M/s Vivekanand General Hospital, Hubli V. CIT, Hubli

ITA 1195/BANG/2012

• Counselvise Citation: 119521114 RSA 2012
• Duration Of Justice: 1 year(s) 4 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-02-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 07-11-2016
• Assessment Year: misc
• Appeal Filed On: 18-09-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RONMOY DAS CITI
• Keywords: Charitable institution
• Section: 80G; 12A; 12AA; 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, JUDICIAL MEMBER AND SHRI JASON P. BOAZ, ACCOUNTANT MEMBER ITA NOS.1195 & 1196/BANG/2012 ASSESSMENT YEAR : N.A. M/S. VIVEKANAND GENERAL HOSPITAL, CIRCUIT HOUSE ROAD, HUBLI. VS. THE COMMISSIONER OF INCOME TAX, HUBLI. APPELLANT RESPONDENT APPELLANT BY : MS. SHEETAL BORKAR, ADVOCATE RESPONDENT BY : SHRI RONMOY DAS, CIT-I (DR) DATE OF HEARING : 30.01.2014 DATE OF PRONOUNCEMENT : 07.02.2014 O R D E R PER N.V. VASUDEVAN, JUDICIAL MEMBER THESE TWO APPEALS ARE BY THE ASSESSEE AGAINST THE TWO SEPARATE ORDERS OF THE COMMISSIONER OF INCOME TAX (CIT), HUB LI. ITA NO.1195/B/12 IS AN APPEAL AGAINST THE ORDER DATED 25.07.2012 CAN CELLING REGISTRATION GRANTED TO THE ASSESSEE U/S. 12AA AND ITA NO.1196/B /12 IS AN APPEAL ITA NOS.1195 & 1196/BANG/2012 PAGE 2 OF 11 AGAINST THE ORDER DATED 13.08.2012 WITHDRAWING RECO GNITION GRANTED U/S. 80G OF THE ACT. 2. THE ASSESSEE IS A TRUST WHICH CAME INTO EXISTEN CE BY TRUST DEED DATED 01.03.1996. THE OBJECT OF THE TRUST WAS TO G IVE MEDICAL RELIEF, BESIDES OTHER CHARITABLE OBJECTS. THE ASSESSEE HAD APPLIED FOR GRANT OF REGISTRATION U/S. 12AA OF THE ACT. THE ASSESSEE WA S ALSO REGISTERED UNDER THE CHARITABLE PUBLIC TRUSTS ACT, 1950 (BOMBAY XXIX OF 1950). THE ASSESSEE WAS ALSO GRANTED CERTIFICATE OF REGISTRATI ON U/S. 12AA OF THE ACT BY THE OFFICE OF CIT, HUBLI BY ORDER DATED 9.4.2002. THIS REGISTRATION WAS TO TAKE EFFECT FROM 1.3.1996. THE ASSESSEE WAS ALSO G RANTED RECOGNITION U/S. 80G OF THE ACT. 3. THE CIT IN EXERCISE OF HIS POWERS U/S. 12AA(3) O F THE ACT ISSUED A SHOW CAUSE NOTICE ON 14.05.2012, WHEREBY HE PROPOSE D TO WITHDRAW THE REGISTRATION GRANTED TO THE ASSESSEE U/S. 12AA OF T HE ACT. THE SHOW CAUSE NOTICE REFERS TO THE FACT THAT THE JT. CIT, RANGE 3 , HUBLI HAD SUBMITTED A DETAILED ENQUIRY REPORT DATED 8.4.2012 STATING THAT THE ACTIVITIES CARRIED ON BY THE TRUST WERE NOT IN THE NATURE OF CHARITABLE A CTIVITIES AS DEFINED IN SECTION 2(15) OF THE ACT AND THAT THE ACTIVITIES OF THE ASSESSEE ARE NOT BEING CARRIED OUT IN ACCORDANCE WITH THE OBJECTS OF THE T RUST. THE ASSESSEE SENT