2010 (12) TMI 1208 - AT - Income Tax

Summary

Issues involved: Refusal of registration u/s 12AA of the Income-tax Act to the assessee-society by the ld. CIT based on the nature of activities carried out by the society.

Summary:
Issue 1: Refusal of registration u/s 12AA without proper consideration and opportunity for the applicant.
The assessee appealed against the order of the ld. CIT, Madurai, dated 26.8.2010, refusing registration u/s 12AA. The grounds of appeal included the contention that the ld. CIT erred in passing the order hastily without giving sufficient opportunity for a hearing.

Issue 2: Interpretation of the provisions of Section 2(15) of the Income-Tax Act.
The appeal raised concerns regarding the ld. CIT's interpretation of Section 2(15) of the Income-Tax Act, arguing that the term "charitable purpose" had been well defined by the courts and no further discussion was necessary.

Issue 3: Compliance with CBDT instructions and relevant circulars.
The appeal highlighted that the ld. CIT should have followed the instructions of the CBDT as per circular No.11 of 2008 dated 19.12.2008 in assessing the charitable nature of the society's activities.

Issue 4: Nature of activities and charitable status of the hospital.
The ld. CIT's observation that the hospital was run on a commercial basis and lacked elements of charity was contested in the appeal. The appellant argued that the income source of the society should be assessed annually during the assessment proceedings.

Issue 5: Consideration of documentary evidence and proper viewpoint.
The appeal criticized the ld. CIT for not considering the documentary evidence presented during the hearing regarding the charitable activities of the hospital and for making observations without a proper understanding of the nature of the activities.

Issue 6: Totality of facts and circumstances in arriving at a conclusion.
The appeal contended that the ld. CIT failed to consider the totality of the facts and circumstances of the case before arriving at an untenable conclusion regarding the charitable status of the society.

Final Decision:
After considering the submissions and documents, the Appellate Tribunal found that the objects of the assessee-society were charitable in nature. The Tribunal emphasized that registration u/s 12AA should be granted if the objects are charitable, and the assessment of activities should be done during assessment proceedings. Consequently, the ld. CIT was ordered to grant registration u/s 12AA to the assessee-society, and the appeal was allowed.