Hakim al-Umma Mawlana Ashraf Ali Thanawi [may Allah have mercy on him] said,

‘It should be realized that actions and practices innovated after the passage of the first three generations of Muslims [khairul quroon/ best of eras] are categorized into two types,

First category: Pseudo-bid’ah
Those actions whose rationale is new but some essential acts of the Shariah [ma`moor behe] are dependant upon it. Hence, without this [innovation] this faculty of Deen will not function effectively.

For example, the compilation and authoring of religious texts, the establishment of learning institutes (madrasa) and spiritual retreat lodges (khanqahs), etc.

These things were not present during the era of Prophet [Allah’s blessings and peace be upon him], and their initiative is new, however, an essential part of the Deen depends on [the initiation of] these acts.

It is well established that it is an essential and necessary requirement upon every [Muslim] individual to protect and safeguard the Deen. One should also remember that during the ‘best of era’s, such means [the above mentioned innovations] did not exist. This was because there was no need for them. That era was permeating with blessings [of Prophet (Allah’s blessings and peace be upon him], and the memories of the his blessed Companions [Allah be pleased with them all] were so excellent that when they heard or observed Prophet [Allah’s blessings and peace be upon him], saying or doing anything, it remained embedded and etched in their minds. Their understanding and intellect was also such that there was no need for formal classes wherein prescribed lessons in Deen needed to be taught.

Following this era, in the subsequent Muslim generations negligence and carelessness [in matters of Deen] crept in, the memories became weaker, deviated and eccentric interpretations and implementations increased. This threatened the gradual destruction of the edifices of the Deen. Hence an urgent need arose to formulate methods to administrate the structures of the Deen, safeguarding all its facets. In this regards, the basic texts of the Deen, Prophetic tradition (hadith), Principles of studying the Prophetic tradition (usool-e-hadith),  the rulings of worship (usool-e-fiqh),  and basic belief (aqaai`d) needed to be compiled. Hence, learning institutes (madrasa) were established in order to teach these sciences of the Deen.

In similar vein, the physicians of the soul (mashaa`ikh) saw the need to establish spiritual retreats (khanqahs) to revive and nurture the spiritual, perpetual and mutually favorable personal relationship with Allah (nisbet) and self-reformation.

Besides these, there was no other means envisaged which would safeguard our Deen.

Hence these are such things whose reasons and causes [sabab] are new, and these sababs were not prevalent during the khariul quroon. These are also such matters upon which the existence and preservation of some essential religious matter rests. Hence these things may fit the apparent hue and definition of bid`ah, but in reality they are not bid`ahs. On the contrary, according to the ruling: prelude to an essential is also essential itself (muqaddamatul wajib wajibun), they are essential (wajib) acts.

Second category: Real bid’ah
In the second category are those innovated actions and practices whose rationale [sabab] is old (and was present during the best of era but they were not performed).

For example, the motive (sabab) of celebrating the birth of Prophet [Allah’s blessings and peace be upon him] (mawlid), forwarding reward of good deeds to the deceased on specific days (teeja, daswah), etc. are all old.

The reason for the performance of mawlid is expression of happiness at the birth of the Prophet [Allah’s blessings and peace be upon him]. This very reason was established and existent during the era of the Prophet [Allah’s blessings and peace be upon him] and his blessed Companions [Allah be pleased with them all], but it was never celebrated by any of them. Can we claim that, God forbid (nauthubillah), their minds  did not perceive doing this activity?

However, if the reason (sabab) was not present during their era, then at least we could have said that they had no rationale to do it. But since the reason for holding mawlid was also present during that time, and neither the Prophet [Allah’s blessings and peace be upon him] nor his blessed Companions [Allah be pleased with them all] ever held or encouraged such activity, we can safely state this to be a bid`ah – in word, definition and practice. 

This  category of innovations fall under the scope of the  Prophetic saying (hadith),
“Whosoever innovates anything into our religion, is not from amongst us.”

Hence, it is impermissible to participate in and hold such gatherings.

This is the general ruling to recognize and distinguish between Sunna and bid`ah.

Rulings about all other matters can be deduced from this explanation.
[Wa`azus Suroor, page 27]