A DETAILED REPLY DATED 26.05.2012 DENYING THE ALLEG ATIONS MADE IN THE SHOW CAUSE NOTICE DATED 14.05.2012. THE CIT PASSED AN ORDER DATED 25.07.2012 WITHDRAWING THE REGISTRATION U/S. 12AA O F THE ACT, ITA NOS.1195 & 1196/BANG/2012 PAGE 3 OF 11 CONSEQUENTLY, THE CIT ALSO PASSED AN ORDER WITHDRAW ING THE RECOGNITION GRANTED U/S. 80G OF THE ACT. 4. THE REASONS GIVEN BY THE CIT FOR WITHDRAWING THE REGISTRATION U/S. 12AA OF THE ACT MAY BE SUMMARISED AS FOLLOWS:- (A) THE CIT REFERRED TO THE DEFINITION OF CHARITA BLE PURPOSE AS GIVEN IN SECTION 2(15) OF THE ACT AS AMENDED BY THE FINANCE ACT, 2008 W.E.F. 1.4.2009, WHICH READS THUS:- (15) 'CHARITABLE PURPOSE' INCLUDES RELIEF OF THE POOR, EDUCATION, MEDICAL RELIEF, [PRESERVATION OF ENVIRON MENT (INCLUDING WATERSHEDS, FORESTS AND WILDLIFE) AND PR ESERVATION OF MONUMENTS OR PLACES OR OBJECTS OF ARTISTIC OR HISTO RIC INTEREST,] AND THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY: PROVIDED THAT THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERA L PUBLIC UTILITY SHALL NOT BE A CHARITABLE PURPOSE, I F 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 RETENTION, OF THE INCOME FROM SUCH ACTIVITY (B) ACCORDING TO THE CIT, AS PER THE PROVISO INTRO DUCED BY THE FINANCE ACT, 2008, IF A TRUST OR OTHER CHARITABLE INSTITUTI ON HAS ITS OBJECTS FALLING IN THE CATEGORY OF ANY OTHER OBJECT OF GEN ERAL PUBLIC UTILITY GIVEN IN SEC.2(15) OF THE ACT, AND IF IN CARRYING O UT ITS OBJECTS, IT CARRIES ON ACTIVITIES IN THE NATURE OF TRADE, COMME RCE OR BUSINESS, OR ANY ACTIVITY OF RENDERING ANY SERVICE IN RELATION T O ANY TRADE, COMMERCE OR BUSINESS; THEN THE ACTIVITIES CARRIED O N BY THE ASSESSEE CANNOT BE REGARDED AS CHARITABLE. (C) THEREAFTER, THE CIT REFERRED TO THE FACT THAT T HE ASSESSEE WAS CHARGING MUCH MORE THAN WHAT PRIVATE HOSPITALS WERE CHARGING IN ITA NOS.1195 & 1196/BANG/2012 PAGE 4 OF 11 THE VERY SAME AREA AND IN THIS REGARD HAS GIVEN A C OMPARATIVE CHART OF CHARGES IN PARA 3.5 OF HIS ORDER. (D) THE CIT WAS ALSO OF THE VIEW THAT THE ASSESSEE WAS PLOUGHING BACK ITS INCOME IN PURCHASE OF MACHINERIES AND DOING SO WELL WOULD NOT BE CHARITABLE. (E) THE CIT ALSO FOUND THAT THE CONCESSIONS PROVIDE D BY THE ASSESSEE TO THE PATIENTS WAS INSIGNIFICANT PORTION COMPARED TO THE PROFESSIONAL RECEIPTS. 5. FOR ALL THE ABOVE REASONS, THE CIT CAME TO THE C ONCLUSION THAT THE ASSESSEE WAS CARRYING ON COMMERCIAL ACTIVITIES AND ITS ACTIVITIES WERE NOT CHARITABLE. 