Income Tax Appellate Tribunal - Amritsar
Divine Health Services Fondation,, ... vs Assessee on 29 May, 2012
IN THE INCOME TAX APPELLATE TRIBUNAL
AMRITSAR BENCH; AMRITSAR.
BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER
AND SH. B.P.JAIN, ACCOUNTANT MEMBER
I.T.A. No. 417(Asr)/2010
Assessment year:2010-11
PAN :AABTD4087F
M/s. Divine Health Services vs The Commissioner of Income Tax-II,
Foundation, Amritsar. Amritsar.
(Appellant) (Respondent)
Appellant by:S/Sh. Padam Bahl, CA & G.S. Grover,Advocate
Respondent by: Sh. Amrik Chand, DR
Date of hearing:29/05/2012
Date of pronouncement:07/06/2012
ORDER
PER BENCH ;
The assessee has filed the present appeal against the impugned order of Ld. Commissioner of Income Tax-II, Amritsar, dated 21/23-09-2010.
2. The assessee has filed an application under section 12A(1)(aa) in Form No.10A alongwith photocopy of Trust Deed for grant of registration under section 12AA of the Income-tax Act, 1961 on 31.03.2010 to the Commissioner of Income Tax -II, Amritsar. The Ld. CIT-II, Amritsar, called for report from the ITO Ward 4(1), Amritsar on the genuineness of 2 ITA No.417(Asr)/2010 the objects and activities of the assessee-trust. In response to the same, the ITO Ward 4(1), submitted his detail inquiry report dated 16/21-07-2010, in which he has not recommended for grant of registration under section 12AA of the act to the assessee-trust. The Ld. CIT-II, Amritsar, provided the opportunity to the assessee by fixing the hearing for 11.08.2010. In response to the same, the Authorised Representative of the assessee appeared from time to time and also filed various documentary evidence as mentioned by the Ld. CIT-II, Amritsar in para 2 (page 1) of his order. After perusing the contents of application as well as documentary evidence furnished by the assessee alongwith report of the ITO Ward-4(1), Amritsar, the Ld. CIT-II finally held that the assessee-trust is just a family trust of two professionals who are in the line of medical and health profession. As per the main aims and objects of the assessee-trust, it seems that these medical professional trustees want to run professional institution of health and medical education and in order to give it a face of charity, the trust has been created with the intention to first get it registered as a charitable trust u/s 12AA of the Act. He finally opined that the assessee trust is unable to satisfy or to convince him for its charitable face. Therefore, the assessee-trust is not entitled for registration under section 12AA of the Act and rejected the application filed by the assessee vide impugned order dated 21/23-09-2010. 3 ITA No.417(Asr)/2010
3. Aggrieved by the impugned order of the ld. CIT-II, the assessee has filed the present appeal before this Bench. At the time of hearing, the Ld. counsel for the assessee, Sh. Padam Bahl, CA, stated that the impugned order passed by the Ld. CIT-II is against the law and facts on the file and liable to be cancelled because the Ld. CIT-II, Amritsar, has exceeded his jurisdiction for examining the application of income for charitable purpose, which can be examined at the stage when the trust files its return. He further stated that if the objects of the trust are not found charitable or the activities of the trust are not according to the aims and objects of the trust or not genuine then the Ld. CIT-II, Amritsar, can cancel the registration granted to the assessee. He further stated that the assessee has filed all necessary required documentary evidence before the Ld. CIT-II, Amritsar, which has not been thoroughly appreciated by him. He has also filed Income Tax Return filed by the assessee for the assessment year 2011-12 alongwith rent deed and statement of account for the year ending 31.03.2011 alongwith computation of income to support his arguments. He finally requested that the assessee is entitled for grant of registration u/s 12AA of the Act and requested that the appeal filed by the assessee may be accepted and direction be issued to the Ld. CIT-II, Amritsar to grant registration as requested by the assessee. He also placed reliance on the following case laws: 4 ITA No.417(Asr)/2010
i) Commissioner of Income Tax vs. Surya Educational & Charitable Trust 203 Taxman 53 (P&H)
ii) New Life on Christ Evangelistic Association vs. CIT 246 ITR 532 (Mad)
iii) Medical Accident Prevention Society vs. CIT 278 ITR 165 (Ker.)
