- Vide Decision of Supreme Court Of India in Commissioner of Income-tax (Exemptions) v. Paramount Charity Trust
Facts of the case:
- The assessee, a registered public trust, had applied for and was granted registration under Section 12A of the Income-tax Act, 1961. Initially, the object of the Trust had eleven clauses which inter alia included education purpose; research; relief to poor; medical aid in form of donations to the hospitals, dispensaries, convalescent homes, asylums, nursing homes and other public institutes for administering medical relief to the poor and to organize relief works in normal times as well as during natural catastrophes. The trust deed authorize the trustees to amend the objects as long as the same were for public charitable purpose.
- The trust deed was amended so as to include providing all kinds of medical, diagnostic, family welfare and general health facilities and treatment to the patients, in the field of allopathy, Homeopathy or Ayurved, without any distinction of castes, creed, race, religion or language basis, either on free of charge or no profit basis. Yet another object added was to buy, acquire, hire, take on lease, import medical or diagnostic machineries and equipments to run a hospital, dispensary, maternity home, etc. It was provided that such diagnostic
treatment center would be providing service either on free of charge or no profit basis. - The Commissioner was of the opinion that insertion of these clauses were not informed to him and they mutilated the charitable objects of the trust. On such basis, he passed an order cancelling the registration.
- Contending that the existing clauses already enable the trust to open diagnostic center and that therefore, there was no deviation from the charitable objects, the Assessee appealed to the Income Tax Appellate Tribunal.
- The Tribunal reversed the contention of the Commissioner. The Tribunal was of the opinion that non-communication of the amendment in the trust deed was a mere irregularity and would not be a ground for cancellation of registration already granted. The Tribunal did not agree with the Commissioner that running of a diagnostic center was a commercial venture.
- On appeal by the Revenue to the High Court, High Court upheld the Order of the Tribunal.
- The instant case is as a result of SLP filed by Revenue against High Court’s ruling.
Judgement: The Honorable Supreme Court of India held that the objects in original trust deed were sufficiently wide and covered range of charitable activities relatable to education, medical aid and help to poor in times of calamities and thus, existing objects enabled assessee to support activities of diagnostic center as long as it was done for charitable purpose. Amended objects clarified that such center would run on no profit basis. As the appeal of Revenue is without merit, the Special Leave Petition filed against impugned order was dismissed by the Supreme Court.