(1) Anand Escher Amar Charitable Cancer and Malty Specialty Hospital Society Vs. CIT (Exemption) Chandigarh 2019. 104 Taxman.com 369 (Amritsar Tribunal) 2019 176 ITD 424 (Amritsar)
As the trust has not started activity as per Trust Deed. Registration was not granted.
Tribunal observe that at the time of granting Registration only Object and genuineness are to be verified. As this being initial / Nascent Stage, so registration should be granted. CIT Vs. Surya Education Charitable Trust(2011) 15 Taxman.com 123/203 Taxman 53/ 355 ITR 280 (Punjab and Haryana High Court
(2) CIT(E) vs. Gettwell Health and Education Samiti (2020) 115 taxman.com66(Raj). Dated 15th March 2019- Asst.Yr. 2010-11 to 2014-15
Charitable or Religious Trust – Registration procedure (Deemed Registration) – Section s12AA and 13 of I.T.Act 1961 – Where Commissioner (Exemption) did not decide application u/s 12AA with in six months from the date on which matter was remitted by Tribunal, registration u/s 12AA(2) would be deemed to be granted to assessee society; A. Ys. 2010-11 to 2014-15
The assessee is a society registered under the Rajasthan Societies Registration Act 1958 vide registration certificate dated 3rd January, 2008. Its main object is to provide medical facilities in the State of Rajasthan. The assessee is running a hospital at Sikar in the name of Getwell Hospital and Research Centre. The filed an application in Form No 10A seeking registration u/s 12AA of the Income Tax Act 1961, on 19th January 2010. The Commissioner of Income Tax (Exemption) rejected that application by an order dated 23rd July,2010. By an order dated 22nd July, 2011, the Tribunal set aside the order dated 23rd July, 2010 and remanded the matter back the file to the CIT(E) with a direction that the assessee should be given an opportunity before deciding the issue of registration and should be considered adverse to the assessee.
After remand of the matter, the CIT(E) passed a fresh order on 9th October, 2015 and rejected the application of the assessee, holding that the assessee was running the hospital for the benefit of the family members of Shri B. L. Ranwa and there was no charity in it.
The Tribunal allowed the assessee’s appeal.
On appeal by the Revenue, the Rajasthan High Court uphold the decision of the Tribunal and held as under:
i) The Tribunal also noted that once the matter was remanded back to the CIT(E) then the limitation for passing the order/ decision can not be more than the limitation provided for deciding the application u/s 12AA of the Act. There is no dispute that as per the provisions of Section 12AA(2) of the Act the limitation for granting or refusing the registration is prescribed as before the expiry of six months from the end of the month in which the application was received. Relying the judgment of Supreme Court in CIT vs. Society for the Promotion of Education (2016) 67 taxman.com 264/238 Taxman 330/382 ITR 6 which upheld the judgment of the Allahabad High Court and judgment of this court in CIT vs. Sahitya Sadawart Samiti (2017) 88 taxman.com 703/396 ITR 46 (Raj) the Tribunal held that once the limitation prescribed u/s 12AA of the Act expired and the consequential default on the part of CIT(E) in deciding the application, would result in deemed grant of registration is a settled proposition.
ii) Therefore, it has been held by the Tribunal that the judgment of the CIT(E) is reserved on the merits and registration would stand granted to the assessee by prescription of law made in Section 12AA(2) of the Act. The Tribunal in this behalf relied on the judgment of the Lucknow Bench of the Tribunal in Harshit Foundation vs. CIT(2013) 38 taxmann.com 309/60 SOT 147(URO) in which case it was held that where the Commissioner does not pass any order even after six months from the receipt of the Tribunal’s order remitting the matter to him, the registration will be deemed to have been granted.
iii) This is subject to exercise of the commissioner’s power u/s 12AA(3) of the Act in appropriate cases.
iv) In view of the above, we hardly find any justification in admitting this appeal as in our considered view, it does not raise any question of law, much less substantial question of law. The appeal is therefore dismissed.
(3) Anand Social and Educational Trust vs. CIT, Civil Appeal Nos. 5437-5438/2012, 4702/2014 and Civil Appeal No. 1727/2020 (arising out of SLP(C) No 25761/2015, Date of order 19th February, 2020
Registration of Charitable Trust – Section 12AA – The Commissioner is bound to satisfy himself that the object of the trust is genuine and that its activities are in furtherance of the objects of the Trust, that is equally genuine – Section 12AA pertains to the registration of a trust and not to assess what a trust has actually done – The term ‘activities’ in the provision include ‘ proposed activities’
In the DIT(E) vs. Foundation of Ophthalmic and Optometry Research Education Centre (Civil Appeal No 4702/2014) the appeal had been preferred by the appellant Director of Income Tax against the impugned judgment and the order passed by the Delhi High Court holding that a newly – registered trust is entitled for registration u/s 12AA of the Act on the basis of its objects, without any activity having been undertaken.
Section 12AA – remanded back to CIT(E) for fresh adjudication.
The tribunal remanded the matter to primary authority in view of the allegation that no opportunity of cross examination was given to the representative of the donor whose statement was relied upon in cancellation of 12AA. High Court quashed the order of cancellation of registration and held that while it is possible that in a particular donation may be bogus or fictitious but the single donation which is allegedly bogus, would not establish that the activities of the trust are not genuine and not being carried out in accordance with the objects of the trust. On appeal, the Apex Court quashed and set aside the order of High Court in view of serious allegations against respondent trust so that it was error committed by High Court in entering the appeal. It was made clear that CIT(E) would consider all the issues on its own merit, uninfluenced by the observations made by appellate authority the High Court or by this court.
Yoga is education and medical relief ?
The Tribunal concluded upon analysis of the practice of yoga that it confers positive relief to certain ailments such as asthma, migraine, hypertension, stress etc. and promotes wellness and well being generally. Having regards to the observations, the court is of the opinion that the mere inclusion of yoga specifically with effect from April 1, 2016 did not per se imply that it came to be included as a education, medical relief, relief to the poor etc.
Delhi High Court.
Registration of Charitable Trust u/s 12AA:
Pr.CIT(E) vs. Dawoodi Bohra Masjid (2018) 402 ITR 29 (guj)
Whether a Charitable Trust can be granted certificate u/s12AA in absence ofi Trust Deed when all other details are available?
The fact of existence of a trust could also be established by producing evidencing its creation. The order passed by the Wakf Board recognized various Daudi Vohra trusts and the Assessee had also listed its objects, who would be the manager of the trust, and how such managers would be appointed or removed. The Tribunal had gone through the registration details of the Assessee as contained in the order of the Wakf Board and was satisfied that the full details of the functions of the trust were available which established the existence of the trust, its registration by the State Wakf Board and also contained the details if its objects, the manner of appointment of mutawalli etc. The Tribunal was right in holding that looking to the nature of the assesses trust no separate trust deed was required for registration u/s 12AA as it was registered with the State Wakf Board.
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Charitable institution- Exemption – Section 2(15) and 11 of ITA,1961 –Denial of exemption – Activity for profit – effect of proviso to section 2(15)Concurrent find of appellate authorities that the assessee was charitable institution – event organized to raise money- Amount earn entitled to exemption
CIT(Exemption) vs. United Way of Baroda (2020) 423 ITR 596 (guj Date of order 25th February, 2020 A.Y. 2014-15
The assessee is a charitable institution registered u/s 12A of the Act. For A.Y.2014-15, the assessee filed its return of income declaring total income as NIL after claiming exemption u/s 11. But the A.O. assessed the income of Rs. 4,53,97,808. He had found that the assessee had received a total sum of Rs. 5,48,04,054 which included Rs. 4,37,61,637 as income from organizing the event of Garba during Navratri festival. According to A.O., the assessee sold the passes and gave food stalls on rent etc. which constitute 79.85% of its total income.