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TMI Blog2019 (8) TMI 1819X X X X Extracts X X X X X X X X Extracts X X X X ..... urther time to file Paper Book. But after going through the facts of the case and on hearing the contentions of both the parties, it was found that the matter needed to be considered further by the CIT(A) for bringing out certain facts before adjudicating the issue at hand. The adjournment application filed by the assessee was, therefore, rejected. 3. Ongoing through the facts of the case as find mention in the assessment order and the order of the CIT(A), it was noted that the issue related to denial of grant of exemption u/s 11 of the Act to the assessee. The assessment order notes that the assessee is a trust and registered u/s 12A of the Act and runs Gurudwara Talhan Sahib. The AO noted that the assessee was a wholly religious trust. H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ious activity. The appellant has also contended that it was under the belief that service to humanity in the form of medical services being rendered are part of religion, ft is submitted that hospital is also registered u/s 12A of the I.T Act and is an independent trust. The appellant, has also reliance on certain judicial decisions on this issue to support its contentions. It is stated that claim has been accepted m A.Y. 2012-13 under scrutiny by the AO. 4.6 The appellant has further submitted that there is no justification in taxing the surplus income of Rs. 1,07,58,847 on the ground of applying section 13(3) of the I.T Act. It is submitted that provisions of section 13 can be invoked only to the cases where section 11 does not apply an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by 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 disallowing the claim made on this account. I have also gone through the order passed by the under signed in the case of the appellant, cited above, and find that order was passed in the absence of any meaningful representation being made by the appellant. I find that in fact no submissions were filed by the appellant and therefore, appeal was decided on the basis of material available on record in that year. 4.9 The facts in the present year are different as the appellant has been able to bring on record sufficient material to jus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant to hold that the religion and charity are one. 1.5 The learned C1T(A) has erred in confirming addition of Rs. 51,50,000/- by holding that amount spent on hospital is not related to the activities of the trust. 1.6 The learned CIT(A) has failed to adjudicate on the contention that the AO has failed to hold consistency as this expenditure has been accepted 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 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the assessee to its alleged sister concern Shaheed Baba Nihal Singh Charitable Hospital which had utilized the amount for making payment of salaries to its doctors. The fact that the assessee is wholly a religious trust is an admitted fact. The disallowance has been made for two reasons: 1) The amount donated to its sister concern was not for the purpose for which the assessee trust was set up i.e. it was not for the purpose of any religious activity being donation made to hospital. 2) The donation was made to a related concern which had benefited by said donation and, therefore, the provisions of section 13(1)(c) read with section 13(3) of the Act were attracted. 8. Vis-a-vis the first charge of the Revenue that the application was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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