registration of trust

1Seminar of Charitable Organisation

REGISTRATIONS UNDER REGISTRATIONS UNDER INCOME-TAX ACT

Presented by CA Paras Savla23/04/2011

AgendaAgenda2

Registration 12A / 12AA 12A / 12AA 80G 10(23C) 10(23C)

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Registration u/s 12A3

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Regulatory framework - 12AARegulatory framework 12AA4

S. 12A S. 12AA Rule 17A F 10A Form 10A

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Registration Registration 5

Why registration under Income-tax Act 1961 No single window clearances Applicability of Multiple laws, Multiple compliances Separation & independent registration prescribedp p g p

under Income-tax Act 1961 to claim benefit u/s 11 &12 & to obtain registration u/s 80G(5)

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Registration ApplicationRegistration Application

Wh l f6

When to apply for registration No statutorily time limit has been prescribed

A li i d 1 6 07 i i f S 11 & 12 Application made post 1-6-07, provisions of S. 11 & 12shall apply in relation to income from assessment yearfollowing the previous year in which application made.g p y pp

Lets examine under mentioned situation Trust deed executed on 1-4-2009 Registered before Charity Commissioner on 15-8-2009 Application filed on 1-4-2010 Registration granted on 15 9 2010 Registration granted on 15-9-2010

Impact on income for AY 2009-10, AY 2010-11 What if application is filed on 31-3-2010

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JurisdictionJurisdiction7

Whom to apply Jurisdictional Commissioner Director of Income-tax If applicant assessed in four metropolitan cities, Delhi,

Mumbai, Kolkata & Chennai Circular No. 585 dated 13-11-1990.

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Registration ApplicationRegistration Application8

Application for registration u/s 12A(1)(aa) in form 10A in duplicate

Simple application form, information to be provided Name of applicant, Name of applicant, Name and address of Trust, author/founder Date of creation of trust Date of creation of trust Name & address of trustee manager

D il f d l Details of mandatory enclosures

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A li ti i d b i d t

9

Application accompanied by various documents Original instrument about constitution of institution /trust along with one copy

Where original instrument cannot be conveniently produced, Commissioner may accept certified copycertified copy Certified copy means?

In case Original trust deed / instrument / Memorandum of Association is not in English / Hindi translation of it in English / Hindi need to be submitted

Copy of Accounts in case such charitable organisation in existence in priorfinancial years Trust established on 1-2-2011 Application made on 10-4-2011 Accounts for FY 2010-11 need to be submitted at the time of application What if application submitted on 25-3-2011?

Whether to submit provisional accounts? The requirement of obtaining the details of the past accounts cannot be said to be a

ceremonial one. Ananda Marga Pracharaka Sangha v. CIT 218 ITR 254 (Cal.)

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I d h h d h

10

In case trust is created other than under an instrument, thedocument evidencing the creation / establishment of trust.

Established by producing constitutive and evidentialdocuments. The evidential documents cannot be limited todocuments. The evidential documents cannot be limited todocuments which directly prove the creation of the trust, theywill embrace all documents which afford a logical basis of

f f h d ll h d binferring creation of the trust and till such documents can bedescribed to be "documents evidencing the creation of thetrust" within the meaning of r. 17A(a).trust within the meaning of r. 17A(a). Laxminarayan Maharaj And Another. v. CIT 50 ITR 465 (M.P.)

