DCIT(E), New Delhi V. M/s India HIV/AIDS Alliance, New Delhi

ITA 716/DEL/2015

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 6639 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 11 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-01-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2010-2011
• Appeal Filed On: 05-02-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: V K TULSIYAN
• Keywords: Depreciation; Charitable institution; Rule of consistency
• Section: 12A; 12AA; 12; 15

Judgement Text

PAGE | 1 INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C : NEW DELHI BEFORE SHRI BHAVNESH SAINI , JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO. 7210/DEL/2017 (AGAINST ORDER U /S 12AA ( 3) OF THE ACT DATED 3/10/2017 INDIA HIV/ AIDS ALLIANCE. 6, COMMUNITY CENTRE, ZAMRUDPUR, KAILASH COLONY EXTENSION, NEW DELHI PAN: AABCI2577E VS. CIT(EXEMPTION), NEW DELHI (APPELLANT) (RESPONDENT) ITA NO. 7 1 6 /DEL/2017 (ASSESSMENT YEAR 2010 - 11) DCIT (E) CIRCLE - 1(1), NEW DELHI VS. INDIA HIV/ AIDS ALLIANCE. 6, COMMUNITY CENTRE, ZAMRUDPUR, KAILASH COLONY EXTENSION, NEW DELHI PAN: AABCI2577E (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI V.K.TULSIYAN, ADV REVENUE BY: SHRI AMIT KATOCH, SR. DR DATE OF HEARING 27/11/2018 DATE OF PRONOUNCEMENT 2 3 / 01 / 201 9 O R D E R PER PRASHANT MAHARISHI , A. M. 1. THESE ARE THE TWO APPEALS FILED IN THE CASE OF INDIA HIV ALLIANCE A COMPANY REGIST ERED U/S 25 OF THE COMPANIES ACT , 1956 , ONE FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD CIT ( EXEMPTION ), NEW DELHI DATED 3 - 10 - 2017 , WHEREIN THE REGISTRATION ALREADY GRANTED UNDER SECTION 12A A OF THE ACT HAS BEEN WITHDRAWN UNDER SECTION 12 AA (3) OF THE ACT HOLDING THAT ASSESSEE IS NOT CARRYING ON CHARITABLE ACTIVITIES AND SECOND BY LD ASSISTANT DIRECTOR OF INCOME TAX ( EXEMP TION) [ THE LD AO ] AGAINST THE ORDER OF THE LD COMMISSIONER OF INCOME TAX (APPEALS) - 40, NEW DELHI DATED 26/11/2014 FOR AY 2010 - 11 WHERE IN ORDER OF THE PAGE | 2 AO IS SET ASIDE AND ASSESSEE WAS HELD TO BE CARRYING ON CHARITABLE ACTIVITIES. 2. I N T H E APPEAL O F T H E A S S E S S E E IN ITA NO. 7210 /DEL/ 2017 A S S E S S E E RAIS E D FOLLOWING GROUNDS OF APPEAL : - 1. THE LD CIT(E)S ORDER DATED 03.10.2017 FOR WITHDRAWAL OF REGISTRATION U/S 12AA(3) OF THE INCOME TAX ACT, 1961 IS ILLEGAL VOID SINCE AB - INITIO. 2. THE LD CIT(E) ERRED IN CONCLUDING THAT T HE ACTIVITIES ARE NOT CHARITABLE IN NATURE. 3. THE LD CIT(E) ERRED IN CONCLUDING THAT SET - OFF OF PAST DEFICIT COULD BE REASON FOR DENYING 12AA REGISTRATION. 