9911796707
TMI Blog2025 (5) TMI 1235X X X X Extracts X X X X X X X X Extracts X X X X ..... ome Tax Act to the assessee. It has further pleaded that CIT( A) has erred in deleting the addition of Rs. 6,01,88,516/-. 3. The brief facts of the case are that the assessee Society, at the relevant time was running Eye Hospital at various locations of Himachal Pradesh and its neighbouring States. It has filed its return of income on 14.08.2017 declaring 'nil' income. The case of the assessee was selected for scrutiny assessment and notices under Section 143(2) and 142(1) were issued and served upon the assessee. The assessee Society was registered as a Charitable Institution under Section 12A(a) of the Income Tax Act, 1961. The ld. AO perused the accounts of the assessee and observed that surplus over income and expenditure is about 31.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g stock. The onus of declaring true material facts lies upon the assessee. Therefore the assessee has violated the provisions of the Act and concealed the income by presented incorrect particulars of its income. 4. In view of the above, it is held that the assessee is not a charitable institution and is working on commercial lines, therefore, the exemptions u/s 12AA is being denied and net surplus to the tune of Rs. 6,01,88,516/- is treated as taxable income for the year under consideration. I am satisfied that the assessee under reported the income as a consequence of misreporting. Therefore, penalty proceedings u/s 270A of the IT. Act are being initiated separately Assessed at Rs. 6,01,88,516/-. Charge interest as per provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 143(3) of the Act which was completed on 11.12.2019. In completing the assessment, the AO denied exemption granted u/s.12AA of the Act as the appellant according to him was working on commercial lines and not doing the Charitable work. Aggrieved by the said addition, the appellant is in appeal and has raised 09 grounds which are adjudicated as under:- 7. Ground no.1 & 9 are general and hence, not adjudicated. 8. Ground no.2 to 7 are relating to not allowing exemption u/s.12AA of the Act and addition of Rs. 6,01,88,516/- being bad-in-law. As all these grounds are relating to the same issue of addition of net profit as per income and expenditure account, they are being adjudicated together. The appellant being a charitable institution can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the AO. It was further pleaded that the appellant is registered under Section 12A of the Act and is engaged in providing charitable services like eye care patients suffering eye ailments. The appellant has 03 eye care hospitals catering to Himachal Pradesh, Punjab and J&K. The appellant also runs general care hospital in 03 districts of Himachal Pradesh and Gynecological and Physiotherapy services are also provided. It is further argued that audit report in Form no.10B gives complete account of the income of the appellant and amount applied and accumulated/set apart as part of the provisions of Section 11(2) of the Act. Out of the total receipts received during the impugned AY of Rs. 19,23,59,913/-, a sum of Rs. 14,09,47,908/- was applie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fact that assessee is registered as a Charitable Society with the Income Tax Department under Section 12A(a) of the Income Tax Act, 1961. This registration has not been withdrawn or cancelled. The expression 'Charitable Purpose' has been defined in Section 2(15) of the Income Tax Act which read as under : "Charitable Purpose includes relief of the poor, education, medical relief, preservation of environment (including watersheds, forests and wildlife) and preservation of monuments or place or objects of artistic or historic interest and the advancement of any other object of general public utility." 6. A bare perusal of the above definition would indicate that this clause provided two sets of activities. In the first compartment, four a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ratus for the purpose of achieving its objects. The AO ought to have appreciated that huge investment will be required for purchasing medical instruments and equipments so that good quality of eye treatment could be provided to the citizens. This aspect has totally been lost sight by the AO and he analyzed the accounts in a very sympathetic manner. All these aspects have been brought to the notice of CIT(A) in the written submissions reproduced by the CIT(A) from page No. 3 to 11 of the impugned order. Ld. First Appellate Authority has perused the submissions and appreciated them in a right perspective. The AO has not pointed out any single defect within the meaning of Section 13(3) of the Income Tax Act whereby it could be demonstrated tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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