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Income Tax Appellate Tribunal, “B” BENCH, MUMBAI
Before: SHRI R. C. SHARMA, AM & SHRI AMARJIT SINGH, JM
Assessee by: Shri R. V. Shah & Monika Denendra Department by: Shri Saurabh Deshpande(DR) सुनवाईकीतारीख / Date of Hearing: 02.07.2018 घोषणाकीतारीख /Date of Pronouncement: 25.07.2018 आदेश / O R D E R
PER AMARJIT SINGH, JM:
The assessee has filed the present appeal against the order dated 16.10.2015 passed by the Commissioner of Income Tax (Appeals)-1, Mumbai [hereinafter referred to as the “CIT(A)”] relevant to the A.Y. 2011-12.
2. The assessee has raised the following grounds:- “1. The Ld, CIT(A) erred in confirming the order of the Assessing Officer treating the registration u/s 12A dated 29.08.1975 as deemed to be cancelled thereby denying exemption u/s section 11 and section 12 of the Income Tax Act and assessed the income at ITA. No.53/M/2016 A.Y. 2011-12 Rs.18,40,660/- by taxing it under normal provisions of the Act, on the alleged ground that the objects of Appellant trust are amended which is unwarranted, unjustified and contrary to facts, 2. The Ld, CIT(A) failed to appreciate that pursuant to the order of Charity Commissioner dated 15.83,2004 the objects remained charitable under section 2(15) of the income Tax Act. Hence, denial of exemption of section 11 and 12 is unwarranted and unjustified and contrary to the provisions of law. B. The Ld, CIT(A) has failed to consider that registration has not been cancelled by DIT(E). Hence, there is no question seeking fresh registration u/s 12A and therefore disallowance of claim under section 11 and section 12 is unwarranted and unjustified. 4- Appellant submits that main objects framed by settlers have not been altered, the ancillary objects extended by Hon'ble Charity Commissioner under the Scheme of better administration and management of the trust does not invalidate registration granted under section 12A, Hence, Appellant prays that they are entitled to exemption u/S 11 and 12 of the Act.
5. The learned CIT(A) has failed to consider the order passed by his predecessors C1T(A) vide order dated 19.11,2012 for A-V. 2069-10 and the order passed by the Jurisdictional Tribunal in the case of Bhansali Trust 1TA No. 5948/Mum/2012 dtd, 31,8.2015 wherein the facts are the same as for the current year and therefore the order passed by him is contrary to the order passed by the predecessor CIT(A) on the same set of facts. Hence, the order passed by learned CIT(A) be set aside, as is contrary to provisions of law.
6. The Id. CIT(A) failed to appreciate that Appellant has communicated the order dated 15,63-2064 passed by the Hon'ble Charity Commissioner framing scheme for the management and administration of the trust to Id. DTT(E) as well as Assessing Officer in the earlier years. Hence, the procedural compliance was fulfilled, and hence the order of CIT(A) is unwarranted and unjustified and therefore the said order be set aside.
7. Appellant has not pusued any non-charitable objects and has pursued only activities of running the hospital in the year under consideration. Hence, denial of exemption under section 11 and 12 is unwarranted, unjustified and contrary to law.”
ITA. No.53/M/2016 A.Y. 2011-12
The brief facts of the case are that the assessee filed its return of income on 27.09.2011 along with the income & Expenditure Account, Balance-Sheet and Audit Report in Form No.10B declaring total income to the tune of Rs.Nil. The trust is registered as Charitable Organization with DIT(E), Mumbai U/s 12A of the Act under vide Registration No. TR./2763 dated 29.08.1975 and with Charity Commissioner, Mumbai vide Registration No.A-746 dated 16.12.1952. The case was selected for scrutiny and notices u/s 143(2) & 142(1) of the Act were issued and served upon the assessee. The trust came into existence on 11.01.1932 for the purpose of setting up Bhatia General Hospital. In the said trust deed, the assessee’s income shall be used for the following objects. “Use of income: whatever income may be left over out of the income of the corpus fund after meeting the expenses of this writing as mentioned above and the recovery of the income and the maintenance of the Trust fund, the same shall be utilized for the use of the hospital. However, the amount or property received in charity or by way of gift without any condition for using the same for any particular manner shall be utilized or the hospital or the expenses with regard to the same. The expenses mentioned in this clause shall of so include in addition to the above mentioned expenses, the rent of the premises of the hospital taken or rent, for the hospital taken on the condition of Purchas then price thereof or rent or any other expenses rendered by the, salary to be paid to the servants, nurse, clerks and the honorarium gifts and ins short all the expenses may be deemed proper by the trustees for running and maintaining the hospital. Additional- if any income or property is left out after meeting is left out after meeting the above mentioned expenses then the same shall be accumulated and when moneys are required to run and ITA. No.53/M/2016 A.Y. 2011-12 maintain the hospital, the same shall be used from out of the left over accumulation as if the same is the income of the Corpus Fund.”