6. THE FINAL CONCLUSIONS OF THE CIT WERE AS FOLLOWS :- 7. IN VIEW OF THE ABOVE VGH CANNOT BE SAID TO HAVE SATISFIED THE CONDITIONS OF BEING A TRUST ENGAGED IN PROVIDIN G MEDICAL RELIEF OR RELIEF TO POOR . THEREFORE, THE VGH DOES NOT SATISFY THE VERY INTENT OF THE WORD MEDICAL RELIEF OR RELIEF TO POOR RELIEF OR RELIEF TO POOR DEFINED IN SECTION 2(15) OF I.T. ACT 1961. THE TRU ST IS RUNNING A HOSPITAL AND COLLECTS HUGE SUMS OF MON EY FROM THE PATIENTS FOR EVERY KIND OF SERVICES FOR THE PURPOSE OF MAKING PROFIT OR SURPLUS. THIS ITSELF GOES TO SHOW THAT T HE ASSESSEES INTENTION IS TO MAKE PROFIT. THERE IS NO ELEMENT O F CHARITY INVOLVED IN THE CASE AS THE VGH IS NOT IMPARTING TH E SERVICES FREE OF COST BUT FOR A CONSIDERATION. THEREFORE, THERE IS NO ELEMENT OF RELIEF TO POOR OR WEAKER SECTIONS AS CLAIMED IN THE OBJECTS. THE OBJECTIONS FILED ARE IN THE NATURE OF GENERAL RECIT ALS. THEREFORE, THE ACTIVITIES DO NOT COME UNDER THE PURVIEW OF EVE N ANY OTHER OBJECTS OF GENERAL PUBLIC UTILITY ALSO. 8. IN THE LIGHT OF THE ABOVE CUMULATIVE FACTORS, TH E VGH HAS RENDERED ITSELF LIABLE FOR DISCONTINUANCE OF REGIST RATION GRANTED U/S 12AA W.E.F. 01.04.2006. THEREFORE, IN EXERCISE OF POWERS ITA NOS.1195 & 1196/BANG/2012 PAGE 5 OF 11 UNDER SECTION 12AA(3), THE REGISTRATION GRANTED TO VIVEKANANDA GENERAL HOSPITAL IS WITHDRAWN AND DISCONTINUED W.E. F. 01.04.2006. 7. SIMILAR ORDER WITHDRAWING RECOGNITION U/S. 80G O F THE ACT WAS ALSO PASSED BY THE CIT. 8. AGGRIEVED BY THE AFORESAID ORDERS, THE ASSESSEE HAS PREFERRED THE PRESENT APPEALS BEFORE THE TRIBUNAL. 9. WE HAVE HEARD THE SUBMISSIONS OF THE LD. COUNSEL FOR THE ASSESSEE. SHE SUBMITTED THAT THE ASSESSEE IS ADMITTEDLY RUNNI NG A HOSPITAL. IT WAS HER SUBMISSION THAT THIS FACT IS DULY RECOGNIZED IN THE IMPUGNED ORDER PASSED BY THE CIT. SHE DREW OUR ATTENTION TO THE D EFINITION OF CHARITABLE PURPOSE IN SECTION 2(15) OF THE ACT AND SUBMITTED THAT MEDICAL RELIEF IS BY ITSELF A CHARITABLE PURPOSE, IRRESPECTIVE OF THE FA CT THAT WHETHER MEDICAL RELIEF IS GIVEN FOR CONSIDERATION OR FREE OF COST. IT IS NOT THE REQUIREMENT U/S. 2(15) OF THE ACT THAT MEDICAL RELIEF SHOULD BE PR OVIDED AT A CONCESSIONAL RATE OR FREE OF COST TO BE REGARDED AS CHARITABLE PURPOSE. IT WAS FURTHER SUBMITTED THAT PROVISO TO SECTION 2(15) OF THE ACT PROHIBITING A CHARITABLE ORGANIZATION FROM CARRYING ON BUSINESS IS APPLICABL E ONLY WHEN THE CHARITABLE ORGANIZATION EXISTS FOR ANY OTHER OBJEC TS OF GENERAL PUBLIC UTILITY. IT WAS SUBMITTED THAT SINCE THE ASSESSEE IN THE PRE SENT CASE WAS DOING A CHARITABLE ACTIVITY OF MEDICAL RELIEF, PROVISO TO SECTION 2(15) OF THE ACT WILL NOT BE APPLICABLE. ITA NOS.1195 & 1196/BANG/2012 