9911796707
TMI Blog2024 (7) TMI 213X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee trust that it is a section 8 company registered under the Companies Act, 2013 with charitable object of providing medical relief to the geriatric population and registration u/s 7(2) of the Companies Act, 2013 was not at all considered by the CIT(Exemption) before rejecting the claim of registration u/s 12AA of the Act. We find from the various details furnished by the assessee that the excess of income over expenditure for the year ending 31.03.2022 was Rs. 160,562/- and 31.03.2021 was Rs. 1,79,157/-. Therefore, we fail to understand as to how the CIT(Exemption) has contended that the assessee trust is making substantial surplus when such surplus appears to be nominal. Thus, we deem it proper to restore the issue to the file of Ld. CIT(Exemption) with a direction to grant one more opportunity to the assessee to substantiate its case by filing the requisite details. The grounds raised by the assessee are accordingly allowed for statistical purposes. - SHRI R. K. PANDA, VICE PRESIDENT AND SHRI S.S. GODARA, JUDICIAL MEMBER For the Assessee : Shri Rajendra Agiwal For the Department : Shri Keyur Patel, CIT-DR ORDER PER R. K. PANDA, VP : This appeal filed by the assessee is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n objects of foundation shown in I E account and supporting evidences are not furnished. 3. In response to the above queries raised by the CIT(Exemption), the assessee furnished its reply. However, the CIT(Exemption) was not satisfied with the explanation given by the assessee and rejected the provisional registration granted on 27.05.2021 u/s 12AB r.w.s. 12A(1)(ac)(vi) of the Act by recording as under: 5.1 The assessee received donations of Rs. 50 Lakhs which has not been routed through I E account. In a query, the assessee submitted a letter dt 25/03/2023 signed by one Ms Prachi N Karnik. The signatory has stated that the letter was signed by her on behalf of her mother Smt. Anjali Telang as per her instructions. The assessee and the signatory, however has not furnished any document of her identity like Aadhar/PAN card and proof regarding her relation with the donor. Also, no clarification for signing the letter by Ms Prachi N Karnik and not by the donor Smt. Telang herself, has been offered. There is not any document to show that Ms Prachi N Karnik was so authorized by Smt. Telang to sign letter on her behalf. 5.2 Regarding, various health camps, awareness programmes stated to h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ily education and advocacy, offering counseling and support, providing health care services and its effective operation by tapping the expertise of the private sector while maintaining affordable tariffs, to mobilize private capital to speed up the delivery of infrastructure and services, providing comprehensive care to rapidly increasing elderly population of the India and abroad. 5.3.2 The objective clearly demonstrates a commercial nature rather than a charitable one. Several key elements in the stated objective highlight a focus on revenue generation, profitability, and the mobilization of private capital, all of which are indicators of a commercial character. The objective emphasizes the importance of 'maintaining affordable tariffs. which suggests that the assessee intends to charge fees for its services, which is a characteristic of a commercial enterprise. It implies an objective to generate revenue from the services offered to patients rather than providing them free of charge. The objective mentions tapping the expertise of the private sector, which indicates intention to collaborate with private companies and entities. In a charitable organization, the emphasis is us ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supplementary activities. Furthermore, none of these activities can be categorized as emergency services. This clearly points to the assessee's primary engagement in providing medical services through contractual arrangements, for which it receive fees and charges. The assessee has not furnished any details, evidence to substantiate that it has been extending medical services, free of cost, to indigent and poor people. 5.5 In schedule 18 of I E account, the assessee has shown expenditure of Rs. 22.90 Lakhs under the head 'expenses on objects of foundation . The assessee was requested to furnish details of the same with supporting evidences. In compliance, the assessee has merely furnished a ledger extract of said account. It is seen that entire expenditure is on account of payment to 'Desing Media'. Nature and purpose of said expenditure and how the expenditure was incurred in achieving the objects of the foundation has not been clarified by the assessee. Also, no supporting documents are furnished despite a specific request to that effect. 6. In view of the above, the undersigned is not satisfied about the charitable nature and the genuineness of activities of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted that for granting registration purpose of payment and character of the payment is to be seen rather than irrelevant considerations as applied by the Ld. CIT(E). 7. The Ld. CIT(E) erred in making the general observation in the concluding para that he is not satisfied about the charitable nature and genuineness of the activities of the assessee and compliance of any other law in general for the time being in force. 8. The Ld. CIT(E) erred in rejecting the registration on various above grounds without appreciating that the appellant furnished maximum possible data to prove the genuineness of the activities of medical relief. If Ld. CIT(E) is not satisfied he would have been justified in calling the further information. 9. The Ld. CIT(E) passed the rejection order at the end of the limitation period as prescribed of 6 months from the end of the month in which the application is received and so it appears that he has not issued any further notice to call for additional details. The Ld. CIT(E) would have been justified to give one more opportunity for submission of specific details which he wants. 5. The Ld. Counsel for the assessee referring to the paper book filed containing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the fact that the assessee trust is a section 8 company registered under the Companies Act, 2013 with a charitable object of providing medical relief to the geriatric population and registered u/s 7(2), rejected the claim of registration without affording proper opportunity to the assessee. It is his submission that if the CIT(Exemption) was not satisfied with the details furnished by the assessee, he could have asked for further clarification from the assessee, which he has failed to do and passed the order rejecting the registration u/s 12A of the Act towards fag end of the limitation period of six months. We find some force in the arguments of the Ld. Counsel for the assessee. It is an admitted fact that the assessee has filed an application dt 24.04.2023 and the CIT(Exemption) issued first notice to the assessee through ITBA portal on 26.07.2023. After the assessee furnished the details, he issued a show cause notice to the assessee on 06.10.2023, to which the assessee furnished a detailed reply on 11.10.2023. However, we find the CIT(Exemption) without calling for any clarification from the side of the assessee, passed the order on 27.10.2023. Further, the claim of assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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