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Income Tax Appellate Tribunal, DELHI BENCH “D”: NEW DELHI
Before: SHRI H.S.SIDHU & SHRI PRASHANT MAHARISHI
PER PRASHANT MAHARISHI, A. M. 1. This is an appeal filed by the assessee against the order of the ld CIT(Exemptions), New Delhi dated 12.06.2015 wherein the application u/s 80G(5)(vi) of the Income Tax Act, 1961 filed by the assessee on 20.06.2014 for approval was rejected. 2. The assessee has preferred following grounds of appeal “1. For the ld CIT(E) has legally and factually erred in rejecting the application for approval under section 80G of the Income Tax Act, 1961.
2. For the ld CIT(E) is legally incorrect in ignoring two orders of the ld CIT(Appeal) and instead relying on the order of the ld AO u/s 143(3) which was quashed by the ld CIT(Appeals)
3. Fro that the ld CIT(E) erred by ignoring the fact that the applicant was working on medical relief of importance and did not fall in the list limb of the definition of section 2(15) “advancement of any other general public utility. The proviso to section 2(15) regarding business activity does not apply to the organization falling in the first six limbs.”
Brief facts of the case is that the assessee is a charitable trust, it filed its application in Form No. 10G for seeking approval u/s 80G(5)(vi) of the Income Tax Act, 1961. On filing the application the assessee was issued several letters seeking explanation which remain un- complied with. The ld CIT(E) called for the report of the ld AO who stated that the assessee is not carrying charitable activities as provided u/s 2(15) of the Act. The ld AO further stated
India HIV AIDS Alliance Vs CIT(E), ITA No. 5185/Del/2015 that in Assessment Year 2012-13 the income of the assessee is assessed at Rs. 108653630/- against the Nil income. In view of this the ld CIT(E) held that assessee is not entitled to the above recognition. It was further mentioned that proceeding for withdrawal for registration u/s 12AA(3) of the Act were also initiated vide communication dated 10.01.2012 for the reason that activities of the applicant trust do not constitute charitable purpose u/s 2(15) of the Act. The ld AR submitted that the assessee is executing project in the field of HIV/AIDS control and therefore, the activities of the assessee are medical relief and hence, falling in the definition of section 2(15) of the Act as charitable purposes. It was therefore, submitted that the assessee is entitled for recognition u/s 2(15) of the Act.
The ld DR submitted that the assessee is carrying on activities by obtaining grant from various agencies and therefore, the same is engaged in activities of general public utility. He further stated that the assessee is not carrying on activities of medical relief.
We have carefully considered the rival contentions as well as perused the orders of the ld CIT(E) u/s 80G(5)(vi) dated 12.06.2015. It is apparent that as the names suggests that the assessee is engaged in the execution of project in the field of HIV/ AIDS control therefore apparently it carries the activities of medical relief prima facie. Merely because the applicant gets grant from various agencies for execution of projects it cannot be said that the assessee is carrying on object of general public utility. Furthermore, merely because in Assessment Year 2012-13 the assessment has been made holding that activities of the assessee are not charitable, it cannot be said that the assessee is not engaged in the activity of medical relief. It is also the fact that the assessee has also not complied with many of the notices issued by the ld CIT(E). Furthermore, the ld CIT(E) has called for the report of the AO which is not confronted to the assessee to make its submission. According to section 80G(5) of the Act the assessee is entitled to the recognition if it is established in India for a charitable purpose. Therefore, looking at the object of the trust which is apparently medical relief, we set aside the whole issue back to the file of the ld CIT(E) to decide the issue afresh after granting the assessee an opportunity of hearing to provide details about its object and activities falling into the object of medical relief. The assessee is also directed to furnish requisite details called for as stated in para No.2 of the order of the ld CIT(E) and to demonstrate before him that the assessee is in fact carrying on activities of medical relief. The ld CIT(E) may also examine the actual conduct of activities of the medical relief but should not be influenced by receipt of grant from various agencies of the assessee.
India HIV AIDS Alliance Vs CIT(E), ITA No. 5185/Del/2015