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4. Being aggrieved, the assessee carried the matter in appeal before the CIT(A). It was submitted before the CIT(A) that Dr. P.N. Chuttani was founder of the trust, who was an eminent doctor and had an outstanding record of service in the medical field. He served PGI for almost two decades. Dr. Chuttani was a bachelor and bequeathed his entire wealth to TTVC. Since Dr. Chuttani was associated with medical profession, his dream was also to set up a trust, which would afford medical relief and encourage medical research and for that purpose Chandigarh Medical Centre and Chuttani Medical Centre were set up. It was emphatically submitted that the AO had failed to appreciate that the assessee-trust's activities were not merely to afford medical relief and encourage medical research but were charitable also which was obvious from its name as 'Trilok Tirath Vidyavati Chuttani Charitable Trust'. It was submitted that the AO had mentioned the donee-trust as 'Sardarni Uttam Kaur Charitable Society' all along in the assessment order, whereas the correct name of the donee-trust is 'Sardarni Uttam Kaur Educational Society'. It was submitted that the AO had misinterpreted the provision of law governing the trust. As per Article 4 of the trust, donation to University, School or other like institutions is one of the objects of the trust and 'education' stands covered under this Article. The AO had deliberately omitted the word 'educational' from the donee society and had substituted the word 'educational' by 'charitable'. It was further submitted that medical education cannot be acquired without completing primary and secondary education and, therefore, nursery and secondary education is an integral part of higher education. It was further pointed out that there is no bar against a charitable trust giving donation to another charitable trust. The CBDT had considered the issue and vide Instruction No. 1132 dated 5.1.1978, it was decided that 'as law stands at present, the payment of a sum by one charitable trust to another for utilization by the donee-trust towards its charitable objects is proper application of income for charitable purpose in the hands of the donee-trust; and the donor-trust will not lose exemption under Section 11 of the Income-tax Act, 1961 merely because the donee-trust did not spend the donation during the year of receipt itself." It was further submitted that the Hon'ble Supreme Court in the case of CIT v. Andhra Chamber of Commerce, 55 ITR 722, had laid down that if the primary or dominant purpose of a trust or institution was charitable, any other object which by itself might not be charitable, which was actually or incidental primary or dominant purpose, would not prevent the trust from being a valid charity. It was submitted that the AO had herself accepted the fact that Sardarni Uttam Kaur Educational Trust is a charitable trust and allowed exemption Under Section 80G of the Income-tax Act. Since the assessee-trust has been recognized as a charitable trust, the AO's action in holding that the donation given by the assessee-trust had not been applied towards the objects of the trust, is totally mis-conceived. It was thus pleaded that the impugned addition made by the AO being contrary to law, should be deleted.

8. The ld. Counsel for the assessee, Shri B.M. Khanna, drew our attention to a copy of trust deed placed in the paper book. Drawing our attention to the objectives of the trust mentioned at page 4 he submitted that the same, inter alia, included to maintain, establish, finance, subsidize, exclusively or partly, or give grants-in-aid, recurring or otherwise, for the maintenance of hospitals, clinics, dispensaries, nursery schools or other establishments of like nature. He submitted that providing assistance for maintenance and running of nursery schools was also the objects of the assessee-trust. Proviso to Article 4 of the trust deed mentions that funds made available to other institutions may be subject to such conditions as may be imposed by the trustees keeping in view the objects of the trust. However, he further submitted that it has also been mentioned on page 5 that any contribution by the trustees to any other trust or society, institution etc. having as its sole objets on all or any of the objects of the assessee trust shall mean furtherance of the objects of the trust. He further drew our attention to page 2 of the paper book, which is a copy of balance sheet, as on 31.3.96 and the same shows corpus of Rs. 3.10 crores of the Trust. He drew our attention to page 33 of the paper book for the assessment year 1997-98, which is a copy of the receipts and expenditure for the financial year 93-94, 94-95, 95-96 and 96-97. He submitted that that right up to the assessment years 95-96, net result of the trust was a loss. However, the assessee started earning interest income on sale proceeds of the property from the assessment year 95-96 onwards. He submitted that for the assessment year 96-97, interest income aggregated to Rs. 32,13,031. thus, the question of application of income arose in the assessment year 96-97. The assessee donated an amount of Rs. 29 lakhs to SUKES for the purpose of nursery schools, which was one of the objects of the assessee-trust. He submitted that SUKESH was registered with the CIT, Jalandhar for the purpose of Section 80G. He drew our attention to a copy of order dated 21.9.93 of the CIT, Jalandhar granting registration to SUKES for the assessment years from 94-95 to 97-98. He submitted that the objects of SUKESH were, inter alia, to open, run, and continue educational and vocational institutions. Thus, the objects of the donee-trust were in consonance with the objects of the assessee-trust. He submitted that the fact that the donee-trust