PAGE 6 OF 11 10. THE LD. COUNSEL FOR THE ASSESSEE THEN DREW OUR ATTENTION TO THE PROVISIONS OF SECTION 12AA(3) OF THE ACT AND SUBMIT TED THAT THE REGISTRATION GRANTED CAN BE CANCELLED ONLY WHERE THE TRUST OR IN STITUTION IS NOT GENUINE OR THE ACTIVITIES ARE NOT BEING CARRIED OUT IN ACCO RDANCE WITH THE OBJECTS OF THE TRUST OR INSTITUTION. IT WAS HER SUBMISSION TH AT IN THE PRESENT CASE, THERE IS NO SUCH COMPLAINT BY THE DIT IN THE IMPUGNED ORD ER. IT WAS SUBMITTED THAT THE CIT HAS ADMITTED THE FACT THAT THE ASSESSE E PROVIDES MEDICAL RELIEF, BUT THE ONLY COMPLAINT OF THE REVENUE IS T HAT MEDICAL RELIEF WAS PROVIDED ON COMMERCIAL LINES. ACCORDING TO HER, EX ERCISE OF POWER U/S. 12AA(3) OF THE ACT, CANNOT BE DONE ON THE AFORESAID GROUND. IN THIS REGARD, OUR ATTENTION WAS DRAWN TO THE JUDGMENT OF THE HON BLE KARNATAKA HIGH COURT IN THE CASE OF DIT(E) V. M/S. VENKATESHA EDUCATION SOCIETY , ITA NO.182 OF 2011, DATED 10.07.2012 , WHEREIN THE HONBLE HIGH COURT IN A CASE WHERE REGISTRATION U/S. 12A WAS NOT GRANTED HE LD AS FOLLOWS:- 13. THE TWO RELEVANT EXAMINATIONS ARE THAT THE AU THORITY SHOULD SATISFY HIMSELF THAT THE OBJECTS OF THE TRUS T SHOULD BE IN THE NATURE OF CHARITABLE PURPOSES AND THE GENUINENE SS OF THE ACTIVITIES OF SUCH INSTITUTION, AND ON BEING SATISF IED ON BOTH COUNTS, THE APPLICANT CAN BE GRANTED REGISTRATION U NDER SECTION 12-A OF THE ACT. THE OBJECT OF THE TRUST SO LONG A S IT FITS INTO ANY ONE OF THE OBJECTS AS MENTIONED UNDER SECTION 2(15) OF THE ACT, THE FIRST REQUIREMENT IS FULFILLED AND THE SECOND R EQUIREMENT WILL BE MET BY THE GENUINENESS OF THE ACTIVITIES OF SUCH INSTITUTIONS ARE ALSO TO THE SATISFACTION OF THE AUTHORITY. WE DO NO T FIND ANY RECORDING BY THE REGISTERING AUTHORITY ABOUT THE LA CK OF GENUINENESS OF ACTIVITIES, BUT THE REGISTERING AUTH ORITY DID NOTICE SOME SHORTCOMINGS ON THE PART OF THE SOCIETY, IN TH E MANNER OF ITS FUNCTIONING. ITA NOS.1195 & 1196/BANG/2012 PAGE 7 OF 11 14. WE ARE OF THE OPINION THAT THE SHORTCOMINGS BY THEMSELVES CANNOT BE PUT ON PAR WITH LACK OF GENUINENESS OF TH E SOCIETY, IN THE ACTIVITIES OF THE SOCIETY. HOWEVER, AS NOTICED IN THE JUDGMENT OF THIS COURT RENDERED IN THE CASE OF GARDEN CITY EDUCATIONAL TRUST (SUPRA), THIS IS THE EXERCISE WHI CH PERHAPS THE ASSESSING AUTHORITY MAY HAVE TO INDULGE IN AT THE TIME OF EXAMINING THE RETURNS FILED BY A CHARITABLE ORGA NISATION CLAIMING EXEMPTION IN TERMS OF SECTIONS 11 AND 12 O F THE ACT. 11. BASED ON THE ABOVE OBSERVATIONS OF THE HONBLE HIGH COURT OF KARNATAKA, THE LD. COUNSEL SUBMITTED THAT THE PRESE NCE OF COMMERCIAL MOTIVE CANNOT BE A GROUND TO CANCEL REGISTRATION U/ S. 12AA(3) OF THE ACT. FURTHER RELIANCE WAS PLACED ON THE DECISION OF THIS TRIBUNAL IN THE CASE OF KRUPANIDHI EDUCATIONAL TRUST V. DIT (E) , (2012) 6 TAXCORP (A.T.) 30107 (BANGALORE) / ITA NO.1272(BNG)/2011 DATED 22. 