TaxTMI 
TaxTMI 
2019 (5) TMI 614
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....t he was not justified to hold that the activities claimed to be undertaken by the Appellant do not fall within the definition of Sec. 2(15) of the Income Tax Act, 1961." M/s Anand Isher Amar Charitable Cancer & Multi Specialty Hospital Vs.CIT(Exemptions) 2. Briefly stated, the assessee society which was established on 10.01.2017 had filed an application in Form No. 10A as on 17.04.2017 with the CIT(E), Chandigarh, seeking registration under Sec. 12A of the IT Act. The aims and objects of the assessee society were to set up, run and maintain dispensaries and hospital for the general public irrespective of caste or creed; to construct building for that purpose and for staff on the land in possession or purchased or donated from trust committees; to receive and accept any gifts, subscription and donation whether in cash or in kind or acquired by any other lawful ways and means and spend the same in fulfilment of all or any of the aims and objects of the society; to apply the income for the fulfilment of object and not to pay any portion thereof by way of profit or dividend or bonus; and to do all such lawful acts, needs and things incidental to the attainment of its objects. 3.....
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....ivities which could be held to be of charitable purpose. It was also observed by him that the assessee society also could not explain as to how creating a multi-speciality hospital would qualify for 'medical relief' as envisaged in Sec. 2(15) of the IT Act. In fact, the CIT(E) was of the view that the envisaged activities of the assessee society could be purely in the nature of a commercial activity with no element of 'medical relief', whatsoever. On the basis of his aforesaid observations the CIT(E) declined to grant registration under Sec. 12AA to the assessee society. 4. Aggrieved, the assessee society has assailed the order of the CIT(E) passed under Sec. 12AA(1)(b)(ii) of the IT Act in appeal before us. The Ld. Authorised representative (for short 'A.R') for the assessee at the very outset of the hearing of the appeal submitted that the assessee society which was in operation since 10.01.2017 had filed an application in Form 10A seeking registration under Sec. 12A of the IT Act on 17.04.2017. It was submitted by the Ld. A.R that the CIT(E) instead of confining himself to the examination of the objects of the society and the genuineness of its activities at the stage of cons....
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....der Sec. 12A did not find favour with the registering authority for the reason that the assessee society had neither conducted activities as per its aims and objects nor its financial statements supported the same. Apart therefrom, the CIT(E) had also expressed his doubts as to how setting up a multi-speciality hospital would qualify for 'medical relief' as envisaged in Sec. 2(15) of the IT Act, as he held a conviction that the same may be in the nature of a commercial activity with no element of 'medical relief' whatsoever. 7. We have deliberated at length on the issue under consideration in the backdrop of the observations of the CIT(E). We find that the provisions of Sec. 12AA which contemplates the procedure for registration, reads as under : "The [Principal Commissioner or] Commissioner, on receipt of an application for registration of a society or institution made under clause : (a) [or clause (aa) of sub-section (1)] of section 12A shall:- M/s Anand Isher Amar Charitable Cancer & Multi Specialty Hospital Vs.CIT(Exemptions) (a) Call for such documents or information from the society or institution as he thinks necessary in order to satisfy himsel....
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.... creation of the trust and there is no requirement that the trust or institution should have started all its envisaged activities in the first year itself. It was further observed that Sec. 12AA of the IT Act required satisfaction in respect of the genuineness of the activities of the trust, which includes the activities which the trust is undertaking at present and also which it may contemplate to undertake. Apart therefrom, it was observed by the Hon'ble High Court that sub-section (3) to section 12AA of the IT Act empowered the Commissioner to cancel the registration if the activities of the trust were not carried out in accordance with its objects. 9. In the backdrop of the aforesaid observations of the Hon'ble High Court of Jurisdiction, we are of the considered view that the view taken by the CIT(E) that the envisaged activities of setting up a multispeciality hospital by the assessee society may turn out to be a commercial activity with no element of "medical relief" whatsoever, is an aspect which has to be looked into by the assessing officer at the stage when the assessee filed its return of income and also by the commissioner for cancelling the registration in exercise....