was registered for the purpose of Section 80G was accepted by the AO where he had held that donation of Rs. 29 lakhs given to SUKES would qualify for deduction Under Section 80G. He further submitted that at the time of completing the assessment, the AO never doubted the charitable character of the institution. His only objection was that the donation given to SUKES was not for furtherance of the objects of the assessee-trust. It was only during the course of appeal proceedings that the AO questioned the charitable character of the institution. He submitted that the ld. CIT(A) was in error in taking cognizance of the subsequent inquiries made by the AO under the directions of the CIT. For this purpose, he relied on the judgment of Bombay High Court in the case of Lokenath Tolaram v. CIT, 161 ITR 82. The ld. Counsel drew our attention to order dated 19.5.97 of the CIT, Patiala granting exemption Under Section 80G to the assessee trust for the assessment years form 93-94 to 97-98. He further submitted that once the registration is allowed by the CIT, the charitable character of the trust couldn't be called into question. He relied on the decision of ITAT, Ahmedabad Bench in the case of Stock Exchange, Ahmedabad v. ACIT, 74 ITD 1, where it has been held that after registration Under Section 12A has been allowed by the CIT, it is beyond the province of the AO to reject the claim of exemption Under Section 11 by looking into objects of association and holding the same as non-charitable in nature. He further submitted that the assessee was a charitable institution entitled to exemption. The assessee gave donation of Rs. 29 lakhs to SUKES. Similar donation was also given in the assessment year 95-96 to the same society. Such donation was accepted by the AO and exemption was allowed. Relying on the judgment of Supreme Court in the case of Radhasomi Satsang v. CIT, 193 ITR 321, the ld. Counsel submitted that when on the same facts and claim of the assessee has been accepted in the past, it is desirable that status quo should be maintained. He further submitted that donations given by one charitable institution to another charitable institution amounted to application of income for charitable purposes and hence the donor-trust entitled to exemption of the amount donated. For this proposition, the ld. Counsel relied on the judgment of Bombay High Court in the case of CIT v. Trustees of The Jadi Trust, 133 ITR 495, and the judgment of Gujarat High Court in the case of CIT v. Sarladevi Sarabhai Trust No., 172 ITR 698. He further submitted that there was no bar on assessee to carry on business. The mere fact that assessee was running CMC for commercial consideration did not disentitle the assessee from exemption of its income so long as the income so generated had been utilized and reinvested for the objects of the trust. He relied on the decision of ITAT, Amritsar Bench in the case of DCIT v. DCIT v. Ch. Aishi Ram Batra Charitable Trust, 70 ITD 487, decision of ITAT, Delhi Bench in the case of Taxation Owners Sarla Bhargava Memorial Trust v. ITO, 59 ITD 331, and the decision of ITAT, Ahmedabad Bench in the case of Stock Exchange, Ahmedabad v. ACIT, 74 ITD 1. He further submitted that once the assessee had donated the amount to an educational society, it lost control over the said amount. There are no provisions in any Act under which assessee could recover the amount from the donee-trust. However, the assessee satisfied itself that the donee-trust was registered for the purpose of Section 80G and its objects were similar to the objects of the assessee-trust. Therefore, the assessee was under a bonafide impression that amount would be utilized for the attainment of the objects. He further submitted that even the donee trust had purchased lands for the purpose of running a nursery school. He further submitted that the mere fact that the donee-trust has misutilized the funds by way of giving loans to the business ventures of Brar family would not disentitle the assessee from exemption in respect of its income. If the donee-trust has misutilized the funds, the same would result in addition in that case because the donee-trust would not be entitled to exemption Under Section 11 of that income. He further submitted that none of the members of Brar family is a trustee or founder of assessee-trust. Therefore, no benefit in respect of the amounts advanced by donee-trust to the Brar family has flown to the trustees of the assessee. He further submitted that the terms "charitable purposes" as defined in Section 2(15) of the Act is of wide amplitude. The definition was inclusive and not exclusive or exhaustive. He relied on the judgment of Supreme Court in the case of CIT v. Andhra Chamber of Commerce, 55 ITR 722. He further submitted that the ratio of judgment of Bombay High Court in the case of CIT v. Trustees of The Jadi Trust, 133 ITR 495, and the judgment of Supreme Court in the case of Director of Income Tax v. Bharat Diamond Bourse, 259 ITR 280, were not applicable to the facts of the present case because the benefits of donations given to the donee-trust had not flown back to the trustees of the assessee-trust. He referred to the provisions of Section 13 of the Income-tax Act and submitted that benefit of exemption can be denied to the assessee trust only if any part of such income or any property of the trust is, during the previous year, used or applied directly or indirectly for the benefit of any person referred to in Sub-section (3). He submitted that none of the clauses of Sub-section (3) applies to the facts of assessee's case. Therefore, such benefit cannot be denied to the assessee. Thus, the ld. Counsel urged that the order of the CIT(A) in allowing exemption in respect of donation of Rs. 29 lakhs given to SUKES did not merit any interference.

