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TMI Blog2021 (12) TMI 448X X X X Extracts X X X X X X X X Extracts X X X X ..... n u/s 12A of the Act on the ground only does not augur well with the intent and purpose of the Act. Because of all these factors, if applicant is being used for accelerating its commercial activities of the Hospital, the same are to be separately and independently examined by the AO at the time of assessment in the light of the provisions contained u/s 11 12 Section 12AA of the Act provides for procedure for registration as to how ld. CIT (E) will provide registration after getting satisfaction with the aims and objects of the society and not to sit on the chair of AO as all these facts ought to be taken care by the AO at the time of assessment. Declining the registration on the ground that medical research to be carried out in the hospital of settler company would convert the charitable activities into commercial activities is mere surmises, hence not sustainable in the eyes of law. Not only this, sub-section (3) of section 12AA empowers the ld. CIT(E) to cancel the registration of the Trust if activities of Trust are not in consonance with its charitable aims and objects enshrined in the constitution. So, at the stage of according registration u/s 12AA of the Act examinin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this stage commercial angle of any activities can only be assumed but can only be decided during the assessment proceedings. It is a matter of fact that medical research has to be carried out in the premises of Artemis Hospital/settler company and any such medical research would otherwise facilitate the general public to have a specialized treatment in the hospital of their choice. We would like to record that medical research cannot be branded as a mode of advertisement to enhance the profitability of the hospital because both are existing in entirely separate domain. When we examine the issue of delay in the light of the fact that the appeal challenging the order passed by the ld. CIT (E) u/s 12AA of the Act has been filed well within time it can be taken as a bonafide mistake that challenging the rejection of approval u/s 80G is automatic. Even otherwise negligence or indolence on the part of a trained practitioner who has been hired to protect the interest of the applicant, cannot be attributed to the litigant by declining the relief in the interest of justice. So, we find it a reasonable ground to condone the delay and appeal against the order passed u/s 80G is ordered to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Form No.10G read with section 80G of Income tax Act, 1961 is bad in law and void ab-initio. 3. That since section 12A and section 80G of the Income tax Act, 1961 operates separately hence section 12A approval rejection can not ipso facto apply to rejection for section 80G approval. 4. That the CITY (E) is wrong in holding that an application under Form No.10G in absence of any registration u/s 12A does not meet the requirement for approval as mandated by section 80G(5)(vi) of Income tax Act, 1961 and Rule 11AA of the Income tax Rules, 1962. 3. Briefly stated the facts necessary for adjudication of the controversy at hand are : Application in Form No.10A seeking registration u/s 12A of the Income-tax Act, 1961 (for short the Act ) and for approval u/s 80G of the Act respectively moved by the Appellant/Applicant being a Trust registered under Societies Registration Act has been rejected by ld. CIT(E) on the ground that the prime intent of the applicant is to pursue only medical research which is not covered under the term education . 4. Feeling aggrieved, the applicant has come up before the Tribunal by way of filing the present appeals. 5. We have heard the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the applicant/assessee u/s 12A of the Act by the ld. CIT(E) that all medical research does not qualify for the label education in the sense of the term explained by the Hon ble Apex Court in the case of Sole Trustee, Loka Sikshan Sansthan 101 ITR 234 is concerned, when we examine the aims and objects of the applicant trust it is not only established for medical research rather for various other charitable aims and objects viz. establishing professional colleges, hospitals, health promotion facilities like health club, nature club facilities, yoga and meditation facilities, entertaining facilities and community centre/religious centers. 9. At this stage, aims and objects having charitable nature need to be seen for the purpose of according approval u/s 12A of the Act. So, we are of the considered view that application moved u/s 12A of the Act cannot the throttled merely by relying upon selective aims and objects by making observation that there is a possibility that researches being carried out by the applicant within the premises of the settler company would in turn further enhance the commercial potential of the hospital. These are mere perceptions entirely based upon sur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... registration of the Trust if activities of Trust are not in consonance with its charitable aims and objects enshrined in the constitution. So, at the stage of according registration u/s 12AA of the Act examining the aims and objects like AO is not permissible. 13. So far as second reason of rejections u/s 12A of the Act by the ld. CIT (E) that the intention to create global infrastructure is in contravention of section 11(1)(a) of the Act and even after 4 years of incorporation, applicant has not carried out any research/outcase is concerned, when applicant has come up with specific aims and objects to carry out medical research as one of the aims and objects which can only be carried out within the premises of the hospital, creating infrastructure is a sine qua non to carry out the research in the medical field. Medical research can always be carried out in the infrastructure created within or near to the hospital which cannot always lead to the conclusion that it is for the purpose of pursue the commercial activities. Because there are numerous aims and objects sought to be pursued by the applicant in order to carry out its charitable activities. 14. So far as question o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2250 42400 138271 3938470 12 - - - - - 34000 106701 1743450 12 - - 5900 - 3354 Total Expenditure 6268 5618 4982706 5127078 4289393 4005203 4119153 1893417 Net (5618) (5618) (72424) (27078) (289393) (5203) (30847) (93417) *All the donations are from Artemis Medicare Services Limited (PAN AAFCA0130M) 15. Receipt of donations and appropriation of funds show that the applicant Trust is not merely on the paper but keeping its activities alive for further carrying out the charitable activities enshrined in its aims and objects. So, the reason recorded by the ld. CIT (E) is not sustainable to reject the application moved by the applicant. 16. So far as third ground taken by the ld. CIT (E) for rejection of application u/s 12A of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecessary that the object should be to benefit the whole of mankind or even all persons living in a particular country or province. It was sufficient if the intention was to benefit a section of the public as distinguished from specified individuals. The section of the community sought to be benefited must undoubtedly be sufficiently defined and identifiable by some common quality of a public or impersonal nature: where there is no common quality uniting the potential beneficiaries into a class, it might not be regarded as valid. 19. Applicant by moving an application u/s 151 of Code of Civil Procedure sought to condone the delay of 1462 days on the ground that the delay is attributed to bonafide mistake under the bonafide belief that challenge of rejection of section 12A of the Act would suffice to cover the rejection of section 8G approval. Ld. DR for the Revenue has opposed the application that when the matter is being pursued by trained tax practitioner it is not a ground to condone the delay. 20. We are of the considered view that when we examine the issue of delay in the light of the fact that the appeal challenging the order passed by the ld. CIT (E) u/s 12AA of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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