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Registration ProcessRegistration Process11

On receipt of application Commissioner / Director may – Call for such documents / information to satisfy himself

about genuineness of activities of the charitable organisation

Make such enquiry, deem necessary Pass necessary speaking order registering such

institution or rejecting registration

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Details generally called Details generally called

C i i b l ll f f ll i i f ti

12

Commissioner by an large calls for following information Original trust deed & registration certificate, if not filed along with application Details actual charitable / religious activities carried on by trust Explanation as to how object and activities are within the meaning of S.2(15) NOC from the owner of premises along with proof of ownership, which is used

by Trust. P l f T t t l t d POA i t d th h Personal presence of Trustee at least once and POA in case reresented through

authorised representative Copies of bank accounts, along with details of withdrawals and deposits Copies of PAN card of all Trustees and Trust and original for verification Copies of PAN card of all Trustees and Trust and original for verification Details of ordinary / corpus donation, earmark funds, received during last 3

years along with name, address, PAN of donor If trust is old copies of ITR If trust is old copies of ITR Copies of change report submitted to charity commissioner in case of change in

trustees

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Enquiry during registration Enquiry during registration

A f

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At registration stage, it is not proper to examine the application of income. Fifth Generation Education Society v. Commissioner of Income Tax. 185 ITR 634 (All.)

Whether trust would be in position to claim exemption u/s 11/12 are the question p p / / qwhich is required to be examined at the time of assessemnt and not at the time of grant of registration. DIT v. Garden City Education Trust [2010] 91 Taxman 238 (Kar.)y [ ] ( )

There is nothing in the language to suggest that an institution of a religious nature isprecluded from getting registration under section 12A. Whether the said societywould be entitled to the benefits under sections 11 and 12 or as the case may bewould be entitled to the benefits under sections 11 and 12 or, as the case may be,under section 80G, would be pre-judging the issues before the grant of certificate.In insisting upon the society in changing or amending its bye-laws and in refusing toconsider the application on the ground that those bye-laws had not been changedconsider the application on the ground that those bye laws had not been changedso as to exclude the religious aspect from those bye-laws, the Commissioner hadclearly over-stepped his limits. New Life in Christ Evangelistic Association (NLC) v. CIT [2000] 111 Taxman 16 (Mad.) New Life in Christ Evangelistic Association (NLC) v. CIT [2000] 111 Taxman 16 (Mad.)

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Enquiry during registration Enquiry during registration

L i S 12A d t b t t l li i i tit ti

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Language in S. 12A does not bares, not even remotely, religious institutionto get itself registered u/s 12A CIT v. Shri Digamber Jain Mandir 2008 Tax LR 400 (Raj)J i i i li i t ll it f d th t th iti h Jainism is religion at all, it was found that some authorities havepropounded that Jainism is not a religion but a way of life. Further IfJainism was regarded as a religion, then the trust was not for a particularreligious community or caste.religious community or caste. Shri Chanda Charitable Trust v ITO [1995] 80 Taxman 300 (AHD.)(MAG.)

The Hindu society is neither a religious community nor a caste within themeaning of section 13(1)(b)meaning of section 13(1)(b) Bharatiya Utkarsha Mandal v. Inspecting Assistant Commissioner 12 Taxman 95

(NAG. - TRIB.) S. 12AA does not refers activities in India or outside India. Registration S. 12AA does not refers activities in India or outside India. Registration

cannot be denied for income applied outside India. M. K Nambyar Saarc Charitable Trust v. UOI 249 ITR 556 (Del.)

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Time limit Time limit

A li ti f i t ti t b di d f ithi 6 th f th

15

Application for registration must be disposed of within 6 months from theend of the month in which application was filed.

Non-consideration of application for registration within time fixed, wouldresult in deemed grant of registrationresult in deemed grant of registration. Society for the promotion of Education Adventure sport & Conservation of

Environment v CIT [2008] 171 Taxman 113 (All.) Wherever application is made the authorities must act within the time Wherever application is made, the authorities must act within the time-

frame. Failure on the part of the authority concerned to pass order withinthe statutorily laid down period of limitation will give rise to a presumptionthat registration, as applied for by the assessee, has been granted. This isthe natural and legal consequence of an action on the part of thedepartment not to have acted within the prescribed time-frame. The latchesand the lapse on the part of the department could not be to its advantage.

K t k G lf A i ti Di t f I t [2004] 91 ITD 1 (BANG ) Karnataka Golf Association v. Director of Income-tax [2004] 91 ITD 1 (BANG.)

