ORIENTAL ARDAAS FOUNDATION ,NEW DELHI vs. CIT(EXEMPTION), NEW DELHI

On hearing both the sides, we find that primarily the assessee’s applications u/s 12AB(1)(b)(ii)(B) of the Act has been dismissed leading to dismissal of application u/s 80G of the Act as the ld.CIT(E) [hereinafter referred to as the ‘ld. Competent Authority’] was of the view that the assessee has failed to provide necessary justification in support of the genuineness of the charitable activity. It was concluded by the Competent Authority that no genuine activity has been carried out by the applicant towards the stated objectives and the intended activity of the applicant does not come under the purview of ‘charitable activity’ as per the provisions of section 2(15) of the Act. The relevant findings of competent authority are reproduced below; “3. On a perusal of the submissions, it is seen that the applicant has not shown any charitable activity. The primary activity as submitted by the applicant is that it intends to set up an old age home for senior citizens. Accordingly, the issues are discussed as under:

1 From the perusal of the submissions made by the applicant, it is seen that the applicant has shown payments/donations made to various individuals/organizations in FY 2021-22 to FY 2023-24. However, the applicant has not submitted any beneficiary details for the said donations and has also not submitted the purpose for which such payments/donations have been made. The applicant has also not submitted how these payments/donations align with its stated objects, which is of intending to start an old age home.

2 The applicant has submitted that it intends to build old age home for senior citizens and provide various facilities to the senior citizens. The applicant submitted copies of sale deed dated 15.04.2021 related to acquiring of land of about 4.82 acres at Dhunela, Sohna, Haryana for the purpose of construction of old age home facilities. Further, from the project details related to the setting up of old age home by the applicant, the services proposed to be provided at the old age home seemed commercial in nature. In view of the above, the applicant was asked vide questionnaire dated 23.09.2024 to "Please state the terms and conditions for the prospective residents of the old age home for senior citizens including screening/selection criteria of the residents, tariffs etc.” In response, the applicant has stated as under:

3 The reply of the applicant has been perused. The applicant has stated that it has taken various steps for getting approvals for setting up an old-age home such as taking building plan approval, obtaining change of land use, etc. However, the applicant has still not decided on the terms and conditions for the prospective residents, which shows that the old age home will not be an inclusive old age home but an exclusive old age home, in view of the various facilities planned. The applicant has also still not, provided the target group of beneficiaries to be covered. The applicant has also not shown any expertise/experience in related programmes/services. The proposed project document for the old age home, as is available on the internet at ITA No.5079 & 5078/Del/2024

Now before us, on behalf of the assessee, the ld. AR has submitted that the assessee acquired land measuring 4.82 acres for construction of old age home facilities and change of land use has been approved by the Department of Town and Country Planning on 1st February, 2024. The copy of the same is made available in the paper book at pages 98-101 of the paper book. The perusal of the same shows that the building plan of the old age home (institutional building) at subjected site was considered by the Building Plan Approval Committee Office of Sr. Town Planning as per Haryana Building Code-2017 and as per the provisions of approved zoning plan to allow the assessee to raise the old age home (institutional). Based on the expenses incurred in FY 2024-25 and FY 2025-26 till date, the ld. AR has submitted that substantial expenditures have been made towards concrete work, site approval, purchase of earth building material, etc. Thus it can be concluded that the project of assesse is at stage of development of infrastructure. 4. It is settled provisions of law that at this stage, the competent authority is not supposed to inquire into the actual conduct of charitable or other activities to ITA No.5079 & 5078/Del/2024

Thus it is too early to draw any inference about the commercial nature of activity. So far the material relied substantiates the claim of assesse that intention is to run an old age home. In the light of the aforesaid discussion, the conclusions drawn by the ld. CIT(E) cannot be sustained. The grounds raised are allowed. The appeals of the assessee are allowed. The ld.CIT(E) is directed to approve the application of the assessee in accordance with the law.