TMI Blog2018 (3) TMI 48X X X X Extracts X X X X X X X X Extracts X X X X ..... sent appeal is directed at the instance of the assessee against order of ld.CIT-I dated 30.9.2014 passed under section 12AA(3) of the Income Tax Act, 1961 vide which the ld.Commissioner has cancelled registration granted to assessee under section 12A of the Act. 2. Originally assessee took seven grounds of appeal, which were running into three pages, thus, they were descriptive and argumentative in nature. However, subsequently assessee has revised grounds. In the concise ground, it has pleaded that the ld.Commissioner has erred in cancelling registration under section 12AA w.e.f. the amendments made in trust deed. 3. Brief facts of the case are that the assessee-trust came into existence on 15.6.1977 when it was registered with Assistant Charity Commissioner, Baroda vide registration No.E/2469/Vadodara. It was a public charitable trust. The assessee-trust has applied for grant of registration under section 12A of the Income Tax Act. This, application of the assessee was allowed and it was granted registration on 1.1.1982 vide order dated BRD/SIB/110-6-P/81. At this stage, it is pertinent to take note of objects of assessee-trust in original trust deed. Such objects have been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect to the Bombay Public Trust Act. 4. It is pertinent to mention that the assessee-trust was granted registration under section 80G(5) of the Act which was renewed from time to time. According to the assessee, Assistant Commissioner of Charity under Bombay Public Trust Act 1980 carried out an inquiry under section 22A of this Act with regard to objects of the assessee. It was noticed that in clause (6) of the object clause the expression abroad means that assistance could be given within and outside India. Thus, on the basis of this inquiry the trustees amended trust-deed on 24.6.1977. They have unanimously agreed to delete the word abroad to include expression education and training of students/teachers in clause (3), (4) and (7) of the original trust-deed. It was pointed out to the ld.Commissioner that in 1989-90 there was an acute need for setting up of a centre which could provide medical diagnostic services to public of Baroda because there were no facilities available at the relevant time in the city and patients have to travel far places in Ahmedabad and other places. Thus, an amendment was carried out in the trust deed by way of a resolution dated 24.2.1990. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee that as per section 22 of the Bombay Public Trust Act, changes in the trust deed was duly brought to the notice of the ld.Assistant Charity Commissioner. The changes were duly notified and recorded on 8.5.1990 in the register of public trust maintained by the ld.Commissioner. Copy of such details is being placed on paper book on page no.72. He also pointed out that on the basis of these changes and registration under Bombay Public Trust Act it could avail loan from IOB. 7. In its second fold of contentions, it was submitted that registration under section 80G of the Act was granted to the assessee in 1977. Meaning thereby, donors of the assessee could avail exemption from payment of tax on such donation. After amendment carried out on 1.4.1990 by including of objects number 13 in the trust-deed, it has applied for renewal of registration granted under section 80G in Form No.10G on 31.3.1991. Copy of such application has been placed in the paper book on page no.81 and 82. According to the ld.counsel for the assessee, it was mandatory to file following documents for grant of registration under section 80G of the Act viz. (a) copy of Income Tax Registration Certificate, ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee has withheld the information. He relied upon the following decisions: i) Bhansali Trust, ITAT, Mumbai ITA No.5948/Mum/2012 ii) Mehta Jiveraj Makandas Parekh Trust, ITAT, Mumbai ITA No.2212/Mum/2010; iii) Moolchand Khairati Ram Trust, Delhi High Court, ITA No.141/2013; iv) Vivekanand General Hospital, ITAT, Bangalore, ITA No.1195 1196/2012; v) Shree Balaji Educational Trust, ITAT, New Delhi, IT no.877/Del/2014; vi) Shree Anjaney Medical Trust, Kerala High Court, ITA No.17 of 2015; vii) Samarpan Samiti, ITAT, Agra, ITA Nos.427/2011 36/2012 8. He also placed on record copies of these decisions. 9. In his next fold of submission, it was submitted that diagnostics facility falls within the ambit of medical relief as per section 2(15). This activity is per se a charitable. Even if some incidental profits on performing a charitable activities result to the assessee then that surplus is always applied for the objects of the trust. It is not being pocketed either by the trustee or by some persons. Section 13 of the Act duly take care of any surplus generated by a charitable trust and also take care of the activities for some undue b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure of use or application, or retention, of the income from such activity, unless- ( i) such activity is undertaken in the course of actual carrying out of such advancement of any other object of general public utility; and ( ii) the aggregate receipts from such activity or activities during the previous year, do not exceed twenty per cent of the total receipts, of the trust or institution undertaking such activity or activities, of that previous year;]] Section 12AA(3) Section 12AA(3) states that where a trust or an institution has been granted registration under clause (b) of subsection( 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 1996)]] and subsequently the Commissioner is satisfied that the activities of such trust or institution are not genuine or are not being carried out in accordance with the objects of the trust or institution, as the case may be, he shall pass an order in writing cancelling the registration of such trust or institution: Provided that no order under this sub-section shall be passed unless such trust or institution has been gi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d or objects of the assessee-trust are concerned, they are per se charitable. Even