TaxTMI 
TaxTMI 
2022 (8) TMI 348
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....by ignoring the departmental circular No. 11/2008 dated 19.12.2008 which is binding on the department. 2. That the Ld. CIT (Appeals)-National Faceless Appeal Centre (NFAC) Delhi has erred in law and facts by confirming the orders of AO for not considering addition made to fixed assets amounting to Rs. 26,58,327/- as application of income for charitable purposes for the purposes of calculating application of 85% of its income for charitable purposes. 3. That the Ld. CIT (Appeals), Delhi is not justified in confirming and disallowing the claim of the assessee in respect of deemed application of expenses amounting to Rs. 16,34,692/- u/s. 11(2) despite the assessee filing Form 10 on 06.06.2020 and Ld. CIT(Exemptions) condoning the delay in late filing of Form 10 vide its letter No. ITBA/COM/F/2020-21/1027573046(1) dated 23.07.2020. 4. The orders of The Ld. CIT (Appeals)-ii confirming the orders of the Assessing Officer are against the law and facts of the case on account of Judicial inconsistency as the cases of the assessee for the last so many years are being regularly assessed u/s. 143(3) by different assessing officers without any adverse inference on the....
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....#39;s society submitted that it is undertaking various kind of charitable activities which mainly constitute/fall under medical field and relief to the poor and does not undertake any activity in the nature of general public utility. It was submitted that charging of room rent does not make it a commercial activity. Even PGI and other government hospitals are charging room rent on concessional rates and that does not change the character of the organization from charity to commercial as these serve the purpose of poor and needy who cannot afford rooms in commercial organizations. It was submitted that these charitable organizations have been instrumental in fulfilling the aspirations of the poor and needy for their medical and educational requirements. It was submitted that the proviso to Sec. 2(15) of the Act, is never meant to deprive genuine trusts and institutions whose main object is charity, but in the process of achieving main object, they undertake some income generating activity which is ancillary and incidental to the main object and the income so generated is utilized for achieving the main charitable object. It was submitted that this matter has come up for scrutiny bef....
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....after year from the activity of letting out rooms/halls and further, there is no activity of the Trust which qualifies it as a charitable trust for claiming exemption u/s. 11 of the Act. On the basis of the activities undertaken by the assessee's society, it cannot be taken as a charitable trust within the meaning of Sec. 2(15) of the Act, and the income earned therefore, cannot be treated as exempt. It was further held by the AO that the assessee has generated substantial profit and the same is not ploughed bag to feed any charitable activities and thereafter, in his concluding findings, the AO has held as under: "2.23 The perusal of nature of receipts and percentage of profit, clearly the case of the assessee is covered by proviso to section 2(15) of the Act because it has been mentioned that the advancement of any other object of general public utility would not be a 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 retent....
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....evening. 11) Free blood donation camps. 12) Free Riki Classes Monday and Tuesday. 13) Free motivational talks. 14) Social functions like Kirya Ceremonies, social welfare schemes (Aadhar centre), lectures, talks against social evils, awareness camps etc. 15) Stay at concessional rates for all such facilities and people in need than the market and further concessions for the needy, deserving and poor. 16) Providing medical facilities to needy to all section of the society at concessional rates much lower approx. 25% than the market rates generating nominal surplus and providing free facility to the poor. 17) Daily medical consultation facilities are provided to all needy in the form of free homeopathic medicines. 18) Daily free allopathic medical consultation facilities are provided to all. 19) People coming from far off places including drivers, class IV employees and other needy persons on account of performing their official duties, for medical treatments in PGI, Chetanaya Hospital, Sector 32 Hospital and other hospitals, in search of jobs, for examinations and for so many other reasons who cannot aff....
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....Form 10AC dated 15.10.2021 has been placed on record. 11. Further, the ld. AR has filed a detailed paper book containing documentary evidences of various charitable activities undertaken by the assessee as well as the corresponding expenditure incurred during the year while undertaking such activities. It was accordingly submitted that the order of the ld. CIT(A) be set-aside and the assessee be granted necessary relief. 12. Per contra, the CIT/DR relied on the findings of the AO as well as the ld. CIT(A), NFAC. It was submitted that the ld. CIT(A) has clearly held in his order that the AO in the present case has brought out uncontroverted findings that the entire set of activities as undertaken by the assessee has nothing to do with what has been stated in its objectives rather the assessee is clearly engaged in business of running a guest house/letting out rooms/halls for social functions, lady sangeet, ring ceremonies, etc. and in the process, has earned an enormous profit amounting to Rs. 62,55,092/- from these activities. It was further held by the ld. CIT(A) that the assessee has not shown the building from which it run its activities rather the building is an asset in ....
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....hered to by the authorities. Therefore, the contention of the assessee regarding consistency in approach by the Revenue authorities need to be appropriately addressed and for that reasons, we believe that the matter deserve to be said set-aside to the file of the Assessing office for examination a fresh and to record a specific finding in this regard as to why he believes that a position accepted by the Revenue in the earlier years should not be followed and the reasons for arriving at such a finding. 14. The second contention which has been raised by the assessee is that its objects fall under the category of medical relief, relief of the poor and yoga and doesn't fall under the category of "advancement of any other object of general public utility" and as per settled legal position, the proviso to section 2(15) which applies to last limb under the category of "advancement of any other object of general public utility" doesn't apply in the instant case. In this regard, we find that the AO in para 2.3 of his order has summarily held that as list of objects sought to be achieved by the assessee society encompasses nearly all objects mentioned in the definition of charitab....
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.... such funds are used for undertaking aforesaid charitable activities. In support, the assessee has submitted documentary evidence in support of undertaking the charitable activities. On the other hand, the contention of the Revenue is that looking at the assessee society's income and expenditure account, the assessee has shown receipts of Rs. 1.41 cr from booking of halls and rooms which amounts to 93% of total receipts and it has generate net profit of 41.13% and further, it is generating huge profits from year-on-year and the same is not ploughed back to feed any charity. On careful perusal of records, we find that the AO has not recorded any findings regarding various charitable activities being carried out by the assessee society, as listed in its written submissions filed before the AO, which also find mention in para 2.8 of the AO's order, however, there is no finding by the AO disputing such activities being undertaken by the assessee society. On a prima facie read of these activities, we find that a lot of these activities are undertaken without any charges and therefore, the question of reflection of any receipts from such activities in the profit/loss account does....