TMI Blog2015 (2) TMI 681X X X X Extracts X X X X X X X X Extracts X X X X ..... an but also against the scheme of the Constitution as held by the Apex Court in Miss Mohini Jain's case (1992 (7) TMI 330 - SUPREME COURT). This Tribunal is of the considered opinion that there is no genuineness in the activity of the assessee trust and it exist only for profit motive to administer and manage the medical college in a commercial manner, therefore, it is not entitled for registration as a charitable institution u/s 12AA of the Act. - Decided against assessee. - IT APPEAL NO. 85 (COCH.) OF 2012 - - - Dated:- 14-8-2014 - N.R.S. GANESAN AND CHANDRA POOJARI, JJ. For The Appellant : T.M. Sreedharan, Ld. Sr. Counsel For The Respondent : M. Anil Kumar, CIT DR and Smt. Latha V. Kumar, Jr. DR ORDER N.R.S. Ga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be returned with 12% interest per annum. According to the ld.senior counsel, the assessee has to mobilize funds for construction of massive building for medical college and hospital before grant of recognition by the Medical Council of India (MCI). Therefore, the assessee has mobilized all the resources under its control for construction of the massive building for the medical college and hospital. According to the ld.senior counsel, since the trust was established for the purpose of education and the medical college was in fact started after getting approval from the MCI, the assessee is entitled for registration u/s 12AA of the Act. The ld.senior counsel took us through the impugned order passed by the Commissioner and submitted that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ld.DR. 4. We have considered the rival submissions on either side and perused the material available on record including the trust deed. The trust was established by a registered deed dated 27-05-2005 by contributing ₹ 10,000 as nucleus of the trust. After establishment of the trust, the assessee acquired huge chunk of loan and started constructing massive building. During the course of construction if vyukdubgs , the revenue authorities found that the assessee has mobilized funds by collecting money from various persons including the so called prospective students assuring admission for medical course. On examination, the managing director of the assessee trust admitted that he collected money to the extent of ₹ 4 crore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounted. It can be roughly that said payments to the tune of 50% (cash payment) are not accounted. I state that no tax has been deducted from this payment. 7. From the above admission of Shri V Anil Kumar, it is obvious that the assessee trust collected money from various persons on the assurance of employment and admission for medical education. It is pertinent to note that even before obtaining recognition from the MCI and government of India and affiliation from the concerned university, the assessee started collecting money for employment and admission of students. The reasons for collecting money appears to be that assessee needs huge money for construction of a massive building for the medical college and hospital. The object is la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent. In this case, even before starting the college and even before obtaining recognition from the MCI and affiliation from the concerned university, the assessee mobilized funds on the assurance of employment and admission in the medical college. 9. The Apex Court in the case of Miss Mohini Jain v. State of Karnataka [1992] 3 SCC 666 after examining the Constitution of India found that collection of money for admission of students in the professional colleges is not only inhuman but also against the scheme of the Constitution. In the case of T.M.A. Pai Foundation v. State of Karnataka [2002] 8 SCC 481 and in Islamic Academy of Education v State of Kerala [2003] 6 SCC 697 the Apex Court found that when the educational institution collect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uation, this Tribunal is of the considered opinion that the activities of the trust was not carried out in accordance with the object of the trust. The assessee trust administer and manage the so-called medical college in a commercial manner with profit motive. The assessee trust gone to the extent of entering into agreement for offering employment and admission for medical education and collects money. It is to be remembered that admission in any educational institution including medical college has to be made only on merit basis. Therefore, entering into agreement for admission in medical college after collecting money is not only inhuman but also against the scheme of the Constitution as held by the Apex Court in Miss Mohini Jain's c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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