TaxTMI 
TaxTMI 
TaxTMI 
2022 (12) TMI 1264
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....umstances and legal position of the case, the Worthy CIT has erred in rejecting the application of the appellant for grant of registration u/s. 12AA of the Act on issues/objections which are beyond the scope of powers for which examination can be carried out in proceedings u/s. 12AA by a CIT. 4. That on the facts, circumstances and legal position of the case and in law, the impugned order deserves to be quashed, as no reasonable opportunity of being heard u/s. 12AA was granted by the respondent." 3. The appeal has been filed against the order of the Ld. CIT(E) by the assessee on 06.10.2017 and hearings have been conducted till 14.12.2022. During all these years, there was no compliance from the side of the assessee or the authorized representative whose power of attorney dated 03.10.2017 has been on record. We have perused the order of the Ld. CIT(E). For the sake of ready reference and completeness, the order of the Ld. CIT(E) is reproduced in toto as under: "The above named society has Filed an application for registration u/s. 12A(a) of the Income Tax Act, 1961 on 12.01.2017 with the Commissioner of Income Tax(Exemptions), Lucknow. 2. Subsequently, the applicant society w....
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....pital is basically a commercial entity that is providing medical services on commercial lines which is evident from the hefty receipts amounting to the tune of Rs. 74,57,110/- for the F.Y. 2015-16. The other two centers namely the Quadra School of Nursing and Quadra Institute of Ayurveda are basically commercially operated institutions that are providing various courses and levying hefty fee in lieu of the same. The receipts from the Quadra School of Nursing under the head of tuition fees amount to Rs. 1,19,57,500/- for the F.Y. 2015-16. In addition to that Hostel fee and Registration Fee is also being levied from the students. Same is the case with the Quadra Institute of Ayurveda wherein Tuition fee for the F.Y. 2015-16 amounts to Rs. 2,20,33,900/- and in addition to that Hostel Fee, Transportation Fees, Library Fees, and Registration Fee is also being levied from the students. Although huge income is being generated by the applicant from the Quadra Hospital, Quadra School of Nursing and Quadra Institute of Ayurveda, yet the expenditures of the applicant are primarily aimed at augmenting its business of providing medical services and medical education. There is literally no expen....
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....early establish that the applicant company instead of pursuing the objects and activities circumventing charity, is engaged in working towards the benefit of persons referred to in Section 13(3) of the Income Tax Act, 1961. The applicant company has, by this very act, come in clear violation of Section 13(1)(c) wherein a part of the income has been, during the previous year, applied to the benefit of the interested persons and thus has failed to confirm to the norms mandated by law while considering the application for according the said registration. This is fatal to the claim of the applicant. Section 13(1)(c) of the I.T. Act, 1961 provides that where a part of income of charitable and religious trust or Institutions ensures or is used or applied directly or indirectly for the benefit of those persons specified in section 13(3), that a trust or institutions forfeits the exemptions u/s. 11 even if only a small portion of money is utilized or used or applied for benefit of a person mentioned in section 13(3) and accordingly the trust denied the exclusion except as per provisions section 13(4) of the Act. Reliance is also placed on CIT vs. Jamuna Lal Bajaj Seva Trust (1988) 171 ITR ....
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....y organizations to keep their activities transparent and to maintain their books of account in reliable manner. In the instant case, neither has the applicant produced the books of accounts to evince the transparency in its activities nor has it provided any documentary evidences to substantiate the genuineness of its activities. This is fatal to the claim of the applicant. 4. In the case of CIT vs. National Institute of Aeronautical Engineering Education Society 2009, 181 Taxman 205 (Uttarakhand) it was held that Clause (a) of sub-section (1) of section 12AA empowers the CIT to call for such documents or information from the trust or institution as he thinks necessary in order to satisfy himself about the genuineness of the activities of the trust or institution and may also make such inquiries, as he may deem necessary in this behalf. Said provision in section 12AA makes it clear that CIT is not supposed to allow registration with blind eyes. On perusal of the Income and Expenditure Account of the previous years it is found that the sole objective of the company is to make huge profits by undertaking the business of medical services in a totally profit oriented manner. 'Cha....