4. THE LD CIT(E) ERRED IN CONCLUDING THAT IN THE ASSESSMENT YEAR 2012 - 13 THE ASSESSEE DID NOT CON DUCT ANY CHARITABLE, THE ASSESSEE HAS BEEN CONDUCTING SIMILAR NATIONWIDE ACTIVITIES IN ALL THE ASSESSMENT YEAR. 5. THE LD CIT(E) ERRED IN RELYING ON THE ORDERS OF THE AO PARTICULARLY WHEN ALL THE ORDERS WERE QUASHED BY THE LD CIT(APPEAL) IT WAS INCUMBENT ON THE CIT(E) TO HAVE RELIED ON THE ORDERS OF HIGHER APPELLATE BODY THAN THE AO. 6. THE LD CIT(E) ERRED IN QUESTIONING THE NATURE OF ACTIVITY WITHOUT ESTABLISHING ANY DEFECT OR INFIRMITY IN THE EXPENDITURE AND SUPPORTING. 3. THE SECOND APPEAL IS FILED BY THE REVENUE DCIT ( EXEMPTION ) U/S 143 (3) OF THE ACT ON 28 /0 3 / 2013 , WHEREIN THE APPEAL FILED BY THE ASSESSEE AGAINST ORDER BY ASSISTANT DIRECTOR OF INCOME TAX ( EXEMPTION ), TRUST CIRCLE - 2, NEW DELHI DATED 28 /0 3 / 2013 UNDER SECTION 143 ( 3 ) OF THE ACT DENYING EX EMPTION TO THE ASSESSEE UNDER SECTION 11 AND 12 OF THE ACT I S A L L O W E D B Y T H E L D C I T ( A ) , T H E L D A O HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT(A) HAS ERRED IN HOLDING THAT THE ASSESSEE SOCIETY IS A CHARTIABLE ORGANIZATION DESPITE THE FACT THAT THE ASSESSEE SOCIETY WAS DOING BUSINESS WITHIN THE MEANING OF AMENDED PROVISIONS OF SECTION 2(15) OF THE INCOME TAX ACT, 1961. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT(A) HAS ERRED IN AL LOWING THE EXEMPTION TO THE ASSESSEE U/S 11 & 12 OF THE ACT. 4. THE BRIEF FACTS OF THE CASE IS THAT THE ASSESSEE IS A COMPANY REGISTERED UNDER SECTION 25 OF THE COMPANIES ACT , 1956 AND ALSO REGISTERED UNDER PAGE | 3 SECTION 12A A OF THE ACT VIDE CERTIFICATE DATED 17 / 7 /2000 . THE MAIN OBJECT OF THE ASSESSEE IS TO PROVIDE RELIEF TO PERSONS WHO ARE SUFFERING FROM HIV AIDS BY PROVIDING FINANCIAL , TECHNICAL AND MANAGERIAL ASSIST ANCE TO FAST EN THE CURE AND COMMUNITY SUPPORT TO THOSE SUFFERING FROM THAT DISEASE. IT WAS FURTHER THE OBJECT TO ADVANCE THE EDUCATION OF THE PUBLIC CONCERNING THE PREVENTION OF THE ABOVE DISEASE AND TO COLLABORATE WITH OTHER NGOS FOR THE ABOVE OBJECT S . 5. FOR ASSESSMENT YEAR 2010 - 11 , THE RETURN WAS FILED ON 28 - 1 - 2011 CLAIMING EXEMPTION UNDER SECTION 11 AND 12 OF THE ACT . THE LD AO WAS OF THE VIEW THAT THE ASSESSEE IS NOT IN THE FIELD OF EDUCATION, MEDICAL RELIEF OR RELIEF TO POVERTY BUT I S C A R R Y I N G O N OBJECT OF GENERAL PUBLIC UTILITY AS PER SECTION 2 ( 15 ) OF THE ACT . HE FURTHER NOTED THAT ASSESSEE HAS RECEIVED A GRANT FROM INTERNATIONAL HIV AIDS ALLIANCE, UK AND OTHER AGENCIES OF RS. 391074038 / - . ON RECEIPT OF GRANT , F O R I M P L E M E N T A T I O N O F P R O J E C T S , ASSESSEE ALSO CHARGES MANAGEMENT FEES FROM ITS DONOR AGENCIES AND THEREFORE AO WAS OF THE VIEW THAT ACTIVITY OF CHARGING FEE IN LIEU OF EXECUTION OF PROJECTS FOR DONOR AGENCIES IS LIKE A BUSINESS ACTIVITY WHEREIN SERVICE CHARGE S ARE TAKEN FOR RENDERING SERVICES TO THE DONOR. THEREFORE , AO HELD THAT ASSESSEE IS NOT CARRYING ON ANY OBJECT OTHER THAN OBJECT OF GENERAL PUBLIC UTILITY. HE FURTHER HELD THAT ASSESSEE IS SEPARATELY CHARGING THE DONOR FOR SALARIES OF ITS STAFF AS