TaxTMI 
TaxTMI 
2013 (6) TMI 131
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....anna and daughter-in-law Smt. Ragini Khanna. The object of the Trust is to construct, establish, maintain and support charitable hospitals, nursing homes and dispensaries. 4. The petitioner-Trust claims to be running a charitable homeopathic clinic from two rooms on the ground floor of the premises No. 33/70-72, Topi Bazar, Chowk, Kanpur. These rooms were made available free of cost to the petitioner-Trust by its owner Shri Shivji Behari Trust. 5. The petitioner-Trust claims that it is providing free medical facilities to the needy patients. 6. It appears that the petitioner-Trust obtained a registered lease deed dated 9.3.1998 from Shri Shivji Behari Trust for raising construction on the roof of property No. 33/70-72, Topi Bazar, Chowk, Kanpur. The purpose for obtaining the lease as mentioned in the lease deed is for raising construction of a public charitable dispensary. It appears that constructions were started in February, 2002 and were completed sometimes in March, 2002, and thereafter the petitioner-Trust obtained another lease dated 9.3.2002 for raising construction over the roof of the first floor of the building constructed by it under the previous lease deed. In....
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....me. The petitioner-Trust tried to justify its aforesaid activities by stating that construction of shops is not the business of the Trust and the corpus donation received by it were mostly utilized for constructing the building in question. It was further stated that letting out of shops is not the object of the Trust nor its business but it intends to utilize rental income for achieving the object of the Trust. It was further stated that such act is only incidental to its main object of carrying out charity and in such circumstances, it may be granted renewal under section 80-G of the Act. 10. The CIT after considering the submissions and explanation given by the Petitioner-Trust came to the conclusion that the petitioner Trust had utilized major part of corpus donation received till 31.5.2005 for construction of shopping complex. He also came to the conclusion after examining the balance sheets that only meagre sum has been applied for charitable purpose, while major part of corpus donations have been spent in constructing the commercial complex. He further found that the dispensary being run on the ground floor of the building is not even registered by the CMO and the amount ....
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....oticed that the corpus donations were substantially utilized for commercial activities in the nature of construction of shopping complex as mentioned in para 1.7 above. The petitioner however, used meager amount of fund on its other activities. The details of total expenditure debited in P & L account are as under. Financial Year Amount Spent Remark 2004-05 Rs. 83,276/- Out of total receipt Rs. 6,18,378/- including corpus donation of Rs. 5,33,000/- 2003-04 Rs. 53,655/- 2000-01 Rs. 64,610/- Thus, as compared to the income and donation received by the petitioner only a meager amount of money was spent in activities other than the construction of commercial property. The petitioner Trust thus violated provisions of Section 80 G(5) in as much as- The corpus donation made to the Trust was used for construction of commercial property in violation of provision (b) to section 80-G (5) (i). No separate books of account in respect of said commercial activity of constructing a commercial building were maintained. This is in contravention of proviso (a) to Section 80-G (5)(i). The petitioner Trust has violated the terms and conditions ....
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....lding by lease deed dated 9.3.1998. The lease deed specifically recites that the demise of the roof to the petitioner-Trust was in order to enable to it to construct or run a public charitable dispensary. However, the roof of the building was not utilized for constructing any dispensary or clinic but a commercial complex having 12 shops. (c)The petitioner-Trust after constructing first floor entered into another lease agreement dated 9.3.2002 whereby the roof of the first floor of the building was demised in its favour giving right to construct a charitable dispensary. Again, no such constructions were made and, admittedly, on the second floor two halls and one store room were constructed. (d) Admittedly, till date, the entire so called charitable activities of the petitioner-Trust remained confined to two rooms on the ground floor of premises No 33/70-72, Topi Bazar, Chowk, Kanpur which were admittedly made available to it free of cost since the Trust came into existence. Thus admitted fact of record reveals that there has been no expansion of any charitable activities. (e) On the other hand, the petitioner-Trust under the guise of constructing a Homeopathic hospital and ....
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....ion under section 80-G on the ground that the institution has made very low expenses out of total donation received by it. He also placed reliance on (2003) 264 ITR 481 (Patna) Madani Musafir Khana Welfare Society v. CIT in which the application for renewal of exemption under section 80-G was rejected on the ground that the institution has constructed a shopping complex and had not carried other charitable work. 22. There can be no dispute to the broad proposition of law that construction of a commercial building by itself cannot be a factor to refuse renewal under section 80-G of the Act. However, it depends upon the facts and circumstances of each case. In the instant case, a cogent and categorical finding has been recorded in the impugned order that although huge amount has been received as donation by the Trust during the previous years, but amount spent for the charitable purposes is merely an eye wash. 23. The explanation given by the petitioner-Trust in para 23 of the writ petition that it had to confine its charitable activities to the ground floor of the building on account of compulsion, is not worthy of credence. The petitioner had stated that it is unable shift to....