TaxTMI 
TaxTMI 
2026 (9) TMI 1528
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....h appeals are accompanied by separate applications dated 08.11.2024 seeking condonation of delay of 8 days in filing the appeals. The applications contain an identical explanation. It has been stated therein that the assessee encountered technical difficulties in accessing the ITAT e-filing portal, including difficulties in generating the OTP and logging into the portal, during the period from 22.10.2024 to 28.10.2024. It has further been stated that, after resolution of the technical difficulties, the consultant of the assessee was unavailable from 28.10.2024 on account of the Diwali holidays. According to the assessee, the delay was neither intentional nor attributable to negligence and the appeals were filed as soon as the stated impediments ceased to operate. The assessee has accordingly prayed that the delay be condoned and the appeals be admitted for adjudication on merits. The learned DR raised no objection to the condonation of delay. 3. We have considered the submissions of both sides and perused the applications filed by the assessee. Having regard to the explanation furnished therein and particularly considering that the learned DR has raised no objection, we are sati....
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....gistration u/s 12AB of IT Act as his entire action in based on Inspector's report forwarded by the ITO, As per report No employee found we strongly objected that as our employee were on part time basis they were available during our camp days only because having trained medical staff on permanent basis is highly costly and trust is not having requirement for complete month here report of ITO is also with mollified intention that they have not even meet or asked to come to office. 6. The CIT(E) has erred on facts and in law in rejecting the application filed by the assessee u/s 12A(1)(ac)(iii) in form No. 10AB seeking registration u/s 12AB of IT Act as claimed by CIT that salary and other details were not filed are base less as we have provided each persons salary details as per month basis of all employees which were completely ignore we were also ready to present all employees in CIT office whenever asked all those fact of matter were duly ignored. 7. The CIT(E) has erred on facts and in law in rejecting the application filed by the assessee u/s 12A(1)(ac)(iii) in form No. 10AB seeking registration u/s 12AB of IT Act as claimed by CIT We details of patents who wa....
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....ings, the learned CIT(E) issued notices dated 23.04.2024, 16.05.2024, 08.06.2024 and 04.08.2024, calling upon the assessee to furnish the documents and explanations specified therein. The assessee filed replies on 02.05.2024, 13.06.2024 and 15.08.2024. The learned CIT(E) also caused a local verification to be conducted through the Income Tax Officer (Exemption), Jodhpur, regarding the activities, expenditure and functioning of the assessee. 6. Upon considering the replies furnished by the assessee and the local-verification report, the learned CIT(E) entertained doubts regarding the genuineness and independent functioning of the assessee. He was of the view that the assessee had not satisfactorily substantiated the expenditure incurred on rent and salary, the use of the medical equipment owned by it, the particulars of the beneficiaries of the eye camps and the donations received by it. The learned CIT(E) further inferred that the premises, operation theatre and medical equipment were being used in connection with Mathur Eye Hospital, a proprietary concern of one of the trustees, and that the funds of the assessee were being diverted for the benefit of persons connected with its....
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....ds the financial statements for the financial year 2023-24, the assessee had sought further time on account of the non-availability of its accounts staff and professional consultant due to heavy rainfall in Jodhpur. In respect of the salary expenditure, it was explained that four employees were engaged as technical staff for approximately eight to ten days in a month, depending upon the requirement of the eye camps, and that their month-wise salary and work details had been furnished. The assessee had also stated that none of those employees was related to the management and had expressed its willingness to produce them before the learned CIT(E) whenever required. 12. The learned AR further submitted that the assessee had explained the payment of rent to Shri Vipul Mathur. According to the reply, the assessee was using a portion of Mathur Eye Hospital, including the operation theatre and other facilities, for conducting its free eye camps. It was stated that rent of Rs. 15,000/- per month, aggregating to Rs. 1,80,000/- per annum, was paid for the use of such facilities and that Shri Vipul Mathur had donated Rs. 1,50,000/- out of the rent received by him back to the assessee. It ....
