HIGH COURT OF KARNATAKA
Commissioner of Income-tax
versus
Rajasthan Jain Charitable Trust
IT Appeal No. 5002 OF 2012
JANUARY 8, 2013
JUDGMENT
H.N. Nagamohan Das, J.
The Income Tax Department is before this Court in this appeal filed under Section 260A of the Income-tax Act, 1961 (for short the Act). Though this Court vide order dated 20.03.2012 framed four questions of law for consideration and decision we are of the opinion that the following two questions of law raised in the memorandum of appeal requires reconsideration in this appeal. The said two questions of law are as under:
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1. |
Whether on facts and in law, the Hon’ble ITAT is right in holding that the sale of blood amounts to medical relief within the purview of section 2(15) of the Income-tax Act, 1961? | |
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2. |
Whether on facts and in law, the Hon’ble ITAT is right in holding that the CIT cannot withdraw recognition under section 80G(5) on the basis of wrong application submitted by the assessee for renewal of recognition when the facts stated in the order itself prove that the assess is not eligible for recognition under section 85G(5) of the Income-tax Act, 1961? |
2. The facts in this case are as under:
The respondent is a registered trust engaged in charitable purpose. Respondent Trust obtained exemption certificate under section 80G of the Income Tax Act for the period up to 30.03.2010. The respondent Trust under a bona fide impression that the exemption certificate requires renewal made an application to the Commissioner of Income Tax for renewal of exemption certificate. The Commissioner noticed the fact that section 80G came to be amended to the effect that exemption granted prior to 01.10.2009 need not require renewal. Accordingly, the Commissioner issued a notice to the respondent and under the impugned order, rejected the application of the respondents for renewal. Insofar as this portion of the order passed by the Commissioner there is no grievance to both the parties.
3. The Commissioner while rejecting the application of the respondent for renewal of exemption under section 80G proceeded to hold that the activity i.e. carried on by respondent do not come under section 2(15) of the Act and further held that there is violation of conditions specified in section 80(G) of the Act and consequently under the impugned order, the Commissioner had withdrawn the exemption granted to the respondent under section 80G. Aggrieved by this order of the Commissioner as per Annexure-B, the respondent filed an appeal in ITA No.79/2011 before the Income Tax Appellate Tribunal, Panaji Bench, Goa. Under the impugned order Annexure-A, the Tribunal set aside the order of Commissioner. Therefore, the revenue is before this Court.
4. We heard arguments on both the side and perused the entire appeal papers.
5. It is necessary at this stage to extract section 2(15) of the Act and the same reads as under:
“Charitable purpose” includes relief of the poor, education, medical relief, [preservation of environment (including watersheds, forests and wildlife) and preservation of monuments or places or objects of artistic or historic interest] and the advancement of any other object of general public utility.
Provided that the advancement of any other object of general public utility shall not be a charitable purpose, if it involves in carrying on of any activity of rendering any service in relation to any trade, commerce or business, for a cess or fee or any other consideration, irrespective of the nature of use or application, or retention, of the income from such activity
[Provided further that the first proviso shall not apply if the aggregate value of the receipts from the activities referred to therein is [twenty-five lakh rupees] or less in the previous year;]
6. The Tribunal noticed that memorandum of association of respondent-Trust specifying the object of the trust and the same is as under:
