TaxTMI 
TaxTMI 
2012 (7) TMI 366
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....d as under :- 4. The brief facts of the case are that the assessee Samiti is a registered Society with Registrar of Society U.P. The assessee Samiti granted registration under section 12A/12AA of the Act since 01.04.1993 vide order dated 05.04.1994. Exemption under section 80G was also granted upto 2011. The CIT noticed that the assessee Samiti carries on business of running a Blood Bank, X-ray Centre, Physiotherapy Centre, Homoeopathic Dispensaries etc. The CIT found that the services provided by the Society/Samiti are of commercial nature. The CIT also gone through the objects of the Samiti and found that the objects of the Samiti are not for medical relief but are for general public utility. The CIT rejected the assessee's contention observing that section 2(15) are very clear and unambiguous stating that if the Samiti or Society involves to carry out any activities in the nature of trading, commerce or business, or any activity of rendering any service in relation to any trade, commerce or business, for a cess or fee or any other consideration, irrespective of the nature of use or application, or retention, of the income from such Society. The CIT also examined the books of ....
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.... of time, the Society enlarged its activities to following medical services: * Providing blood, blood components, packed cells, FFP and platelets. * Providing free blood, on regular basis, to the patients of Thalisemia and Hemophilia. * Running X-ray centre where X-ray services are provided at substantially low rates. * Running of Physiotherapy centre, providing various services to the patients at substantially low rates. * Running 3 Homeopathic dispensaries where medicine is provided at Rs. 2/- per day only. * Providing free medical Oxygen to the needy patients * Running of medical health care centre where services of expert Orthopedic, Gynecology and ENT doctors are provided only at Rs. 30/-. * Conducting free medical checkup and operation camps for the patients of Eye, Hernia, Gall Stone, and Breast Cancer etc. 8. Ld. Authorised Representative pointed out the statistics of medical relief/services provided by the society which is appearing at page no.2 of assessee's Paper Book as under :- Sr No Nature of service Number of patients served in FY 08-09 Number of patients served in FY 09-10 1. Whole B....
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.... from A.Y. 2009-10, providing that the 'advancement of any other object of general public utility' shall not be treated as 'charitable purpose' if it involves the carrying on of any activity in the nature of trade, commerce or business, or any activity of rendering any service in relation to any trade, commerce or business, for a cess or fee or any other consideration, irrespective of the nature of use or application, or retention, of the income from such activity. Authorised Representative submitted that the objective behind this amendment was explained by the Finance Minister in paragraph no.180 of his Budget speech on 29.02.2008. 12. Ld. Authorised Representative has also drew our attention to C.B.D.T. Circular No.11/2008 dated 19.12.2008 wherein the applicability of the commercial activities in respect of charitable purpose has been clarified. 13. Ld. Authorised Representative submitted that in the Circular it is clearly pointed out that the amendment to section 2(15) is applicable only to the fourth limb of the definition i.e. 'advancement of any other object of general public utility' and not to other activities in the field of relief to the poor, education or medical r....
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.... 12A/12AA of the Act. Ld. Authorised Representative also relied upon the judgement of the Apex Court in the case of Addl. CIT vs. Surat Art Silk Cloth Manufactures Association, 121 ITR 1 (SC) and the Hon'ble Mysore High Court in the case of CIT vs. Sole Trustee, Loka Shikshana Trust, 77 ITR 61 (Mysore). 17. Ld. Authorised Representative also relied upon the following decisions:- i) CIT vs. Sarvodaya Ilakkiya Pannai, 206 Taxman (Mad) (Mag) ii) ABC Trust vs. ITO, 4 TTJ 1391 (JP) iii) Order dated 21.05.2012 of Hon'ble High Court of Delhi in ITA No.1335/2010 in the case of Director of Income Tax vs. Maruti Center for Excellence. iv) Chaturvedi Har Prasad Educational Society vs. CIT, 134 TTJ 781 (Lucknow) v) Baba Gandha Singh Education Trust vs. CIT, 138 TTJ 1 (Chd) (UO) vi) H.P. Government Energy Development Agency vs. CIT, 134 TTJ 33 (Chd) (UO) vii) Order dated 04.05.2012 of ITAT, Jaipur Bench in ITA No.100/JP/2012 in the case of Rajasthan Housing Board vs. CIT. viii) Harnam Singh Harbans Kaur Charitable Trust vs. Director of Income Tax (Exemption), 49 SOT 387 (Del) ix) CIT vs. Red Rose School, 163 Taxman 19 (All.) x) Order dated 18.05.2012 of ITAT, Ag....
