GETTWELL HEALTH & EDUCATION SAMITI, BHARATPUR V. CIT-EXEMPTION, Jaipur

ITA 245/JPR/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 9733 (ITAT-JAIPUR)
• Duration Of Justice: 11 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-03-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: misc
• Appeal Filed On: 14-03-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PRITHIVI RAJ MEENA
• Section: 12AA

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH DQY HKKJR] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI KUL BHARAT, JM & SHRI VIKRAM SINGH YA DAV, AM VK;DJ VIHY LA- @ ITA NO. 245/JP/2016 GETTWELL HEALTH & EDUCATION SAMITI, SIKAR CUKE VS. THE C.I.T.(III), JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AABTG 3870 D VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : NONE. JKTLO DH VKSJ LS @ REVENUE BY : SHRI PRITHIVI RAJ MEENA (ADDL. CIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 02/03/2017 MN?KKS'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT :02/03/2017 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF THE LD. CIT(E), JAIPUR DATED 09.10.2015 DENYING THE REGISTR ATION UNDER 12AA OF THE ACT. 2. THE MATTER WAS EARLIER FIXED FOR HEARING ON 4 TH AUGUST, 2016, 8 TH NOVEMBER, 2016, 16 TH DECEMBER, 2016 AND HAS COME UP FOR HEARING TODAY AGAIN BEFORE THIS BENCH. NONE APPEARED ON BEH ALF OF THE ITA NO.245/JP/2016 GETTWELL HEALTH & EDUCATION SAMITI, SIKAR VS. C.I.T .(III), JAIPUR 2 ASSESSEE. THEREFORE, IT SEEMS THAT THE ASSESSEE IS NOT INTERESTED IN PURSUING THIS MATTER. IT WAS THEREFORE DECIDED TO H EAR THE LD. DR AND DISPOSE OF THE APPEAL BASED ON MATERIAL AVAILABLE O N RECORD. 3. THE LD. DR HAS DRAWN ATTENTION OF THE BENCH THAT THIS IS THE SECOND ROUND OF APPEAL WHEREIN THE ASSESSEE HAS APP ROACHED THE HONBLE ITAT. IN THE EARLIER ROUND, THE HONBLE ITA T VIDE ITS ORDER DATED 22.07.2011 IN ITA NO.1022/JP/2010 HAS SET ASIDE THE MATTER WITH THE FOLLOWING DIRECTIONS: WE HAVE HEARD THE BOTH THE PARTIES. THE PAPER BOOK DOES NOT CONTAIN THE COPY OF THE TRUST DEED SO AS TO ENABLE US TO ASCERTAIN THE OBJECTS OF THE TRUST. THE BALANCE SHEET AS ON 3 1-03-2008 SHOWS THAT THE ASSESSEE IS HAVING ASSETS LIKE AIR-C ONDITIONERS, COMPUTERS, FURNITURE AND FIXTURES AND TELEVISIONS. THERE IS NO REFERENCE FOR ANY ASSETS WHICH ARE NOTED FOR HOSPIT AL. WE ARE ALSO NOT AWARE TO THE INVESTMENTS MADE IN THE BUILDING I N WHICH THE HOSPITAL IS BEING RUN. THE BUILDING IS BEING OWNED BY HUF, DR. B.L. RANWA. IN THE ABSENCE OF ANY DETAILS OF QUANTUM OF INVESTMENT, ONE CANNOT ASCERTAIN AS TO WHETHER THE RENT BEING F OR THE HOSPITAL IS REASONABLE OR EXCESSIVE. IN CASE THE RENT IS EXC ESSIVE THEN THE TRUST IS PROVIDING BENEFIT TO A PERSON COVERED U/S 13 OF THE ACT. THE LD. CIT HAS ALSO MENTIONED THAT NECESSARY DETAI LS HAVE NOT ITA NO.245/JP/2016 GETTWELL HEALTH & EDUCATION SAMITI, SIKAR VS. C.I.T .(III), JAIPUR 3 BEEN FILED. THE ASSESSEE IN ITS GROUND OF APPEAL HA S SUBMITTED THAT THE LD. CIT HAS NOT COMMUNICATED THE AOS REPO RT. HENCE, WITHOUT GOING INTO THE DETAILED SUBMISSIONS FILED B Y THE LD. AR WE FEEL THAT THE ISSUE OF REGISTRATION IS TO BE RESTOR ED BACK ON THE FILE OF THE LD. CIT. 4. IT WAS FURTHER SUBMITTED BY LD. DR THAT TAKING I NTO CONSIDERATION THE DIRECTIONS OF THE HONBLE ITAT AND AFTER HEARIN G THE LD. COUNSEL FOR THE ASSESSEE, CIT(E) HAS HELD THAT SOCIETY CANNOT B E HELD TO CARRY OUT ANY ACTIVITY WHICH IS CHARITABLE IN NATURE WITHIN T HE MEANING OF SECTION 2(15) OF THE ACT. THE RELEVANT FINDING OF THE COMMI