Smt. Vimal Chawla Charitable Trust Vs CIT (Exemption) (ITAT Chandigarh)
Charity in Name, Commerce in Practice- Surplus Without Service- Hospital Run on Commercial Lines Not Eligible for 80G Approval
Aggrieved by rejection of an application seeking approval u/s 80G(5)(iii) by CIT(E), assessee filed appeal before Tribunal.
Tribunal noted that Assessee is running a hospital by the name ‘NIMS’ since its inception & providing medical & health care services. Though Assessee was running a hospital, it failed to furnish any document to show that the hospital was being run for charity or providing services at nominal fees. Assessee had large surplus in Income & Expenditure for the year ending 31-03-2022. It was finally concluded by that the hospital had nothing to do with charity rather it was set up to earn profits.
Tribunal perused assessee’s financial statements for FYs 2021-22 to 2023-24 & noted that these financials would show that the assessee is always having large surplus of more than 13% in each of the three years. The donations being received by the assessee in FYs 2021-22 & 2022-23 are ‘nil’ where’s it has received nominal donations of Rs.8 Lacs only during FY 2023-24. No expenditure is shown to have been incurred on charity. Upon perusal of these financials, it could very well be concluded that the hospital is being run as a commercial organization only. No element of charity is shown in the same. The only evidences relied upon by Assessee are printed pamphlets for free mega health checkup camps on various dates which are coupled with few photographs. However, there no data is available for identification of patients, number of patients & charitable treatment offered by Assessee to these patients during these camps. The perusal of these documents hardly inspire any confidence to support assessee’s plea of carrying out of charitable activities. Hence Tribunal refused interference in the order rejecting the relevant registration application of Assessee.
