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2021 (2) TMI 739 - AT - Income TaxExemption u/s 11 - Registration u/s 12AA denied - donation to Roman Catholic Diocese Private Limited - during the year under consideration admittedly the said donee entity was never engaged in the activities of medical relief and running of hospitals - whether donation given by one charitable institution to another charitable institution is to be treated as application of income u/s 11 and is exempt from income-tax? - as per AO object of the donor and the donee society are not same, as can be seen from their Memorandum of Association, and hence said amount cannot be considered as application of income for charitable purposes - HELD THAT:- we do not find that any clause in the object clause of Memorandum of Association of the assessee was wide enough to cover the activities in the field of education , as all the clauses are towards incidental and attainment of main object of the assessee to establish and run hospitals, nursing homes , welfare homes , rest houses for the good and benefit of the people. The entire object clauses of the assessee as well of the donee are reproduced by ld. CIT(A) in its appellate order. The Residuary clause ‘M’ is also towards the attainment of main object of the assessee to establish and run hospitals, nursing homes , welfare homes , rest houses for the good and benefit of the people, - Thus, in our considered view the act of donating/contributing ₹ 72, 00, 000/- as donation by the assessee to donee viz. Roman Catholoc Diocose Private Limited , was ultra vires the object clause of the donor and does not comply with the mandate of Section 11(1)(a). It is true that the assessee can either itself carry out charitable activities or it can contribute to other trust or institution who is carrying on the activities which are also the same/similar as per assessee’s object clause in Memorandum of Association. The assessee’s Memorandum of Association permit carrying on activities to establish and run hospitals , nursing homes, welfare homes , rest houses for the good and benefit of the people and the assessee infact is engaged in running hospital and school of nursing at Allahabad, while the donee entity namely Roman Catholic Diocese Private Limited is engaged in the activities in the field of education.. Although , the object clause of Roman Catholic Diocese Private Limited refers to hospitals , but what transpires from enquiries conducted by lower authorities that during the year under consideration admittedly the said donee entity was never engaged in the activities of medical relief and running of hospitals , and in fact it utilized the donation of ₹ 72 lacs received from assessee for the purposes of education. The objects of the donor viz. assessee only permitted to engage in activities to establish and run hospitals, nursing homes, welfare homes, rest houses for the good and benefit of the people, and other objects which are incidental to the attainment of above main object . The objects as are approved by assessee no where stipulated engaging in educational activities and its act in donating ₹ 72 lacs to a charitable organization namely M/s Roman Catholic Diocese Private Limited who is engaged in educational activities, is an act ultra vires to the object clause of the assessee and also does not fulfill the condition as stipulated u/s 11(1)(a) to apply its income for such purposes in India . Thus, based on detailed discussions above, we hold that the assessee will not be entitled for exemption of ₹ 72 lacs paid by it as donation to M/s Roman Catholic Diocese Private Limited, under the provisions of Section 11(1)(a) of the 1961 Act and the appeal filed by assessee fails.
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