The Tax Publishers2021 TaxPub(DT) 0744 (Ind-Trib) : (2021) 088 ITR (Trib) 0451

INCOME TAX ACT, 1961

Section 12AA

Where the activities carried out by assessee society by way of running hospitals and medical colleges was for the benefit of public and for the students at large and were for charitable purposes only as provided in section 2(15), the impugned order of Principal CIT cancelling the assessee's registration granted under section 12AA(1) deserves to be quashed.

Charitable trust - Cancellation of registration under section 12AA(3) - Assessee running hospitals and medical colleges or the benefit of public -

Assessee filed appeal against the order of Pr. CIT cancellation registration under section 12AA on the ground of that assessee trust did not act in a fair manner and collected donations from parties who were found to be nonexistent.Held: As regards alleged donations received from various concerns mentioned in the impugned order, identity of the alleged donors, genuineness of the transaction of giving donation to the assessee trust was satisfied as most of the alleged donors were either charitable trusts or known to the Directors/Promoters and the transactions were carried out through banking channel and the creditworthiness of the alleged donors was also satisfied as they had sufficient financial strength to provide the donation to the assessee trust. Pr. CIT can only cancel the registration under section 12AA(3) if it is found that the activities of the society/trust are either not genuine or are not being carried out in accordance with its object provided in bye laws. Nothing on record had been brought by way of an independent enquiry by Pr. CIT thereby collecting necessary evidence which can show that the activities of the assessee society were either not genuine or were not being carried out as per the objects of the society which were filed before the registering authority at the time of granting registration under section 12AA. It was therefore established that the activities carried out by assessee society by way of running hospitals and medical colleges was for the benefit of public and for the students at large and were for charitable purposes only as provided in section 2(15). Therefore, the impugned order of Pr. CIT cancelling the assessee's registration granted under section 12AA(1) deserves to be quashed.

Applied: Ashok Pal Daga(HUF) v. CIT reported in (1996) 220 ITR 452 (MP) : 1996 TaxPub(DT) 0812 (MP-HC), Orient Trading Co. Ltd. v. CIT reported in (1963) 49 ITR 723 (Bom) : 1963 TaxPub(DT) 0279 (Bom-HC), CIT v. Metachem Industries reported in (2000) 245 ITR 160 (MP) : 2000 TaxPub(DT) 0822 (MP-HC), CIT v. Orissa Corporation (P) Ltd. reported in (1986) 159 ITR 78 (SC) : 1986 TaxPub(DT) 1425 (SC), ACIT v. Radhey Shyam Bansal reported in (2000) 68 TTJ (Rajkot) 136Followed:Fateh Chand Charitable Trust v. CIT (Exemptions) v. CIT (Exemptions) (2017) 83 taxmann.com 33 (Lucknow-Trib) ; 2016 TaxPub(DT) 3365(Luck-Trib)

REFERRED : D.A. Gadgil v. Securities & Exchange Board of India ((2000) CLC 1873 : 2004 TaxPub(CL) 0350 (SAT Mum)), Mohinder Singh Gill v. The Chief Election CIT (AIR 1978 SC 851), S.L. Kapoor v. Jagmohan (AIR 1981 SC 136), Anand Rathi v. Securities and Exchange Board of India ((2001) 32 SCL 227), Hindustan Lever Ltd. v. Director General (Investigation, Registration) (2001(1) SCALE 219) : 2001 TaxPub(CL) 0401 (SC), Wimco v. Union of India (1980) 6 ELT 235 (Bom) : 1980 TaxPub(EX) 0035 (Bom), Rapheal Pharmaceuticals v. Superintendent of Distilleries (1998 (38) ELT 11(AP) : 1988 TaxPub(EX) 0767 (AP) and Lubrichem Industries Ltd. v. Collector of Customs (1994 (73) ELT 257 (SC) : 1994 TaxPub(EX) 0772 (SC)).

FAVOUR : In assessee's favour.

A.Y. :



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