iv) Director of Income Tax (Exemptions) vs. Meenakshi Amma Endowment Trust 50 DTR (Kar) 243.
v) CIT vs. Red Rose School 163 Taxman 19 (All)
vi) CIT vs. Lucknow Education & Social Welfare Society 340 ITR
86 (All)
vii) Fifth Generation Education Society vs. CIT 185 ITR 634 (All)
4. On the contrary, the Ld. DR, Sh. Amrik Chand, relied upon the order passed by the Ld. CIT-II, Amritsar. He stated that the Ld. CIT-II has passed a well reasoned order after perusing the evidence filed by the assessee and finally found that the activities of the trust are not genuine and has rightly rejected the application filed by the assessee for grant of registration.
5. We have heard both the parties and perused the relevant materials available with us. We are of the view that there is a force in the arguments advanced by the ld. counsel for the assessee because for granting registration under section 12AA by the Ld. CIT-II, Amritsar, the scope of inquiry by him is only to examine the genuineness of the objects of the trust and not application of income for charitable purpose, which can be examined at the stage when the trust files its return. It is also an admitted fact that in view of sub section (3) of section12AA which empowers the Ld. CIT to cancel registration of the trust or institution, if the ld. CIT is satisfied that the 5 ITA No.417(Asr)/2010 activities of such trust or institution are not genuine or not carried out in accordance with the aims and objects of the trust or institution. This view is supported by the decision of the Hon'ble Punjab & Haryana High Court in the case of Commissioner of Income Tax vs. Surya Educational & Charitable Trust 203 Taxman 53 (P&H). The Hon'ble Allahabad High Court (Lucknow Bench) in the case of Commissioner of Income Tax vs. Lucknow Education and Social Welfare Society [2012] 340 ITR 86 has also held that the tests for registration which have to be applied are (i) whether the activities of the society are genuine, and (ii) whether the purpose of the society is charitable. We are of the considered view that the assessee had satisfied the conditions for registration under section 12AA of the Income- tax Act, 1961 because the activities of the assessee3-trust are genuine and purpose of the assessee-trust is charitable. As per aims and objects mentioned in the trust deed, which have been reproduced by the Ld. CIT-II, Amritsar, in the impugned order in para 3 (pages 2 & 3, the Ld. CIT-II, Amritsar, has passed the impugned order contrary to the revision of section 12AA, which is not sustainable in the eyes of law. After perusing the copy of audited accounts for the year ending 31.03.2010, Notes on activities of the Trust filed before Ld. CIT, letter dated 28.08.2010 filed with CIT at the time of hearing u/s 12AA, coy of pamphlets filed with CIT, copy of rent deed 6 ITA No.417(Asr)/2010 dated 13.04.2010 filed with the worthy CIT as well as other documentary evidence supporting the claim of the assessee, we are of the view that the assessee is entitled for grant of registration under section 12AA of the Act. In view of the above discussions, we cancel the impugned order passed by the Ld. CIT-II, Amritsar and direct him to grant registration to the assessee- trust without any further delay.
6. In the result, the appeal filed by the assessee in ITA No.417(Asr)/2010 is allowed.
Order pronounced in the open court on 7th June, 2012
Sd/- Sd/-
(B.P. JAIN) (H.S. SIDHU)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Dated: 7th June, 2012
/SKR/
Copy of the order forwarded to:
1. The Assessee: M/s. Divine Health Services Foundation, Amritsar.
2. The CIT-II, Amritsar.
3. The SR DR, ITAT, Amritsar.
True copy By order (Assistant Registrar) Income Tax Appellate Tribunal, Amritsar Bench: Amritsar.