HUMAN RESOURCE EXPENDITURE , TRAINING INFRASTRUCTURE ETC AND MANAGEMENT FEE IS ALSO CHARGING OVER AND ABOVE THIS. HE FURTHER HELD THAT EXCESS OF INCOME OVER EXPENDITURE ITSELF INDICATES THAT THERE IS A PROFIT COMPONENT IN THE ACTIVITY OF THE EXECUTION OF THE PROJECTS. THEREFORE , HE HELD THAT ASSESSEE IS COVERED BY THE PROVISIO TO SECTION 2 ( 15 ) OF THE ACT AND CLAIM OF THE ASSESSEE BEING A CHARITABLE INSTITUTION WAS REJECTED. LD AO MENTIO NED THAT IN THE O R D E R THAT A PROPOSAL FOR WITHDRAWAL OF REGISTRATION UNDER SECTION 12A A OF THE ACT HAS ALREADY BEEN SENT TO THE CI T ( EXEMPTION ) ALSO. ACCORDINGLY , HE DETERMINE D THE GROSS TOTAL INCOME OF THE ASSESSEE OF RS. 392676839 / - AND G R A N T E D DEDUCTION FOR EXPENDITURE OF RS. 336269357 / - AND DEPRECIATION OF RS. 786653 / - AND DETERMINE D THE TAXABLE INCOME OF THE PAGE | 4 ASSESSEE AT RS. 55620829 / - AGAINST THE RETURN ED INCOME OF THE ASSESSEE AT RS. N IL BY ORDER UNDER SECTION 143 (3) OF THE ACT ON 28 - 3 - 20 13 . 6. ASSESSEE AGGRIEVED WITH THE ORDER PREFERRED APPEAL BEFORE THE LD CIT(A) - 40, NEW DELHI WHO ALLOWED THE CLAIM OF THE ASSESSEE VIDE PARA NUMBER 4.4 OF HIS ORDER AS UNDER : - 4.4 I HAVE CONSIDERED THE ORDER OF THE AO AND THE SUBMISSION OF THE ASSESSEE AND I FIND CONSIDERABLE MERIT IN THE SUBMISSION OF THE ASSESSEE THAT THE ASSESSEE IS INVOLVED IN SOCIAL WORK AND CHARITABLE ACTIVITY WITHIN THE MEANING OF SECTION 11(1) OF THE IT ACT AS THE ASSESSEE IS INVOLVED IN THE HIVB/ AIDS AWARENESS PROGRAMMES AND PROVIDE S FINANCIAL AND MEDICAL HELP TO THE POOR AND HIC/ AIDS PATIENTS AS DISCUSSED EARLIER IN PARA 4.2. IT IS APPARENT FROM THE SUBMISSIONS OF THE ASSESSEE THAT THE ASSESSEE IS NOT INVOLVED IN ANY TRADE, COMMERCE AND BUSINESS ACTIVITY AS THE ASSESSEE IS INVOLVED IN SPREADING THE AWARENESS ABOUT THE HIV/ AIDS AMONG THE PEOPLE AND THE ASSESSEE IS ALSO INVOLVED IN MEDICAL HELP TO THE POOR AND HIV/ AIDS PATIENTS, CARE AND COUNSELING TO THE HIV/ AIDS PATIENTS AND AS SUCH THE ASSESSEE IS INVOLVED IN CHARITABLE ACTIVITY AND APPARENTLY COMES UNDER THE HEAD RELIEF TO THE POOR AND MEDICAL HELP WHICH COMES WITHIN THE MEANING OF THE CHARITABLE PURPOSES U/S 2(15) OF THE IT ACT. THERE IS ALSO MERIT IN THE SUBMISSION OF THE ASSESSEE THAT THE FACTS AND CIRCUMSTANCES OF THE CASE O F THE EARLIER AY 2009 - 10 ARE THE SAME IN WHICH THE EXEMPTION U/S 11(1) HAS BEEN ALLOWED BY THE LD CIT(A) AND AS SUCH THE SAME SHOULD BE FOLLOWED ON THE PRINCIPLE OF CONSISTENCY. AFTER CONSIDERING ALL THE FACTS AND CIRCUMSTANCES OF THE CASE, I AM OF THE VIE W THAT THERE IS NO PROPER JURISDICTION IN THE ORDER OF THE LD AO FOR DENYING EXEMPTION U/S 11(1) TO THE ASSESSEE AND ACCORDINGLY THE APPEAL OF THE ASSESSEE IS ALLOWED. 7. AGGRIEVED WITH THE ORDER OF THE LD CIT(A) , LD AO IS IN APPEAL BEFORE US . 