TMI Blog2019 (5) TMI 410X X X X Extracts X X X X X X X X Extracts X X X X ..... ects as it is nowhere the case of the Department that the donee trust has not applied such sums for charitable purpose by deviating its funds, hence relief granted by ld. CIT (A) needs no interference - Decided against revenue Receiving consideration on sale of medicines, publications, CD-VCDs, etc. - whether such activities of the trust cannot be said to be charitable in nature as it is receiving consideration while carrying out its business activities which falls under the explanation of advancement of any object of any public utility under section 2(15) ? - HELD THAT:- Objects of the assessee trust fall within the purview of providing medical relief, imparting education or relief to the poor and are not in the nature of general public utility, so the proviso to section 2(15) of the Act is not attracted in case of the assessee trust. So, ld. CIT (A) has rightly decided the issue in favour of the assessee by following the decision rendered by the Tribunal in assessee s own case for AY 2009-10 [ 2019 (2) TMI 1616 - UTTARAKHAND HIGH COURT] - Decided in favour of assessee. - ITA No.5612/Del./2015 - - - Dated:- 30-4-2019 - Shri N.K. Billaiya, Accountant Member And Shri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in nature being not involved in providing relief to the poor, education and medical relief etc. AO also held that at the most, the trust can be treated as advancement of other objects of general public utility and on this ground also, the assessee is not entitled for any relief because income of the trust during the year under assessment exceeds ₹ 25,00,000/-. 3. Assessee carried the matter by way of filing an appeal before the ld. CIT (A) who has partly allowed the relief by following the decision rendered by the Tribunal in assessee s own case for AY 2009-10. Feeling aggrieved, the Revenue has come up before the Tribunal by way of filing the present appeal. 4. We have heard the ld. Authorized Representatives of the parties to the appeal, gone through the documents relied upon and orders passed by the revenue authorities below in the light of the facts and circumstances of the case. GROUND NO.1 5. Ld. AR for the assessee contended that the issue in controversy is covered in favour of the assessee in assessee s own case vide order dated 27.08.2013 of the Tribunal in ITA No.387/Del/2013 for AY 2009-10 [(2013) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4.22 In support, the Ld. AR placed reliance on the following decisions:- i) CIT Vs Thanthi Trust 239 ITR 502 (SC) ii) CIT Vs Trustees of Jadi Trust 133 ITR 494 (Bom.) iii) CIT Vs Hindustan Charity Trust 139 ITR 913 (Cal.) iv) CIT Vs Nirmala Bakubhai Foundation 226 ITR 394 (Guj.) v) CIT vs Shri Ram Memorial Foundation 269 ITR 35 (Del.) vi) CIT Vs HPS Social Welfare Foundation 235 CTR 330 (Del.) .. 6.6.4. Further allegation of Ld. CIT(DR) remained that the appellant has applied minimum amount of income for charitable purpose and diverted substantial amount to its sister concern i.e. Patanjali Yogpeeth Trust with the intention of retaining funds within its own control. It was alleged by her that the appellant was charging exhorbitant rates for accommodation fee in the name of participation fee. In alleging so the Ld. CIT(DR) has placed reliance on the statement of one Shri Balwant Singh Minhas, wherein he has alleged to have paid amount of ₹ 49,000/- as participation fee for the yoga shivir purportedly conducted by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l not affect the exemption claimed by the assessee u/s 11 of the Act in any manner whatsoever nor inter-trust donation can be termed as deviation from its objects as it is nowhere the case of the Department that the donee trust has not applied such sums for charitable purpose by deviating its funds, hence relief granted by ld. CIT (A) needs no interference at the ends of the Tribunal being based upon the findings of the Tribunal pertaining to AY 2009-10. So, ground no.1 of the Revenue s appeal is determined against the Revenue. GROUND NO.2 9. Ground No.2 raised by the Revenue challenging the impugned order passed by the ld. CIT (A) is that since the assessee trust has been receiving consideration on sale of medicines, publications, CD-VCDs, etc., such activities of the trust cannot be said to be charitable in nature as it is receiving consideration while carrying out its business activities which falls under the explanation of advancement of any object of any public utility under section 2(15) of the Act . 10. Again, this issue has been decided by the coordinate Bench of the Tribunal in assessee s own case for AY 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation one of the charitable objects defined u/s 2(15) of the Act and accordingly the appellant s activities are not hit by the proviso inserted in the definition of charitable purpose as contained in the said section. During the course of hearing the appellant was directed to provide complete details of the Patanjali Bhartiya Ayurvigyan Avam Anusandhan Sansthan at Haridwar for imparting education in the field of ayurveda which started operations w.e.f. 20.7.2009. In compliance the Ld. AR submitted that during the year the appellant had applied substantial amount on construction of the ayurveda medical college which is affiliated to the Uttarakhand Technical University. It was submitted that ayurveda medical college set up by the appellant was approved and duly recognized by the Department of Ayurveda, yoga naturopathy, unani, siddha and homoeopathy (AYUSH) vide notification dated 20.7.2009, a copy thereof has been made available at page No. 805 and 806 of the supplementary paper book II. Department of Ayush is a body set up by the Ministry of Health Family Welfare, Govt. of India with the primary objective of regulating and upgrading the educational standards, quality control ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct. We thus come to the conclusion that any form of educational activity involving imparting of systematic training in order to develop the knowledge, skill, mind and character of students, is to be regarded as education covered u/s 2(15) of the Act. In view of these decisions we hold that imparting of yoga training through well structured yoga shivir / camps also falls under the category of imparting education which is one of the charitable objects defined u/s 2(15) of the Act. The appellant s activities are thus not hit by the proviso inserted in the definition of charitable purpose in section 2(15) of