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TMI Blog2024 (7) TMI 213X X X X Extracts X X X X X X X X Extracts X X X X ..... e following points: "(i) Assessee has received donations of Rs.50 Lakhs which has not been routed through I&E account. No clarification for the same and details of donations such as name/address/PAN of donor, mode and date of donation, receipt no. issued, specific direction letter of donor, copies of receipt and communication are not furnished. (ii) Assessee has stated to have conducted various health camps, awareness programmes. However, details such as place and date of activity, names of participants/beneficiaries, experts who rendered their services, bills/invoices of expenditure on each activity, other documentary evidences are not furnished. (iii) Assessee is stated to be charitable. However, as seen from the MoA, object 1 appears to be of commercial nature with an element of profits involved. Even the income of Rs.28.30 Lakhs received is by way of Emergency medical services contract receipts. Thus, the activities of the assessee appear to be of commercial nature rather than charitable nature. (iv) As per the provisions of Rule 17A(2)(g) of the Income Tax Rules, 1962, the application in Form No.10AB shall be accompanied by the self certified copies of annual accounts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeared to be of commercial nature rather than charitable nature In reply, the assessee contended that considering the amount of surplus each year, it was clear that there was no commercial element in its activities. After incurring expenditure, it left with minor/negligible surplus and that majority amount was spent on the object of the Foundation. The assessee further contended that unless its I&E itself disclosed surplus it was not correct to draw the inference that the activities are not charitable. 5.3.1 In FYs 2019-20, 2020-21 and 2021-22, against the income of Rs. 6.64 Lakhs, Rs. 3.40 Lakhs and Rs. 28.30 Lakhs, there is surplus of Rs 3.82 Lakhs Rs. 1.79 Lakhs and Rs. 1.64 Lakhs respectively. Surplus so generated works out to 57.53, 52.65 and 5.79 for FYs 2019-20, 2020-21 and 2021-22 respectively. Thus, the assessee has been making good surplus during these years. However, its not the quantum of surplus that has been taken note of to consider the activity as commercial. The very first object of the assessee foundation is as under: "1. To undertake all the activities pertaining to Geriatric Healthcare Management by conducting care-planning assessments to identify needs, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... comprehensive approach that may involve higher costs. The objective's focus on "offering referrals to specialists" and "providing health care services" also points to a business model that involves coordinating and offering specialized medical services, which is typical of commercial healthcare providers. Thus, the objective of the assessee in question clearly tend to cater its activities in a commercial nature. The assessee has stated to provide services at discounted rates which shows that the assessee has been providing services for charges and not free-of cost. In support of its claim, the assessee has furnished comparative rates of services charged by other entities. However, no evidences to prove the genuineness of said comparison has been furnished by the assessee. Considering these facts and its emphasis on revenue generation, private sector collaboration, and mobilization of private capital, along with the comprehensive range of services, sets the assessee foundation apart from charitable organizations that primarily rely on donations and grants to provide free or low-cost services to those in need. 5.4 Moreover, the entire of the assessee's income is exclusively der ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nces of the case and in law the Ld. CIT(E) erred in rejecting the registration on the ground that Corpus donation received is not routed Income & Expenditure A/c and holding that documents about identity of the doner has not been submitted. 2.1. The Ld. CIT(E) erred in not granting any opportunity to produce the document for identity of the doner. 2.2. The Ld. CIT(E) erred in rejecting the registration on the ground that bills and invoices in respect of expenditure of health camps have not been furnished and statistics and photographs regarding holding of health camps are not conclusive. 3. On the facts and in the circumstances of the case and in law the Id. CIT(E) erred in not taking cognizance of the fact that the appellant trust is a section 8 Company registered under Companies Act, 2013 with a charitable object of providing medical relief to the geriatric population and registered u/s 7(2) of the Companies Act 2013. 4. On the facts and in the circumstances of the case and in law the Ld. CIT(E) grossly erred in alleging that the appellant trust is making substantial surplus when the surplus amount is nominal. Further the Ld. CIT(E) erred in not appreciating the fact that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tted that although the assessee had furnished maximum possible data to prove the genuineness of the activities of medical relief, the CIT(Exemption) rejected the registration without calling for any further information. He submitted that the fees charged by the assessee for treatment of the patients are much below the fees charged by other hospitals and these are only to meet the routine expenses for conducting the tests / camps and the activities of the trust are not commercial in nature. Finally, he submitted that given an opportunity, the assessee is in a position to substantiate its case before the CIT(Exemption) by clarifying whatever doubts he has for allowing the registration u/s 12AA of the Act. 6. The Ld. DR on the other hand, heavily relied on the order of CIT(Exemption) and also filed a paper book containing 31 pages, details of which are as under: Sr. No. Document Details Pages 1 Assessee's submission before CIT(E), Pune dated on 11/10/2023 1 to 3 2 Letter of Anjali P. Telang dated on 25/03/2022 4 3 Schedule of Charges for FY 2019-20, 2020-21, 2021- 22 5 4 Financial Statement of assessee along with notes on accounts 6 to 15 5 ` Ledger Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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