new objects included by the assessee vide amendment dated 1.4.1990 is also charitable in nature. Thus, question before us is whether objects of the assessee-trust are non-genuine or it has commenced any activities which are not in accordance with objects of the trust. A perusal of impugned order would indicate that the ld.Commissioner basically did not examine objects of the assessee-trust. He simply harboured a belief that diagnostic centre is to be categorized as a commercial venture which does not fulfill any philanthropic objects. In his second objection, he further objects that since running of a diagnostic centre was not part of original objects on whose genuineness registration was granted to the assessee, therefore it is to be construed that the assessee-trust has not carried activities in accordance with objects on the basis of which registration under section 12A was granted to it. 13. At this stage, before adverting to the specific facts of the present case, we would like to take note of the case laws relied by the ld.counsel for the assessee in order to appraise us whether non-communic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the purpose of the Trust which we have found earlier to be for a 'charitable purpose' as per original Trust deed. Therefore, factually speaking, even if one has to consider the amendments of 1975 1979 made in the Trust Deed, in our view it does not signify that the registration granted to the assessee on 27/11/1973 under section 12A of the Act is rendered nugatory. 14. The Tribunal has considered judgment of Hon ble Allahabad High Court in the case of Allahabad Agricultural Institute Another Vs. Union of India and Others, 291 ITR 116 (All). The ld.CIT(A) allowed benefit under sections 11/12 to such assessee and Tribunal upheld allowance of such benefit. 15. Next decision relied upon by the ld.counsel for the assessee was from the order of ITAT, Mumbai Bench in the case of Mehta Jivaraj Makandas Parekh Trust (supra). In this case also, the assessee trust got registration under section 12A on 21.11.1975. Its objects were amended and it filed an application for renewal of registration under section 80G on 13.4.2001 which was denied to the assessee. Allegation against the assessee was that it had not complied with requirement in the statutory form no.10A becau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in the Will. The main object was to set up a hospital named Shri Mool Chand Khairati Ram Hospital and Ayurvedic Research Institute in Lahore. After partition of the Country in 1947, the assessee applied for allotment of land to the Government of India, and in 1958 an institution was set up known as Shri Mool Chand Khairati Ram Hospital and Ayurvedic Research Institute. The assessee was granted registration under section 12A in December, 1974. In the assessment year 2006-07 it was raised by the AO that the trust was settled for running an Ayurvedic Hospital and Research Centre, whereas it has started running an Alopathic centre which is not in consonance with the objects of the trust. Hence, it is not entitled for benefit under sections 11 and 12. Ultimately, dispute travelled upto the Hon ble Apex Court, and the Hon ble Delhi High Court has set aside order of the ITAT and held that running an Allopathic Hospital would also in a way a medical relief and boost Ayurvedi system in hospital in question, apart from considering activity of running allopathy system of medicine in consonance with objects of the trust. Hon ble High Court has further observed that once the department has a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to this rule would lead to anomalous results. Thus, in the circumstances, where the views are mistaken and apparently erroneous, it would not be apposite to compel the Revenue to follow the same on the principle of estoppel or of consistency. However, in cases, where two views are plausible, it would be, plainly, whimsical to frame an assessment contrary to the position accepted in earlier years. This would render the exercise of assessment highly subjective; clearly, an Assessee cannot be subjected to such vagaries. Indisputably, the powers of AO are wide but its exercise cannot be undisciplined. In cases where there is a palpable mistake or the position accepted by the Revenue in earlier years is apparently erroneous, the AO would not be bound to accept the view of his predecessors. However, in cases - such as the present case - where the Assessee's claim for exemption has been accepted for several decades, it would not be open for AO to think of new grounds, which at best raise contentious issues, to cast a wider net of tax. It is trite law, that if two views are possible, the one favoring the Assessee must be adopted. This rule would apply a fortiori in cases where the Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... commercial venture, but how establishing of diagnostic centre is not to be construed as a medical relief to the public and how it will automatically become a commercial venture is not disernable. It is pertinent to observe that in clause 8 and 9 of the original trust deed, the assessee is having objects to grant relief in any form to disabled and poor and also to grant subscription and donation to the hospitals and dispensaries. Thus, in its original objects, the assessee was having certain objects of providing relief to the poor. It can be in the form of finance, medial, education etc. Thus, establishment of a diagnostic center is in the line or coherent to its existing objects. It is not something alien or some different activities have been started, which would disentitle it for getting registration under section 12AA of the Act. As far as non-communication of amended trust deed to the department in form no.10A of the Act is concerned, in the case of Mehta Jivraj (supra) ITAT Mumbai has held that there is no requirement in the Act for furnishing the amended deed; it is being contemplated in the clause of form no.10A under rules, thus worst-to-worst it could be an irregularity. W ..... X X X X Extracts X X X X X X X X Extracts X X X X
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