TMI Blog2014 (3) TMI 767X X X X Extracts X X X X X X X X Extracts X X X X ..... upon Social Pedia Knowledge Foundation Versus Director of Income-tax (Exemptions) [2013 (12) TMI 357 - ITAT CHENNAI] - where the object of assessee-company was providing education etc., it is entitled to registration u/s 12AA, particularly when the assessee has been incorporated u/s 25 of the Companies Act, 1956 - The DIT(E), merely on certain assumptions has rejected the application of the assessee for registration under section 12AA - the DIT(E), selected some of the terms of the agreement so as to consider that assessee is a contract service provider, ignoring the overall object of the agreement and the activities of the assessee - The order of the DIT(E) is set aside and the DIT(E) is directed to grant registration to the assessee u/s 12AA – Decided in favour of Assessee. - ITA. No. 1382/Hyd/2013 - - - Dated:- 21-3-2014 - Shri B. Ramakotaiah And Smt. Asha Vijayaraghavan,JJ. For the Petitioner : Mr. Y. R. Rao For the Respondent : Mr. D. Sudhakar Rao ORDER Per B. Ramakotaiah, A. M. This appeal by assessee is against the order of Director of Income Tax (Exemption), Hyderabad dated 30th August, 2013 rejecting the application for registration und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Uttar Pradesh and assessee submitted that the objectives of the project is to provide and manage emergency medical transport services in the area of operations i.e., in the jurisdiction of Uttar Pradesh State, responding to the medical emergency and transporting the patient to the nearest Community Health Centre or District Hospital within the shortest possible time. The objective itself required to function for a social cause and reaching much needed emergency services to the population at large. The services are offered free of cost to the residents of Uttar Pradesh. Since this activity is meant for the benefit of the general public, assessee is in the area of medical relief as provided under the definition of charitable activity. It was further submitted that assessee operates various ambulances and provide emergency medical relief to the people in distress. GVKEMRI is also having similar objects and it has been granted registration under section 12AA by the DIT(E), Hyderabad. Just because a separate Special Purpose Vehicle was constituted for operation in the State of U.P. assessee was denied as it was registered as a non-profit company. It was submitted that the learned DIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ergency medical services and was successful in the bidding procedure. Since the Government of U.P. wanted an SPV exclusively for the State of U.P., the said GVKEMRI formed a Private Limited Company initially which was converted to non-profit organization by the revised registration granted to it under Companies Act. Therefore, as far as the assessee who is seeking registration under section 12AA is concerned, it is registered as non-profit company under the Companies Act. A perusal of the objects clause shows that it has been incorporated to provide and manage emergency medical transport services in the state of U.P. for responding to medical emergencies and transporting the patient to the nearest Community Health Centre or District Hospital within the shortest possible time. The ambulance services will be coordinated through an Emergency Response Centre (in short ERC ) which shall be accessible through a toll free number. As part of the agreement with the Government of U.P. assessee started its operations and is operating in the field of EMTS. As seen from Schedule-I of the Agreement with the Government of U.P. the assessee s scope of operations are listed. It specifies in variou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly in respect of the first three limbs of section 2 (15) i.e., relief of the poor, education or medical relief. Consequently, where purpose of a trust or institution is relief of the poor, education or medical relief, it will constitute charitable purpose even if incidentally involves carrying on of commercial activities. Even the Board Circular 11 of 2008 dated 19.12.2008 clarifies the above position. As per the circular, where the purpose of the trust or institution is, relief of the poor, education or medical relief, preservation of involvement or preservation of historic monuments places or objects of artistic or historic interest, it will constitute charitable purpose, even if it involves commercial activities. Thus the object of providing medical relief is charitable activity even if consequent to carrying of such activity, the trust earns any commercial benefit out of it. 8. In the instant case, a perusal of the object clause of the company shows that it has been incurred with the aim of providing emergency medical transport services. Similar objects of the GVKEMRI has already been approved as charitable and registration under section 12AA was already granted. We a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng organization. The Coordinate Bench concluded that where the object of assessee-company was providing education etc., it is entitled to registration under section 12AA, particularly when the assessee has been incorporated under section 25 of the Companies Act, 1956. The facts in the above case and principles laid down are squarely apply to the facts of the present case. 10. In our considered view the DIT(E), merely on certain assumptions has rejected the application of the assessee for registration under section 12AA. As seen from the order the DIT(E), selected some of the terms of the agreement so as to consider that assessee is a contract service provider, ignoring the overall object of the agreement and the activities of the assessee. The impugned order of the Director of Income Tax (E) is therefore set aside. The DIT(E) is directed to grant registration to the assessee under section 12AA. However, it shall be open to DIT(E) to withdraw the same if the activities of the assessee are not found in accordance with its objects at any point of time later. With these observations, assessee s grounds are allowed and DIT(E) is directed to grant registration to the assessee. 11. ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