8. BASED ON A PROPOSAL FOR WITHDRAWAL O F REGISTRATION UNDER SECTION 12AA OF THE ACT SENT BY THE LD AO ON 15 / 12 / 2011 , THE LD C I T ( EXEMPTION ) ISSUED NOTICE ON 15 / 3 / 2007 FOR WITHDRAWAL OF REGISTRATION. THE LD CIT AFTER HEARING THE ARGUMENTS AND THE WRITTEN SUBMISSIO N OF THE ASSESSEE VIDE PARA 4 TO 6 OF HIS ORDER 3 - 10 - 2017 , CON C U R R E D WITH THE FINDING OF THE LD AO AND HELD THAT THE ACTIVITIES CARRIED OUT BY THE APPLICANT ARE IN THE NATURE OF CONTRACTUAL WORK WHICH CANNOT BE CONSIDERED AS A CHARITABLE ACTIVITY . HE FURTH ER HELD THAT THE ASSESSEE IS NOT INVOLVED DIRECTLY INTO THE CONDUCT OF CHARITABLE ACTIVITIES UNDER SECTION 2 ( 15 ) OF THE ACT BUT SUCH ACTIVITIES ARE IN THE NATURE OF BUSINESS OR PROFESSION . HE FURTHER HELD THAT PAGE | 5 THE ASSESSEE HAS INCURRED ADMINISTRATIVE EXPEN DITURE WHICH IS KNOWN AS APPLICATION OF INCOME BUT IN RELATION TO THE EXECUTION OF THE PROJECT SANCTION TO IT BY VARIOUS AGENCIES . THERE FOR E, REGISTRATION UNDER SECTION 12 AA OF THE ACT ORIGINAL LY GRANTED TO THE ASSESSEE WAS WITHDRAWN V I D E ORDER D A T E D 3 - 10 - 2017 . A G A I N S T T H I S O R D E R A S S E S S E E I S I N APPEAL . 9. IN VIEW OF THE ABOVE FACTS THE ONLY ISSUE THAT REQUIRES TO BE ADJUDICATED IN BOTH THE APPEALS IS THAT WHETHER A C T I V I T I E S C A R R I E D O N B Y T H E A S S E S S E E T R U S T A R E F O R C H A R I T A B L E P U R P O S E S A S D E F I N E D U / S 2 ( 1 5 ) O F T H E A C T AND NOT BUSINESS AND PROFESSION . IF IT IS HELD THAT ASSESSEE IS ENGAGED IN CHARITABLE ACTIVITIES THEN WHETHER PROVISO T O SECTION 2 ( 15 ) OF THE ACT APPLIES TO THE ASSESSEE OR NOT AND THE THIRD ISSUE IS THAT WHETHER THE BENEFIT OF U/S 11 AND 12 OF THE ACT IS ALLOWABLE TO THE ASSESSEE. 10. THE LEARNED AUTHORIZED REPRESENTATIVE FIRSTLY ASSAILED THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (EXEMPTION) SUBMITTING THAT THE PROPOSAL FOR WITHDRAWAL OF REGISTRATION U /S 12 A OF THE INCOME TAX ACT HAS BEEN SUBMITTED BY THE LEARNED ASSISTANT DIRECTOR OF INCOME TAX (EXEMPTION ), NEW DELHI ON 15/12/2011 HOWEVER THE LEARNED CIT (EXEMPTION) HAS PASSED AN ORDER ON 3/10/2017 AFTER A GAP OF ALMOST 6 YEARS. HE SUBMITTED THAT SUC H A LATE ORDER PASSED BY THE LEARNED CIT ITSELF MAKES THE ORDER NOT SUSTAINABLE. WITH RESPECT TO THE OBJECT OF THE TRUST HE SUBMITTED THAT ACCORDING TO THE MEMORANDUM AND ARTICLES OF ASSOCIATION OF THE ASSESSEE IT IS TO PROVIDE RELIEF TO PERSONS WHO ARE S UFFERING FROM HIV AIDS BY PROVIDING FINANCIAL, TECHNICAL AND MANAGERIAL ASSISTANCE TO FOSTER THE CARE AND COMMUNITY SUPPORT OF THOSE SUFFERING FROM HIV/AIDS. THE TRUST ALSO ADVANCES THE EDUCATION OF THE PUBLIC CONCERNING THE SYMPTOMS, PREVENTION AND CONSE QUENCES OF HIV AIDS THROUGH IMPROVED HIV PREVENTION EFFORTS BY CREATING AWARENESS TO GENDER, SEXUAL HEALTH AND SEXUALITY. THE ASSESSEE IS ALSO COLLABORATING WITH LOCAL