Contai Rotary Community Welfare Trust, Purba Medinipur V. CIT, (Exemptions), Kolkata, Kolkata

ITA 341/KOL/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 9216 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-03-2017
• Appeal Filed By: Assessee
• Bench Allotted: C
• Assessment Year: misc
• Appeal Filed On: 02-03-2016
• Court: TRIBUNAL
• Department Lawyers: G MALLIKARJUNA
• Keywords: Charitable institution
• Section: 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C, BENC H KOLKATA BEFORE SHRI N.V.VASUDEVAN, JM & DR. A.L.SAINI, AM ./ ITA NO.340&341/KOL/2016 ( / ASSESSMENT YEAR: NA) CONTAI ROTARY COMMUNITY WELFARE TRUST, RATHTALA, PO-CONTAI, DIST-PURBA-MEDINIPUR-721401 VS. CIT(EXEMPTIONS), 10B, MIDDLETON ROW, 6 TH FLOOR KOLKATA-700071 ./ ./PAN/GIR NO.: AAATC 7008 C ( /APPELLANT ) .. ( / RESPONDENT ) ASSESSEE BY : SHRI SUBASH AGARWAL, ADVOCATE REVENUE BY : SHRI G.MALLIKARJUNA, CIT DR / DATE OF HEARING : 09/03/2017 /DATE OF PRONOUNCEMENT 22/03/2017 / O R D E R PER DR. ARJUN LAL SAINI, AM: THE CAPTIONED TWO APPEALS FILED BY THE ASSESSEE (IT A NOS.340&341/KOL/2016) ARE DIRECTED AGAINST THE TWO ORDERS PASSED BY THE COMMISSIONER OF INCOME TAX(EXEMPTIONS) U/S.80G(5)(V I) AND U/S.12AA OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED T O AS THE ACT), DATED 15.12.2015, RESPECTIVELY. 2. THE CAPTIONED TWO APPEALS PERTAIN TO SAME ASSESS EE, COMMON ISSUES INVOLVED, THEREFORE, THESE HAVE BEEN CLUBBED AND HEARD TOGETHER AND A CONSOLIDATED ORDER IS BEING PASSED FOR THE SA KE OF CONVENIENCE AND BREVITY. 3. BRIEF FACTS OF THE CASE QUA THE ASSESSEE ARE THA T THE ASSESSEE TRUST WAS CREATED ON 19.03.2003 WITH GENERAL CHARITABLE OBJECTS SPECIFIED U/S.2(15) OF THE INCOME TAX ACT. THE TRUST PROVIDES MEDICAL SERVICES TO THE MANKIND UNDER ONE ROOF, WITHOUT DISCRIMINATION OF CASTLE, CREED AND RELIGION. THE TRUST PROVIDES POLY-CLINIC, PATHOLOGY , X-RAY AND MEDICAL ITA NO.340 & 341/KOL/16 CONTAI ROTARY COMMUNITY WELFARE TRUST 2 SERVICES. THE ASSESSEE TRUST MAINTAINS BOOKS OF ACC OUNTS FOR ITS ALL ACTIVITIES SEPARATELY. THE CIT(EXEMPTIONS) KOLKATA HAS CANCELLED THE REGISTRATION OF THE TRUST U/S.12AA AND THE APPLICAT ION U/S.80G(5)(VI) OF THE INCOME TAX ACT, 1961, OBSERVING THAT ACTIVITIES OF THE TRUST ARE PURELY COMMERCIAL ONE AND NOT COVERED WITHIN THE FRAMEWORK OF SECTION 2(15) OF THE INCOME TAX ACT. THE COMMISSIONER OF INCOME TAX (EXEMPTIONS) ALSO OBSERVED THAT THE ASSESSEE TRUST IS PRIMARILY ENGAG ED IN SALE AND PURCHASE OF MEDICINES, PATHOLOGY TEST, X-RAY TEST E TC, WHICH ARE BUSINESS IN NATURE AND ACCORDINGLY THE APPLICATION FOR GRANT OF REGISTRATION U/S.12AA OF THE ACT AND APPLICATION IN FORM NO.10G U/S.80G(5 )(VI) OF THE IT ACT, HAVE BEEN REJECTED. 4. ALTHOUGH IN THESE APPEALS, THE ASSESSEE HAVE RAI SED THREE GROUNDS OF APPEAL IN ITA NO.340/KOL/2016 AND SIX GR OUNDS OF APPEAL IN ITA NO.341/KOL/2016, BUT AT THE TIME OF HEARING THE MAIN GRIEVANCE OF THE ASSESSEE HAS BEEN CONFINED TO THE ISSUE THAT LD CIT (EXEMPTIONS) ERRED IN REJECTING THE APPLICATION FOR REGISTRATION U/S 12AA OF THE ACT AND APPLICATION FOR APPROVAL U/S 80 G (5) (VI) OF THE I.T. ACT 1961. 