration u’s 12A of the Act and (b) That assessee is consistently and continuously assessed as charitable organization u/s 2(15) in series of orders passed u/s 143(3) and (c) That activity of assessee organizing “to spread and impart the knowledge of spiritual meditation amongst human beings for their welfare and upliftment, mental and/or physical, irrespective of age, sex, cast, creed or religion” is not called in question; (d) no Show cause notice (SCN) is issued before declining of registration qua stated reasoning, But merely satsang and spiritual expenses as viewed by CIT(E) is treated as religious objects /activity to reject assessee entitlement u/s 80G is subject matter of present appeal;
Our humble submission:
Once it is undisputed and admitted fact that registration u/s12A is operative, to deny registration u/s 80G is not permitted: Having found assessee eligible for registration u/s 12A (which registration is operative /existing), then registration u/s 80G cannot be denied. Humble reference is made to:”
In Commissioner of Income-Tax (Exemptions) v. Sant Girdhar Anand Parmhans Sant Ashram 2018 SCC OnLine P & H 7109
Hon’ble Chattisgarh high court decision in case of Commissioner of Income Tax v. M/s Adharshila Shikshan Sangh 2025: CGIC:37156-DB
Hon’ble Chattishgarh High Court decision in the case of CIT (Exemption) v. Dignity Education Society TAXC No. 87 of 2022 (28.22.2024)
In Hiralal Bhagwati v. Commissioner of Income Tax, 2000 SCC Online Guj 441
Hon’ble Madras High Court in case of CIT v. P.S. v. P.S. Ramaswamy Telugu Minority Educational dated 01.07.2025 TCA No. 324 of 2011.
Hon’ble Delhi High Court in case of CIT Exemptions Delhi v. Hamdard Laboratories (India)
CIT (Exemptions) v. Anjuman E Nusratul MUslimin Tankaria
Hon’ble Apex Court in case of CIT v. Hindustan Bulk Carriers
Accordingly view of Ld CIT(E) in impugned order is totally against the well settled legal position as stated in above cited judicial precedents.
3.4 Finally there is admittedly no valid/requisite Show cause notice (SCN) issued by CIT(E) during impugned proceedings u/s 80G(5), while declining to grant registration, same is treated fatal to rejection order. On issue of valid SCN in income tax adjudication (sec 80G) charitable trust registration Held not issuing valid SCN is fatal to impugned order (deemed invalid) Hon’ble Gujarat high court in case of THE COMMISSIONER OF INCOME TAX EXEMPTION Versus SHREE SATTAVIS KADVA PATIDAR PRAGATI MANDAL (6.04.2026) TAX APPEAL NO. 1030 of 2024 approved underlying Ahmedabad bench ITAT decision in ITA ITA No.414/Ahd/2023 (08.05.2024) HELD/UPHELD “7.7 At this juncture, it is also important to note that no show cause notice was issued to the assessee before rejecting the application under section 80G of the Act by Ld. CIT(E). The show cause notice holds immense significance in income tax proceedings, ensuring procedural fairness and safeguarding the rights of taxpayers. There are many judicial pronouncements which have reinforced the indispensability of this notice, emphasizing that orders issued without its adherence may be deemed invalid” “Thus, in view of the categorical findings recorded by the Tribunal about the absence of any notice issued to the assessee by the CIT (Exemption), we are not inclined to entertain the present appeal on the proposed substantial questions of law. Hence, the appeal stands dismissed accordingly.”
Humble Prayer: Impugned order of CIT(E) may please be reversed and appellant may please be directed to be registered u/s 80G of the Act.’
6. On the other hand, ld. DR submitted that the activities of the assessee trust are in contravention to section 80G(3) of the Act. Therefore, he submitted that the ld. CIT(E) rightly rejected the application for grant of registration u/s 80G.
7. Considered the rival submissions and materials placed on record. We observed that the ld. CIT(E) granted registration u/s 12AB on 19.02.2026 as the religious trust. Further we observed that the assessee was granted registration u/s 12A and u/s 80G of the Act, since inception, i.e., 11.01.1989 onwards. We observed that the reasons for rejecting the registration u/s 80G was that the trust was registered as a religious trust and it incurs substantial amount in spiritual and satsung expenses. We notice that in order to reach the above conclusion, the ld. CIT(E) has reproduced the receipts and payment account for the year end of 31st March, 2025 and 31st March, 2024 respectfully in the impugned order and the only expenditure which was considered to be incurred towards spiritual knowledge and satsung expenses. After careful consideration, we observed that the assessee has incurred expenditure towards spiritual knowledge and satsung expenses of Rs. 68.03 lakhs as on 31st March, 2025 and 76.07 lakhs as on 31st March, 2024. At the same time, we observed that the assessee has spent an amount on food, cloth and Bhandara expenses, medicines and other administration expenses to the extent of Rs. 6.65 crores. We also observed that the assessee has received substantial donations towards seva and towards corpus funds. It is also fact on record assessee is a religious trust and heavily collects and donations which was collected for not only spiritual knowledge and satsung arrangement, it is also collected towards other charitable activities carried on by the assessee. On careful verification, we observed that the assessee has spent less than 5% of the total donation received by it towards spiritual knowledge and satsung expenses. This is within the norms provided by the amended provisions of section 80G Explanation (3).
8. Further we observed that once trust was granted registration u/s 12AB treating them as religious trust after analyzing the objects of the trust which are charitable in nature. With the same breath, the same institution is being treated as not charitable for the purpose of section 80G. In our view, the arranging and conducting meetings to spread the spiritual knowledge that itself cannot be branded as religious in nature. It is being provided across the community. We observed that the courts have held that once registration is granted u/s 12AB, registration u/s 80G cannot be denied on the basis of same objects and it also records that unless and until it violates specific provisions contained u/s 12AB/80G. Therefore, in our considered view, the assessee cannot be denied registration u/s 80G merely on the basis of the observations as made by ld. CIT(E) which is not specific but rather high handedness. It is fact on record that the assessee was considered as religious trust, it is expected to incur expenditure towards religious activities and once it is seen that it is carried on its religious activities for common benefit of the community without extending any individual benefits to the trustee or to specific community. The conducting of satsang and related activities cannot be considered as religious activity unless and until, it is incurred towards a particular deity or such related activity. Further, provisions of section 80G itself allows up to 5 of the explanation towards religious activities. Therefore, we are inclined to direct the ld. CIT(E) to grant registration u/s 80G of the Act as it is fulfilled conditions specified therein. The Grounds raised by the assessee are allowed.
9. In the result, the appeal filed by the assessee is allowed.