The trust was registered with Charity Commissioner under Reg. No. A-746 (Bom) and with the Commissioner of Income Tax u/s 12A of the I.T. Act vide registration No. TR/2763 dated 29.08.1975. The said registration was granted on the basis of trust deed dated 11.01.1932 specifically in view of the objects specified therein. It was observed that on an application from the trust u/s 50A of BPT Act 1950, the object clause in the trust deed dated 11.01.1932 was amended vide order dated 15.03.2004. The new objects also include educational objects and objects of General Public Utility in addition to Medical Objects which are reproduced below.:-
a. To acquire, establish and maintain or donate to hospitals, nursing homes, medical centers, research centers or other institutions in various fields of medicines. b. To grant medical help, financial help and or help in form of materials like clothes, medicines, food etc. to persons who are victims of natural calamities anywhere in India. c. To establish and maintain and/or support, or donate to institutions for mentally and/ or physically handicapped persons. d. To provide medical support and assistance to poor and needy persons(s): e. To carry out or supplement all charitable purposes including relief of poverty, education and any other object of general public utility.
Since the assessee trust introduced new objects, therefore, the assessee was asked to furnish the new Registration u/s 12A of the Act after the date of amendment dated 15.03.2004, the assessee did not ITA. No.53/M/2016 A.Y. 2011-12 furnish the any fresh registration u/s 12A of the Act. Therefore, the claim of the assessee in connection with exemption u/s 11/12 of the Act was declined and the income of the assessee was assessed to the tune of Rs.5,18,40,660/-. Feeling aggrieved, the assessee filed an appeal before the CIT(A) who confirmed the said order, therefore, the assessee has filed the present appeal before us.
ISSUE NOs. 1& 6:-
All the issues are inter-connected, therefore, are being taken up together for adjudication. At the very outset, the Ld. Representative of the assessee has argued that the issues are duly been covered by decision of the Hon’ble ITAT in the assessee’s own case for the A.Y. 2009-10 & 2010-11 in & 1588/M/2015 dated 27.02.2017, therefore, in the said circumstances, the claim of the assessee is liable to be allowed. Before going further, we deemed it necessary to advert the relevant finding of the Hon’ble ITAT in connection with the issues above on record.: -
"6 Heard both the parties, perused the material placed before us and also gone through the impugned orders including the letter issued by the DIT(E), dated 29.03.2016. A perusal of the said letter the DIT(E) reveals that DIT(E) allowed registration which is extracted below.:- Office of the Commissioner of Income Tax (Exemption) 6th Floor, Piramal Chambers, Lalbaug, Mumbai-400012. No.CIT(E)/U/s. 2A/TR-2763/15-16 Dated: 29.03.2016 To The Trustees, The Bhatia General Hospital Trust,
ITA. No.53/M/2016 A.Y. 2011-12 Tardeo Road, Nana Chowk, Mumbai-400007. Sir/Madam, Sub: Registration u/s 12A of the I.T. Act, 1961-reg. Ref: Letter No. SHR/597/ 15-16 dated 23/03/2016. Please refer to the above.
Vide above stated letter a request has been made to take on record the amended trust deed and grant benefit of exemption u/s 11 and 12 of the LT Act, 1961. It is also noted that similar requests was made on 24.09.2012 and 12.03.2013.
3. This is to inform you that the new trust deed which was amended on 15.03.2004 and duly approved by the Charity Commissioner, Mumbai under a scheme for the management and administration of the trust u/s 50A(1) of the Bombay Public Trusts Act, 1950 has been taken on record. The registration certificate u/s 12A No. TR-2763 dt. 29 J081 1975 shall continue to be valid. We also find from the copy of the assessment order for the A.Y. 2013-14 dated 31.3.2016 that the department has duly allowed the exemption u/s 11 and 12 of the Act to the assessee. Under these facts and circumstances of the case, we are of the view that the deduction u/s 11 and 12 of the Act cannot be dened to the assessee especially when the Registration granted by the Commissioner u/s 12A was allowed to be continued meaning thereby that the registration of the trust was continuing retrospectively. Moreover, the Revenue itself accepted and allowed deduction u/s 11 and 12 of the Act in the A.Y. 2013-14. In view of the these circumstances ground 1 raised by the assessee is allowed.” .”
On appraisal of the above mentioned order, we noticed that the claim of the assessee was declined on the basis of the amendment in the object on 15.03.2004, the Assessing Officer was of the view that the amended object is liable to be registered further in accordance with provision of Section 12A of the Act. The CIT (E) has regularized the objection by virtue of letter dated 29.03.2016 on record which has been discussed by Hon’ble ITAT in its decision (supra). According to the letter, the exemption u/s 11/12A of the Act is in continuance of ITA. No.53/M/2016 A.Y. 2011-12 earlier registration which has not been disruptive even at the time of the amendment of the objects on 15.03.2004. The case of the assessee is squarely covered by its own case in & 1588/M/2015 dated 27.02.2017, therefore, by honoring the order of the Hon’ble ITAT, we allowed the claim of the assessee u/s 11/12A of the Act in the A.Y. 2013-14.Accordingly, we decide all the issues in favour of the assessee against the revenue.