Mere earning of surplus income in carrying out charitable activities would not render activities of trust as non-charitable

ITAT CHANDIGARH BENCH ‘B’

PIMS Medical & Education Charitable Society

versus

Commissioner of Income-tax-II, Chandigarh

IT Appeal No. 456 (Chd.) of 2012

OCTOBER 30, 2012

ORDER

Mehar Singh, Accountant Member

The present appeal filed by the assessee is directed against the order dated 29.03.2012 passed by the ld. CIT u/s 12AA of the Income-tax Act,1961 (in short ‘the Act’).

2. In this appeal, the assessee has raised the following Grounds of Appeal:

“1. That the order of the Learned Commissioner of Income Tax II, Chandigarh is defective both in law and facts of the case.

2. That the Learned Commissioner of Income Tax II, Chandigarh is not justified in rejecting the application of the appellant for the grant of registration u/s 12A of Income-tax Act, 1961 as the appellant Trust duly fulfills all the necessary conditions for registration u/s 12A of Income-tax Act, 1961. The Application for Registration has been rejected only on surmises and on whimsical grounds.

3. That any other ground may kindly be allowed to be taken at the time of hearing.”

3. In the course of present appellate proceedings, ld. ‘AR’ vehemently contended that ld. CIT has declined registration, to the appellant, u/s 12AA of the Act, vide order, dated 29.03.2012, on the foundation of irrelevant considerations by invoking the provisions of sections 11 & 12 of the Act. The issue of registration u/s 12AA of the Act, has to be considered, in the light of the statutory provisions, as contained u/s 12A read with section 12AA of the Act and not in the context of sections 11 & 12 of the Act. He was of the opinion that registration proceedings u/s 12AA of the Act and assessment proceedings of the Institution or Trust are exclusive, different and independent proceedings. Ld. ‘AR’ contended that the appellant society is running a hospital and rendering other services, within the meaning of section 2(15) of the Act. Members of the society are qualified doctors, as is evident from page 31 of the Paper Book. Ld. ‘AR’ narrated factual history of the case and, further, stated that the hospital is run on the pattern and rules of PGI, Chandigarh, in terms of charging of fees, from the patients, irrespective of the caste, creed, religion etc. of the patients. The assessee filed a Paper Book and placed reliance on pages 32, 33 and 34 of the same. He also placed reliance on the Paper Book from pages 22 to 29, which contain note on charitable activities. The summary of charitable objects, as contained at page 22 of the book are reproduced here under :

“Major Charitable Activities done by our Society.

• Dec 15,16: General check-up camp in Cambridge International School for Girls

• PIMS joins hands with WHO against Drunk Driving RS 10 project for two days; Dec 12,13

• Dec 07: ENT department holds medical camp; 202 patients checked

• Nov 24’11: PIMS holds Orthopedic camp; 263 patients diagnosed

• Medical camp at PIMS on World Diabetes Day; Nov 14’11443 patients avail free sugar test and medicines

• Urology camp held at PIMS; Nov 11’11152 patients availed the facility and Uroflowmetry test was done.

• Diabetic, BP and Blood Donation camp organized; 215 patients

• Psychiatry Camp; 86 patients October 20’11

• Pulmonary Medicine camp; Oct 17’11

• Sep 08’11 International students do a project on AIDS in PIMS

Please become a Premium member. If you are already a Premium member, login here to access the full content.