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....nstitution as he thinks necessary in order to satisfy himself about the genuineness of activities of the trust or institution and may also make such inquiries as he may deem necessary in this behalf; and (b) after satisfying himself about the objects of the trust or institution and the genuineness of its activities, he- (i) shall pass an order in writing registering the trust or institution; (ii) shall, if he is not so satisfied, pass an order in writing refusing to register the trust or institution, and a copy of such order shall be sent to the applicant : Provided that no order under sub-clause (ii) shall be passed unless the applicant has been given a reasonable opportunity of being heard. [(1A) All applications, pending before the Chief Commissioner on which no order has been passed under clause (b) of sub-section (1) before the 1st day of June, 1999, shall stand transferred on that day to the Commissioner and the Commissioner may proceed with such applications under that sub-section from the stage at which they were on that day.] (2) Every order granting or refusing registration under clause (b) of sub-section (1) shall be ....
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....nt before an order of refusal to grant registration is passed by the Chief Commissioner or Commissioner. The reason for refusal of registration shall also have to be mentioned in that order. The order granting or refusing registration has to be passed within six months from the end of the month in which the application for registration is received by the Chief Commissioner or Commissioner and a copy of such order shall be sent to the applicant." 20. Sub-section (3) of section 12AA provides that if subsequently the Commissioner is satisfied that the activities of such trust/Samiti are not genuine, or are not being carried out in accordance with the objects of the trust/Samiti, the subclause (3) of section 12AA inserted w.e.f. 1st October 2005 gave power of cancellation of registration to the CIT. This power has been conferred to the CIT(A) to save the misuse of exemption provision. Thus for exercising power of cancellation of registration under section 12A/12AA on the following conditions:- i) That the trust or society has already been granted registration under section 12A/12AA of the Act. ii) The CIT subsequently found and satisfied that :- a....
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....4 of The Societies Registration Act. All the assets of Samiti (cash, movable and immovable) will be vested in any other registered charitable trust with prior consent of the members in general meeting. No member will have any personal rights on the Samiti`s assets." 24. The assessee furnished English translation of activities of the Samity in brief for different years of which copy has been placed at page 201 and 202 of the assessee's Paper Book. For the purpose of ready reference the same is reproduced as below :- "1. SAMARPAN BLOOD BANK It was inaugurated by Hon'ble Governor Shri Ramesh Bhandari Ji on 27 July, 1996. Initially, the license for only whole blood supply was received. Then in year 2002 blood bank received the license for extracting & supply of various blood components i.e. packed cells, platelets and F.F.P, and in June 2007 received the license for platelets aferisis. Blood is provided only on exchange basis but in certain emergency cases it can be given without any exchange. Blood received in exchange or donation, after finding for blood group, is diagnosed for Hepatitis B, C, A.I.D.S., V.D.R.L., Malaria parasite and Hemoglobin etc. and ....
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....g homeopathy dispensary for last so many years quite successfully. Medicines are provided by well qualified Doctors only for Rs. 2/- per day. At present 3 such Homeopathy Dispensaries are managed at Agra - 1. Khadari 2. Delhi Gate and 3. at Karmyogewar Mandir, Kamla Nagar, Agra. 6. Samarpan Free Medical Oxygen Supply Under this service, patients are provided with free medical oxygen as per their needs. The service is totally free of cost. 7. Samarpan Health Care Center It was inaugurated on 16 Jan. 2011, at which Specialized Doctors can be consulted at only Rs. 30/-. At the center service is provided by Dr. Yogesh Bindal, in orthopedics, Dr. Alka Bindal in gynecology and Dr. Vikrant Singhal in ENT. Apart from this, Samiti conduct operations for female patients (stone in gallbladder, hernia, breast cancer, uterus) free of cost with full facility. In the same manner, eye checkup, providing spectacles and operation of cataract are conducted by senior surgeons. Samiti has been honoured by various organizations for its noble activities as under: a) Achal Trust, Agra - 05/05/2002 b) Agrawal Sangathan, Kamla Nagar, Agra - 2003....
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....h wear the mask of a charity." "I once again assure the House that genuine charitable organisations will not in any way be affected. The CBDT will, following the usual practice, issue an explanatory circular containing guidelines for determining whether an entity is carrying on any activity in the nature of trade, commerce or business or any activity of rendering any service in relation to any trade, commerce or business. Whether the purpose is a charitable purpose will depend on the totality of the facts of the case. Ordinarily, Chambers of Commerce and similar organisations rendering services to their members would not be affected by the amendment and their activities would continue to be regarded as "advancement of any other object of general public utility."" 26. We may also refer a C.B.D.T. Circular No.11/2008 dated 19.12.2008 wherein the applicability of the commercial activities in respect of charitable purpose has been clarified. The said circular is reproduced as below:- "2.2. 'Relief of the poor' encompasses a wide range of objects for the welfare of the economically and socially disadvantaged or needy. It will, therefore, include within its ambit pur....