5. LD. AR FOR THE ASSESSEE SUBMITTED BEFORE US THAT MEDICAL IS A CHARITABLE ACTIVITY. THE ASSESSEE TRUST EARNS SOME SMALL NEGLIGIBLE PROFIT BY DOING POLY-CLINIC, PATHOLOGY, X-RAY ACTIVITY, BU T THAT DOES NOT MEAN THAT THE ASSESSEE TRUST IS ENGAGED IN BUSINESS ACTIVITIE S, SINCE THE MEDICAL ASSISTANCE AND MEDICAL SERVICES TO THE MANKIND WITH OUT DISCRIMINATION OF CAST, CREED AND RELIGION IS CHARITABLE IN NATURE. S INCE THE CHARITABLE TRUST IS ITA NO.340 & 341/KOL/16 CONTAI ROTARY COMMUNITY WELFARE TRUST 3 EARNING A VERY SMALL PROFIT OUT OF ITS SERVICES BUT THAT DOES NOT MEAN THAT THE TRUST IS ENGAGED IN THE BUSINESS ACTIVITIES. SE CTION 2(15) OF THE ACT CLEARLY SAYS THAT MEDICAL SERVICE IS A CHARITABLE A CTIVITY AND, THEREFORE, REGISTRATION U/S.12AA SHOULD NOT BE REJECTED. THERE FORE, LD. AR FOR THE ASSESSEE HAS AGAIN VEHEMENTLY SUBMITTED BEFORE US T HAT BARE READING OF SECTION 2(15) OF THE ACT WHICH CLEARLY SAYS THAT CH ARITABLE PURPOSE INCLUDES RELIEF TO THE POOR, EDUCATION, YOGA, MEDIC AL RELIEF, PRESERVATION OF ENVIRONMENT AND THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY. THEREFORE, THE ASSESSEE TRUST IS SQUARELY FALLS WITHIN THE PROVISIONS OF SECTION 2(15) WHICH CLEARLY SAYS THAT MEDICAL RE LIEF IS ONE OF THE CHARITABLE ACTIVITIES. 6. ON THE OTHER HAND, LD. DR FOR THE REVENUE HAS PR IMARILY RELIED ON THE FINDINGS OF THE CIT(EXEMPTION), WHICH WE HAVE A LREADY NOTED IN OUR EARLIER PARA AND IS NOT BEING REPEATED FOR THE SAKE OF BREVITY. 7. HAVING HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL ON RECORD, WE ARE OF THE VIEW THAT THERE IS MERIT IN THE SUBMI SSIONS OF THE ASSESSEE, AS THE PROPOSITION CANVASSED BY LD. AR FOR THE ASSE SSEE ARE SUPPORTED BY THE FACTS NARRATED IN THE CONTEXT OF THE PROVISIONS OF SECTION 2(15) OF THE I.T.ACT. SECTION 2(15) OF THE ACT CLEARLY DEFINES T HE CHARITABLE PURPOSE WHICH, INCLUDES MEDICAL RELIEF AND IN ORDER TO OBTA IN THE OBJECT OF MEDICAL RELIEF THE ASSESSEE TRUST IS RUNNING POLY-CLINIC, P ATHOLOGY, X-RAY AND MEDICAL SERVICES. WE ARE OF THE VIEW THAT THE TRUST ACTIVITIES ARE WITHIN THE FRAMEWORK OF SECTION 2(15) OF THE I.T.ACT, 1961. TH EREFORE, WE CANCEL THE ORDER PASSED BY THE CIT(E) U/S.12AA AND U/S.80G(5)( VI) OF THE I.T ACT . ITA NO.340 & 341/KOL/16 CONTAI ROTARY COMMUNITY WELFARE TRUST 4 8. IN THE RESULT, BOTH APPEALS FILED BY THE ASSESS EE (ITA NOS.340&341/KOL/20116) ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 22/03 /2017. S D/ - (N.V.VASUDEVAN) S D/ - (DR. A.L.SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER /KOLKATA ; ! DATED 22/03/2017 '#$%& /PRAKASH#MISHRA ,SR.PS. / COPY OF THE ORDER FORWARDED TO : / BY ORDER, ( ASSTT. REGISTRAR) $ % , / ITAT, KOLKATA 1. / THE APPELLANT-CONTAI ROTARY COMMUNITY WELFARE TRUST 2. / THE RESPONDENT.- CIT(EXEMPTIONS), KOLKATA 3. 0 ( ) / THE CIT(A), KOLKATA. 4. 0 / CIT 5. 12 3 4456 , 56 , / DR, ITAT, KOLKATA 6. 3 78 / GUARD FILE. 1 4 //TRUE COPY//