INCOME TAX ACT, 1961

Section 80G(5)

Deduction under section 80G(5) - Allowability - Allegation that assessee was not doing charitable work without any discrimination on basis of caste, creed or religion -

Assessee was a Trust established through a Memorandum of Association and was granted recognition under section 80G ever since the date of the registration and applied for grant of renewal of recognition under section 80G. DIT(E) while processing the renewal application of assessee inter alia observed that primary object of Society was to establish and run medical college and hospital and as per Memorandum of Association, the primary object of Trust among others, primarily was for the benefit of Catholics and others may be admitted without any distinction of caste or creed. It was found that Clause 3 of the Memorandum of Association was not in consonance with the requirement of section 80G(5)(iii). AO rejected the application filed by assessee stating that clauses in proposed Memorandum of Association was not in consonance with provisions of section 80G(5)(iii). Held: Clause 3 of the Memorandum of Association which uses the expression 'primarily for the benefit of Catholics'. Others may be admitted without distinction of caste and creed' has been thoroughly examined by Department several time and only on the satisfaction, Tribunal granted exemption under section 80G(5)(iii) to assessee. Even though the object of formation of Trust was primarily for the benefit of Catholics, Tribunal had taken into account the statistics in financial year 2008-09 and has found that assessee-Trust's Hospital had treated 8,51,127 patients of non-Christian community out of 9,00,406 total patients received treatment which works out to 94.5%. Thus, this fact belies the finding recorded by DIT(E) that assessee-Trust had served only Catholic community and only run for the benefit of Catholics. Since assessee was serving the people on humanity basis in its noble profession by rendering timely treatment to needy without discriminating the caste, creed, community, etc., therefore, assessee was entitled for renewal of exemption under section 80G(5)(iii).

Relied:Upper Ganges Sugar Mills Ltd. v. CIT (1997) 227 ITR 578 (SC) : 1997 TaxPub(DT) 1328 (SC) and CBCI Society for Medical Education v. DIT [ITA No. 1226/Bang/2009, dt. 23-7-2010].

REFERRED :

FAVOUR : In favour of assessee.

A.Y. :

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