TaxTMI 
TaxTMI 
2014 (2) TMI 644
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....1950). The assessee was also granted certificate of registration u/s. 12AA of the Act by the office of CIT, Hubli by order dated 9.4.2002. This registration was to take effect from 1.3.1996. The assessee was also granted recognition u/s. 80G of the Act. 3. The CIT in exercise of his powers u/s. 12AA(3) of the Act issued a show cause notice on 14.05.2012, whereby he proposed to withdraw the registration granted to the assessee u/s. 12AA of the Act. The show cause notice refers to the fact that the Jt. CIT, Range 3, Hubli had submitted a detailed enquiry report dated 8.4.2012 stating that the activities carried on by the trust were not in the nature of charitable activities as defined in section 2(15) of the Act and that the activities of the assessee are not being carried out in accordance with the objects of the trust. The assessee sent a detailed reply dated 26.05.2012 denying the allegations made in the show cause notice dated 14.05.2012. The CIT passed an order dated 25.07.2012 withdrawing the registration u/s. 12AA of the Act, Consequently, the CIT also passed an order withdrawing the recognition granted u/s. 80G of the Act. 4. The reasons given by the CIT for withdrawing....
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....g medical relief or relief to poor. Therefore, the VGH does not satisfy the very intent of the word medical relief or relief to poor relief or relief to poor defined in section 2(15) of I.T. Act 1961. The trust is running a hospital and collects huge sums of money from the patients for every kind of services for the purpose of making profit or surplus. This itself goes to show that the assessee's intention is to make profit. There is no element of charity involved in the case as the VGH is not imparting the services free of cost but for a consideration. Therefore, there is no element of relief to poor or weaker sections as claimed in the objects. The objections filed are in the nature of general recitals. Therefore, the activities do not come under the purview of even any other objects of general public utility also. 8. In the light of the above cumulative factors, the VGH has rendered itself liable for discontinuance of registration granted u/s 12AA w.e.f. 01.04.2006. Therefore, in exercise of powers under section 12AA(3), the registration granted to Vivekananda General Hospital is withdrawn and discontinued w.e.f. 01.04.2006." 7. Similar order withdrawing recognition u/s. 8....
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....itable purposes and the genuineness of the activities of such institution, and on being satisfied on both counts, the applicant can be granted registration under Section 12-A of the Act. The object of the Trust so long as it fits into any one of the objects as mentioned under Section 2(15) of the Act, the first requirement is fulfilled and the second requirement will be met by the genuineness of the activities of such institutions are also to the satisfaction of the authority. We do not find any recording by the Registering Authority about the lack of genuineness of activities, but the Registering Authority did notice some shortcomings on the part of the Society, in the manner of its functioning. 14. We are of the opinion that the shortcomings by themselves cannot be put on par with lack of genuineness of the Society, in the activities of the Society. However, as noticed in the judgment of this court rendered in the case of GARDEN CITY EDUCATIONAL TRUST (Supra), this is the exercise which perhaps the assessing authority may have to indulge in at the time of examining the returns filed by a Charitable Organisation claiming exemption in terms of Sections 11 and 12 of the Act." ....
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...."advancement of any other object of general public utility". It does not apply to the other categories of charitable purpose viz., "relief to poor, education and medical relief". As rightly pointed out by the learned counsel for the assessee, eleemosynary element is not essential element of charity. It is also not a necessary element in a charitable purpose that it should provide something for nothing or for less than it costs or for less than the ordinary price. The surplus generated, if it is held for charitable purpose and applied for charitable purpose of the assessee, and then the Assessee has to be considered as existing for a charitable purpose. There are enough safeguards provided in Sec.12 and 13 of the Act to ensure that personal benefits of the persons in control of the trusts are not treated as having applied for charitable purpose and for being brought to tax like provisions of Sec.13(1) (c ) of the Act which restricts unreasonable and excessive payments to certain category of persons connected with a trust or other institution. In such circumstances, we are of the view, that the order u/s 12AA(3) of the Act, cannot be sustained." 12. Drawing our attention to the or....