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TMI Blog2018 (6) TMI 1657X X X X Extracts X X X X X X X X Extracts X X X X ..... porate the condition that the Hospital will be charitable only and not for commercial gains, in the aims and object/ MOU of society. We endorse the assent of the Ld. A.R. Set aside the order passed by the Ld. CIT(E) and feel it appropriate to remand the case in hand to the file of the ld. CIT(E) for deciding afresh while taking into consideration the facts, circumstances and documents inter-alia, the amended MOA whereby the aims and objects have already been amended and further incorporation of condition in the aims and objects of society to the effect that the Hospital will be charitable only and not for commercial gains. - Appeal filed by the assessee society is allowed for statistical purposes. X X X X Extracts X X X X X X X X Extracts X X X X ..... any charitable activity as per object clause of the MOA and for purpose i.e., not contended or allowed by the objects clause of the MOU, do not enthuse confidence in respect of the applicant viz. a viz. its claims about being charitable and neither the objects nor the genuineness of its activity get corroborated in the instant case. Our attention was drawn by the Ld. AR to the amended aims and objects of the society which reflects from clause no.(1) reproduced herein below for the sake of convenience and brevity. "To open an educational/medical and researches Institutions/Hospitals for the health and welfare of mankind." We also perused the certified copy of minutes of meeting held on 06.11.2017 at society office of the assessee where the proper amendment in MOA has already been made and vide application dated 17.01.2018 forwarded to the Assistant Registrar of the Society cum District Manager, District Industry Center, Ludhiana for appropriate in-corporation. From the amended MOA aims and objects of society, clause No.9 reflects " to acquire land and building for the construction and maintains of Hospitals, Medical Institutions, Schools, Colleges, Hostels and maintains of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies, relevant dates are very much material in the instant case. The trust was established and registered only on 12th March, 2015 and thereafter, application for registration u/s 12A was filed on 29.04.2015 and main objects of the trust are establishment of educational institution and/or maintenance of educational institution ,meditation and prayer halls, granting of scholarship and financial assistance to needy for educational purposes and establishment of hospitals and nursing homes etc. which are covered under the dimension of Sec.2(15) of the I.T. Act. Further we feel it appropriate to reproduce herein the contents of Sec.12AA of the Act. Section 12AA (1) The Chief Commissioner or 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 he may deem necessary in this behalf; and (b)after satisfying himself about the objects of the tru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... High Court in the case of Hardayal Charitable & Educational Trust Vs. Commissioner of Income Tax-II, Agra decided on 15 March, 2013 observed that: " The preponderance of the judicial opinion of High Courts as well as ITAT is that at the time of registration u/s 12AA of the Act, the CIT is not required to look into the activities, where such activities have not or are in the process of its initiation. Where a trust, set up to achieve its objects of enabling educational institution, is in the process of establishing such institution and receives donations, the registration u/s 12AA cannot be refused, on the ground that the Trust has not yet commenced the charitable or religious activity" . Further, Co-ordination Bench of ITAT, Amritsar in the case of Ek Umeed Welfare Society, Fazika Vs. Assessee in ITA No.615(Asr)/2013 "Directed to grant registration to the society where the registration was denied by the CIT on ground of negligible activity till the date of registration". Let us to consider reasons for rejection of Application for grant of registration u/s 12 AA of the Act: First reason for denial of registration by the Ld. CIT was that that the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in different part of Jammu & Kashmir as submitted . Further from the cutting of newspapers, it reflects that inauguration for construction and laying stone for establishment of the School has already been done and as per computation of Income of Asst. Year: 2016-17 it reflects that the assessee trust has received ₹ 1,80,52,900/- as voluntarily contribution and during the Financial Year the assessee trust has incurred the expenditure of ₹ 13089100 and ₹ 379000 for the purchase of the land and its construction for School purposes, and further income and expenditure for the period ended 31st March, 2016 shows that the assessee trust has contributed ₹ 11,000/- to the P.M. relief fund and ₹ 9,472/- for cleaning moment at Katra and ₹ 5,640/- for the environment awareness and ₹ 8,548/- for medical care at FDR. On perusal of records and judgments, it is clear that at the time of registration u/s 12AA of the Act, the Ld. CIT(E) is required to see the objects of the trust or institutions and genuineness of its activities, however, if we come to the instant case, then it is not disputed that the trust was formed and registered only on 12th Mar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f application u/s 12AA of the Act, the trust was at nascent stage and all the activities which are reflecting from the documents submitted herein are of the later stage, however, in our considered opinion at the time of disposal of application, the Ld. CIT(E) in order to satisfy himself about the genuineness of the activities of the trust or institution can call for such documents or information from the trust or institution as he thinks necessary and also empowered to make such enquiry as he may deem fit necessary in this behalf , secondly that after satisfying himself about the object of the trust or institution and the genuineness of the activities, he shall pass order in writing either register or refusing to register the trust or institutions. In the instant case no activity was carried out therefore question of genuineness did not arise. Hence, we direct the Ld. CIT(E) to grant the registration u/s 12A of the Act to the assessee and it is clarified in case, the assessee does not qualify/satisfy the objects of the trust and/or not involved in genuine activities , then the concerned authority shall be at liberty to withdraw or to cancel the registration u/s 12A of the Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ford the costly medical facility in present day . The hospital will be charitable and not for commercial gains. However from the amended aims and objects and rules and regulations of the society it does not reflect that the hospital will be charitable and not for commercial gains. On specific query raised by the Bench, which was acceded by the Ld. AR on behalf of the Assessee/Applicant Society that the assessee society shall get incorporate the condition that the Hospital will be charitable only and not for commercial gains, in the aims and object/ MOU of society. We endorse the assent of the Ld. A.R. On the aforesaid reasoning, we are inclined to set aside the order passed by the Ld. CIT(E) and feel it appropriate to remand the case in hand to the file of the ld. CIT(E) for deciding afresh while taking into consideration the facts, circumstances and documents inter-alia, the amended MOA whereby the aims and objects have already been amended and further incorporation of condition in the aims and objects of society to the effect that the Hospital will be charitable only and not for commercial gains. The Ld. CIT(E) shall also be at liberty to re-examine the case of the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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