NON - GOVERNMENTAL ORGANIZATION TO CARRY OUT OPERATIONS, RESEARCH, POLICY AND ADVOCACY IN ITIATIVES FOR THE PURPOSE OF THE ABOVE DISEASE AND IT IS ALSO DEVELOPING AND IMPROVING METHODS OF PREVENTION OF HIV AIDS AND ITS TREATMENT . HE FURTHER STATED THAT THE ASSESSEE RECEIVED GRANT FROM GLOBAL FUND TO CARRY OUT THESE ACTIVITIES . HE FU RTHER STATED PAGE | 6 THAT THE GRANT AGREEMENT WAS AN END RESULT OF THE COUNTRY PROPOSAL SUBMITTED BY THE NATIONAL AIDS CONTROL ORGANIZATION WHICH IS A DIVISION OF THE MINISTRY OF HEALTH AND FAMILY WELFARE, GOVERNMENT OF INDIA TO THE GLOBAL FUND. THE GRANT WAS ALS O RECEIVED WITH A SPECIFIED PURPOSE TO REDUCE HIV - RELATED MORBIDITY AND MORTALITY IN ADULTS AND CHILDREN AND MITIGATE THE IMPACT OF HIV ON CHILDREN AND WOMAN HEADED HOUSEHOLDS, PREVENTION TESTING AND COUNSELING , CARE AND SUPPORT FOR THE CHRONICALLY ILL AN D WIDENING ACCESS TO TREATMENT AND EXPAND ACCESS TO COUNSELING AND TESTING ET CETERA. HE THEREFORE SUBMITTED THAT THE TRUST IS CARRYING ON THE OBJECT OF MEDICAL RELIEF. HE FURTHER STATED THAT THE HUMAN RESOURCE EXPENDITURE IS THE COST PERTAINING TO THE FEE PAID TO MEDICAL STAFF, COUNSELOR AND MEDICAL OFFICERS. HE ALSO REFERRED THE INFRASTRUCTURE AND EQUIPMENT EXPENDITURE WHICH IS A COST FOR SETTING UP CENTERS FOR ANTIRETROVIRAL THERAPY. HE ALSO REFERRED THAT THE TRAINING EXPENDITURE ARE INCURRED FO R THE RECRUITMENT AS PER THE STANDARDIZED TRAINING AND CV DEVELOPED BY THE AGENCY ADHERING TO WORLD HEALTH ORGANIZATI ON GUIDELINES . ON THE COMMODITIES AND PRODUCT EXPENDITURE HE STATED THAT THESE EXPENDITURE REFERRED TO ANTIRETROVIRAL DRUGS AND HEALTH PRO DUCTS. WITH RESPECT TO THE PLANNING AND ADMINISTRATION EXPENDITURE HE STATED THAT THESE ARE THE PROGRAM IMPLEMENTATION AND ADMINISTRATION COSTS INCURRED BY THE ASSESSEE. ON THE BASIS OF THE ABOVE OBJECT HE STATED THAT IT IS ABUNDANTLY CLEAR FROM THE ABOV E THAT THE ASSESSEE IS CARRYING ON THE ACTIVITY OF MEDICAL RELIEF. HE ALSO REFERRED TO THE AUDITED ACCOUNTS OF THE ASSESSEE. IN VIEW OF THIS HE SUBMITTED THAT THE ASSESSEE IS CARRYING ON THE ACTIVITY OF THE MEDICAL RELIEF WHICH IS CLASSIFIED AS A CHARITA BLE ACTIVITY UNDER SECTION 2 (15) OF THE INCOME TAX ACT. HE FURTHER STATED THAT THE LEARNED ASSESSING OFFICER AS WELL AS THE LEARNED COMMISSIONER OF INCOME TAX (EXEMPTION) HAS NOT BROUGHT ON ANY MATERIAL TO SHOW THAT THE ASSESSEE IS NOT CARRYING ON THE ACTIVITY OF THE CHARITABLE NATURE IN THE FORM OF MEDICAL RELIEF . HE FURTHER STATED THAT IN CASE OF A CHARITABLE TRUST THE ACTIVITIES ARE CARRIED OUT EITHER THROUGH DONATION OR THROUGH GRANT IN AID RECEIVED FROM THE VARIOUS AGENCIES. HE STATED THAT ME RELY RECEIVING THE GRANT DOES NOT MAKE AN ACTIVITY OF THE TRUST NON - CHARITABLE. HE PAGE | 7 FURTHER STATED THAT IN THE INCOME TAX ACT THERE IS NO BAR IN RECEIVING GRANT FROM THE