TaxTMI 
TaxTMI 
2018 (3) TMI 48
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....6.1977 when it was registered with Assistant Charity Commissioner, Baroda vide registration No.E/2469/Vadodara. It was a public charitable trust. The assessee-trust has applied for grant of registration under section 12A of the Income Tax Act. This, application of the assessee was allowed and it was granted registration on 1.1.1982 vide order dated BRD/SIB/110-6-P/81. At this stage, it is pertinent to take note of objects of assessee-trust in original trust deed. Such objects have been enumerated by the ld.Commissioner in the show cause notice issued for cancellation of registration. They are available at page no.2 of the impugned order. They read as under: "(1) To establish and or acquire maintain support of schools, colleges, vidhyapeeths and other institutions for imparting education and training of students and/or teachers in such lines or courses as the trustees may from time to time deem fit. (2) To promote education, learning vocational training in all the branches (3) To conduct experiments, research project etc. (4) To prepare and publish reports magazines and any other publications (5) To grant monetary assistance from time to ....
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.... the word "abroad" to include expression "education and training of students/teachers" in clause (3), (4) and (7) of the original trust-deed. It was pointed out to the ld.Commissioner that in 1989-90 there was an acute need for setting up of a centre which could provide medical diagnostic services to public of Baroda because there were no facilities available at the relevant time in the city and patients have to travel far places in Ahmedabad and other places. Thus, an amendment was carried out in the trust deed by way of a resolution dated 24.2.1990. The following objects which according to the assessee ancilliary to already existing objects were added. "13) To provide all kinds of medical, diagnostic, family welfare and general health facilities and treatment to the patients, in the field of allopath, homeopathy, or Ayurved, without any distinction of castes, creed, race, religion or language basis, either on free of charge or no profit basis. To buy, acquire, hire, take on lease, import medical or diagnostic machineries and equipments to run a hospital, dispensary, maternity home, nursing home, diagnostic centre, sanatorium or camps and to construct or acquire ....
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.... thereby, donors of the assessee could avail exemption from payment of tax on such donation. After amendment carried out on 1.4.1990 by including of objects number 13 in the trust-deed, it has applied for renewal of registration granted under section 80G in Form No.10G on 31.3.1991. Copy of such application has been placed in the paper book on page no.81 and 82. According to the ld.counsel for the assessee, it was mandatory to file following documents for grant of registration under section 80G of the Act viz. (a) copy of Income Tax Registration Certificate, (b) Trust deed, (c) details of activities since its inception or last three years, whichever is less, (d) copy of audited accounts of institution since its inception or last three years whichever is less. The assessee has submitted copy of the trust-deed including addition of objects under clause 13. Based on these details, its application for renewal under section 80G was allowed vide letter dated 11.12.1991. Copy is placed at page no.84 of the paper book. Thereafter the said approval is renewed from time to time, and ultimately vide letter dated 19.9.2012 ld.CIT informed the trust that approval would in perpetuity. The letter....
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....aced on record copies of these decisions. 9. In his next fold of submission, it was submitted that diagnostics facility falls within the ambit of medical relief as per section 2(15). This activity is per se a charitable. Even if some incidental profits on performing a charitable activities result to the assessee then that surplus is always applied for the objects of the trust. It is not being pocketed either by the trustee or by some persons. Section 13 of the Act duly take care of any surplus generated by a charitable trust and also take care of the activities for some undue benefit is being given either to the trustees or any persons associated with the trust. He made reference to subclause (3) of section 13 in this regard. He relied upon following decision for buttressing that registration could not be cancelled by the ld.Commissioner more so, from date such alteration was made to the trust deed. i) Mehta Jiveraj Makandas & Parekh Trust, ITAT, Mumbai ITA No.2212/Mum/2010; ii) Bhansali Trust, ITAT, Mumbai ITA No.5948/Mum/2012 iii) Moolchand Khairati Ram Trust, Delhi High Court, ITA No.141/2013; In other words, there is no power with the ld.Commiss....
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....under clause (b) of subsection( 1) [or has obtained registration at any time under section 12A [as it stood before its amendment by the Finance (No.2) Act, 1996 (33 of 1996)]] and subsequently the Commissioner is satisfied that the activities of such trust or institution are not genuine or are not being carried out in accordance with the objects of the trust or institution, as the case may be, he shall pass an order in writing cancelling the registration of such trust or institution: Provided that no order under this sub-section shall be passed unless such trust or institution has been given a reasonable opportunity of being heard." 12. A perusal of section 2(15) would indicate that this clause contemplates meaning of expression "charitable purpose", and in that stride it illustrates few activities of an institution for falling within the ambit of "charitable purpose" in two categories, viz. in the first category "charitable purpose" would indicate relief to the poor, education, yoga, medical relief, preservation of environment ....... and in the second category advancement of any other objects of general public utility. So far as objects performed for activities carrie....