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Effect of RegistrationEffect of Registration16

Registration is precondition for exemption. Registration did not ipso factomean that the assessee would be entitled to exemption u/s 11. However theassessee has a strong case for claiming exemption when registered. But,eligibility of exemption is required to seen by the AO at the time of makingthe assessment for a particular assessment year.

M. Visvesvaraya Industrial Research and Development Centre v. ITAT 251 ITR M. Visvesvaraya Industrial Research and Development Centre v. ITAT 251 ITR 852 (Bom.)

Registration under section 12A is a fait accompli to hold Assessing Officerb k f f th b i t bj t f t tback from further probe into objects of trust. ACIT v. Surat City Gymkhana [2008] 170 Taxman 612 (SC)

Registration of an institution is sufficient proof of it being established for Registration of an institution is sufficient proof of it being established for charitable purpose. Sonepat Hindu Educational and Charitable Society v. CIT [2005] 278 ITR 262

(P&H) (P&H)

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Effect of RegistrationEffect of Registration17

/ Once the organisation had been registered with the Commissioner u/s 12Aas charitable institution, the Assessing Officer could not treat theorganisation as non-charitable institution. The order of the AO refusing totreat the assessee as charitable was beyond his jurisdiction and also againstsection 118. Surat City Gymkhana v Assistant Commissioner of Income-tax 106 Taxman 114 Surat City Gymkhana v. Assistant Commissioner of Income tax 106 Taxman 114

(AHD.) (MAG.)

Scope of registration proceed and its cancellation are different from thedi A i ffi i i f i b d b hassessment proceedings. Assessing officer is prima facie bound by such

registration. Madhya Pradesh Madhyam v CIT [2002] 125 Taxman 382

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Registration u/s 80G(5)18

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Regulatory frameworkRegulatory framework19

S. 80G(2)(iv) S. S. 80G(5)( ) Rule 11AA F 10G Form 10G

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Eligibility for registrationEligibility for registration

S 80G(2)(i ) ll f d i tit ti f th i t ti / 80G(5)

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S.80G(2)(iv) allows any fund or institution for the registration u/s 80G(5).On registration donor is entitled for deduction on account of donation.

Registration is granted to the institution/ Trust established in India forCharitable purpose and fulfilling various conditionsCharitable purpose and fulfilling various conditions “Charitable purpose” does not include, any whole or substantially the whole of a

religious purpose. Exceptions- Application upto 5% of the total income is allowed for the religious purposes.Application upto 5% of the total income is allowed for the religious purposes.

Institution is set up either as a Public Charitable Trust or Registered under Societies Registration Act or Registered under Societies Registration Act or Company u/s 25 or University established by law or Ed ti i tit ti i d b G t U i it t bli h d b l Education institution recognised by Government or University established by law

or affiliated to University established by law Institution financed wholly or in part by the Government or local Authority

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ConditionsConditions

I t li bl t b i l d d i t t l i f th t t / 10(23AA)/

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Income not liable to be included in total income of the trust u/s 10(23AA)/ (23C),11, 12. Income trust/institution derives income from business condition about non-inclusion

of income u/s 11 would not applyof income u/s 11 would not apply Separate books of accounts for such business is maintained Donation received not directly or indirectly used for the purposes of business Institution issues certificate to donor confirm above 2 condition.

Constitution documents does not allows for transfer of income or assets forany purposes other than charitable purposes. Income of trust is given to the authors family members with a condition that such

part would be spent on a particular charitable object of the trust is not inviolation this condition. Geep Flashlight Industries Ltd. v. CIT [1978] Tax LR 490 (All.)

Post grant of donation to hospital if some are reserved for the donors Post grant of donation to hospital if some are reserved for the donorsemployees is not violative of provision. CIT v. Maharaja Shri Umed Mills [1984] 148 ITR 72 (Raj.)