11.2012; WHERE IN THE CASE OF A TRUST WHICH EXISTED FOR THE PURPOSE O F EDUCATION AND WHOSE REGISTRATION WAS CANCELED U/S. 12AA(3) OF THE ACT, THE TRIBUNAL QUASHED THE ORDER U/S. 12AA(3) OF THE ACT AND OBSERVED AS FOLLO WS:- 19. WE ARE ALSO OF THE VIEW THAT THE OTHER REASON S GIVEN BY THE DIT(E) IN THE ORDER U/S 12AA(3) OF THE ACT, DO NOT MAKE OUT ANY CASE, WHICH CAN SHOW THE ACTIVITIES OF THE ASSESSEE ARE NOT GENUINE OR THAT THE ACTIVITIES OF THE ASSESSEE ARE NOT BEING CARRIED OUT IN ACCORDANCE WITH THE OBJECTS OF THE TRUST OR INSTITUTION. THE FACT THAT THE ASSESSEE WAS PAYING COMMISSION TO PER SONS WHO SOLICIT STUDENTS FOR STUDYING IN THE ASSESSEES INS TITUTION CANNOT LEAD TO THE CONCLUSION THAT THE ASSESSEE IS NOT IMP ARTING EDUCATION. SIMILARLY PURCHASE OF A BMW CAR, BORROW ING OF LOANS FROM SINDHI FINANCIERS, NON MAINTENANCE OF REGULAR BOOKS OF ACCOUNTS, VIOLATIONS OF PROVISIONS OF SEC.13(1)( C) OF THE ACT IN AS MUCH AS THE TRUSTEES WERE PAID ENORMOUS SALARY ARE ALL BY WAY OF PASSING REFERENCE HAVING NO RELEVANCE TO WHETHER OR NOT THE ASSESSEE WAS PURSUING EDUCATION AS ITS MAIN OBJECT. THERE ARE NO ITA NOS.1195 & 1196/BANG/2012 PAGE 8 OF 11 FACTS BROUGHT OUT IN THE IMPUGNED ORDER REGARDING T HE GENUINENESS OF THE ACTIVITIES OF THE TRUST OR AS TO WHETHER THE OBJECT OF EDUCATION WAS NOT PURSUED BY THE ASSESSEE AS ITS MAIN AND PREDOMINANT ACTIVITY. IN FACT, THE ORDER OF T HE DIT(E) DOES NOT ANYWHERE SHOW THAT THE ASSESSEE IS NOT IMPARTIN G EDUCATION. THE COMPLAINT OF THE REVENUE SEEMS TO BE THAT EDUCA TION IS BEING IMPARTED BUT ON COMMERCIAL LINES. THE DEFINITION O F CHARITABLE PURPOSE IS GIVEN IN SEC.2(15) OF THE ACT. THE SAME REFERS TO RELIEF TO POOR, MEDICAL RELIEF, EDUCATION AND THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY. THE PROVISO TO SEC.2(15) OF THE ACT INTRODUCED BY THE FINANCE ACT, 2008 W.E.F. 1.4.2008 REGARDING EXCLUDING ORGANIZATIONS WHERE TH ERE IS PROFIT MOTIVE FROM THE DEFINITION OF CHARITABLE PURPOSE AP PLIES ONLY TO THE CATEGORY OF TRUSTS WHICH HAS AS ITS OBJECT, THE OBJECT OF ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY. IT DOES NOT APPLY TO THE OTHER CATEGORIES OF CHARITABL E PURPOSE VIZ., RELIEF TO POOR, EDUCATION AND MEDICAL RELIEF. A S RIGHTLY POINTED OUT BY THE LEARNED