TMI Blog2019 (8) TMI 1819X X X X Extracts X X X X X X X X Extracts X X X X ..... ue of this donation a related person of the assessee had been benefited, the Ld. DR himself pointed out that there is no finding of fact as to how the hospital was related to the assessee society in terms of the definition so provided u/s 13 (3) - In the absence of this essential fact the applicability of section 13 (1) (c) of the Act cannot be enforced. For the aforesaid reasons we consider it fit to restore the issue back to the CIT(A) to adjudicate the issue afresh after bringing out all relevant facts on record as pointed above and any other facts considered necessary by him for adjudicating the issue at hand. Needless to add the assessee be granted adequate opportunity of being heard and the issue thereafter be decided in accordance with law. - Appeals of the assessee and the Revenue are allowed for statistical purposes. - ITA No.1382/Chd/2018, ITA No.1398/Chd/2018 - - - Dated:- 20-8-2019 - SMT.DIVA SINGH, JUDICIAL MEMBER AND SMT.ANNAPURNA GUPTA, ACCOUNTANT MEMBER Revenue by: Shri Hemant Gupta, Sr.DR ORDER PER BENCH: The above cross appeals, by the assessee and the Revenue, have been filed against the order of learned Commissioner of Income Tax (Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of Rs. 51,50,000 paid as donation to a hospital for medical relief has been disallowed by the AO. Further, I find that AO has also disallowed the claim of exemption of surplus/income of Rs. 1,07,58,847 u/s 11 of the IT Act on the ground that provisions of section 13(1)(c) r.w.s. 13(3) of the 1.T. Act have been violated. It is seen from the order that the claim of exemption of income u/s 11 of the IT Act has been disallowed by the AO on the ground that receipts of the trust have not been utilized for the purposes for which it was setup. AO has assessed income of the trust as an AOP. 4.3 During the course of examination of books of accounts it was found by the AO that funds have been diverted and an amount of Rs. 51,50,000 has been transferred to its sister society, which is engaged in activities other than religious purposes. It is stated that these funds have been utilized for meeting salary/professional fee paid to employees/doctors. It was held by the AO that income has not been applied by the appellant towards the religious charitable purposes for which it has been setup. The utilization of funds was held to be not for the purposes for which it has been formed. 4.4 AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on record, 1 find that appellant has been able to bring on record sufficient material to support its contentions with regard to the claim of exemption of income u/s 11 of the I.T Act cannot be denied on the ground that donations have been made to the sister trust which do not fall within the purview of the activities of the trust. The contentions of the appellant that claim may be disallowed to the extent of violations, if any, made in the light of judicial decisions cited has been considered and found to be correct. 1 have gone through the decision of Hon'ble ITAT Delhi bench in the case of Puran Chanel Dharmarth Trust 04.05.2018 and also in the case of Time Centre for Medial Management studies dated 31.05.2018 on this issue and find force in the contentions of the appellant. 4.8 Further, I find that appellant has made donations to the other society (related to the appellant society) having different objectives which are not religious in nature and thereby violated the purposes for which it was set up. The appellant has not been able to justify that activities carried out by the other trust are religious in nature and therefore, I hold that AO was justified in disallowin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cepted in years prior to A.Y. 2013-14 and has even been accepted in the A.Y. 2015-16 and 2016- 17. 1.7 The learned CIT(A) has erred in confirming the addition of Rs. 51,50,000/- being the donation/support given to the Hospital being run by the other society. The AO has accepted this donation in the year subsequent to the year under appeal 2. The appellant craves leave to alter, to amend, to add, or to delete any or all the grounds of appeal on or before the final hearing. 6. The Revenue in turn has challenged the act of the Ld.CIT(A) in restricting the disallowance to Rs.51,50,000/- as against the denial of exemption by the AO to the entire surplus generated by the assessee raising the following grounds before us: i. That on the facts and circumstances of the case, the Ld. CIT(A) has erred in law in allowing the claim of the exemption under section 11 of the IT. Act on the surplus without appreciating the fact that the diversion of money had resulted in giving benefit to specified person under section 13(3) of the Act and therefore the provisions of section 13(l)(c) were applicable. ii. That on the facts and circumstances of the case, the Ld. CIT (A) has erred in l ..... X X X X Extracts X X X X X X X X Extracts X X X X
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