TaxTMI 
TaxTMI 
2014 (8) TMI 1257
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....In the first round, this Tribunal remitted back the matter to the file of the Commissioner for reconsideration by an order dated 21-10-2011. According to the ld.senior counsel, this Tribunal directed the Commissioner to examine the trust deed and other records said to be filed by the assessee and thereafter decide the matter afresh. The ld.senior counsel further submitted that the Commissioner has not carried out the direction of the Tribunal while reexamining the matter. The Commissioner simply found that the assessee has collected money even before commencement of the medical college and therefore he found that there was a financial irregularity. Accordingly, the registration was rejected. Referring to the statement said to be recorded fr....
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....as collecting money from the prospective employees and the students even before obtaining recognition from the MCI. According to the ld.DR, the assessee has not maintained any books of account for the money collected from the public and the expenditure incurred. Since there was huge financial irregularities, the Commissioner found that merely because the assessee ultimately started the medical college, the end will not justify the means. According to the ld.DR, the assessee collected huge money from the public by throwing all norms to the winds without maintaining any proper records. Since the institution collected money in a commercial manner for admission of the students and for providing employment opportunity to the prospective employee....
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....n say that an amount of Rs. 4 crores have been collected till date." 5. Further he admitted as follows: "I have taken money from 4 parties. An agreement has been written to the effect that medical seat would be given under NRI quota on getting permission from Medical Council of India and government of India. It is also stated that if the permission is declined on any ground from the concerned authorities for the FY 2009-2010, the amount would be returned along with 12% interest per annum." 6. In response to a query with regard to maintenance of books of account, Shri V Anil Kumar, the managing director of the assessee trust has clarified that "no proper books of account has been maintained by him for his consultancy business and Malabar....
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....n the medical college that would come up in the future. It is also a fact that the assessee is not maintaining any books of account for collection of money and the expenditure incurred for construction. The managing director very fairly admitted before the authorities that he has not maintained any books of account for the medical institution / college. The assessee has also admitted that 50% of the amounts paid to the doctors are in cash and it is not accounted for. Therefore, it is obvious that the assessee trust is collecting unaccounted money on the assurance for providing employment and admission in medical college. The object of the assessee even though stated to be establishing a medical college, the purpose is to run the medical col....
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....ey was collected for admission of students there was no element of charity remains in such an activity. A useful reference can also be made in P.A. Inamdar vs State of Maharashtra 2005 6 SCC 537. The jurisdictional High Court had an occasion to examine the matter in Dawn Educational Charitable Trust (supra). In fact, the jurisdictional High Court has observed as follows: "........... It is well settled that even if nomenclature of the trust may indicate it is meant for charitable purpose, but if activities reveal otherwise, that should weigh with the authorities who grant registration. Similarly, while considering claim of exemption, authorities under the Act would look into the actual activity of the institution, especially main activity....