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....ferred to in section 13(3) of the Act. 17. In view of the aforesaid material, the learned AR contended that the observation of the learned CIT(E) regarding non-compliance with the show-cause notice was contrary to the record. It was submitted that the impugned order had been passed without an effective and issuewise consideration of the reply dated 15.08.2024 and the documents stated to have been furnished therewith. Therefore, the conclusions regarding the non-genuineness of the activities and siphoning off of the funds were not sustainable. 18. Per contra, the learned DR relied upon the impugned order passed by the learned CIT(E). However, having regard to the contention of the assessee that its detailed reply dated 15.08.2024 and the supporting documents furnished therewith had not been duly considered, the learned DR submitted that the matter may be restored to the file of the learned CIT(E) for fresh consideration. He requested that the learned CIT(E) be directed to examine the explanations and supporting material furnished by the assessee and thereafter decide the application afresh in accordance with law. 19. We have considered the rival submissions and perused the ....
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....where the trust has before applying for registration found to have undertaken activities contrary to the objects of the Trust. 22. The ratio emerging from the aforesaid decision is that the Commissioner must be satisfied that the objects of the institution are genuinely charitable and that its actual or proposed activities are in furtherance of those objects. Registration may be refused where the objects are not charitable or where the activities are found to be contrary to the stated objects. However, the registration proceedings cannot be converted into a full-fledged assessment of the sufficiency of charitable expenditure or the allowability and taxability of individual transactions. 23. The principles consistently applied in registration matters are that the enquiry under section 12AB is conducted on a prima facie basis. It does not contemplate a conclusive or exhaustive verification of every receipt, expense, beneficiary or activity. Deficiencies in certain invoices, beneficiary particulars or supporting records may justify further enquiry and an opportunity to cure such deficiencies. They do not, by themselves, establish that the activities are non-genuine. Similarly, i....
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....e camps recorded in the local-verification report were fictitious or that the patients whose names were furnished had not received medical treatment. Therefore, the absence of exhaustive particulars of every OPD patient could justify further verification, but could not constitute sufficient ground to hold that the entire medical activity of the assessee was non-genuine. 28. As regards the salary expenditure, the assessee explained in its reply dated 15.08.2024 that four persons were engaged as technical staff according to the requirements of the eye camps and worked approximately eight to ten days in a month. It was stated that their salaries ranged from Rs. 4,500/- to Rs. 9,000/- per month and that the aggregate salary expenditure of Rs. 3,10,500/- was substantially lower than the cost of employing full-time trained medical staff. The assessee further stated that month-wise salary particulars and details of work performed by the employees were enclosed with the reply, that none of the employees was related to the management and that all four persons could be produced before the learned CIT(E) whenever required. 29. The adverse conclusion regarding salary expenditure was base....
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....rence, by itself, does not establish that the activities of the assessee were non-genuine or that the entire rent payment represented diversion of funds. 33. The explanation regarding the donation of Rs. 1,50,000/- by Dr. Vipul Mathur out of the rent received by him was material to the allegation of siphoning off of funds. The learned CIT(E) neither dealt with this explanation nor recorded any finding that the donation was not reflected in the books or bank account of the assessee. In the absence of such examination, the conclusion that the rent payment was intended to confer an undue benefit upon the trustee was not supported by adequate material. 34. We may clarify that payment of rent to a trustee or a person referred to in section 13(3) is not, by that fact alone, sufficient to hold that the institution itself is non-genuine. The reasonableness and allowability of such expenditure and the consequences, if any, under section 13 are ordinarily matters to be examined during assessment proceedings. At the registration stage, the payment may be relevant if it establishes that the institution is merely a façade or that its funds are being diverted for private benefit. Su....
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....ations and were in the nature of business receipts. However, no material was brought on record to establish that the assessee had charged any fee from the beneficiaries of the eye camps or that any identified donation represented consideration for medical services. The tax character of a particular receipt and the applicability of the provisions governing anonymous donations are matters that may be examined during the relevant assessment proceedings. At the registration stage, such receipts could be relevant only if they demonstrated that the stated charitable activities were a sham or that the institution was carrying on business under the guise of charity. No such material has been identified in the present case. 39. On an overall consideration of the material, we find that the local verification corroborates the existence of the assessee, the conduct of eye camps, the treatment of patients, the availability of medical equipment and the use of hospital facilities for carrying out medical activities. The deficiencies pointed out by the learned CIT(E) concern the completeness of the supporting records and individual items of salary, rent and donations. The assessee furnished a d....