COUNSEL FOR THE ASSESSEE, ELEEMO SYNARY ELEMENT IS NOT ESSENTIAL ELEMENT OF CHARITY. IT I S ALSO NOT A NECESSARY ELEMENT IN A CHARITABLE PURPOSE THAT IT S HOULD PROVIDE SOMETHING FOR NOTHING OR FOR LESS THAN IT COSTS OR FOR LESS THAN THE ORDINARY PRICE. THE SURPLUS GENERATED, IF IT IS HE LD FOR CHARITABLE PURPOSE AND APPLIED FOR CHARITABLE PURPOSE OF THE A SSESSEE, AND THEN THE ASSESSEE HAS TO BE CONSIDERED AS EXISTING FOR A CHARITABLE PURPOSE. THERE ARE ENOUGH SAFEGUARDS PROVIDED IN SEC.12 AND 13 OF THE ACT TO ENSURE THAT PERSONAL BENEFITS OF THE PERSONS IN CONTROL OF THE TRUSTS ARE NOT TREATED AS HAVING APP LIED FOR CHARITABLE PURPOSE AND FOR BEING BROUGHT TO TAX LIK E PROVISIONS OF SEC.13(1) (C ) OF THE ACT WHICH RESTRICTS UNREASONA BLE AND EXCESSIVE PAYMENTS TO CERTAIN CATEGORY OF PERSONS C ONNECTED WITH A TRUST OR OTHER INSTITUTION. IN SUCH CIRCUMSTANCE S, WE ARE OF THE VIEW, THAT THE ORDER U/S 12AA(3) OF THE ACT, CANNOT BE SUSTAINED. 12. DRAWING OUR ATTENTION TO THE ORDER OF THE TRIBU NAL, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT IT WAS NOT A NECESSARY ELEMENT FOR A CHARITABLE PURPOSE THAT IT SHOULD BE PROVIDING SOMETHING FOR N OTHING OR FOR LESS THAN WHAT IT COSTS OR FOR LESS THAN THE ORDINARY PRICE. IT WAS SUBMITTED THAT THE ITA NOS.1195 & 1196/BANG/2012 PAGE 9 OF 11 ORDER U/S. 12AA(3) OF THE ACT HAS TO BE CANCELLED A ND CONSEQUENTLY ORDER WITHDRAWING RECOGNITION U/S. 80G OF THE ACT SHOULD ALSO BE CANCELLED. 13. THE LD. COUNSEL FOR THE ASSESSEE ALSO PLACED RE LIANCE ON THE DECISION OF THE ITAT DELHI BENCH IN THE CASE OF ITO V. DHARMASHILA CANCER FOUNDATION & RESEARCH CENTRE , 128 ITD 1 (DEL), WHEREIN THE TRIBUNAL IN A CASE OF ASSESSMENT DENYING RELIEF U/S . 11 OF THE ACT TO A CHARITABLE ORGANIZATION PROVIDING MEDICAL RELIEF, HELD THAT PROFITABILITY IS NOT THE SOLE CRITERION TO JUDGE CHARITABLE NATURE OF TH E SOCIETY. 14. THE LD. DR RELIED ON THE ORDER OF THE CIT. 15. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE A RE IN AGREEMENT WITH THE ARGUMENTS PUT FORTH ON BEHALF OF THE ASSES SEE. AS RIGHTLY CONTENDED BY THE LD. COUNSEL FOR THE ASSESSEE, THE DEFINITION OF CHARITABLE PURPOSE HAS SEVERAL LIMBS VIZ., (I) RELIEF OF THE POOR, (II) EDUCATION, (III) MEDICAL RELIEF, (IV) PRESERVATION OF ENVIRONMENT (I NCLUDING WATERSHED, FOREST & WILDLIFE), (V) PRESERVATION OF MONUMENTS OR PLACE S OR OBJECTS OF ARTISTIC OR HISTORIC INTEREST, AND (VI) ADVANCEMENT OF ANY OTHE R OBJECT OF GENERAL PUBLIC UTILITY. PROVISO TO SECTION 2(15) OF THE ACT IS AP PLICABLE ONLY IN RESPECT OF A CHARITABLE INSTITUTION