the Act. Relief to the poor 6.6. So far as question of providing relief to the poor by the appellant trust to bring it within the purview of the same is concerned, we find that the contention of the assessee remained that the appellant through its hospital, Patanjali hospital and Patanjali Chikitsalaya at Haridwar, Ranchi and Patna has served more than 2.25 lacs, 0.60 lacs and 0.75 lacs patients during the relevant year. The hospitals have team of doctors, nurses and paramedical staff working round the clock. It was submitted that the hospi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or character building, moral cultural upliftment and imparting education for character building and upliftment of moral values. I. To prepare missionaries and facilitate them and sensitize people for uprooting jealously, hate, evils, injustice, Tyranny and heavenly this on earth by keeping above the communalism, castes and the feeling of sex and creed. J. To run the free educational centers and to facilitate the worthy poor helpless orphans, students by providing clothes, food, study material and lodging. K. To establish and run stables for the poor cows to save them from victimization and killings. L. To carry out researches or agni hotra and perform scientific yajnas in order to solve the serious problems of environmental pollution of modern age. M. To give award and certificates to the trainees who undertake weekly, fortnightly, monthly, quarterly and annually Yog and Acupressure training. N. To help and co-operate the relief activities related to flood, earthquakes, epidemic, drought etc. O. To co-operate other such institutions and organizations ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the object of the trust, exemption could not be denied. 6.6.3. The contention of the Ld. CIT(DR) also remained that the predominant objective of the appellant trust is to prepare and sell medical formulations, which is apparent from the sheer magnitude of business, sales counters and volume of its promotion and publication house which is not incidental to the main objective of providing medical relief. She has further alleged that appellant has established a chain of retail outlets (seva Kendra) for selling its products all over India and has also collected security deposit of ₹ 6.21 crores from these seva kendras. She alleged further that the assessee is also engaged in export of its products and quantum of such exports aggregates to ₹ 5,15,64,050/- during the assessment year under consideration, which portrays that the appellant is pre dominantly engaged in undertaking commercial activities. In the rejoinder the submission of the Ld. AR remained that business undertakings were run by the appellant as an activity incidental to attainment of the main objects of the appellant and to feed charity, which is permitted u/s 11(4) / 11(4A) of the Act. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mained that there is no legal impediments in one charitable trust giving donation to inter charitable trust. It was submitted that it is a well settled position that when a charitable donation amount out of its current income is donated to inter charitable trust, the same constitute application of income u/s 11(1)(9) of the Act. A copy of certificate of registration of the donee trust u/s 12A of the Act has been placed at page 856 of the supplementary paper book (III). The CBDT instruction No. 1132 dated 5.1.1978, extract of which has been made available at page No. 857 of the supplementary paper book-III has made it clear that payment of a sum by one charitable trust to another for utilization by the donee trust towards its charitable objects is proper application of income for charitable purpose in the hands of the donee trust and the donor trust will not loose exemption u/s 11 of the Income Tax Act 1961. We thus do not find substance in the contention of the Ld. CIT(DR) that the appellant has donated an amount to the donee trust to deviate from its objectives. Since it is not the case of the department that Patanjali Yog Trust, the donee has not applied such sums for charitabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich has nowhere been disputed by the department. Against the allegation of the department that appellant was unable to produce the medical practitioners for verification during the course of remand proceedings is erroneous. The Ld. AR submitted that the appellant has produced 15 out of 71 medical practitioners whose details and permanent residential addresses were made known to the revenue. It was submitted that in their statement recorded on oath , the medical practitioners who were in the employment with the hospital run by the appellant have categorically admitted to the fact that there is no compulsion on the patients to buy medicines prepared / manufactured by the appellant only and that they also prescribed medicine manufactured by other pharmaceutical companies. These submissions of the Ld. AR have not been rebutted. 6.6.6. Considering above submissions in totality we hold that the appellant trust falls within the purview of providing relief to the poor . 6.6.7. The first issue as to whether the appellant trust did fall within the purview of providing of medical relief imparting education or relief to the poor is thus decided in f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rich and poor may avail its benefits in order to attain sound health; - To form a new integrated system of treatment, consisting mainly of the techniques of Yoga and Ayurveda, for Surgery and Emergency cases , Allopathy, Homoepathy, Unani and Acupressure to soothe patients suffering from unbearable pains and rid them of disease. - To evaluate methods of treatment of Physical Body, Etheric Body , Astral Body, Mental Body and Casual Body beyond the present incomplete system of treatment for cure of physical body alone; - Imparting Yoga and health education and to begin degree and diploma courses for students in disciplines of Yoga and Ayurveda. As discussed above the proviso to section 2(15) of the Act applies only to trusts/institution falling in the last limb of the definition of charitable purpose ; that too, if such trust / institution carry on commercial activities in the nature of business, trade or commerce. The said proviso does not apply to trust / institution engaged in the charitable object of providing relief to the poor, imparting education and providing medical relief. The last limb of the defi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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