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TMI Blog2012 (7) TMI 366X X X X Extracts X X X X X X X X Extracts X X X X ..... are that the assessee Samiti is a registered Society with Registrar of Society U.P. The assessee Samiti granted registration under section 12A/12AA of the Act since 01.04.1993 vide order dated 05.04.1994. Exemption under section 80G was also granted upto 2011. The CIT noticed that the assessee Samiti carries on business of running a Blood Bank, X-ray Centre, Physiotherapy Centre, Homoeopathic Dispensaries etc. The CIT found that the services provided by the Society/Samiti are of commercial nature. The CIT also gone through the objects of the Samiti and found that the objects of the Samiti are not for medical relief but are for general public utility. The CIT rejected the assessee's contention observing that section 2(15) are very clear and unambiguous stating that if the Samiti or Society involves to carry out any activities in the nature of trading, commerce or business, or any activity of rendering any service in relation to any trade, commerce or business, for a cess or fee or any other consideration, irrespective of the nature of use or application, or retention, of the income from such Society. The CIT also examined the books of account of the society and noticed that every ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... * Providing blood, blood components, packed cells, FFP and platelets. * Providing free blood, on regular basis, to the patients of Thalisemia and Hemophilia. * Running X-ray centre where X-ray services are provided at substantially low rates. * Running of Physiotherapy centre, providing various services to the patients at substantially low rates. * Running 3 Homeopathic dispensaries where medicine is provided at Rs. 2/- per day only. * Providing free medical Oxygen to the needy patients * Running of medical health care centre where services of expert Orthopedic, Gynecology and ENT doctors are provided only at Rs. 30/-. * Conducting free medical checkup and operation camps for the patients of Eye, Hernia, Gall Stone, and Breast Cancer etc. 8. Ld. Authorised Representative pointed out the statistics of medical relief/services provided by the society which is appearing at page no.2 of assessee's Paper Book as under :- Sr No Nature of service Number of patients served in FY 08-09 Number of patients served in FY 09-10 1. Whole Blood supply 20704 22205 Packed Cell supply 3898 4856 Platelet1s supply 2233 1183 FFP Supply 1993 3439 &nb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relation to any trade, commerce or business, for a cess or fee or any other consideration, irrespective of the nature of use or application, or retention, of the income from such activity. Authorised Representative submitted that the objective behind this amendment was explained by the Finance Minister in paragraph no.180 of his Budget speech on 29.02.2008. 12. Ld. Authorised Representative has also drew our attention to C.B.D.T. Circular No.11/2008 dated 19.12.2008 wherein the applicability of the commercial activities in respect of charitable purpose has been clarified. 13. Ld. Authorised Representative submitted that in the Circular it is clearly pointed out that the amendment to section 2(15) is applicable only to the fourth limb of the definition i.e. 'advancement of any other object of general public utility' and not to other activities in the field of relief to the poor, education or medical relief. 14. Ld. Authorised Representative submitted that prior to Assessment Year 1984-85, the words 'advancement of any other object of general public utility' were qualified by the words 'not involving the carrying on of any activity for profit'. The Hon'ble Supreme Court of India i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 61 (Mysore). 17. Ld. Authorised Representative also relied upon the following decisions:- i) CIT vs. Sarvodaya Ilakkiya Pannai, 206 Taxman (Mad) (Mag) ii) ABC Trust vs. ITO, 4 TTJ 1391 (JP) iii) Order dated 21.05.2012 of Hon'ble High Court of Delhi in ITA No.1335/2010 in the case of Director of Income Tax vs. Maruti Center for Excellence. iv) Chaturvedi Har Prasad Educational Society vs. CIT, 134 TTJ 781 (Lucknow) v) Baba Gandha Singh Education Trust vs. CIT, 138 TTJ 1 (Chd) (UO) vi) H.P. Government Energy Development Agency vs. CIT, 134 TTJ 33 (Chd) (UO) vii) Order dated 04.05.2012 of ITAT, Jaipur Bench in ITA No.100/JP/2012 in the case of Rajasthan Housing Board vs. CIT. viii) Harnam Singh Harbans Kaur Charitable Trust vs. Director of Income Tax (Exemption), 49 SOT 387 (Del) ix) CIT vs. Red Rose School, 163 Taxman 19 (All.) x) Order dated 18.05.2012 of ITAT, Agra Bench in ITA No.412/Agr/2011 in the case of Tishir Shiksha Prasar Samiti. 18. Ld. Departmental Representative submitted that the CIT has power to withdraw the registration granted under section 12A/12AA of the Act if the CIT finds that the trust is not carrying out charitable activities. He further submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the trust or institution; (ii) shall, if he is not so satisfied, pass an order in writing refusing to register the trust or institution, and a copy of such order shall be sent to the applicant : Provided that no order under sub-clause (ii) shall be passed unless the applicant has been given a reasonable opportunity of being heard. [(1A) All applications, pending before the Chief Commissioner on which no order has been passed under clause (b) of sub-section (1) before the 1st day of June, 1999, shall stand transferred on that day to the Commissioner and the Commissioner may proceed with such