VARIOUS OTHER ORGANIZATIONS FOR CARRYING ON THE ACTIVITIES OF THE TRUST WHICH A CHARIT ABLE IN NATURE. HE FURTHER STATED THAT THE PROVISIONS OF SECTION 2 (15) OF THE ACT INSERTED WITH EFFECT FROM 01/04/2009 DOES NOT APPLY TO THE TRUST AS ASSESSEE IS NOT CARRYING ON THE OBJECT OF THE GENERAL PUBLIC UTILITY BUT CARRYING ON THE ACTIVITIES OF TH E MEDICAL RELIEF. IN VIEW OF THE ABOVE SUBMISSION HE STATED THAT THE ORDER OF THE LEARNED ASSESSING OFFICER IN NOT GRANTING THE EXEMPTION PROVIDED UNDER SECTION 11 AND 12 OF THE INCOME TAX ACT TO THE ASSESSEE ARE AGAINST THE PROVISIONS OF THE LAW , WHICH H A S B E E N S E T A S I D E B Y T H E L D C I T ( A ) . 11. O N T H E APPEAL O F T H E A S S E S S E E R E I T E R A T I N G T H E S A M E A R G U M E N T S HE STAT ED THAT THE LEARNED CIT ( EXEMPTION ) HAS MERELY FOLLOWED WHAT HAS BEEN STATED BY THE LEARNED ASSESSING OFFICER WHICH HAS ALREADY BEEN NEGATED BY THE ORDER OF THE LEARNED CIT A IN ASSESSEES CASE FOR EARLIER YEARS TO WHEREIN IT HAS BEEN HELD THAT THE ASSES SEE IS NOT CARRYING ON THE OBJECT OF THE GENERAL PUBLIC UTILITY AND THE PROVISO TO SECTION 2 (15) OF THE INCOME TAX ACT DOES NOT APPLY TO THE ASSESSEE. THEREFORE HE SUBMITTED THAT THE ORDER OF THE LEARNED CIT A MAY BE UPHELD AND THE ORDER OF THE LEARNED CIT EXEMPTION PASSED WITHDRAWING THE REGISTRATION ALREADY GRANTED TO THE TRUST U/S 12 AA OF THE INCOME TAX ACT MAY BE QUASHED. 12. THE LEARNED DEPARTMENTAL REPRESENTATIVE VEHEMENTLY SUBMITTED THAT THE ASSESSEE IS RECEIVING THE GRANT AND IS CARRYING ON THE B USINESS ACTIVITY AS IT IS C H A R G I N G MANAGEMENT FEES FOR THE VARIOUS PROJECTS AND THEREFORE IT CANNOT BE HELD TO BE AN ACTIVITY FOR CHARITABLE PURPOSES . HE THEREFORE RELIED UPON THE ORDER OF THE LEARNED ASSESSING OFFICER AS WELL AS THE ORDER OF THE L EARNED CIT EXEMPTION AND SUBMITTED THAT THE BOTH THE ORDERS MAY BE UPHELD. 13. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTION AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES. UNDISPUTED FACT SHOWS THAT THE ASSESSEE IS A REGISTERED CHARITABLE INSTITUTION UN DER SECTION 25 OF THE COMPANIES ACT 1956 HOLDING REGISTRATION U/S 12 A OF THE INCOME TAX ACT V IDE ORDER DATED 17/7/2000 AND ALSO ENJOYS THE BENEFIT UNDER SECTION 80 D OF THE INCOME TAX ACT WIDE ORDER DATED 11/9/2006 . THE MAIN OBJECT OF THE APPELLANT F OR PAGE | 8 WHICH IT HAS BEEN FORMED ARE TO PROVIDE RELIEF TO THE PERSONS WHO ARE SUFFERING FROM HIV/AIDS BY PROVIDING FINANCIAL, TECHNICAL AND MANAGERIAL ASSISTANCE TO FOSTER THE CARE AND COMMUNITY SUPPORT OF THOSE SUFFERING FROM THAT DISEASE. I T FURTHER ADVANCES THE EDUCATION OF THE PUBLIC CONCERNING THE SYMPTOMS, PREVENTION AND CONSEQUENCES OF THAT DISEASE THROUGH IMPROVED HIV PREVENTION EFFORTS BY CREATING AWARENESS TO GENDER, SEXUAL HEALTH AND SEXUALITY. IT IS ALSO COLLABORATING WITH