TaxTMI 
TaxTMI 
2025 (6) TMI 394
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.... No.4549/Del/2024 against the rejection of the application u/s 12A(1)(ac)(iii) of the IT Act. 3. Brief facts of the case:- The applicant had filed an application dated 08.02.2024 in Form 10AB for registration u/s 12A(1)(ac)(iii) which was rejected by the ld. CIT(E) vide order dated 29.08.2024 which is reproduced as under: The applicant has filed an application dated 08.02.2024 in Form 10AB for registration u/s 12A(1 )(ac)(iii) of the Income Tax Act, 1961. The applicant was issued a questionnaire dated 19.03.2024 with a request to furnish certain details I documents / clarifications in support of its claim of registration u/s 12A(1)(ac)(iii). The case was fixed for compliance on 03.04.2024. 2. In response, the applicant filed part details by way of financials, declarations, NOC, trust deed, Balance Sheet and Income & Expenditure for the year ending 31.03.2021 to 31.03.2023 etc. on 02.04.2024 and 19.04.2024. Hence, further opportunity was afforded vide letter dated 14.06.2024 to file pending details and some additional details / clarification / documents by 20.06.2024. It was also mentioned that in case of failure, the proceedings shall be decided on the basis of information ava....
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....ertified that the said documents were also filed before the ld. CIT(E). The written submission of the assessee is reproduced as under: "Denial of exemption certificate u/s. 12A The assessee, a charitable society, came into existence vide trust deed Dtd. 18.04.15, got registered on 30.12.15 with Sub-Registrar. - The founder of the trust deed are 03 doctors as under:- i. Dr. Sushant Gupta (MBBS, M.D., DM) Oncology, Director Balaji Action Cancer Hospital. ii. Dr. Samit Purohit (MBBS, M.D., DM) Oncology, Director Balaji Action Cancer Hospital. iii. Dr. Hari Goyal (MBBS, M.D., DM) Oncology, Director Max Cancer Hospital. The objects of the trust deed are as per trust deed including: - (5-8) (192, 187) * To organize seminars, conferences, continuing medical education. * To provide medicines to poor and needy. * To provide Tarpaulin for making tent for homeless people. * To provide financial help for treatment of poor and needy people. * To provide donation to other registered trust. The provisional registration u/s. 12A granted by provisional registration certificate Dtd.23.01.23. (18-19) - However the application for final registration u/s. 12A stood rejecte....
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....st filed application for registration u/s. 12AA - Commissioner refused to grant registration by holding that activities of assessee-trust were nothing but adventure in nature of trade and would not fall in definition of 'charity' - It was found that aims and objects of assessee-trust clearly showed that it came into existence for providing medical assistance to poor patients and to promote research work on medical site and to hold conference etc., to create awareness and educating doctors especially paediatricians about respiratory disorders/diseases of children, etc - Further, accounts also showed that expenses were incurred for conferences and medicines for poor patients which were directly connected to achieve aims and objects of assessee-trust - Whether since assessee-trust existed for charitable purpose only, assessee would be eligible for deduction u/s. 12AA - Heid. ;es 'Para [In favour of assessee] * TPS deducted by donors u/s. l94C - The A.O. rejected 12A for the reason that donors deducted TDS u/s. 194C from the donation. (31-34) - This cannot be a reason for denial of registration. - The PCIT is not disputing that the assessee reed, donation. - His only ....
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....t and fulfillment of the principal and other objects as mentioned at Sl. No. 1 to 24 of the trust. 7.3 Further clause 26 of the Trust deed wherein, 'conference and seminars' is mentioned as one of the object of the trust deed inter-alia states that in furtherance of the object of the trust, the society will undertake, 'conferences and seminars'. Clause 26 of the Trust deed is reproduced for ready reference as under:- 26) For above purpose and or in pursuance thereof undertake, execute, support and assist any programe(s) or project(s) with no profit motive designed to provide: research and studies into the problems of the marginalized, publishing of books, magazines, periodicals, pamphlets, brochures etc, in furtherance of the object of the society, study circles, conferences and seminars. 7.4 In the written submissions filed before us, the objects of the trust have been mentioned as under: * To organize seminars, conferences, continuing medical education. * To provide medicines to poor and needy. * To provide Tarpaulin for making tent for homeless people. * To provide financial help for treatment of poor and needy people. * To provide donation to other registered trus....
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....come and expenditure are related to conference only. The Ld. AR relied upon the finding as arrived by the Tribunal in the said case that since the trust existed for the charitable purpose only and held that the assessee trust was eligible for registration u/s 12AA of the Act. The Tribunal in the cited case relied upon the decision of the Hon'ble Punjab & Haryana High Court in IT Appeal No.263 of 2013, vide order dated 28.04.2014 and the relevant discussion of the Tribunal in para no. 7 of the order is reproduced as under: "7. In this case the learned CIT denied the registration because no activities have yet started. However, the Tribunal followed the decision of the Hon'ble Punjab & Haryana High Court in which the society had not done any charity work and registration has been granted to the assessee. The aims and objects of the assessee trust as reproduced above, clearly show that the assessee trust came into existence for providing medical assistance to the poor patients and to promote research work on medical side and to hold conference, etc., to create awareness and educating the doctors especially Paediatricians about the respiratory disorders/diseases of children which....
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....conferences and medicines for poor patients, which were directly connected to achieve the aims and objects of the assessee trust. However, the ld. CIT(E) has not made any such examination /verification of the details filed by the assessee before the Ld. CIT(E) and such verification is required before the decision relied by the assessee can be applied to the facts of the case of the assessee. 8. The other reason for the rejection given by the ld. CIT(E) was that the trustees as per submission made by the assessee are medical practitioners and doctors and at the same time donors are all pharmaceuticals companies and they have deducted TDS u/s 194C on the payment made to the assessee trust. 8.1. In this regard, the assessee has relied upon the decision of the Hon'ble Delhi High Court in the case of the Aroh Foundation vs. CIT (Exemption) [2024] 159 taxmann.com 608 (Delhi) wherein, the Hon'ble Court held that TDS by donor under some mis-conception could not disentitle the assessee to claim benefit u/s 11 and 12 of the Act unless the case of the assessee is specifically hit by the proviso -2 section 2 (15) of the Act. The Hon'ble Court further held that the Proviso to section 2(15) of....
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....ment, foreign institutions etc. These grants were to be spent as per the terms and conditions of the project grant. The amount, which remained unspent at the end of the year, got spilled over to the next year and was treated as unspent grant. The Commissioner of Income-tax (Appeals) while deleting the said addition had observed as under:- "I have considered the assessment order and submissions of the appellant along with evidences placed on record. On perusal of the evidences regarding the project grants placed on record, it is seen that the said amounts are received/sanctioned for a specific purpose/project to be utilized over a particular period. The utilization of the said grants is monitored by the funding agencies who send persons for inspection and also appoint independent auditors to verify the utilization of funds as settled terms. The appellant has to submit inter/final progress/work completion reports along with evidences to the funding agencies from time to time. These agreements also include a term that separate audits accounts for the project will be maintained. The unutilized amount has to be refunded back to the funding agencies in most of the cases. All the terms ....