9911796707
TMI Blog2012 (7) TMI 366X X X X Extracts X X X X X X X X Extracts X X X X ..... ny other object of general public utility’ and not to other activities in the field of relief to the poor, education or medical relief - cancellation of registration under section 12AA (3) and refusal to renew exemption u/s 80G is not warranted - in favour of assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted that there is no change or deviation in basic activities of the society i.e. medical relief which is very much covered by "charitable purpose" as enumerated in section 2(15) of the Act. The Ld. Authorised Representative submitted that the society has been formed by seven individuals from different sections, having no relation or connection amongst them, not controlled by any particular family or section of society. No particular individual or member has any vested interest. It is also submission of the Ld. Authorised Representative that no asset or income of the society was available for the benefit of the members of the society. Ld. Authorised Representative submitted that the society was registered as charitable society under Societies Registration Act, 1860, since 17.02.1992. He further submitted that since its formation, the society is carrying on various activities which are in the nature of medical relief. Ld. Authorised Representative submitted that the society is running "Samarpan Blood Bank" with the object of providing blood after proper examination, to the needy patients, on exchange basis. Ld. Authorised Representative submitted that in due course of time, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re X-ray services are provided at substantially low rates. • Running of Physiotherapy centre, providing various services to the patients at substantially low rates. • Running 3 Homeopathic dispensaries where medicine is provided at ₹ 2/- per day only. • Providing free medical Oxygen to the needy patients • Running of medical health care centre where services of expert Orthopedic, Gynecology and ENT doctors are provided only at ₹ 30/-. • Conducting free medical checkup and operation camps for the patients of Eye, Hernia, Gall Stone, and Breast Cancer etc. 11. Ld. Authorised Representative submitted that the amended section 2(15) of the Act defines the expression 'charitable purpose' to include relief of the poor, education, medical relief and the advancement of any other object of general public utility. Ld. Authorised Representative submitted that the said amendment to section 2(15) by the Finance Act, 2008 restricted the scope of the definition, by inserting a proviso effective from A.Y. 2009-10, providing that the 'advancement of any other object of general public utility' shall not be treated as 'charitable purpose' if it involves ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nerate any surplus. No charitable organization can manage its affairs in such a way that the activities terminate at zero figure or expenses should be equal to the receipts. The law, while providing for accumulation of surplus to the extent of 15% of the gross receipts, also recognizes his fact. 16. Ld. Authorised Representative relied upon the order of I.T.A.T., Lucknow Bench in the case of Chaturvedi Har Prasad Educational Society vs. CIT, 134 TTJ (Lucknow) 781 and submitted that in the said order the I.T.A.T. has clearly stated that a registration granted to any trust or society under section 12A/12AA can be cancelled under section 12AA (3) only on condition that the CIT is satisfied that the activities of such trust or institution are not genuine or not being carried out in accordance with the objects thereof. Ld. Authorised Representative submitted that in the case of assessee's society, neither the activities have been changed nor objects have been changed since the registration has been granted under section 12A/12AA of the Act. Ld. Authorised Representative also relied upon the judgement of the Apex Court in the case of Addl. CIT vs. Surat Art Silk Cloth Manufactures Assoc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1) The provisions of section 11 and section 12 shall not apply in relation to the income of any trust or institution unless the following conditions are fulfilled, namely : (a) the person in receipt of the income has made an application for registration of the trust or institution in the prescribed form and in the prescribed manner to the Commissioner before the 1st day of July, 1973, or before the expiry of a period of one year from the date of the creation of the trust or the establishment of the institution, whichever is later and such trust or institution is registered under section 12AA. …………..…………… ………………………." Procedure for registration. 12AA. (1) The [***] Commissioner, on receipt of an application for registration of a trust or institution made under clause (a) [or clause (aa) of sub-section (1)] of section 12A, shall- (a) call for such documents or information from the trust or institution as he thinks necessary in order to satisfy himself about the genuineness of activities of the trust or institution and may also make such inquiries as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd in the prescribed manner to the Chief Commissioner or Commissioner of Income-tax within the specified time. However, there was no provision in the Income-tax for processing of such an application and granting or refusal of registration to the concerned trust or institution. Finance (No. 2), Act, 1996 19.2 Hence the Act now provides for a procedure to be followed for grant of registration to a trust or institution. According to this procedure, the Chief Commissioner or Commissioner