2020 (12) TMI 772 - AT - Income Tax

Grant of registration u/s. 80G denied - assessee was enjoying the registration u/s.12A - objection that the assessee was granted registration u/s. 12A for religious or general public utility purposes and the registration was not granted for chairtiable purposes i.e. relief of poor and medical relief and whereas the assessee had spent amount on healthcare education and relief to poor - HELD THAT - From the perusal of main objects of the assessee as contained in memorandum of association at Sr. Nos. 2 and 3 we find that these are for establishment and promotion of hospitals medical and healthcare institutions and to establish maintain and run colleges and schools for primary and technical scientific institutions. CIT(E) while rejecting the application u/s. 80G of the Act ignored the objects as contained in the object clause of memorandum of association whereas he himself has noted that the assessee had spent an amount of ₹ 1,44,000/- towards health and further an amount of ₹ 22,300/- was spent on education and ₹ 58,540/- as help to poor. These all expenditure represents expenditure for charitable purposes which is mentioned in the object clause of the assessee. Though the registration granted u/s. 12A mentions the purpose of registration as religious or general public utility but the object clauses of the assessee clearly shows that main object of the assessee were promotion of health and imparting of education. We do not agree with the findings of ld. CIT(E) in dismissing the application of the assessee. Moreover, we find that once registration u/s. 12A is given the registration u/s. 80G can be denied if the activities are not genuine. The ld. CIT(E) nowhere has doubted the genuineness of activities of assessee. - Decided in favour of assessee.

Summary

Issues:
Appeal against refusal to grant registration u/s. 80G(5) of the Income Tax Act, 1961.

Analysis:
1. The appellant argued that registration u/s. 12A was granted for religious or general public utility purposes, including healthcare, education, and relief to the poor. The ld. CIT(E) refused registration u/s. 80G, claiming the activities were not aligned with charitable purposes. The appellant highlighted the main objects of the society, emphasizing promotion of hospitals, medical care, and educational institutions. They cited legal precedents where non-carrying out of activities was not a valid ground for rejection.

2. The respondent contended that the appellant's activities did not align with the main objects for which registration was granted, focusing on religious or general public utility purposes. The ld. CIT(E) rejected the application based on this discrepancy.

3. The Tribunal noted that the appellant had valid registration u/s. 12A for religious and general public utility purposes, including healthcare and education. The ld. CIT(E) overlooked the main objects of the society, which included healthcare and education. The Tribunal disagreed with the ld. CIT(E)'s findings and emphasized that once registration u/s. 12A is granted, registration u/s. 80G can only be denied if activities are not genuine. Legal precedents were cited to support the appellant's case, directing the ld. CIT(E) to grant registration u/s. 80G(5) to the appellant.

4. The Tribunal's decision was influenced by the appellant's valid registration u/s. 12A for religious and general public utility purposes, which included healthcare and education initiatives. The Tribunal disagreed with the ld. CIT(E)'s reasoning and emphasized that registration u/s. 80G could not be denied if activities were genuine. Legal precedents were cited to support the Tribunal's decision, ultimately allowing the appeal and directing the ld. CIT(E) to grant registration u/s. 80G(5) to the appellant.