TaxTMI 
TaxTMI 
2006 (10) TMI 182
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.... the AO be restored." 2. Rival contentions have been heard and record perused. 3. The brief facts of the case are that the assessee is a charitable trust and carrying on charitable activities in the shape of meditation, running a free homeopathy and allopathic dispensary, organizing eye camps besides providing the use of Celebration Hall to the general public for marriages and other social functions for which the trust accepts the donations and those donations are utilized for the various charity activities being organized by the trust. The learned Asstt. CIT has disallowed the exemptions as provided in ss. 11 and 12 of the IT Act, 1961. In this case, the return in the status of trust was filed on 28th Oct., 1992 claiming exemption under s. 11 of the Act. Survey under s. 133A was carried out on 22nd Dec., 2002 and it was found that the trust was running a wedding point at 111-Rajpur Road, Dehradun and receipts from the wedding point were shown by the assessee as donation. According to AO, no record was also kept to show that medicines have actually been dispensed to the persons. The AO, therefore, came to the conclusion that trust was carrying on business and declaring receip....
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....nder the name and style of Heavens Garden. The income from these three activities has been declared separately by these people by filing their IT returns for the last many years. Photocopies of the returns filed by Mr. Satish Sondhi, proprietor Osho Resorts, Mrs. Sulekha Sondhi, proprietor Osho Resorts Meditation Centre and Mrs. Ninu Sethi have been placed on record. A chart showing the income in the last two years is reproduced as under: ------------------------------------------------------------- Name of Name of the Nature of Date of Asst. yr. Income person business business filing concern the return ------------------------------------------------------------- Satish Osha Running a 6.9.2001 2001-02 2,62,630 Sandhi Resorts hotel &....
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....h Sondhi, the managing trustee of the trust. This portion of the hall has been taken on rent by the trust on a monthly rent of Rs. 200 per month. The another hall namely, Celebration Hall having carpet area of about 4,400 sq.ft. is also owned by Smt. Sulekha Sondhi and this has also been taken on rent by the trust on a monthly rent of Rs. 5,000 per month. Copy of the lease deeds has been filed before the AO. Both these properties have been declared by the owners in their IT returns and the rents from both these properties have also been duly declared as income from property. Buddha Hall is being used by the trust for morning and evening meditation. The Celebration Hall is, many a times, made available to the general public for functions such as marriages and birthdays, etc. The practice followed by the trust is that as and when anybody approaches the trustee for use of the Celebration Hall, he is told that as the property is being used by the trust, it will not charge any pre-fixed sum for the use of the hall and the users of the hall are free to donate whatever amount they wish for the aims and objects of the charitable trust. Out of the total donations of Rs. 5,34,755 received du....
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....ties are being carried out from the premises has amply been clarified above. M/s Osho Resorts Meditation Centre belongs to Mrs. Sulekha Sondhi. Similarly, Mr. Satish Sondhi is owning "Osho Resorts" in his individual capacity and Mrs. Ninu Sethi has made an arrangement with M/s Osho Resorts as per which she is sharing the receipts from the restaurant business in lieu of rent for the use of the premises of M/s Osho Resorts. Thus, the activities are quite independent of the activities of the trust although these are in the same campus. The trust has nothing to do with the activities mentioned by the AO. Even if it is assumed for argument sake that the trust was carrying business then also receipts of the business have been used for the objects of the trust and in such cases trust is entitled to exemption, the activity being ancillary or incidental to the primary and dominant purpose of the trust [CIT vs. Krishna Tent House (1989) 179 ITR 161 (P&H) and Yograj Charity Trust vs. CIT 1976 CTR (SC) 211 : (1976) 103 ITR 777 (SC)]. Regarding the diary impounded during the course of survey, the advances received in some cases have been noted down. According to Authorised Representative, the d....