shall call for documents and information and conduct enquiries to satisfy about the genuineness of the trust or institution. After he is satisfied about the charitable or religious nature of the objects and genuineness of the activities of the trust or institution, he will pass an order granting registration. If he is not so satisfied, he will pass an order refusing registration. However, an opportunity of being heard shall have to be provided to the applicant before an order of refusal to grant registration is passed by the Chief Commissioner or Commissioner. The reason for refusal of registration shall also have to be mentioned in that order. The order granting or refusing registration has to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich is placed at page nos.186 to 195 of the Paper Book. For the purpose of ready reference the object of the Samiti is reproduced from memorandum of article of the Samiti from page 187 of the assessee's Paper Book is as under :- 1. Service to Humanity 2. Free help of poor/destitute 3. To create an atmosphere of brotherhood and harmony. 4. Intellectual development 5. Any other activity to achieve the above objects. 23. The relevant dissolution clause 16 at page no 195 reads as under :- "16. Dissolution and disbursement of asset of Samiti after dissolution In case of financial crisis, improper conduct, non-compliances of objects or any legal hurdles, the could be Samiti dissolved the information of which will be given to Asstt. Registrar and all other members and the proceedings will be conducted as per the provisions of section 13 and 14 of The Societies Registration Act. All the assets of Samiti (cash, movable and immovable) will be vested in any other registered charitable trust with prior consent of the members in general meeting. No member will have any personal rights on the Samiti`s assets." 24. The assessee furnished English translation of activities of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ER It was inaugurated in Dec., 2008 physiotherapy service is provided under the guidance of qualified doctors at a well equipped and mechanized center at very concessional rates (only ₹ 150/- per week). Services are provided for Short wave diathermy 500W, Gout, Back-pain, Knee-pain, Arthritis; Paraffin wax bath for frozen shoulders, joint pains, frozen joints after operation; ultrasonic tenniselbow, muscle stimulator for frozen & weak muscles; traction machine with table for spondolitis; Inter Ferentian (IFT) for paralysis; parallel walking bars and for improving walking style. Till now, 600 patients have benefited from these services. 5. Samarpan Homeopathy Dispensary (Khandari, Delhi Gate and Karmyogi Enclave, Kamla Nagar) Samarpan Samiti is managing homeopathy dispensary for last so many years quite successfully. Medicines are provided by well qualified Doctors only for ₹ 2/- per day. At present 3 such Homeopathy Dispensaries are managed at Agra - 1. Khadari 2. Delhi Gate and 3. at Karmyogewar Mandir, Kamla Nagar, Agra. 6. Samarpan Free Medical Oxygen Supply Under this service, patients are provided with free medical oxygen as per their needs. The service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the position about this amendment as under:- "Clause 3 of the Finance Bill, 2008 seeks to amend the definition of 'charitable purpose', so as to exclude any activity in the nature of trade, commerce or business, or any activity of rendering any service in relation to any trade, commerce or business, for a cess or fee or any other consideration, irrespective of the nature or use of application, or retention, of the income from such activity. The intention is to limit the benefit to entities which are engaged in activities such as relief of the poor, education, medical relief and any other genuine charitable purpose, and to deny it to purely commercial and business entities which wear the mask of a charity." "I once again assure the House that genuine charitable organisations will not in any way be affected. The CBDT will, following the usual practice, issue an explanatory circular containing guidelines for determining whether an entity is carrying on any activity in the nature of trade, commerce or business or any activity of rendering any service in relation to any trade, commerce or business. Whether the purpose is a charitable purpose will depend on the totality of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relief. We find that Samiti/ institution/entities whose object is 'education' or 'medical relief' would continue to be eligible for exemption as charitable institutions even if they incidentally carry on a commercial activity. The newly inserted proviso to section 2(15) will apply only to entities whose purpose is 'advancement of any other object of general public utility' i.e. the fourth limb of the definition of 'charitable purpose' contained in section 2(15). Thus, there is no basis for satisfying the CIT that the activities of the trust are not genuine and they are not being carried out in accordance with the object of the trust/society. Since the conditions laid down for cancellation of registration under section 12AA (3) are not satisfied, therefore, we are of the considered view that the CIT is not empowered for cancellation of registration under section 12A/12AA of the Act of the assessee, Samiti. 28 In the light of the above discussions, we hold that the CIT has wrongly cancelled the registration granted to the Samiti under section 12A/12AA of the Act. We, therefore, set aside the order of CIT on the issue. Following the above discussions, we also find that the CIT has w ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
