INDIA HIV AIDS ALLIANCE,NEW DELHI vs. CIT(E), NEW DELHI

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)

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

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.