WHICH HAS THE OBJECT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY. THE ASSESSEE, ADMITTEDLY, IS RUNN ING A HOSPITAL AND EVEN AS PER THE OBJECTS, THE TRUST WAS ESTABLISHED FOR THE PURPOSE OF PROVIDING MEDICAL RELIEF. THEREFORE PROVISO TO SECTION 2(1 5) OF THE ACT WILL NOT BE APPLICABLE. IT IS FURTHER SEEN THAT THIS TRIBUNAL IN THE CASE OF KRUPANIDHI ITA NOS.1195 & 1196/BANG/2012 PAGE 10 OF 11 EDUCATIONAL TRUST (SUPRA) , HAD TAKEN A VIEW THAT IN CASE OF CHARITABLE PURPOSE OF PROVIDING EDUCATION, THE FACT THAT EDUCA TIONAL INSTITUTIONS ARE BEING RUN ON A COMMERCIAL SCALE CANNOT BE A GROUND TO INVOKE THE PROVISIONS OF SECTION 12AA(3) OF THE ACT AND CANCEL REGISTRATION GRANTED TO A TRUST. THE OBSERVATIONS OF THE TRIBUNAL HAVE ALR EADY BEEN EXTRACTED IN THE EARLIER PART OF THIS ORDER AND ARE NOT BEING RE PEATED. WE ALSO FIND FROM THE IMPUGNED ORDER THAT THE ASSESSEE HAS BEEN PURSU ING THE OBJECTS AS PER THE OBJECTIVES OF THE TRUST VIZ., PROVIDING MED ICAL RELIEF. THERE IS NO WHISPER ABOUT THE GENUINENESS OF THE ACTIVITIES OF THE ASSESSEE IN THE IMPUGNED ORDER. THEREFORE THE TWO CONDITIONS FOR I NVOKING THE PROVISIONS OF SECTION 12AA(3) OF THE ACT ARE TOTALLY ABSENT. AS ALREADY STATED, THE COMPLAINT OF THE REVENUE IN THE IMPUGNED ORDER IS O NLY WITH REFERENCE TO THE HOSPITAL BEING RUN ON COMMERCIAL LINES. AS WE HAVE ALREADY OBSERVED, SO LONG AS THE INCOME OF THE TRUST IS APPLIED FOR CHAR ITABLE PURPOSE, THERE CAN BE NO QUESTION OF ANY TAX LIABILITY ON THE ASSESSEE . IF THERE IS ANY SHORTCOMING IN THE APPLICATION OF INCOME FOR CHARIT ABLE PURPOSE, THEN TO THAT EXTENT THE ASSESSING OFFICER IN THE ASSESSMENT OF T HE ASSESSEE, IS FREE TO TAX SUCH INCOME WHICH IS NOT APPLIED FOR CHARITABLE PURPOSE. IN SUCH CIRCUMSTANCES, CANCELING THE REGISTRATION U/S. 12AA OF THE ACT WOULD NOT BE THE APPROPRIATE COURSE OF ACTION FOR THE REVENUE. WE, THEREFORE, ARE OF THE VIEW THAT THE IMPUGNED ORDER U/S. 12AA(3) OF THE AC T DESERVES TO BE CANCELLED. IT IS ORDERED ACCORDINGLY. ITA NOS.1195 & 1196/BANG/2012 PAGE 11 OF 11 16. IN VIEW OF OUR ORDER RESTORING REGISTRATION U/S . 12AA OF THE ACT, RECOGNITION GRANTED U/S. 80G OF THE ACT SHOULD ALSO BE RESTORED. WE HOLD AND DIRECT ACCORDINGLY. 17. IN THE RESULT, BOTH THE APPEALS BY THE ASSESSEE ARE ALLOWED . PRONOUNCED IN THE OPEN COURT ON THIS 7 TH DAY OF FEBRUARY, 2014 . SD/- SD/- ( JASON P. BOAZ ) ( N.V. VASUDEVA N ) ACCOUNTANT MEMBER JUDICIAL MEMBE R BANGALORE, DATED, THE 7 TH FEBRUARY , 2014 . /D S/ COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY ITAT, BANGALORE.