SMT. VIMAL CHAWLA CHARITABLE TRUST,FARIDABAD vs. CIT EXEMPTION, CHANDIGARH

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ITA 196/CHANDI/2025Status: DisposedITAT Chandigarh18 August 2025AY 2211-11Bench: SHRI LALIET KUMAR (Judicial Member), SHRI MANOJ KUMAR AGGARWAL (Accountant Member)3 pages

In favour of the Revenue: the assessee's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Income Tax Appellate Tribunal (ITAT) upheld the CIT(E)'s decision to reject the Section 80G(5)(iii) approval. The ITAT observed consistent large surpluses in the assessee's financial statements and found insufficient evidence to substantiate claims of charitable medical activities.

What were the facts?

The assessee, a charitable trust operating a hospital, sought approval under Section 80G(5)(iii) of the Income Tax Act. The Commissioner of Income Tax (Exemption) rejected the application, concluding that the hospital was primarily run for profit due to significant surpluses and lack of evidence for charitable services.

What were the issues?

Whether the assessee's hospital operations qualified as charitable activities to be eligible for approval under Section 80G(5)(iii) of the Income Tax Act.

Which sections of the Income-tax Act were involved?

Section 80G(5)(iii)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘B’ BENCH, CHANDIGARH

Before: HON’BLE SHRI LALIET KUMAR, JM & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM

Smt. Vimal Chawla Charitable Trust CIT (Exemption) बनाम/ Sector 23-A Faridabad CR Building, Himalaya Marg Vs. Haryana-121005 Sector 17-E, Chandigarh �थायीलेखासं./जीआइआरसं./PAN/GIR No. AACTS-6248-N (अपीलाथ�/Appellant) : (��थ� / Respondent) अपीलाथ�कीओरसे/ Appellant by : Shri Pankaj Gupta (CA) - Ld. AR ��थ�कीओरसे/Respondent by : Smt. Kusum Bansal (CIT) – Ld. DR सुनवाईकीतारीख/Date of Hearing : 06-08-2025 घोषणाकीतारीख /Date of Pronouncement : 18-08-2025 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aggrieved by rejection of an application seeking approval u/s 80G(5)(iii) of the Act vide impugned order dated 13-12-2024 of Ld. Commissioner of Income Tax (Exemption), Chandigarh, [CIT(E)], the assessee is in further appeal before us. Having heard rival submissions and upon perusal of case records, the appeal is disposed-off as under.

2.

Upon perusal of para 3.3 of the impugned order, it could be gathered that the assessee is running a hospital by the name ‘NIMS’ since its inception and providing medical and health care services. Though the assessee was running a hospital, it failed to furnish any document to show that the hospital was being run for charity or providing servcies at nominal fees. The assessee had large surplus in Income & Expenditure for the year ending 31-03-2022. It was finally conldued by Ld. CIT(E) that the hospital had nothing to do with charity rather it was set up to earn profits. Accordingly, the application was rejected against whcih the assessee is in further appeal before us.

3.

The assessee’s financial statements for FYs 2021-22 to 2023-24 has been palced on Page Nos.20 to 31 of the paperbook. The perusal of these financials would show that the assessee is always having large surplus of more than 13% in each of the three years. The donations being receievd by the assessee in FYs 2021-22 & 2022-23 are ‘nil’ wheres it has received nominal donations of Rs.8 Lacs only during FY 2023-24. No expenditure is shown to have been incurred on charity. Upon perusal of these financials, it could very well be concluded that the hospital is being run as a commercial organisation only. No element of charity is shown in the same. The only evidneces relied upon by Ld. AR are printed pamhplets for free mega health checkup camps on various dates which are coupled with few photographs. However, there no data is available for identification of patients, number of patients and charitable treatment offered by the assessee to these patients during these camps. The perusal of these documents hardly inspire any confidence in us to support the assessee’s plea of carrying out of charitable activities. This being so, no intereference is required in the impugned order rejecting the relevant registration application of the assessee.

4.

The appeal stand dismissed. Order pronounced on 18-08-2025.

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