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TMI Blog2011 (7) TMI 1021X X X X Extracts X X X X X X X X Extracts X X X X ..... persons mentioned in section 13(3) of the Act. The main object of the assessee was providing medical relief and also facilitating medical research and training. The assessee-trust was running an ENT hospital in the name of "Chinnammal ENT Medical and Research Foundation" at No. 827, Poonamalle High Road, Chennai-10. During the previous year relevant to the assessment year 1992-93, the assessee-trust imported a pentax video endoscope. During the assessment proceedings, it was noted that the said endoscope was utilised by the managing trustee of the assessee in his private hospital. Against the resultant denial of exemption under section 11 of the Act, the assessee moved in appeal before the learned Commissioner of Income-tax (Appeals) who c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... found that, on enquiry, the equipment was found installed in a room bearing the board 'Chinnammal Endoscope' on the first floor of K. K. R. ENT Hospital. There was no specific name board pertaining to the trust and it was also found that the equipment was not used in the hospital but it was found to be used in the private hospital, which was owned by the trustee and the assessee could not produce even an iota of evidence to buttress this claim. Therefore, the Tribunal found that the assessee-trust failed to establish the reason for shifting the equipment from the hospital to other place and the equipment was clearly found in the private hospital, which was owned by the trustees of the trust. These are factual findings. No substantial questi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6.2 The equipment was installed in the hospital only for a short time. Thereafter, it was shifted to the registered office of the trust at 827, P. H. Road, Chennai-10, which is also the premises where the managing trustee runs his own clinic. 6.3 It was held that the importers have not fulfilled the post importation conditions and the goods were therefore held to be liable for confiscation under section 111(o) of the Customs Act, 1962. A redemption fine of Rs. 3,15,000 was levied. Such an order has reached finality and is against the assessee. 6.4 An enquiry was conducted by the Assessing Officer on January 24, 2003 at the registered office of the trust. The said equipment was found installed in a room bearing the board 'Chinnammal E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommissioner of Income-tax (Appeals) was not impressed. According to him, the assessee did not fulfil the conditions laid down for the customs duty exemption for the import of pentax video endoscope, but instead had installed it in a clinic where a private hospital of the trustee was functioning. Relying on the decision of the hon'ble apex court in the case of Union of India v. Dharamendra Textile Processors [2008] 306 ITR 277 (SC), the learned Commissioner of Income-tax (Appeals), confirmed the levy of penalty. Now before us, the learned authorised representative, strongly assailing the orders of the authorities below, submitted that there was no finding from any of the authorities regarding use of endoscope by any of the trustees. Accord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the authorities below. We have perused the orders and heard the rival contentions. There is no dispute that the subject endoscope was found on the first floor of K. K. R. ENT Hospital Ltd. and its managing director Dr. K. K. Ramalingam was the managing trustee of the assessee-trust. The name of the hospital run by the assessee-trust was "Chinnammal ENT Medical and Research Founda tion". The said hospital was situated at Poonamallee High Road, Chennai77, whereas, the endoscope was found in the premises of K. K. R. ENT Hospital Ltd., which was situated at Kilpauk, Chennai-10. In reply to the queries raised at the time of assessment proceedings, the assessee by its letter dated January 21, 2002 had admitted that M/s. K. K. R. ENT Hosp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... second place, sections 11 and 12 of the Act which provide exemption from income for public charitable and religious trust have been legislated for a laudatory object of encouraging charity and philanthropy. A person could not be allowed to misuse such provisions and say that he had made the claim on a bona fide impression. There is nothing beneficial for the assessee-trust in placing the equipment in a private hospital run by the trustees. The claim for exemption for the income of the trust in such a situation was clearly not bona fide. Misuse of exemption provisions given for charity and conduct of business masquerading as charity are acts on which no court can turn a blind eye. The decision of the hon'ble apex court in the case of Relian ..... X X X X Extracts X X X X X X X X Extracts X X X X
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