MEDICAL SERVICE SOCIETY,DELHI V. CIT EXEMPTION, DELHI, DELHI

ITA 3337/DEL/2024

AI Insights

The case involves M/s Medical Service Society, which appealed against the decision of the CIT(Exemption) rejecting their applications for registration under sections 12A and 80G of the Income Tax Act. The CIT(Exemption) had rejected the applications citing incomplete details and lack of confirmations from beneficiaries and donors. The Tribunal examined the submissions and found that the CIT(Exemption) had not adequately considered the voluminous evidence provided by the assessee to prove the genuineness of its charitable activities. The Tribunal referenced a similar case, Model Village Trust v. CIT Exemption, to support its decision that the registration should not be denied based on the non-submission of specific details that were not critical to establishing the charitable nature of the trust.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 398294 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-06-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: misc
• Other Referred Cases: Model Village Trust v. CIT Exemption
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMISHA S. GUPTA
• Assessee Lawyers: RAKESH GUPTA
• Keywords: Principle of natural justice; Charitable institution
• Section: 12A; 12; 80G

Judgement Text

"1 THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH “E” NEWDELHI BEFORESHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI SUDHIR KUMAR, JUDICIAL MEMBER ITA No.3336 &3337 /Del/2024 Assessment Year: 2022-23 to 2024-25 M/s Medical Service Society E-55A, 3rd Floor , Abul Fazal Enclave -2 Jamia Nagar, Okhla, New Delhi 110025 Vs. CIT(Exemption) Delhi PAN No. AAGTM6481K (Appellant) (Respondent) ORDER PER SUDHIR KUMAR JM: The assessee preferred the captioned appeals, challenging the order dated 30.05.2024 passed by the Ld. CIT(Exemption) (in short Assessee by Dr.Rakesh Gupta, Advocate Sh. Somil Agrawal, Advocate Sh. Deepesh Garg, Advocate Department by Ms. Amisha S. Gupta CIT DR Date of hearing 29.05.2025 Date of pronouncement 04.06.2025 2 “Ld. CIT (Exemption”) Delhi in rejecting the registration u/ 12Aand 80G of the Income Tax Act (referred in short “the Act”) 2. The brief facts of the case are that the assessee trust filed an application dated 29-11-2023 in Form 10 AB for registration u/s 12 A (1) (ac) (iii) of the Act. A questionnaire was issued to the assessee with request to furnish the certain details. The assessee furnished the details in compliance of the questionnaire. After considering the details furnished by the assessee trust the Ld. CIT( E ) rejected the registration application as well as the application u/s 80 G of the Act. Aggrieved by the order the assessee is in appeal before the tribunal. 2. The assessee has raised following grounds of appeal : ITA No.3337/Del/2024 1. That having regard to the facts and circumstances of the case, Ld. CIT(E) has erred in law and on facts in rejecting the registration as well as provisional registration u/s. 12A (1)(ac)(iii) and 12A (1) (a) (vi) respectively vide order dated 30.05.2024 and that too without appreciating the facts and circumstances of the case and in violation of 3 principles of natural justice and by recording the incorrect facts and findings. 2. That in any view of the matter and in any case, action of the Ld. CIT(E) in rejecting the registration as well as provisional registration u/s.12A(1)(ac)(iii) and 12A (1)(a)(vi) respectively vide order dated 30.05.2024, is bad in law and against the facts and circumstances of the case and is contrary to the principles of natural justice as the impugned order has been passed without granting adequate opportunity of hearing and by recording incorrect facts and findings. 3. That the appellant craves the leave to add, modify, amend or delete any of the grounds of appeal at the time of hearing and all the above grounds are without prejudice to each other. 3. The Ld. Counsel for the assessee, at the outset submits that the Ld.CIT(E) is not justified rejecting the registration u/s 12A and 80G of the Act observing that certain details were not filed by the assessee. Ld. Counsel for the assessee has submitted that all the necessary details were filed before the Ld. CIT( E) to prove the genuineness of the 4 objects and activities of the assessee. Ld. Counsel submits that at the stage of granting registration one has to be seen whether the assessee trust was established for charitable purpose and secondly the activities of the trust are genuine. These two conditions are satisfied by the assessee and therefore the Ld. CIT( E) is not justified in rejecting on the ground that some of the details were not furnished by the assessee though all the details were before the Ld. CIT( E). In the support of the contention the assessee has filed the paper book containing page no 1 to 343. He also submitted that the case is squarely covered from the Judgement of the Co-ordinate Delhi Bench passed in ITA No. 3189 & 3190 /Del/ 2024 Model Village Trust v. CIT Exemption. In this case the coordinate bench held as under: “7. Perusal of the above details suggests that the assessee had filed all the necessary details required by the Ld. CIT(E). Confirmation of donation exceeding Rs.50,000/- were filed, details of contractors engaged with the trust, agreements entered into various contractors for construction of low cost house under Model Village were filed activities and the objects of the trust and confirmation letter of donation of Rs. 5 1 lakh or more etc. and also the brief summary of activities carried out by the trust were filed. Therefore the assessee had filed all the necessary details to prove the genuineness of the activities and charitable objects of the assessee. The Ld. CIT(E) did not make any comments on the genuineness of the objects of the trust. The registration u/s 12A as well as 80G was denied only for the reason that certain details were not furnished by the assessee. As held by various High Courts while granting