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ConditionsConditions22

Institution / trust is not for the benefit of particular religious community or caste. Not application for institution created Scheduled Castes,

backward classes, Scheduled Tribes or of women and hildchildren

Institution / trust maintains regular accounts of its i d direceipts and expenditure.

Registration w.e.f. 1-10-2009 is valid till it is cancelled. Registration if granted earlier and valid as on 1-10-

2009 shall become perpetual and valid untill cancelled.

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The application for approval of any institution or fund u/s 80G(5)(vi) shall be made In Form No. 10G in triplicate. The application shall be accompanied bypp p y Copy of registration granted under section 12A (12AA) or

copy of notification issued under section 10(23) or 10(23C) ; Notes on activities of institution or fund since its inception or

during the last three years, whichever is less ; Copies of accounts of the institution or fund since its

inception or during the last three years, whichever is less.

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U A li ti th C i i ll f h f th d t Upon Application the Commissioner may call for such further documents orinformation from the institution or fund or cause such inquiries to be made as he maydeem necessary in order to satisfy himself about the genuineness of the activities ofsuch institution or fund.

Usually following additional information is called : Declaration

About non-violation of provisions of section 11, 12 and 13.C di i f i 80G(5) h b i fi d Condition of section 80G(5) have been satisfied.

Name & Address of Trustee. Copy of PAN of trust & all trustees. List of Donors of Rs Rs 10 000/ & above List of Donors of Rs. Rs.10,000/- & above. Declaration of no change in constitution & object of trust. Copy of certificate of registration of trust. Certified Copy of Trust deed duly registered under Bombay Public Trust Act, 1950. Certified Copy of Trust deed duly registered under Bombay Public Trust Act, 1950. Copy of acknowledgement for filing returns of last three years. Copy of financial statement along with the form 10B of last three years.

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Enquiry during registration Enquiry during registration 25

Th C i i i ti fi d th t ll th diti l id d i l The Commissioner is satisfied that all the conditions laid down in clauses(i) to (v) of sub-section (5) of section 80G are fulfilled by the institutionor fund, he shall record such satisfaction in writing and grant approvalto the institution or fund specifying the assessment year or years forto the institution or fund specifying the assessment year or years forwhich the approval is valid. However post amendment words specifying validity period has not been

deleted under rules. The authority granting approval cannot act as an AO. The inquiry of the

authority should be confined to finding out if institution satisfies prescribedcondition. Actual assessment of institution would not affect claim for specialded ction /s 80G CIT not j stified in ref sing renewal of appro al on thededuction u/s 80G. CIT not justified in refusing renewal of approval on theground that the income of the applicant trust was likely to be included in thetaxable income for not complying with the requirements of s. 11. N.N. Desai Charitable Trust v. CIT 246 ITR 452 (Guj)( j)

Making investment in violation of S.11(5) cannot be sole determinative factor for rejection of certificate u/s 80(5) Orpat Charitable Trust v CIT [2002] 256 ITR 690 (Guj)

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Grant of registration Grant of registration 26

I th C i i i ti fi d th t f th In case the Commissioner is satisfied that one or more of theconditions laid down in clauses (i) to (v) of sub-section (5) of section80G are not fulfilled, he shall reject the application for approval,after recording the reasons for such rejection in writing and afterafter recording the reasons for such rejection in writing and afterproviding to trust an opportunity of being heard.

The Commissioner shall pass an order either granting the approvalj ti th li ti withi i th f th d t for rejecting the application within six months from the date of

application. Any time taken by the applicant in not complying with the directions of

the Commissioner shall be excludedthe Commissioner shall be excluded. Application filed on 8-3-2001 Since detailed information not produced, enquiry was conducted providing

opportunity to petitioner on 16-7-2003opportunity to petitioner on 16 7 2003 On appreciation facts application was rejected on 4-8-2003 In view of R 11AA(3) order passed is not beyond 6 months.

Ref Banglore Education Trust v DIT [2004] 136 Taxman 423 (Kar.)

