Pamphlets and Photos of Charity Camps Insufficient to Establish Charity: ITAT Denies S.80G Approval, Holds Trust’s Hospital Runs Commercially [Read Order]
The assessee relied on printed pamphlets and photographs of free health check-up camps and there was no supporting evidence such as patient records, data on the number of beneficiaries, or details of free treatment provided, noted the court.
Charity Camps - Establish Charity - ITAT - taxscan
Charity Camps - Establish Charity - ITAT - taxscan
The Income Tax Appellate Tribunal ( ITAT ), Chandigarh Bench, has dismissed the appeal of an assessee trust seeking approval under Section 80G(5)(iii) of the Income Tax Act, 1961, holding that the hospital run by the trust functions on a commercial basis rather than as a charitable institution.
The Tribunal observed that mere pamphlets and photographs of health camps are not adequate evidence to demonstrate charitable activities.
The assessee, Smt. Vimal Chawla Charitable Trust had challenged the order dated 13.12.2024 passed by the Commissioner of Income Tax (Exemption), rejecting its application for 80G approval.
The assessee claimed that it was engaged in charitable medical services through its hospital named “NIMS.” However, the CIT(E) found that the hospital was being operated commercially, generating consistent surpluses, and was not engaged in any identifiable charitable activities.
On appeal, the tribunal noted that the assessee’s financial statements for FYs 2021-22 to 2023-24 revealed a surplus of more than 13% in each year, with negligible donations. The bench, specifically noted no donations were received in FYs 2021-22 and 2022-23, while only a nominal sum of ₹8 lakhs was received in FY 2023-24. Furthermore, the financials disclosed no expenditure incurred on charitable activities.
The bench of Laliet Kumar (JM) and Manoj Kumar Agarwal (AM) said that while the assessee relied on printed pamphlets and photographs of free health check-up camps, there was no supporting evidence such as patient records, data on the number of beneficiaries, or details of free treatment provided. Such documents, the Tribunal held, “hardly inspire confidence” to establish the existence of genuine charitable activities.
Accordingly, the appellate tribunal upheld the CIT(E)’s conclusion that the hospital was being run with a profit motive and that the assessee failed to demonstrate its eligibility for approval under Section 80G. Consequently, the assessee’s application for 80G benefits was rejected.
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