CONTAI ROTARY COMMUNITY WELFARE TRUST,PURBA MEDINIPUR vs. CIT, (EXEMPTIONS), KOLKATA, KOLKATA

The captioned two appeals filed by the Assessee (ITA Nos.340&341/Kol/2016) are directed against the two orders passed by the Commissioner of Income Tax(Exemptions) u/s.80G(5)(VI) and u/s.12AA of the Income Tax Act, 1961 (hereinafter referred to as the ‘Act’), dated 15.12.2015, respectively.

The captioned two appeals pertain to same assessee, common issues involved, therefore, these have been clubbed and heard together and a consolidated order is being passed for the sake of convenience and brevity. 3. Brief facts of the case qua the assessee are that the assessee trust was created on 19.03.2003 with general charitable objects specified u/s.2(15) of the Income Tax Act. The trust provides medical services to the mankind under one roof, without discrimination of castle, creed and religion. The Trust provides poly-clinic, pathology, x-ray and medical activities separately. The CIT(Exemptions) Kolkata has cancelled the registration of the trust u/s.12AA and the application u/s.80G(5)(VI) of the Income Tax Act, 1961, observing that activities of the trust are purely commercial one and not covered within the framework of Section 2(15) of the Income Tax Act. The Commissioner of Income Tax (Exemptions) also observed that the assessee trust is primarily engaged in sale and purchase of medicines, pathology test, x-ray test etc, which are business in nature and accordingly the application for grant of registration u/s.12AA of the Act and application in form No.10G u/s.80G(5)(VI) of the IT Act, have been rejected.

Although in these appeals, the assessee have raised three grounds of appeal in and six grounds of appeal in ITA No.341/Kol/2016, but at the time of hearing the main grievance of the assessee has been confined to the issue that ld CIT (Exemptions) erred in rejecting the application for registration U/s 12AA of the Act and application for approval U/s 80G (5) (vi) of the I.T. Act 1961.

Ld. AR for the assessee submitted before us that medical is a charitable activity. The assessee trust earns some small negligible profit by doing poly-clinic, pathology, x-ray activity, but that does not mean that the assessee trust is engaged in business activities, since the medical assistance and medical services to the mankind without discrimination of cast, creed and religion is charitable in nature. Since the charitable trust is the trust is engaged in the business activities. Section 2(15) of the Act clearly says that medical service is a charitable activity and, therefore, registration u/s.12AA should not be rejected. Therefore, ld. AR for the assessee has again vehemently submitted before us that bare reading of Section 2(15) of the Act which clearly says that charitable purpose includes relief to the poor, education, yoga, medical relief, preservation of environment and the advancement of any other object of general public utility. Therefore, the assessee trust is squarely falls within the provisions of section 2(15) which clearly says that medical relief is one of the charitable activities.

On the other hand, ld. DR for the Revenue has primarily relied on the findings of the CIT(Exemption), which we have already noted in our earlier para and is not being repeated for the sake of brevity.

Having heard the rival submissions, perused the material on record, we are of the view that there is merit in the submissions of the assessee, as the proposition canvassed by ld. AR for the assessee are supported by the facts narrated in the context of the provisions of Section 2(15) of the I.T.Act. Section 2(15) of the Act clearly defines the charitable purpose which, includes medical relief and in order to obtain the object of medical relief the assessee trust is running poly-clinic, pathology, x-ray and medical services. We are of the view that the trust activities are within the framework of Section 2(15) of the I.T.Act, 1961. Therefore, we cancel the order passed by the CIT(E) u/s.12AA and u/s.80G(5)(VI) of the I.T Act .