TMI Blog2018 (6) TMI 1657X X X X Extracts X X X X X X X X Extracts X X X X ..... of society. We endorse the assent of the Ld. A.R. Set aside the order passed by the Ld. CIT(E) and feel it appropriate to remand the case in hand to the file of the ld. CIT(E) for deciding afresh while taking into consideration the facts, circumstances and documents inter-alia, the amended MOA whereby the aims and objects have already been amended and further incorporation of condition in the aims and objects of society to the effect that the Hospital will be charitable only and not for commercial gains. - Appeal filed by the assessee society is allowed for statistical purposes. - ITA No.694(Asr)/2017 Assessment Year:2017-18 - - - Dated:- 27-6-2018 - Sh. Sanjay Arora, Accountant Member And Sh. N.K.Choudhry, Judicial Member Appellant by: Sh Sunil Kumar Mukhi (Ld. Adv.) Respondent by: Sh. Sandeep Chauhan(Ld. DR) ORDER N.K.Choudhry, The instant appeal has been preferred by the Assessee/Appellant, on feeling aggrieved against the order dated 29.09.2017, impugned herein, passed by the Ld. CIT, (Exemptions), Chandigarh, u/s 12AA(1)(b)(ii) of the I.T. Act, 1961 (hereinafter called as the Act ). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the involvement of the family members without carrying out any charitable activity as per object clause of the MOA and for purpose i.e., not contended or allowed by the objects clause of the MOU, do not enthuse confidence in respect of the applicant viz. a viz. its claims about being charitable and neither the objects nor the genuineness of its activity get corroborated in the instant case. Our attention was drawn by the Ld. AR to the amended aims and objects of the society which reflects from clause no.(1) reproduced herein below for the sake of convenience and brevity. To open an educational/medical and researches Institutions/Hospitals for the health and welfare of mankind. We also perused the certified copy of minutes of meeting held on 06.11.2017 at society office of the assessee where the proper amendment in MOA has already been made and vide application dated 17.01.2018 forwarded to the Assistant Registrar of the Society cum District Manager, District Industry Center, Ludhiana for appropriate in-corporation. From the amended MOA aims and objects of society, clause No.9 reflects to acquire land and building for the construction and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n below. 6. We have gone through with the facts and circumstances of the case and also rival submissions of the parties, relevant dates are very much material in the instant case. The trust was established and registered only on 12th March, 2015 and thereafter, application for registration u/s 12A was filed on 29.04.2015 and main objects of the trust are establishment of educational institution and/or maintenance of educational institution ,meditation and prayer halls, granting of scholarship and financial assistance to needy for educational purposes and establishment of hospitals and nursing homes etc. which are covered under the dimension of Sec.2(15) of the I.T. Act. Further we feel it appropriate to reproduce herein the contents of Sec.12AA of the Act. Section 12AA (1) The Chief Commissioner or Commissioner, on receipt of an application for registration of a trust or institution made under clause (a) [or clause (aa) of sub-section (1)] of section 12A, shall- (a)call for such documents or information from the trust or institution as he thinks necessary in order to satisfy himself about the genuineness of activities of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Commissioner has authority to reject its application for registration on the ground that the Trust has failed to convince him about the genuineness of the activities. That is what unfortunately the Commissioner did in the preset case . Further, Allahabad High Court in the case of Hardayal Charitable Educational Trust Vs. Commissioner of Income Tax-II, Agra decided on 15 March, 2013 observed that: The preponderance of the judicial opinion of High Courts as well as ITAT is that at the time of registration u/s 12AA of the Act, the CIT is not required to look into the activities, where such activities have not or are in the process of its initiation. Where a trust, set up to achieve its objects of enabling educational institution, is in the process of establishing such institution and receives donations, the registration u/s 12AA cannot be refused, on the ground that the Trust has not yet commenced the charitable or religious activity . Further, Co-ordination Bench of ITAT, Amritsar in the case of Ek Umeed Welfare Society, Fazika Vs. Assessee in ITA No.615(Asr)/2013 Directed to grant registration to the society where the registra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve Engineer of the area , no objection for construction from the concerned Panchayat and construction of School is at advance stage and also executed Memorandum of Understanding with the Bhartiya Shiksha Samiti, which is involved in the field of imparting formal education having established a number of Primary and Secondary level Schools in different part of Jammu Kashmir as submitted . Further from the cutting of newspapers, it reflects that inauguration for construction and laying stone for establishment of the School has already been done and as per computation of Income of Asst. Year: 2016-17 it reflects that the assessee trust has received ₹ 1,80,52,900/- as voluntarily contribution and during the Financial Year the assessee trust has incurred the expenditure of ₹ 13089100 and ₹ 379000 for the purchase of the land and its construction for School purposes, and further income and expenditure for the period ended 31st March, 2016 shows that the assessee trust has contributed ₹ 11,000/- to the P.M. relief fund and ₹ 9,472/- for cleaning moment at Katra and ₹ 5,640/- for the environment awareness and ₹ 8,548/- for medic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies. Although, in the open Court we had shown our inclination to remand the case with direction to the assessee to approach the Ld. CIT(E) with the documents as submitted before this forum because the documents were not available before the CIT(E), however, considering the principles laid down by the various Courts as it is not in controversy that till the adjudication of application u/s 12AA of the Act, the trust was at nascent stage and all the activities which are reflecting from the documents submitted herein are of the later stage, however, in our considered opinion at the time of disposal of application, the Ld. CIT(E) in order to satisfy himself about the genuineness of the activities of the trust or institution can call for such documents or information from the trust or institution as he thinks necessary and also empowered to make such enquiry as he may deem fit necessary in this behalf , secondly that after satisfying himself about the object of the trust or institution and the genuineness of the activities, he shall pass order in writing either register or refusing to register the trust or institutions. In the instant case no activity was carried out there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ness that a business entity of one of the Governing Body Members has provided ₹ 1.06 crores as loan for purchase of land. Reply 4: The certified copy of loan of ₹ 1.06 crores from IMC is enclosed. From the reply No.1 it reflects that construction of Hospital will be for charitable purposes and for needy and deprived public at large. Further from reply No.2 it reflects that the Hospital running will be charitable and will be a medical relief for the needy and the public which cannot afford the costly medical facility in present day . The hospital will be charitable and not for commercial gains. However from the amended aims and objects and rules and regulations of the society it does not reflect that the hospital will be charitable and not for commercial gains. On specific query raised by the Bench, which was acceded by the Ld. AR on behalf of the Assessee/Applicant Society that the assessee society shall get incorporate the condition that the Hospital will be charitable only and not for commercial gains, in the aims and object/ MOU of society. We endorse the assent of the Ld. A.R. On the aforesaid reasoning, we are inclined ..... X X X X Extracts X X X X X X X X Extracts X X X X
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