applications under that sub-section from the stage at which they were on that day.] (2) Every order granting or refusing registration under clause (b) of sub-section (1) shall be passed before the expiry of six months from the end of the month in which the application was received under clause (a) [or clause (aa) of sub-section (1)] of section 12A.] [(3) Where a trust or an institution has been granted registration under clause (b) of sub-section (1) [or has obtained registration at any time under section 12A [as it stood before its amendment by the Finance (No. 2) Act, 1996 (33 of 199 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sub-section (3) of section 12AA provides that if subsequently the Commissioner is satisfied that the activities of such trust/Samiti are not genuine, or are not being carried out in accordance with the objects of the trust/Samiti, the subclause (3) of section 12AA inserted w.e.f. 1st October 2005 gave power of cancellation of registration to the CIT. This power has been conferred to the CIT(A) to save the misuse of exemption provision. Thus for exercising power of cancellation of registration under section 12A/12AA on the following conditions:- i) That the trust or society has already been granted registration under section 12A/12AA of the Act. ii) The CIT subsequently found and satisfied that :- a) activities of such trust or institution are not genuine, or b) are not being carried out in accordance with the objects of the trust or institution. 21. As regards the genuineness of the activities of the trust or institution whose objects do not run contrary to the public policy and are, in fact, related to charitable purposes, the CIT is empowered to make enquiry as he thinks fit. In case the activities are not genuine and they are not being carried out in accordance with the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It was inaugurated by Hon'ble Governor Shri Ramesh Bhandari Ji on 27 July, 1996. Initially, the license for only whole blood supply was received. Then in year 2002 blood bank received the license for extracting & supply of various blood components i.e. packed cells, platelets and F.F.P, and in June 2007 received the license for platelets aferisis. Blood is provided only on exchange basis but in certain emergency cases it can be given without any exchange. Blood received in exchange or donation, after finding for blood group, is diagnosed for Hepatitis B, C, A.I.D.S., V.D.R.L., Malaria parasite and Hemoglobin etc. and for this purpose hi-tech computerized diagnostic machine 'E.C.I' is used. For supply of blood components, Samiti uses world renowned machines. Currently in Agra region, Samarpan Samiti is the only Samiti which started using component G-4 machine of Fresenius Co. of Germany. With the help of this machine extracted blood components are free of white blood cells that help in prevention from reaction during transfusion. We have four imported machines for preparing jumbo packs from word renowned companies i.e. two of Fanwall Co., one of Fresenius and one of Himonatics, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ics, Dr. Alka Bindal in gynecology and Dr. Vikrant Singhal in ENT. Apart from this, Samiti conduct operations for female patients (stone in gallbladder, hernia, breast cancer, uterus) free of cost with full facility. In the same manner, eye checkup, providing spectacles and operation of cataract are conducted by senior surgeons. Samiti has been honoured by various organizations for its noble activities as under: a) Achal Trust, Agra - 05/05/2002 b) Agrawal Sangathan, Kamla Nagar, Agra - 2003-04 c) Moon TV Network - 17/11/2007 d) Kalyan Karoti Sanstha, Mathura - 03/12/2009 e) Sarrafa Panchayat, Agra - 13/03/2011 f) Bharat Vikas Parishad 'Sankalp' - 27/09/2011" 25. The main objection/reason for cancellation of registration granted under section 12A/12AA of the CIT was that the assessee was charging fee and the assessee has surplus in activities. The activities of the assessee Samiti was in the nature of trade, commercial or business. Therefore, according to CIT the activities of the trust is charitable as defined in amended to section 2(15) of the Act. In this regard, we would like to refer object behind the amendment in section 2(15) of the Act which has been explaine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct of general public utility."" 26. We may also refer a C.B.D.T. Circular No.11/2008 dated 19.12.2008 wherein the applicability of the commercial activities in respect of charitable purpose has been clarified. The said circular is reproduced as below:- "2.2. 'Relief of the poor' encompasses a wide range of objects for the welfare of the economically and socially disadvantaged or needy. It will, therefore, include within its ambit purposes such as relief to destitute, orphans or the handicapped, disadvantaged women or children, small and marginal farmers, indigent artisans or senior citizens in need of aid. Entities who have these objects will continue to be eligible for exemption even if they incidentally carry on a commercial activity, subject, however, to the conditions stipulated under section 11(4A) or the seventh proviso to section 10(23C) which are that - (i) the business should be incidental to the attainment of the objectives of the entity, and (ii) separate books of account should be maintained in respect of such business. Similarly, entities whose object is 'education' or 'medical relief' would also continue to be eligible for exemption as charitable institutions ..... X X X X Extracts X X X X X X X X Extracts X X X X
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