LOCAL NON - GOVERNMENT ORGANIZATION TO CARRY OUT OPERATIONS, RESEARCH, POLICY AND ADVOCACY INITIATIVES AND ALSO DEVELOPING AND IMPROVING METHODS OF PREVENTION OF HIV AIDS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE LEARNED AO HELD THAT THE ASSESSEE IS CARRYING ON THE BU SINESS ACTIVITY AS THE ASSESSEES PROPOSAL FOR GETTING GRANT COMPRISING MANAGEMENT FREE FROM THE DONORS . ON APPEAL BEFORE THE LEARNED CIT A HE ALLOWED THE ASSESSEE THE BENEFIT OF SECTION 11 AND 12 OF THE INCOME TAX ACT H O L D I N G T H A T A S S E S S E E I S E X I S T I N G F O R C H A R I T A B L E P U R P O S E S A S P R E S C R I B E D U / S 2 ( 1 5 ) O F T H E A C T A N D P R O V I S O T O T H A T S E C T I O N D O E S N O T A P P L Y T O T H E A S S E S S E E . MEANWHILE ON THE PROPOSAL SENT BY THE LEARNED ASSESSING OFFICER TO THE LEARNED CIT EXEMPTION , HE WITHDREW THE RECOGNITION GRANTED TO THE ASSESSEE FOR REGISTRATION U/S 12 AA OF THE INCOME TAX ACT HOLDING THAT THE ASSESSEE IS CARRYING ON THE ACTIVITY FOR THE PURPOSES OF THE PROFIT AND IS NOT A CHARITABLE ORGANISATION NOT CARRYING ON THE CHARITABLE ACTIVITIES A S SPECIFIED UNDER SECTION 2 (15) OF THE INCOME TAX ACT. THE LEARNED CIT EXEMPTION WAS MAINLY G U I D E D BY THE FINDING OF THE LEARNED A SSESSING OFFICER THAT ASSESSEE IS SEPARATELY CHARGING THE DONORS FOR SALARY TO ITS STAFF IN COMPONENTS OF HUMAN RESOURCES E X P E N S E S , TRAINING AND INFRASTRUCTURE AND EQUIPMENTS AND ALONG WITH THE MANAGEMENT FEE OVER AND ABOVE THE RUNNING COST . T HEREFORE ASSESSEE IS CARRYING ON THE BUSINESS ACTIVITY AND FALLING INTO THE LAST LIMB OF PROVISIONS OF SECTION 2 (15) OF THE INCOME TAX ACT . ACCORDING TO THE PROVISIONS OF SECTION 2 (15) WHICH DEFINES THE CHARITABLE PURPOSE WHICH INCLUDES RELIEF TO THE POOR, EDUCATION, YOGA, MEDICAL RELIEF ALONG WITH MANY OTHER OBJECTIVES AND ALSO THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY. ON LOOKING AT THE OBJECT OF THE ASSESSEE AS WELL AS THE ACTIVITIES OF THE ASSESSEE , IT PAGE | 9 IS APPARENT THAT ASSESSEE IS CARRYING ON THE ACT IVITIES FOR THE PURPOSE OF ERADICATION OF HIV AIDS DISEASE. THEREFORE THE PURPOSE OF THE ASSESSEE IS CHARITABLE FALLING INTO CATEGORY OF MEDICAL RELIEF . THE PROVISO OF SECTION 2 (15) OF THE ACT ONLY APPLIES TO THE OBJECTS OF GENERAL PUBLIC UTILITY AND NO T TO THE MEDICAL RELIEF. IN VIEW OF THIS WE ARE OF THE OPINION THAT ASSESSEE IS CARRYING ON THE CHARITABLE A C T I V I T I E S O F MEDICAL RELIEF F A L L I N G U / S 2 ( 1 5 ) O F T H E A C T . FURTHER MERELY BECAUSE THE ASSESSEE RECEIVES THE GRANT AND ALSO IMPLEMENT THE PROJECT ON BEHALF OF THE VARIOUS ORGANISA TION FOR ERADICATION OF HIV/AIDS , ITS ACTIVITIES DOES NOT BECOME A BUSINESS ACTIVITY O R N O N C H A R I T A B L E . FURTHER FOR THE PURPOSE OF IMPLEMENTATION OF EACH OF THE PROJECT , IT CHARGES THE