registration u/s 12A one has to see whether the objects of the trust are charitable and the activities of the trust are genuine. The voluminous evidences furnished by the assessee proves that the assessee is a charitable trust and the activities carried on by the assessee are genuine. The queries raised and details required by the Ld. CIT(E) were all subject matter of verification by the Assessing Officer while completing the assessment. Therefore, since the genuineness of the objects of the trust and the activities of the trust were not in doubted by the Ld. CIT(E) he should not have rejected the registration u/s 12A as well as 80G of the Act on the 6 ground that certain details were not furnished by the assessee which otherwise all the details were in fact furnished by the assessee. Thus, we direct the Ld. CIT(E) to restore the provisional registration granted to the assessee u/s.12A and also direct to grant registration u/s.12A as well as 80G to the assessee trust”. 4. The Ld. Counsel for the assessee further submitted the detailed submission as under: 7 8 9 10 5. Ld. CIT- DR strongly supported the orders of the Ld. CIT(E) and stated that the head office of the trust has been shown at Delhi, while the mostly donation were given by the resident of the Kerala state without mentioning the address of the donors. She further stated that registration as well as 80G of the Act was rightly rejected. 11 6. We have heard the rival submission and perused the material available on record. The Ld. CIT(E) rejected the registration u/s 12 A and also 80G observing as under: 4. From the perusal of submissions/ details, the following points/ issues have been noted :- 1. from the examination of Income & Expenditure account of assessee for AY 2021-22. 2022-23 & 2023-24, it is noted that the assessee has received following amount of donation during the last three years :- S.No. A.Y Amount received in cash Amount received through cheque/ on line transfer Total (Amount) 1 2020-21 3,45,000/- 1,00,000 4,45,000/- 2 2022-23 20,90,850/- 11,16,153/- 32,07,003/- 3 2023-24 45,70,500/- 40,57,033/- 86,27,533/- 12 It is clear from the above that the assessee has received mostly donation in cash from donors claimed to be of kerala. The address of donors are incomplete, i.e. does not have House Number. 1. The assessee has not submitted narration of credit/debit entry above 10,000/- in the bank account as required vide letter dated 17.01.2024 for verification of amount received and paid by the assessee. 2. It is noted that an amount of Rs. 16.79 lacs has been claimed on account of low cost House in FY 2023-24 and Rs. 29.93 lacs in FY 2022-23 and Rs. 5.54 lacs in FY 2021-22. The assessee was required vide letter dated 06.02.2024 to file details of beneficiaries alongwith confirmation of low cost house. The details of beneficiaries have been filed, but confirmations from the beneficiaries have not been filed, 3. The assessee was asked to furnish the details of contractors, who were engaged in construction of low cost house project and drinking water project vide 13 notice dated 06.02.2024. It is noted that the assessee has submitted copy of agreement of contractors, which are on simply on plain paper, which have no legal sanctity. 4. The assessee has failed to file confirmations from the donors exceeding Rs.50,000/- to 1,00,000/- as required vide letter dated 17.01.2024. 5. The assessee has not filed details of beneficiaries of charitable activities claimed to be of educational awareness Menstrual Hygiene, One teacher School, Hunger Relief project, Sanitation programme etc. claimed in Asstt. Year 2023-24 and malnutrition free village programme in AY 2022-23. 5. In the light of above facts, the assessee has failed to file the necessary details/ evidence in support of genuineness of activities claimed to be carried out. Therefore, the present application filed in Form 10AB for grant of registration u/s.12A (1)(ac) (iii) is hereby rejected. 14 6. Since, the application filed in Form 10AB for grant of registration u/s.12A (1)(ac)(iii) is rejected, the provisional registration granted vide order dated 01.10.2021 having unique Registration No. AAGTM6481KE20218 issued for the period from AY 2022-23 to 2024-25 is also cancelled. 7. Perusal of the order of the Ld. CIT(E), reveals that registration u/s 12A of the Act was denied to the assessee on the ground that assessee has failed to file the confirmation from the donors exceeding Rs.50,000/-toRs.1,00,000/-,details of contractors engaged in construction of low, cost house project and drinking water project etc. was not filed. The assessee has submitted the all details before the Ld. CIT(E) during the proceedings which were required for the registration of the Trust. The assessee also provided the addresseses of the donors. The Ld.CIT(E)did not make any comments on the genuineness of the object of the trust. The registration u/s 12A as well as 80G of the Act was denied for the reason that certain details were not furnished by the assessee. The assessee has furnished the voluminous evidence to prove that the assessee is a charitable trust and activities carried by the assessee are genuine.The queries raised and details required by the Ld. CIT(E) 15 were all subject of verification by the Assessing officer while completing the assessment. The Ld. CIT( E) should not have rejected the registration u/s 12A as well as 80G of the Act on the ground that certain details were not furnished by the assessee, while all the details were furnished by the assessee. Thus, we direct the Ld. CIT(E) to restore the provisional registration granted to the assessee u/s 12 A of the Act and also direct to grant registration u/s 12 A as well as of the Act to the assessee trust. 8. In the result, the appeals of the assessee are allowed. Order pronounced in the open court on 04/06/2025. Sd/- Sd/- (SHAMIM YAHYA) (SUDHIR KUMAR) ACCOUNTANT MEMBER JUDICIALMEMBER Dated: 04 June,2025 “Neha, Sr. PS” Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, Delhi "