M/s. BHOPAL GAS PIDIT PUNARWAS VIBHAG ROGI KALYAN SAMITI, Bhopal V. The CIT, Bhopal

ITA 604/IND/2014

• Counselvise Citation: 60422714 RSA 2014
• Duration Of Justice: 10 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-08-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: misc
• Appeal Filed On: 25-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHIMA GUPTA
• Section: 12A; 12AA; 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, J.M. AND SHRI B.C.MEENA, A.M. I.T.A.NO.604/IND/2014 A.Y. : - BHOPAL GAS PIDIT PUNARWAS VIBHAG ROGH KALYAN SAMITI, CIT, BHOPAL KAMLA NEHRU HOSPITAL GAS RAHAT, VS. HAMIDIA HOSPITAL CAMPUS, BHOPAL APPELLANT RESPONDENT PAN NO. AABTB2322D APPELLANT BY : SHRI ARUN JAIN, C. A. RESPONDENT BY : S MT. ASHIMA GUPTA, CIT DR DATE OF HEARING : 24 . 0 6 .201 5 DATE OF PRONOUNCEMENT : 10 . 0 8 .201 5 -: 2: - 2 O R D E R PER GARASIA, J.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT, BHOPAL, DATED 13.08.2014, PASSED U/S 12AA OF THE INCOME-TAX ACT, 1961. THE SHORT FACTS OF THE CASE A RE AS UNDER. 2. BHOPAL GAS PIDIT PUNARWAS VIBHAG ROGI KALYAN SAMITI, BHOPAL, HAS APPLIED FOR REGISTRATION U/S 12 A OF THE INCOME-TAX ACT, 1961. IN ORDER TO VERIFY THE OBJECT AND ACTIVITIES OF THE ASSESSEE AND TO ASCERTAIN THE FUL FILLMENT OF CONDITIONS MENTIONED U/S 12A, THE ASSESSEE WAS GIVE N AN OPPORTUNITY OF HEARING ON 17.6.2014. ALL TRUSTS ARE REQUIRED TO APPLY FOR REGISTRATION WITHIN ONE YEAR FROM THE DAT E OF THEIR CREATION, BUT THE ASSESSEE DID NOT DO SO AS THE ASS ESSEE SOCIETY WAS CREATED ON 17.08.2005. NO REGULAR RETUR N WAS FILED FOR ASSESSMENT YEAR 2014-15 EVEN THOUGH THE A PPLICANT SOCIETY HAS TAXABLE INCOME AND INCOME OF THE SOCIET Y IS NOT -: 3: - 3 EXEMPT UNDER THE PROVISIONS OF THE ACT. THE ASSESSE E SOCIETY IS FORMED BY THE STATE GOVERNMENT EMPLOYEES AND HAV ING AUTHORIZED TO COLLECT THE USER CHARGES FOR IN AND O UT PATIENTS. THE AMOUNT SO COLLECTED TO BE USED FOR THE PURPOSE OF MEETING THE OBJECTIVES. IT IS RELEVANT TO MENTION HERE THAT VERIFICATION OF NATURE OF EXPENSES VIS--VIS INCOME A ADMITTED, THERE IS NO CORRELATION BETWEEN THEM. IN OTHER WORDS, THE EXPEN SES INCURRED WERE NOT FOR FULFILLING THE OBJECT OF THE SOCIETY FOR THE LAST CONSECUTIVE FINANCIAL YEAR, WHICH THE APPLICAN T HAS SUBMITTED FOR CONSIDERATION. THE SOCIETY WAS CONSIS TENTLY CREATING SURPLUS OF 23% AND ABOVE EVEN AFTER MAKING INVESTMENT IN FIXED ASSETS WHICH IS LIABLE FOR TAXA TION. THEREFORE, THE REGISTRATION U/S 12A WAS REJECTED. 3. THE LD. AUTHORIZED REPRESENTATIVE SUBMITTED THAT TH E OBJECTION OF THE SOCIETY IS TO COLLECT RS. 5/- FROM OUTDOOR PATIENTS OF THE HOSPITAL, WHO ARE COMING IN HOSPITA L FOR TAKING THE TREATMENT AND THEY ARE COLLECTING THE USER CHAR GES FROM IN AND OUT PATIENTS. THE AMOUNT SO COLLECTED IS US ED FOR MEDICAL FACILITIES TO THE PATIENTS, WHO ARE REQUIRE D IN THE SOCIETY. THE MAJOR EXPENSES OF THE ASSESSEE SOCIETY IS FOR -: 4: - 4 PROVIDING AMBULANCE FACILITIES TO THE PATIENTS. THE NEXT OBJECT OF THE TRUST IS TO PROVIDE FREE MEALS TO THE PATIEN TS AND THE RELATIVES OF THE PATIENTS, WHO ARE ATTENDING TO THE PATIENTS. MOREOVER, THIS SOCIETY IS RUN BY THE MINISTER AND T HE COLLECTOR, BHOPAL, IS THE INCHARGE OF THIS TRUST AN D NO PUBLIC IS RUNNING THIS TRUST AND THOSE WHO ARE ADMINISTERI NG THIS TRUST IS ALL GOVERNMENT EMPLOYEES. THEREFORE, THIS TRUST IS DOING CHARITABLE ACTIVITIES AND IF THEY ARE CARRYIN G OUT THE CHARITABLE ACTIVITIES, THEY ARE ENTITLED FOR REGIST RATION. SIMILAR HOSPITALS ARE RUN BY SIMILAR TYPES OF TRUSTS AND TH EIR REGISTRATION WAS GRANTED BY THE CIT. THEREFORE, SIM ILAR ACTIVITIES IS CARRIED OUT BY THIS TRUST. THEREFORE, THE REGISTRATION U/S 12A MUST BE GRANTED. 4. ON THE OTHER HAND THE LD. CIT DR OBJECTED TO GRANT OF REGISTRATION ON THE GROUND THAT THE ASSESSEE IS EVE RY YEAR CREATING SURPLUS, WHICH IS GENERATED MORE THAN 20% EVEN AFTER MAKING THE INVESTMENT IN FIXED ASSETS. THEREF ORE, THE OBJECT OF THE TRUST IS ON COMMERCIAL BASIS. THEREFO RE, REGISTRATION MAY BE DENIED. -: 5: - 5 5. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES. WE FIND THAT THE SOCIETY TRUST HAS APPLIE D FOR REGISTRATION AND THE ASSESSEE SOCIETY IS A SOCIETY FORMED BY THE STATE GOVERNMENT EMPLOYEES HAVING AUTHORIZED TO COLLECT USER CHARGES FROM IN AND DOOR 0PATIENTS. THE AMOUNT COLLECTED IS USED FOR MEETING THE OBJECTIVE OF THE ASSESSEE. THE ASSESSEE TRUSTS ACTIVITIES ARE OF CHARITABLE NATUR E AND WE HAVE ALSO VERIFIED THE ACCOUNTS OF THE ASSESSEE AND FROM VERIFICATION OF THE ACCOUNTS, WE FOUND THAT THEY AR E RUNNING THE DISPENSARIES AND HOSPITALS AND MAJOR EXPENSES A RE FOR RUNNING THE DISPENSARY AND MAJOR PAYMENTS MADE TO D OCTORS AS HONORARIUM AND THE HONORARIUM PAYMENTS ALSO MADE TO TECHNICAL STAFF FOR DOING THEIR SERVICES IN THE VAR IOUS HOSPITALS, LIKE KAMLA NEHRU HOSPITAL, JAWAHARLAL NEHRU CHIKITS ALAYA, KHAN SHAQIR ALI KHAN CHIKITSALAYA AND VARIOUS HOSPI TALS. THEY ALSO RUN POLYCLINIC. THEREFORE, WE ARE OF THE VIEW THAT SIMPLY ON THE GROUND THAT SURPLUS IS GENERATED CANN OT BE CRITERIA FOR DENYING THE REGISTRATION U/S 12A. WE H AVE ALSO VERIFIED THE FIXED ASSETS AS ON 31 ST MARCH, 2013. THEY ARE X- RAY MACHINE, WATER COOLERS, AIR CONDITIONERS, RAM S ETS, ECG -: 6: - 6 MACHINE, CEILING FANS, AND UPS COMPUTERS. ALL ARE N ECESSARY FOR RUNNING THE HOSPITAL. THEREFORE, WE ARE OF THE VIEW THAT THE ASSESSEE TRUSTS ACTIVITIES ARE CHARITABLE IN NATUR E. THEREFORE, WE ALLOW THE APPLICATION OF THE ASSESSEE. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 10 TH AUGUST, 2015. SD/- (B. C. MEENA) ACCOUNTANT MEMBER SD/- ( D.T.GARASIA) JUDICIAL MEMBER DATED : 10 TH AUGUST, 2015. CPU* 17