MANAGEMENT FEES TO DEFRAY ALL OTHER EXPENDITURE AND ADMINISTRATIVE COST OF THE ASSESSEE. MERELY CHARGING THE MANAGEMENT FEES DOES NOT MAKE THE ACTIVITY OF THE MEDICAL RELIEF OF THE ASSESSEE AS BUSINESS ACTIVITY. THE LEARNED CIT A HAS ALSO GIVEN THE SIMILAR FINDING IN PARA NUMBER 4.4 OF HIS ORDER FOR ASSESSMENT YEAR 2010 11 WHEREIN HE HAS FOLLOWED HIS ORDER FOR ASSESSMENT YEAR 2009 10 DATED 2/1/2014. FURTHER IN PARA NUMBER 4.2 OF HIS ORDER WHERE HE HAS RECORDED THE FACT THAT THE FOREIGN GLOBAL FUND THE DONOR TO THE ASSESSEE GIVES 85% OF THE DONATION TO THE GOVERNMENT OF INDIA FOR THE HIV AIDS WHICH RUNS THE AIDS PROGRAM IN THE NAME OF NATIONAL AIDS CONTROL ORGANISATION AND IT IS ONLY ABOUT 15% OF THE TOTAL DONATIONS WHICH ARE GIVEN TO OTHER SOCIETIES FOR AWARENESS AND TREATMENT TO THE POOR HIV AIDS PATIENTS. IT IS ALSO THE FACT HE HAS RE CORDED THAT THE ASSESSEE SPENDS THE WHOLE AMOUNT THROUGH VARIOUS SOCIETIES AND TRUST AND THE ASSESSEE IS ALSO RUNNING ITS OWN PROJECT FOR THE WELFARE OF THE HIV AND AIDS PATIENTS. FURTHER IT IS ALSO THE FACT THAT ASSESSEE IS A SECTION 25 COMPANY UNDER THE C OMPANIES ACT 1956 WHICH CANNOT CARRY ON ANY BUSINESS ACTIVITIES. IN VIEW OF THE ABOVE FACTS IT IS APPARENT THAT ASSESSEE ASSESSEE IS EXISTING FOR AND IS CARRYING ON THE CHARITABLE ACTIVITIES IN THE FORM OF MEDICAL RELIEF FOR HIV AND AIDS PATIENT AND THE A WARENESS ABOUT THE DISEASE. IN VIEW OF THE ABOVE FACTS WE CONFIRM THE ORDER OF THE LEARNED CIT A FOR ASSESSMENT YEAR 2010 11 AND DISMISS THE APPEAL OF THE REVENUE IN ITA NUMBER 716/DEL/2015. PAGE | 10 14. A S WE HAVE ALREADY HELD THAT ASSESSEE IS CARRYING ON TH E ACTIVITIES OF MEDICAL RELIEF FOR ERADICATION AND EDUCATION OF HIV AIDS PATIENTS THE ASSESSEE IS ENTITLED TO THE REGISTRATION U/S 12 AA OF THE INCOME TAX ACT AS THERE IS NO FINDING BY THE LEARNED CIT EXEMPTION THAT THE ACTIVITIES OF THE ASSESSEE ARE NOT GENUINE. SAME IS NOT THE CASE OF THE LEARNED DEPARTMENTAL REPRESENTATIVE ALSO. IN VIEW OF THIS WE CANCEL THE ORDER PASSED BY THE LEARNED CIT EXEMPTION DATED 3/10/2017 CANCELLING THE REGISTRATION ALREADY GRANTED TO THE ASSESSEE BY PASSING AN ORDER U/S 12 AA (3) OF THE INCOME TAX ACT 1961 ON 3/10/2017 AND DIRECT THE L D C I T ( E ) T O R E S T O R E T H E R E G I S T R A T I O N O F T H E TRUST U / S 1 2 A A O F T H E A C T , W E A L O S D I R E C T LEARNED ASSESSING OFFICER TO GRANT BENEFIT OF SECTION 11 AND 12 OF THE INCOME TAX ACT TO THE ASSESSEE. IN THE RESULT APPEAL OF THE ASSESSEE IN ITA NUMBER 7 2 1 0/DEL/2017 IS ALLOWED. 15. IN VIEW OF THIS THE APPEAL OF THE REVENUE IS DISMISSED AND APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 2 3 / 01 / 2019 . - SD/ - - SD/ - ( BHAVNESH SAINI ) (PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 2 3 / 01 / 2019 A K KEOT COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI