M/s. Vaish Charitable Hospital, Sambhal V. CIT, Moradabad

ITA 3749/DEL/2014

• Counselvise Citation: 374920114 RSA 2014
• Duration Of Justice: 4 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-11-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 20-08-2014
• Assessment Year: misc
• Appeal Filed On: 26-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R S MEENA
• Keywords: Charitable institution
• Section: 11A; 80G; 12A; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH H: NEW DELHI BEFORE SHRI I.C. SUDHIR, JUDICIAL MEMBER AND SHRI T.S. KAPOOR, ACCOUNTANT MEMBER ITA NO. 3749/DEL/2014 ASSESSMENT YEAR: VAISH CHARITABLE HOSPITAL, DISPENDARY ROAD, CHANDAUSI, SAMBHAL. AABAV2923R VS. CIT, AAYAKAR BHAWAN, CIVIL LINES, MORADABAD. (APPELLANT) (RESPONDENT) APPELLANT BY : SH. G.N. GUPTA RESPONDENT BY : SH. R.S. MEENA, CIT(DR) O R D E R PER I.C. SUDHIR, J.M. THE ASSESSEE HAS QUESTIONED THE ACTION OF LD. CIT , WHEREBY HE HAS REJECTED THE APPLICATION FOR RENEWAL OF APPROVA L FILED U/S 80G(5)(VI) OF THE I.T. ACT MOVED BY THE APPELLANT. 2. HEARD AND CONSIDERED THE ARGUMENTS ADVANCED BY T HE PARTIES IN VIEW OF THE ORDER IMPUGNED, MATERIAL AVAILABLE ON RECORD AND THE DECISIONS RELIED UPON. 3. WE FIND THAT THE LD. CIT HAS REJECTED THE APPLIC ATION SEEKING APPROVAL U/S 80G OF THE ACT WITH THIS OBSERVATION THAT ON VE RIFICATION BY THE INCOME TAX INSPECTOR IT WAS REPORTED THAT THE HOSPITAL RUN BY THE APPELLANT WAS FOUND LOCKED AND IT WAS GATHERED BY HIM FROM LOCAL ENQUIRY THAT THIS HOSPITAL IS NOT INVOLVED IN ANY KIND OF CHARITABLE ACTIVITY SPECIALLY MEDICAL RELIEF. 4. THE CONTENTION OF THE LD. AR REMAINED THAT THE A PPELLANT HOLDS REGISTRATION U/S 12A OF THE ACT AND VIDE ITS ORDER DATED 13/03/2013 THE ITA NO. 3749/D/2014 VAISH CHARITABLE HOS PITAL 2 SAME LD. COMMISSIONER HAS GRANTED REGISTRATION U/S 12A TO THE ASSESSEE CONSIDERING THE SAME OBJECTS OF THE SOCIETY. THIS REGISTRATION WAS EFFECTIVE FROM THE YEAR 2013-14. LD. AR SUBMITTED THAT THE A PPELLANT SOCIETY WAS ESTABLISHED IN 1957 FOR THE PURPOSE OF PROVIDING ME DICAL RELIEF TO THE POOR IN CHANDAUSI, A SMALL TOWN IN DISTRICT MAURADABAD (U.P ). IN THOSE DAYS MEDICAL FACILITIES IN CHANDAUSI WERE SCARCELY AVAIL ABLE AND THE APPELLANT SOCIETY WAS PROVIDING ITS SERVICES TO THE PUPIL OF THE TOWN AT VERY NEGLIGIBLE CHARGES THROUGH ITS HOSPITAL. HE SUBMITTED THAT BU ILDING OF THE HOSPITAL IS OF THE SOCIETY AND IT WAS CONSTRUCTED IN THE YEAR 1958 . NOW THE BUILDING OF THE HOSPITAL IS IN A DILAPIDATED CONDITION. THEREFO RE, MAJOR PART OF THE BUILDING OF THE HOSPITAL REMAINS CLOSED EXCEPT THE PART WHERE A SMALL DISPENSARY IS RUN. THE SOCIETY NOW PROPOSED TO CON STRUCT A NEW HOSPITAL OR RENOVATE THE EXISTING HOSPITAL BY WAY OF RAISING FU NDS PARTLY FROM SALE OF EXISTING PROPERTY OF THE SOCIETY AND PARTLY FROM DO NATIONS FROM THE PUBLIC AT LARGE. HE SUBMITTED THAT THE REJECTION OF APPROVAL U/S 80G OF THE ACT BY THE LD. CIT HAS SEVERELY IMPACTED THE CONSTRUCTION OF H OSPITAL. HE ALSO REFERRED TO PAGE NUMBERS 1 TO 25 OF THE PB I.E. COPIES OF DI FFERENT DOCUMENTS INCLUDING TRUST DEED, PROJECTION OF WORK TO BE DONE FOR NEXT THREE YEARS, ITS DIFFERENT CHARITABLE ACTIVITIES INCLUDING CHILDREN HEALTH CHECK UP CAMP ORGANIZED BY IT, DISTRIBUTION OF BLANKETS AND MEDIC INES, ETC., ITS BALANCE SHEET AND PROFIT AND LOSS ACCOUNT FOR FINANCIAL YEA R 2010-2011. HE ALSO FURNISHED BEFORE US COPY OF BALANCE SHEET AS ON 31/ 03/2014 AND INCOME AND EXPENDITURE ACCOUNT FOR THE PERIOD FROM 01/04/2 013 TO 31/03/2014. THE LD. AR ALSO PLACED RELIANCE ON THE FOLLOWING DE CISIONS: CIT VS. KUTCHI DASA OSWAL MOTO PARIWAR AMBAMA TRUS T (2013) 29 TAXMANN.COM 228 (GUJ.); DIT VS. SEERVI SAMAJ TAMBARAM TRUST (2014) 362 ITR 199 (MAD.); JASODA DEVI CHARITABLE TRUST VS. CIT (2010) 4 ITR (TRIB.) 547; ITA NO. 3749/D/2014 VAISH CHARITABLE HOS PITAL 3 CIT VS. O.P. JINDAL GLOBAL UNIVERSITY (2013) 38 TA XMANN.COM 366 (PUNJAB & HARYANA). 5. THE LD. DR ON THE OTHER HAND, PLACED RELIANCE ON THE ORDER IMPUGNED WITH THIS CONTENTION THAT SOME ASSETS HAVE NOT BEEN SHOWN IN THE BALANCE SHEET OF THE ASSESSEE AND REFERRED PAGE NOS. 73 & P AGE 55. 6. IN REJOINDER LD. AR SUBMITTED THAT ALL THE DETAI LS OF THE ASSETS OWNED BY THE SOCIETY WERE FURNISHED BEFORE THE AUTHORITIE S BELOW AND A COPY HAS ALSO BEEN MADE AVAILABLE AT PAGE NO. 79 OF THE PB. HE SUBMITTED THAT THE TRUST KEEPS IMMOVABLE PROPERTY WHICH WAS RECEIVED B Y WAY OF DONATIONS FROM ITS FOUNDERS AND OTHER TRUSTS IN THE INITIATIA L YEARS AT THE TIME OF FORMATION OF THE TRUST. IN THE YEAR 2013-2014 IT W AS DECIDED TO SALE DONATED LAND AVAILABLE WITH THE HOSPITAL TO RECEIVE FUNDS FOR THE RENOVATION OF THE HOSPITAL BUILDING. THE APPELLANT HAD ALSO A CCEPTED SOME DONATION FROM THE PUBLIC FOR THESE PERIODS. 7. CONSIDERING THE ABOVE SUBMISSION, WE FIND THAT A DMITTEDLY REGISTRATION GRANTED U/S 12AA TO THE ASSESSEE ON SI MILAR OBJECTS WAS IN OPERATION WHEN THE APPLICATION FOR SEEKING APPROVAL U/S 80G WAS REJECTED BY THE SAME LD. COMMISSIONER AND HE HAS NOT RAISED THE ABOVE STATED OBJECTIONS WHICH LD. DR HAS PREFERRED TO POINT OUT BEFORE THE TRIBUNAL. THE LD. CIT HAS REJECTED THE APPLICATION FOR THE APPROV AL WITH THE FOLLOWING FINDING: THE APPLICATION FOR EXEMPTION U/S 80G WAS FILED IN THIS CASE ON 19/12/2013. DURING HEARING OF THE CASE IT HAS BEEN FOUND THAT THE MAIN OBJECT OF THE SOCIETY IS TO RUN THE ALREADY ES TABLISHED VAISH CHARITABLE HOSPITAL, CHANDAUSI AND PROVIDE MEDICAL RELIEF. THESE FACTS WERE VERIFIED BY THE INCOME TAX INSPECTOR, WH O HAS REPORTED THAT WHEN HE VISITED, THE HOSPITAL WAS FOUND LOCKED AND IT WAS GATHERED BY HIM FROM LOCAL ENQUIRY THAT THIS HOSPIT AL IS NOT INVOLVED IN ANY KIND OF CHARITABLE ACTIVITY SPECIALLY MEDICA L RELIEF. IN VIEW OF THE ABOVE SAID FACTS, I AM NOT SATISFI ED WITH THE GENUINENESS OF ACTIVITIES OF THE SOCIETY AND, THERE FORE, APPLICATION FILED BY THE SOCIETY FOR EXEMPTION U/S 80G IS ALSO REJECTED. ITA NO. 3749/D/2014 VAISH CHARITABLE HOS PITAL 4 8. ON PERUSAL OF THE ORDER IMPUGNED IT IS APPARENT THAT THE LD. CIT HAS NOT PROVIDED OPPORTUNITY TO CONFRONT THE ASSESSEE A PPELLANT WITH THE REPORT OF THE INSPECTOR OR CROSS EXAMINE THE INSPECTOR BEF ORE REJECTING THE APPLICATION FOR THE APPROVAL. IT IS VIOLATION OF T HE PROVISO TO RULE 11A OF THE IT RULES. THE MATTER IS THUS SET ASIDE TO THE FILE OF THE LD. CIT FOR FRESH CONSIDERATION OF THE APPLICATION AFTER AFFORDING OP PORTUNITY OF CROSS EXAMINING THE INSPECTOR ON HIS REPORT AND OF BEING HEARD TO THE ASSESSEE. THE GROUND IS ACCORDINGLY, ALLOWED FOR STATISTICAL PURPOSES. 9. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATIST ICAL PURPOSES. ORDER IS PRONOUNCED IN THE OPEN COURT ON 19/11/2014 SD/- SD/- (T.S. KAPOOR) ACCOUNTANT MEMBER (I.C. SUDHIR) JUDICIAL MEMBER DATED: 19/11/2014 *KAVITA COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, NEW DELHI. TRUE COPY BY ORDER ASSISTANT REGISTRAR