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g [ ] ( )

Few casesFew cases

O i t ti d ti 12A t d b fit t27

Once registration under section 12A was granted, benefit toassessee under section 80G could not be denied Hiralal Bhagwati v. CIT [2000] 246 ITR 188 (GUJ.)

Neither S. 80G(5) nor R. 11AA empowers the registration authoritiesto refuse registration only on the ground that the particulars ofdonors are not provided. Non providing the details of donors, AOd d k S 115BBC & S 13(7) Bduring assessment proceeding may evoke S. 115BBC & S. 13(7). Butthis is not relevant for deciding grant of registration unless there isother material to justify that the assessee is engaged in the activitieswhi h t h it bl d l fl d hwhich are not charitable and are only a camouflage and suchanonymous donations are a consequence of such uncharitableactivities / activities which are not genuine K l K ti CIT [2009] 314 ITR (AT) 295 (L k T ib ) Kalyanam Karoti v CIT [2009] 314 ITR (AT) 295 (Luck.-Trib.)

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Registration of Religious etc TrustsRegistration of Religious etc Trusts28

A id f th ti i f t l h h d Any sum paid for the renovation or repair of temple, church, mosque, gurdwara or any other place notified by the Central Government in the Official Gazette to be a place or historic, archaeological or artistic importance or a place of public worship of renown throughout any State or States will qualify for deduction from the total of renown throughout any State or States, will qualify for deduction from the total income of the donor to the extent of 50 per cent of the donations – S. 80G(2)(b) Donations made to ordinary religious entities are not eligible for any deduction under

section 80G of the Actsection 80G of the Act.

Registration for grant of deduction u/s 80G(2)(b) in the hands of donor is required to be made before DGIT(E)/CIT and he will recommend the applicant’s case with his

t t th CBDT f h tifi ticomments to the CBDT for such notification.

Applications on plain paper, in quadruplicate, stating name of the temple, mosque, gurdwara, church, or other place (as distinct from the name of the institution / trust

/undertaking renovation / repair work) with precise particulars to identify the name.

Copy of the trust deed or evidence of the instrument of creation of the trust, if any.

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Registration of Religious etc TrustsRegistration of Religious etc Trusts29

Th iti f th M i C itt f th i ti The composition of the Managing Committee of the organisationundertaking renovation / repair work.

Whether the permission of the State Government authorities has beenbt i d t t th ti / i kobtained to carry out the renovation / repair work.

The category in which the notification is to be recommended whether ofhistorical importance or archaeological importance or artistic importance ora place of public worship of renown throughout a State or States In case ita place of public worship of renown throughout a State or States. In case itfalls in more than one category, the same should specifically be mentioned.

In case recommendation is for the notification as building of historical,archaeological or artistic importance the supporting material preferablyarchaeological or artistic importance, the supporting material preferablywith some expert opinion should be furnished.

In case the recommendation is for notification as a place of public worshiprenowned throughout a State of States, the particular State or States mustrenowned throughout a State of States, the particular State or States mustbe specified and the material in support of the contention of importanceshould be furnished.

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Registration u/s 10(23C)30

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Regulatory framework – 10(23C)Regulatory framework 10(23C)31

S. 10(23C)(iv)/(v)/(vi)(via) Rule 2C, 2CA, Form 55, 56

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EligibilityEligibility32

/f f / First proviso to S. 10(23C) provided that institutions/funds specified u/s under S.10(23C)(iv)/(v)/(vi)/(via) are required to get themselves registered for grant of theexemption under the Act.

Specified Charitable trust/funds/institution are: Any charitable funds or institution approved having regards to objects and its importance

through out India or through out State or States - s. 10(23C)(iv)

Any trust (including legal obligation) institution wholly for public religious purposes or forpublic religious purposes and charitable purposes are approved having regards to themanner in which the affairs of the trust / institution are administered and supervised for

i i i li d f h bj 10(23C)( )ensuring income is applied for the objects. - s. 10(23C)(v)

Any university or other institution existing solely for education purposes and not forpurposes of profit are approved - s. 10(23C)(vi) (earlier exempted u/s 10(22))

Any hospital or other institution for the reception and treatment of persons suffering fromillness or mental defectiveness etc existing solely for philanthropic purposes and not for thepurposes of profit - s. 10(23C)(via) (earlier exempted u/s10(22A)

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Registration processRegistration process33

S d h h Second proviso authorises appropriate authority toapprove such institutions. Appropriate authority is Chief Commissioner or Director General Appropriate authority is Chief Commissioner or Director General For cases falling in the jursdiction of DIT(E), Mumbai, the

prescribed authority is CC-I For the cases other than specified jurisdiction shall be before the

Chief Commisioner or Director General to whom AO has ajurisdiction to assessjurisdiction to assess Notifcation No. SO 851(E) dt 30-5-07, as amended by SO 1668(E),

dt 14-7-2010 – Applicable for application u/s 10(23C)(iv)/(v) N tif ti N SO 852(E) dt 30 5 07 d d b SO 1666(E) Notifcation No. SO 852(E) dt 30-5-07, as amended by SO 1666(E),

dt 14-7-2010 – Applicable for application u/s 10(23C)(vi)/(via)

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Registration processRegistration process34

A li ti ld b d i Application would be made in Form No. 56 for approval of funds specified u/s 10(23C)(iv)/(v) Form No. 56D for approval of funds specified u/s 10(23C)(vi)/(via)

Application to made in quadruplicate along with followingdocuments: Deed of trust / memorandum or articles of association / other Deed of trust / memorandum or articles of association / other

documents evidencing legal status of the enterprise List of major office bearer including settlor/members of governing body A photo copy of latest certificate u/s 80G A photo copy of latest certificate u/s 80G True copy of assessment order passed for 3 years, if any. Photocopies of the communication with Commissioner with reference to

application of Trust for registration u/s 12Aapplication of Trust for registration u/s 12A

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Time limitTime limit35

A li ti f t f ti l ft 1 6 06 Application for grant of exemption or renewal on or after 1-6-06 shall be made on or before 30th September of the relevant assessment year.

14th i 10(23C) 14th proviso to 10(23C) Act nowhere provides any provisions for condonation of delay in

presenting application u/s 10(23C)(vi) for grant of exemption. In b f h l f l d b d absence of such a provision application filed beyond statutory

period cannot be accepted afted condoning the delay. Roland Educational & Charitable Trust v CCIT [2009] 309 ITR 50 (Ori.) Sant Baba Sunder Singh Canadian Charitable Trust v CBDT [2010] 195

Taxman 88 (P&H) Belated application should be considered on maerit. Since there is pp

no statitory bar preventing condonation Padmashree Krutarth Acharya Institute of Engineering & Technology v

CCIT [2009] 309 ITR 13 (Ori.)

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Enquiry before registration Enquiry before registration 36

Before approving appropriate authority would call for such documents or information or make inquiry to satisfy himself about genuineness of the activities of such institutions.

Approvals granted on or after 1-12-2006 shall be perpetual untill it is withdrawn. perpetual untill it is withdrawn. Cir No. 7/2010 dt. 27-10-2010.

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Conditions – Education institutes Conditions Education institutes 37

C diti d t f ili ti Conditions precedent for availing exemption: The education institution must actually exist and mere taking of steps would not

be sufficient. The educational institution need not be affiliated to any university or Board in The educational institution need not be affiliated to any university or Board, in

fact a society need not itself be imparting education and it is enough if it runs some school or colleges

The education institution must exist solely for educational purposes and not for purposes of profit. But merely because there is surplus, it cannot be said that the education institution exists for profit

If educational institution makes profit incidentally for example by publishing and selling text books and such profits are applied only for the spread of education selling text books and such profits are applied only for the spread of education, it is entitle to exemption. CIT v. Delhi Kannda Education Society [2000] 246 ITR 731 (Del.)

