GETTWELL HEALTH & EDUCATION SAMITI,BHARATPUR vs. CIT-EXEMPTION, JAIPUR

आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR Jh dqy Hkkjr] U;kf;d lnL; ,oa Jh foØe flag ;kno] ys[kk lnL; ds le{k BEFORE: SHRI KUL BHARAT, JM & SHRI VIKRAM SINGH YADAV, AM vk;dj vihy la-@ITA No. 245/JP/2016

cuke Gettwell Health & Education The C.I.T.(III), Vs. Samiti, Jaipur. Sikar LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AABTG 3870 D vihykFkhZ@Appellant izR;FkhZ@Respondent

fu/kZkfjrh dh vksj ls@ Assessee by : None. jktLo dh vksj ls@ Revenue by : Shri Prithivi Raj Meena (Addl. CIT)

lquokbZ dh rkjh[k@ Date of Hearing : 02/03/2017 mn?kks"k.kk dh rkjh[k@ Date of Pronouncement :02/03/2017 vkns'k@ ORDER

PER: VIKRAM SINGH YADAV, A.M. This is an appeal filed by the assessee against the order of the ld. CIT(E), Jaipur dated 09.10.2015 denying the registration under 12AA of the Act. The matter was earlier fixed for hearing on 4th August, 2016, 8th 2. November, 2016, 16th December, 2016 and has come up for hearing today again before this Bench. None appeared on behalf of the

2 ITA No.245/JP/2016 Gettwell Health & Education Samiti, Sikar Vs. C.I.T.(III), Jaipur

assessee. Therefore, it seems that the assessee is not interested in

pursuing this matter. It was therefore decided to hear the ld. DR and

dispose of the appeal based on material available on record.

second round of appeal wherein the assessee has approached the

Hon’ble ITAT. In the earlier round, the Hon’ble ITAT vide its order dated

22.07.2011 in ITA No.1022/JP/2010 has set aside the matter with the

following directions:

“We have heard the both the parties. The paper book does not

contain the copy of the trust deed so as to enable us to ascertain

the objects of the trust. The balance sheet as on 31-03-2008

shows that the assessee is having assets like air-conditioners,

computers, furniture and fixtures and televisions. There is no

reference for any assets which are noted for hospital. We are also

not aware to the investments made in the building in which the

hospital is being run. The building is being owned by HUF, Dr. B.L.

Ranwa. In the absence of any details of quantum of investment,

one cannot ascertain as to whether the rent being for the hospital

is reasonable or excessive. In case the rent is excessive then the

trust is providing benefit to a person covered u/s 13 of the Act.

The Ld. CIT has also mentioned that necessary details have not

3 ITA No.245/JP/2016 Gettwell Health & Education Samiti, Sikar Vs. C.I.T.(III), Jaipur

been filed. The assessee in its ground of appeal has submitted

that the Ld. CIT has not communicated the AO’s report. Hence,

without going into the detailed submissions filed by the Ld. AR we

feel that the issue of registration is to be restored back on the file

of the Ld. CIT”.

the directions of the Hon’ble ITAT and after hearing the Ld. Counsel for

the assessee, CIT(E) has held that society cannot be held to carry out

any activity which is charitable in nature within the meaning of Section

2(15) of the Act. The relevant finding of the Commissioner(Exemption) is

as under:

“7. From the above discussion it can be seen that the society is under the complete control of Sh. B.L. Ranwa and Smt. Kamla Ranwa. They are running the hospital in a manner in which a private hospital is being run with profit motive. The funds of this hospital are being diverted to president and secretary in the form of rent. But to avoid the implication of provisions of Section 13(1)(c) r.w. Section 13(3), the rent has been shown to be paid to HUF, which is not the owner of the property. The concept of charity cannot go in hand with mutuality. The society is running the hospital by charging money from the patients and money is used by the president and secretary in individual capacity or in joint capacity. In another words, the whole benefit of the activities is going to Shri B.L. Ranwa & Smt. Kamla Ranwa and there seems

4 ITA No.245/JP/2016 Gettwell Health & Education Samiti, Sikar Vs. C.I.T.(III), Jaipur

to be no essence of charity. When the society itself is existing for the benefit of family members, it cannot be held as public charitable organization. Charity and mutuality cannot exist together. There has to be fairness in activities. The element of charity needs to be visible from activities. If the society wants to enter into act of mutual benefit then it cannot be held as public charitable organization. 9. In view of above provisions and on examination of the activities of the society, it is seen that it is paying rent to the president and secretary of the society but it is not disclosing the rent payment in their name. It has shown rent payment in the name of HUF of Shri B.L. Ranwa who is not the owner of the property. The assessee also wanted to avoid the test of reasonableness of the rent and therefore it has not submitted the details regarding investment in hospital building. Therefore, it has also failed to comply with the directions of Hon’ble ITAT. It is receiving huge donation but no details of such donations have been provided. Therefore the genuineness of funds is not known. It has provided the direct/indirect benefit to secretary, Smt. Kamla Ranwa through the medical shop. Therefore, the activities of the society cannot be held as genuine and for public charitable purposes. 10. From the above discussion it is clear that the society is running the hospital for the benefit of family members of Shri B.L. Ranwa and there is no element of charity in it. The activities of the applicant society are not genuine for the detailed reasons discussed in the order.

5 ITA No.245/JP/2016 Gettwell Health & Education Samiti, Sikar Vs. C.I.T.(III), Jaipur In view of above facts, the society cannot be held as charitable within the meaning of Section 2(15) of the IT Act, 1961 and therefore the registration to the society is refused”.

In the result, appeal filed by the assessee society is dismissed.

Order pronounced in the open court on 02/03/2017.

Sd/- Sd/- ¼dqy Hkkjr ½ ¼foØe flag ;kno½ (Kul Bharat) (Vikram Singh Yadav) U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 02/03/2017. *Sanjeev*. आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. vihykFkhZ@The Appellant- Gettwell Health & Education Samiti, Sikar. 2. izR;FkhZ@ The Respondent- The CIT(III), Jaipur. 3. vk;dj vk;qDr@ CIT 4. vk;dj vk;qDr@ CIT(A) 5. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत 6. xkMZ QkbZy@ Guard File {ITA No. 245/JP/2016}

vkns'kkuqlkj@ By order,

सहायक पंजीकार@Aेेज. त्महपेजतंत