Veera Devi Ramchandra Vs ITO Exemption (ITAT Jodhpur)
Summary: The Jodhpur Bench of the Income Tax Appellate Tribunal considered two appeals filed by Veera Devi Ramchandra Jhanwar Charitable Trust against separate orders of the Commissioner of Income-tax (Exemption), Jaipur, rejecting its applications for registration under section 12AB and approval under section 80G(5) of the Income-tax Act, 1961. Both appeals arose from the same facts and were disposed of through a consolidated order.
The assessee is a public charitable trust constituted through a Trust Deed dated 11.11.2011 and registered with the Sub-Registrar, Nokha. It had earlier obtained registration under section 12AA by order dated 22.02.2012 with effect from 11.11.2011. Its principal charitable activity is running “Veera Seva Sadan Dharamshala” at P.B.M. Hospital, Bikaner, primarily to provide accommodation and allied facilities to poor and needy patients undergoing treatment at the hospital and their attendants. The Dharamshala operates on a “No Profit No Loss” basis and collects only subsidised room/user charges from beneficiaries.
During proceedings on the applications, the CIT(E) required the assessee to furnish registration under the Rajasthan Public Trust Act, 1959 (“RPT Act”) or establish that it was exempt from such registration. The assessee relied specifically on section 77(1) of the RPT Act, contending that the statutory exemption applied because of the manner in which the Dharamshala was administered and controlled by Government authorities. The CIT(E), however, rejected the applications, noting, among other things, that the trust collected room-rent/user charges, did not receive Government grants, had private trustees and was not registered under the RPT Act. The rejection of the section 80G application followed substantially from the same premise.