12. The facts discussed above further show that the assessee trust was registered in the year 1976. Thereafter, registration has been allowed from time to time to the assessee-trust. A copy of order dated 19.5,1997 of CIT, Patiala placed on our file, shows that the assessee trust was allowed exemption Under Section 80G for the period from 31.3.93 to 31.3.97 relevant to assessment years 93-94 to 97-98, which also covers the assessment year under reference. The scheme of registration and granting exemption Under Section 80G is with a specific objective. It enables the trust to collect donations from other parties to be utilized for achieving the objects of the trust. It is sort of incentive granted to the donors to make contributions to the public charitable trust which they can claim deduction in their returns. For this purpose, the institution is required to submit application in the prescribed proforma before the Commissioner of Income Tax. The CIT examines such application with reference to the objects of the trust and grants registration only if it is found that the objects of the trust are charitable. Procedure in this regard has been spelt out Under Section 12AA of the Income-tax Act and the requisite conditions for registration have been spelt out in Section 12A of the Act. Once registration is granted to the trust, it enables the trust to claim exemption in respect of its income subject to fulfilment of other conditions relating to application and accumulation of income spelt out in Sections 11 to 13 of the Income-tax Act. But grant of registration is a testimony of the fact that trust is a charitable institution. It is also important to note that registration is not granted by the Commissioner for indefinite period. It is only for a limited period of 3 to 4 years. In case the assesses desires to seek renewal of registration, the assessee has to make fresh application. The same is liable to fresh examination by the Commissioner and further registration would be allowed only after satisfying that objects of the trust are charitable. However, at the time of completing the assessment, the AO is duty bound to examine whether the requisite conditions for application and utilization of income for the objects of the trust are met or not. The assessee would be entitled to exemption only if its income has been utilized as per provisions of the Act. But the question is, when once the character of the institution being charitable is accepted by the CIT at the time of granting registration, can the AO still question the charitable character of the institution at the time of completing the assessment? This issue came to be considered before the ITAT, Ahmedabad Bench in the case of Stock Exchange. Ahmedabad v. CIT, supra. The assessee in the said case was allowed registration Under Section 12A. The AO rejected the claim for exemption Under Section 11 mainly on the ground that there was no prohibition clause in trust deed prohibiting the institution from distributing profits to members. On these facts, the Tribunal held that the dominant object of the assessee was development of stock market and it was covered under the definition "charitable purposes" in Section, 2(15). It was further held that once the assessee has been allowed registration Under Section 12A, it was beyond the jurisdiction of the AO to reject the claim of exemption Under Section 11 by looking into the objects of association and holding the same as non-charitable in nature, more so, when the association has been recognized as charitable for the past fifteen years. The facts of the present case are also similar to the facts of the aforesaid case decided by the ITAT, Ahmedabad Bench. Therefore, the charitable character of the assessee cannot be called into question and the assesses cannot be denied exemption in respect of income on the ground that it was not a charitable institution.

12.4 We wish to mention that there may be world fame doctors having vast experience, professional knowledge and skill in the medical field. But possession of such professional competence and skill by themselves are not enough. Such doctors require other infrastructure facilities such as hospital, costly machines and equipments, operation theatres, laboratories, assistance of other paramedical staff, assistance of other specialists necessary for diagnosis and treatment of the patients. All such facilities involve huge investments, which are beyond the reach of such professionally competent and world fame doctors. It is here that the role of a charitable institution assumes importance. Such charitable institution engages the services of such doctors and provides all infrastructure facilities mentioned supra without which they cannot function. One such instance is that of Dr. Trehan, a prominent heart specialist/surgeon working in ESCORT Hospital, New Delhi, which is again a charitable institution. It is because of such facilities provided by the trust that such doctors can make use of their professional competence and skill in treating the patients. This is exactly what the assessee-trust has done. The assessee has brought prominent professionals under one roof and provided all necessary infrastructure and facilities required for the treatment of patients. Thus, these activities are for the attainment of the main object of the trust, i.e. providing medical relief to the public and, therefore, the running of CMC is for the attainment of the main object of the assessee-trust. In the case of CIT v. Sivakasi Hindu Nadars Uravinmurai, 217 ITR 118 (Mad.), relied upon by the ld. D.R., the Madras High Court has held that exemption in respect of assessee's income cannot be granted merely because objects of trust are charitable. The facts in the case before the Madras High Court were that the assessee had claimed exemption in respect of income from hiring of furniture and marriage hall purely for profit and these activities had nothing to do with the objects of the trust. On these facts, the High Court held that such commercial activities were not for public utility and the assessee was not entitled to exemption in respect of such income. However, the High Court further held that the manner in which the activities for advancing charitable purposes were being carried on and the surrounding circumstances would alone show whether the assessee has done such activities for charitable purposes or with an object of profit motive. This judgment is not applicable to the facts of the present case. We have already held that the activities of running CMC are in consonance with the objective of the trust for providing medical relief to the public. Since the activities run by the CMC are not meant for particular caste, community or group or religion, it cannot be said that the same lack an element of altruism or the same are not charitable. Anybody can avail of medical treatment in the CMC. Therefore, the judgment of Allahabad High Court in the case of Chamber of Commerce, Hapur v. CIT, United Provinces, 4 ITR 397, relied upon by the ld. D.R. is also of no help to the revenue.