SSIONER(EXEMPTION) IS AS UNDER: 7. FROM THE ABOVE DISCUSSION IT CAN BE SEEN THAT T HE SOCIETY IS UNDER THE COMPLETE CONTROL OF SH. B.L. RANWA AND SM T. KAMLA RANWA. THEY ARE RUNNING THE HOSPITAL IN A MANNER IN WHICH A PRIVATE HOSPITAL IS BEING RUN WITH PROFIT MOTIVE. T HE FUNDS OF THIS HOSPITAL ARE BEING DIVERTED TO PRESIDENT AND SECRET ARY IN THE FORM OF RENT. BUT TO AVOID THE IMPLICATION OF PROVISIONS OF SECTION 13(1)(C) R.W. SECTION 13(3), THE RENT HAS BEEN SHOW N TO BE PAID TO HUF, WHICH IS NOT THE OWNER OF THE PROPERTY. THE CO NCEPT OF CHARITY CANNOT GO IN HAND WITH MUTUALITY. THE SOCIE TY IS RUNNING THE HOSPITAL BY CHARGING MONEY FROM THE PATIENTS AN D MONEY IS USED BY THE PRESIDENT AND SECRETARY IN INDIVIDUAL C APACITY OR IN JOINT CAPACITY. IN ANOTHER WORDS, THE WHOLE BENEFIT OF THE ACTIVITIES IS GOING TO SHRI B.L. RANWA & SMT. KAMLA RANWA AND THERE SEEMS ITA NO.245/JP/2016 GETTWELL HEALTH & EDUCATION SAMITI, SIKAR VS. C.I.T .(III), JAIPUR 4 TO BE NO ESSENCE OF CHARITY. WHEN THE SOCIETY ITSEL F IS EXISTING FOR THE BENEFIT OF FAMILY MEMBERS, IT CANNOT BE HELD AS PUBLIC CHARITABLE ORGANIZATION. CHARITY AND MUTUALITY CANN OT EXIST TOGETHER. THERE HAS TO BE FAIRNESS IN ACTIVITIES. T HE ELEMENT OF CHARITY NEEDS TO BE VISIBLE FROM ACTIVITIES. IF THE SOCIETY WANTS TO ENTER INTO ACT OF MUTUAL BENEFIT THEN IT CANNOT BE HELD AS PUBLIC CHARITABLE ORGANIZATION. 9. IN VIEW OF ABOVE PROVISIONS AND ON EXAMINATION O F THE ACTIVITIES OF THE SOCIETY, IT IS SEEN THAT IT IS PA YING RENT TO THE PRESIDENT AND SECRETARY OF THE SOCIETY BUT IT IS NO T DISCLOSING THE RENT PAYMENT IN THEIR NAME. IT HAS SHOWN RENT PAYME NT IN THE NAME OF HUF OF SHRI B.L. RANWA WHO IS NOT THE OWNER OF THE PROPERTY. THE ASSESSEE ALSO WANTED TO AVOID THE TES T OF REASONABLENESS OF THE RENT AND THEREFORE IT HAS NOT SUBMITTED THE DETAILS REGARDING INVESTMENT IN HOSPITAL BUILDING. THEREFORE, IT HAS ALSO FAILED TO COMPLY WITH THE DIRECTIONS OF HONBL E ITAT. IT IS RECEIVING HUGE DONATION BUT NO DETAILS OF SUCH DONA TIONS HAVE BEEN PROVIDED. THEREFORE THE GENUINENESS OF FUNDS I S NOT KNOWN. IT HAS PROVIDED THE DIRECT/INDIRECT BENEFIT TO SECR ETARY, SMT. KAMLA RANWA THROUGH THE MEDICAL SHOP. THEREFORE, THE ACTI VITIES OF THE SOCIETY CANNOT BE HELD AS GENUINE AND FOR PUBLIC CH ARITABLE PURPOSES. 10. FROM THE ABOVE DISCUSSION IT IS CLEAR THAT THE SOCIETY IS RUNNING THE HOSPITAL FOR THE BENEFIT OF FAMILY MEMB ERS OF SHRI B.L. RANWA AND THERE IS NO ELEMENT OF CHARITY IN IT. THE ACTIVITIES OF THE APPLICANT SOCIETY ARE NOT GENUINE FOR THE DETAILED REASONS DISCUSSED IN THE ORDER. ITA NO.245/JP/2016 GETTWELL HEALTH & EDUCATION SAMITI, SIKAR VS. C.I.T .(III), JAIPUR 5 IN VIEW OF ABOVE FACTS, THE SOCIETY CANNOT BE HELD AS CHARITABLE WITHIN THE MEANING OF SECTION 2(15) OF T HE IT ACT, 1961 AND THEREFORE THE REGISTRATION TO THE SOCIETY IS RE FUSED. 5. IN LIGHT OF ABOVE FINDING OF THE LD. CIT(E), WE DO NOT SEE ANY INFIRMITY AND THE GROUNDS TAKEN BY THE ASSESSEE SOC IETY ARE DISMISSED. IN THE RESULT, APPEAL FILED BY THE ASSESSEE SOCIET Y IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 02/03/2017. SD/- SD/- DQY HKKJR FOE FLAG ;KNO (KUL BHARAT) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 02/03/2017. * SANJEEV*. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- GETTWELL HEALTH & EDUCATION SAMITI, SIKAR. 2. IZR;FKHZ@ THE RESPONDENT- THE CIT(III), JAIPUR. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE {ITA NO. 245/JP/2016} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR