Case Law Details
Brief of the Case
ITAT Delhi held In the case of JDIT vs. Mool Chand Kharaiti Ram Trust that Merely because, running of an Allopathic hospital is not specifically mentioned, it does not necessarily mean that the same would be ultra vires the objects, as establishment of an Allopathic hospital does assist the Assessee in its object of improving the Ayurvedic system and taking assistance from the Allopathic system of medicine. Any activity reasonably incidental to the object would not be ultra vires the objects. As explained by the Assessee, the modern investigation techniques are equally utilized for treatment under Ayurvedic system.
Facts of the Case
The assessee filed the return of income for the AY 2007-08 on 2.11.2007 declaring NIL Income. The case was selected for scrutiny and notice u/s. 143(2) was issued on 8.9.2008. The assessee was registered u/s. 12A (a) and also approved u/s. 80G (5)(vi) for the period 1.4.2007 to 31.3.2010. The assessee is running a Hospital in the name of Sh. Moolchand Khairati Ram Hospital and Ayurvedic Research Institute at Lajpat Nagar, New Delhi. During the course of assessment proceedings, the assessee submitted a copy of the Will of Late Lala Khairati Ram by which the Trust came into existence.
The AO observed that the claim of the assessee that the activities of the Trust are not charitable within the meaning of section 2(15) does not justify the claim of exemption in the facts and circumstances of the case. The activities of the trust may be charitable per se. But the activities are not in accordance with the objects of the trust. Thus the trust is not eligible for benefits u/s. 11 & 12. AO also held that for the reasons discussed in detail in assessment for assessment year 2006-07, the assessee is not entitled to the benefit of u/s. 11 /12. Further, otherwise also, since the registration u/s. 12A has since been withdrawn by the DIT (E), the assessee is not entitled to the benefit of section 11/12.
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