An educational institution running school/college solely for educational g / g ypurposes & not for profit can be regarded as ‘other educational’ institution u/s 10(22). Aditanar Educational Institution v ACIT [1997] 90 Taxman 528 (SC).

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Conditions – Education institutesConditions Education institutes38

T t b id d f ti / 11(1)( ) 2(15) b t d ti l Trust can be considered for exemption u/s 11(1)(a) r.w.s. 2(15), but educationalinstitution contemplated u/s 10(22) is a narrower concept. U/S. 11(1)(a) r.w.s. 2(15)activities are in focus where as s.10(22) both institution and the activities are infocus. Institution imparting formal education is accountable to some authority andh t l th t hhas control over the taugh. Saurashtra Education Foundation v CIT [2004] 141 Taxman 26 (Guj).

A society having primary object the mere financing of students to pursue their education cannot be treated as an educational institution for s 10(22A) such education cannot be treated as an educational institution for s. 10(22A) such institution can claim exemption u/s 11 only. Saraswathi Poor Students Fund [1984] 150 ITR 142 (Ker.)

It is not necessary that an education institution to be eligible for exemption u/s s o ecessa y a a educa o s u o o be e g b e o e e p o u/s 10(22) should be affiliated to any university or any Board. CIT v Academy o General Education [1984] 150 ITR 135 (Kar.)

If the institution exists solely for the purpose of education and it derives income fromany other source and if the income is used only for the purpose of education, then itwould come u/s 10(22) Brahmin Education Soc v ACIT [1996] 89 Taxman 434 (Ker.)

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Conditions – Education institutesConditions Education institutes39

A t l i t f th d ti l i tit ti ll d ti l ti iti Actual existence of the educational institution as well as some educational activitiesduring the previous year is a necessary pre-condition for the eligibility ofexemption. Mere taking steps for establishment of the educational institutions maynot be sufficient. CIT v. Devi Educational Institution [1985] 153 ITR 571 (Mad.)

Society ran educational institution and it was not for making profit, merely becauseobject of society was also to serve the church and nation, would not mean that theeducational institution was not existing solely for education purposeseducational institution was not existing solely for education purposes Ewing Christian College Society v CIT [2009] 318 ITR 160 (All.)

Besides traditional education assessee also providing guidelines to get admission inprofessional institution to pursue their higher studies, assessee was considered asp o ess o a s u o o pu sue e g e s ud es, assessee was co s de ed ascharitable institution which was engaged wholly for the purposes of education. City Montessori School (Regd) v UOI [2009] 315 ITR 48 (All.)

Amount received as capitation fees by educational institution is not exempt P S Govindaswamy Naidu & Sons v ACIT [2010] 324 ITR 44 (Mad.)

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Conditions – Hospital Conditions Hospital 40

M l b th i i th h it l i l Merely because the assesee is running the hospital on commerciallines and activities are not restricted to free treatment to poor andneedy, the assessee will not be dis-entitled to the exemption u/s10(22A) as along as dominant purpose of a philanthropic one10(22A), as along as dominant purpose of a philanthropic one. CIT v Pulikkal Medical Foundation (P.) Ltd. [1994] 210 ITR 299 (Ker.)

Philanthropy is not restricted to give free treatment only tol b ld l b h l hextremely poor, but it would also be philanthropy to give treatment

at a concessional rate to those who though not extremely poorcannot afford to pay full and normal charges. Breach Candy Hospital Trust v CIT [2010] 322 ITR 246 (Bom.)

In order to claim exemption it is not necessary that the patients mustbe admitted and treated as in-patients in hospitals or there must befacilities for such treatment. Mangilal Gotwawat Charitable Trust v ACIT [1984] 150 ITR 682 (Ker.)

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Let’s talk Let s talk 41

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Thank youThank you42

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registration of trust

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