9911796707
TMI Blog2019 (1) TMI 1268X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 7210/Del/2017 assessee raised following grounds of appeal:- "1. The ld CIT(E)'s order dated 03.10.2017 for withdrawal of registration u/s 12AA(3) of the Income Tax Act, 1961 is illegal void since ab-initio. 2. The ld CIT(E) erred in concluding that the activities are not charitable in nature. 3. The ld CIT(E) erred in concluding that set-off of past deficit could be reason for denying 12AA registration. 4. The ld CIT(E) erred in concluding that in the Assessment Year 2012-13 the assessee did not conduct any charitable, the assessee has been conducting similar nationwide activities in all the Assessment Year. 5. The ld CIT(E) erred in relying on the orders of the AO particularly when all the orders were quashed by the ld CIT(Appeal) it was incumbent on the CIT(E) to have relied on the orders of higher appellate body than the AO. 6. The ld CIT(E) erred in questioning the nature of activity without establishing any defect or infirmity in the expenditure and supporting." 3. The second appeal is filed by the revenue DCIT (Exemption) u/s 143(3) of the act on 28/03/2013, wherein the appeal filed by the assessee against order by Assistant Director Of Income Tax (Exe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing over and above this. He further held that excess of income over expenditure itself indicates that there is a profit component in the activity of the execution of the projects. Therefore, he held that assessee is covered by the provisio to section 2(15) of the Act and claim of the assessee being a charitable institution was rejected. Ld AO mentioned that in the order that a proposal for withdrawal of registration under section 12AA of the Act has already been sent to the CIT (Exemption) also. Accordingly, he determined the gross total income of the assessee of Rs. 392676839/- and granted deduction for expenditure of Rs. 336269357/- and depreciation of Rs. 786653/- and determined the taxable income of the assessee at Rs. 55620829/- against the returned income of the assessee at Rs. Nil by order under section 143(3) of the ACT on 28-3-2013. 6. Assessee aggrieved with the order preferred appeal before the ld CIT(A)- 40, New Delhi who allowed the claim of the assessee vide para number 4.4 of his order as under:- "4.4 I have considered the order of the AO and the submission of the assessee and I find considerable merit in the submission of the assessee that the assessee is involve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... originally granted to the assessee was withdrawn vide order dated 3-10-2017. Against this order assessee is in appeal. 9. In view of the above facts the only issue that requires to be adjudicated in both the appeals is that whether activities carried on by the assessee trust are for charitable purposes as defined u/s 2 (15) of the act and not business and profession. If it is held that assessee is engaged in charitable activities then whether proviso to section 2(15) of the Act applies to the assessee or not and the third issue is that whether the benefit of u/s 11 and 12 of the Act is allowable to the assessee. 10. The learned authorized representative firstly assailed the order of the learned Commissioner Of Income Tax (Exemption) submitting that the proposal for withdrawal of registration u/s 12 A of the income tax act has been submitted by the learned Assistant Director Of Income Tax (Exemption), New Delhi on 15/12/2011 however the learned CIT (exemption) has passed an order on 3/10/2017 after a gap of almost 6 years. He submitted that such a late order passed by the learned CIT itself makes the order not sustainable. With respect to the object of the trust he submitted that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee is carrying on the activity of medical relief. He also referred to the audited accounts of the assessee. In view of this he submitted that the assessee is carrying on the activity of the medical relief which is classified as a charitable activity under section 2 (15) of the income tax act. He further stated that the learned assessing officer as well as the learned Commissioner of income tax (exemption) has not brought on any material to show that the assessee is not carrying on the activity of the charitable nature in the form of medical relief. He further stated that in case of a charitable trust the activities are carried out either through donation or through grant in aid received from the various agencies. He stated that merely receiving the grant does not make an activity of the trust non-charitable. He further stated that in the income tax act there is no bar in receiving grant from the various other organizations for carrying on the activities of the trust which a charitable in nature. He further stated that the provisions of section 2 (15) of the act inserted with effect from 01/04/2009 does not apply to the trust as assessee is not carrying on the object of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th and sexuality. It is also collaborating with local non-government organization to carry out operations, research, policy and advocacy initiatives and also developing and improving methods of prevention of HIV AIDS. During the course of assessment proceedings the learned AO held that the assessee is carrying on the business activity as the assessee‟s proposal for getting grant comprising management free from the donors. On appeal before the learned CIT - A he allowed the assessee the benefit of section 11 and 12 of the income tax act holding that assessee is existing for charitable purposes as prescribed u/s 2 (15) of the act and proviso to that section does not apply to the assessee. Meanwhile on the proposal sent by the learned assessing officer to the learned CIT exemption, he withdrew the recognition granted to the assessee for registration u/s 12 AA of the income tax act holding that the assessee is carrying on the activity for the purposes of the profit and is not a charitable organisation not carrying on the charitable activities as specified under section 2 (15) of the income tax act. The learned CIT exemption was mainly guided by the finding of the learned assessin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee spends the whole amount through various societies and trust and the assessee is also running its own project for the welfare of the HIV and AIDS patients. Further it is also the fact that assessee is a section 25 company under the companies act 1956 which cannot carry on any business activities. In view of the above facts it is apparent that assessee assessee is existing for and is carrying on the charitable activities in the form of medical relief for HIV and AIDS patient and the awareness about the disease. In view of the above facts we confirm the order of the learned CIT - A for assessment year 2010 - 11 and dismiss the appeal of the revenue in ITA number 716/del/2015. 14. As we have already held that assessee is carrying on the activities of medical relief for eradication and education of HIV AIDS patients the assessee is entitled to the registration u/s 12 AA of the income tax act as there is no finding by the learned CIT - exemption that the activities of the assessee are not genuine. Same is not the case of the learned departmental representative also. In view of this we cancel the order passed by the learned CIT - exemption dated 3/10/2017 cancelling the registration ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