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....ill any philanthropic objects. In his second objection, he further objects that since running of a diagnostic centre was not part of original objects on whose genuineness registration was granted to the assessee, therefore it is to be construed that the assessee-trust has not carried activities in accordance with objects on the basis of which registration under section 12A was granted to it. 13. At this stage, before adverting to the specific facts of the present case, we would like to take note of the case laws relied by the ld.counsel for the assessee in order to appraise us whether non-communication of an amended trust-deed as accepted by the Revenue would automatically be construed that registration to the assessee-trust would be cancelled. First decision referred by the ld.counsel for the assessee is that order of the ITAT, Mumbai Bench in the case of Bhansali Trust (supra). In this case the assessee trust came into existence on 19.3.1969. It was registered under section 12A. It had carried out charitable activities for more than 50 years, but the ld.AO denied benefit under sections 11/12 of the Act in the Asstt.Year 2009-10 by holding that objects of the trust have been am....
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....nefit under sections 11/12 to such assessee and Tribunal upheld allowance of such benefit. 15. Next decision relied upon by the ld.counsel for the assessee was from the order of ITAT, Mumbai Bench in the case of Mehta Jivaraj Makandas & Parekh Trust (supra). In this case also, the assessee trust got registration under section 12A on 21.11.1975. Its objects were amended and it filed an application for renewal of registration under section 80G on 13.4.2001 which was denied to the assessee. Allegation against the assessee was that it had not complied with requirement in the statutory form no.10A because the assessee had to give an undertaking to communicate forthwith any alteration in objects of the trust or in the rule governing institution. According to the Revenue changes were intimated only after 15 years vide letter dated 23.12.2009. In this background, the Tribunal has examined the aspects and allowed the application directing the DIT to grant registration. Observation of the Tribunal in para-9 is worth to note. It reads as under: "9. ..... We also note that the original object of the trust of providing hostel accommodation to the students has not been deleted. The a....
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....ereas it has started running an Alopathic centre which is not in consonance with the objects of the trust. Hence, it is not entitled for benefit under sections 11 and 12. Ultimately, dispute travelled upto the Hon'ble Apex Court, and the Hon'ble Delhi High Court has set aside order of the ITAT and held that running an Allopathic Hospital would also in a way a medical relief and boost Ayurvedi system in hospital in question, apart from considering activity of running allopathy system of medicine in consonance with objects of the trust. Hon'ble High Court has further observed that once the department has allowed things to settle in earlier years, even if two opinions are possible, the AO should not have unsettled the issue, when there are no changes in the facts and circumstances. We would like to take note of the finding of the Hon'ble Delhi High Court on this aspect as under: "39. The next issue to be addressed is whether it was open for the AO to take a view different from the one that has been accepted by the Revenue for the past several decades. It is well established that each year is a separate assessment unit and the principles of res judicata are not applicable. How....
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....cise cannot be undisciplined. In cases where there is a palpable mistake or the position accepted by the Revenue in earlier years is apparently erroneous, the AO would not be bound to accept the view of his predecessors. However, in cases - such as the present case - where the Assessee's claim for exemption has been accepted for several decades, it would not be open for AO to think of new grounds, which at best raise contentious issues, to cast a wider net of tax. It is trite law, that if two views are possible, the one favoring the Assessee must be adopted. This rule would apply a fortiori in cases where the Assessee's claim has been consistently accepted by the Revenue in the past. Thus, in cases where the claim of an Assessee has been accepted in earlier years, unless the claim of an Assessee is found to be devoid of any basis or plainly contrary to law, it would not be open for the AO to take a view contrary to the position which has been accepted by the Revenue in earlier years and has been permitted to sustain for a significant period of time. 43. In the facts of the present case, it is not possible to accept that grant of exemption to the Assessee for the pa....
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....edial, education etc. Thus, establishment of a diagnostic center is in the line or coherent to its existing objects. It is not something alien or some different activities have been started, which would disentitle it for getting registration under section 12AA of the Act. As far as non-communication of amended trust deed to the department in form no.10A of the Act is concerned, in the case of Mehta Jivraj (supra) ITAT Mumbai has held that there is no requirement in the Act for furnishing the amended deed; it is being contemplated in the clause of form no.10A under rules, thus worst-to-worst it could be an irregularity. We find that changes were duly notified and recorded in the Register of Public Trust maintained by the office of Charity Commissioner. The assessee was enjoying registration under section 80G since 1977. It had applied for renewal of 80G in form no.10A on 31.3.1991. It is mandatory to file following documents along with application for grant of registration under section 80G viz. (a) copy of Income Tax Registration Certificate, (b) Trust Deed, details of activities since its inception or last three years whichever is less, (c) copy of audited accounts of the institut....