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2019 (5) TMI 614 - AT - Income TaxGrant of registration u/s 12AA rejected - charitable activity or not? - aims and objects of the assessee society were to set up, run and maintain dispensaries and hospitals for the general public irrespective of caste or creed, and to do all such ancillary activities in order to facilitate furtherance of the said object - CIT(E) had expressed his doubts as to how setting up a multi-speciality hospital would qualify for ‘medical relief’ as envisaged in Sec. 2(15) as he held a conviction that the same may be in the nature of a commercial activity with no element of ‘medical relief’ whatsoever - HELD THAT:- View taken by the CIT(E) that the envisaged activities of setting up a multispeciality hospital by the assessee society may turn out to be a commercial activity with no element of “medical relief” whatsoever, is an aspect which has to be looked into by the assessing officer at the stage when the assessee filed its return of income and also by the commissioner for cancelling the registration in exercise of his powers u/s 12AA(3), in case if the activities of the assessee society are at any stage found by him as not being carried out in accordance with its aims and objects. CIT(E) as per the mandate of law, at the stage of considering the application of the assessee society for grant of registration u/s 12AA was supposed to confine himself to two aspects viz. (i) examination of objects of the society or institution; and (ii) satisfaction of the registering authority about the genuineness of the activities of the society or institution on the basis of inquiries. As observed by us hereinabove, it was not correct on the part of the CIT(E) to have rejected the application filed by the assessee society for grant of registration u/s 12AA for the reason that the activities envisaged in the aims and objects had not been carried out by the assessee society, which as observed by us hereinabove was in its nascent stage. We thus in all fairness restore the matter to the file of the CIT(E), who shall dispose off the application filed by the assessee by confining himself to two aspects viz. (i) examination of objects of the society or institution; and (ii) satisfaction about the genuineness of the activities of the society or institution on the basis of inquiries as he may deem fit. Application filed by the assessee society for grant of registration u/s 12AA is restored to the file of the CIT(E) for fresh adjudication in terms of our aforesaid observations. - Decided in favour of assessee for statistical purposes.
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