The ruling on what is called Parents' Supper
Question :
There are people who hold parties during Ramadhan and they sacrifice an animal and they call it Parents' supper. What is the ruling on this?
Answer:
Giving charity on behalf of the deceased parents is permissible and there is no harm in it. However, it is better to supplicate for them than to give charity for them. This is because that is what the Prophet directed and advised to be done when he said:
"When the person dies his deeds are cut off except for three: perpetual charity or knowledge from which benefit is gained or a righteous child who supplicates for him."
He did not say, "a righteous child who gives charity on his behalf or offers prayer (As-Salah) for him." However, if the person gives charity along with this on behalf of his deceased (relative), this will suffice him. This is because the Prophet was asked about that and he allowed it.
However, what some people do during the nights of Ramadhan of slaughtering animals and holding numerous parties and those functions that none attend except the wealthy, this is not legislated. It is not from the practice of the Pious Predecessors (As-Salaf As-Salih). Therefore, the person should not do this, because in reality it is nothing other than parties that people attend and sit at with the presumption that some of them are drawing near to Allâh by sacrificing this animal. They think that the sacrifice is better than buying the meat. This matter is something opposed to the Islamic law, because the sacrifices by which one draws closer to Allâh are the Adhha sacrifices, the sacrifices for Hajj and the sacrifices for new born children. Thus, seeking to draw near to Allâh by making sacrifices during Ramadhan is not from the Sunnah.
Source:
Ash-Shaykh Ibn 'Uthaimin
Fatawa Islamiyah, Vol. 3 Pages 333