M/S. BHAI HOSPITAL TRUST,NEW DELHI vs. DIT (EXEMPTIONS), NEW DELHI

ITA 4147/DEL/2011Status: DisposedITAT Delhi18 June 202110 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the DIT(E) was not justified in cancelling the registration. It noted that the cancellation was made retrospectively from inception, prior to the relevant legal provisions allowing such cancellation, and that donations between charitable trusts are not inherently prohibited.

What were the facts?

The assessee trust, registered under Section 12A since 1980, had its registration cancelled by the DIT(Exemptions). The cancellation was based on the trust donating a large sum of borrowed funds to a sister entity, which the DIT viewed as a violation of provisions related to charitable activities and benefit to related parties.

What were the issues?

Whether the cancellation of registration under Section 12A was legally valid, particularly concerning the retrospective nature of the cancellation and the prohibition of donations to sister concerns.

Which sections of the Income-tax Act were involved?

Section 12A,Section 12AA(3),Section 13(1)(c),Section 13(3),Section 11(5),Section 2(15)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI “A” BENCH: NEW DELHI

Before: SHRI G.S. PANNU & SHRI KUL BHARAT

For Appellant: Adv. &
Hearing: 05.05.2021Pronounced: 18.06.2021

PER KUL BHARAT, JM : This appeal filed by the assessee for the assessment year NIL is directed against the order of learned DIT(Exemptions), Delhi dated

19.07.

2011. The assessee has raised following grounds of appeal:-

1.

“That on facts and in law, the Order dated 19th July, 2011 passed by the Director of Income Tax (Exemptions), New Delhi (Ld.DIT) cancelling the registration u/s 12A of the Act of the appellant trust, since inception, is bad and without properly considering and appreciating the facts and legal position and is also contrary to the position consistently accepted by the department over a long period

The order continues below.

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