Society for the Study of Liver Diseases, Chandigarh V. CIT (Exemptions), Chandigarh

ITA 1104/CHANDI/2016

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 8355 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 5 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-04-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Next Hearing Date: 18-02-2019
• Assessment Year: misc
• Appeal Filed On: 27-10-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Charitable institution; Set aside
• Section: 12A; 12AA

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, B, CHANDIGARH , ! '# $ % & '# , () BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ./ ITA NO. 1104/CHD/2016 U/S 12AA (1)(B)(II) SOCIETY FOR THE STUDY OF LIVER DISEASES, 323, SECSTOR 21A, CHANDIGARH THE COMMISSIONER OF INCOME TAX (EXEMPTIONS), CR BUILDING, 5 TH FLOOR, SECTOR 17-E, CHANDIGARH ./PAN NO: AAOTS8979E / APPELLANT /RESPONDENT /ASSESSEE BY : SH. A.K. SOOD, CA / REVENUE BY : SMT. MANA MOHANTY, CIT DR ! ' # /DATE OF HEARING : 18.02.2019 $%&'() # / DATE OF PRONOUNCEMENT : 08.04 .2019 (*/ ORDER PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY APPELLANT- SOCIETY AGITATING THE ACTION OF THE COMMISSIONER OF INCOME TAX (EXEMP TIONS), CHANDIGARH [HEREINAFTER REFERRED TO AS CIT(E)] IN REJECTING T HE APPLICATION OF THE SOCIETY SEEKING REGISTRATION U/S 12A OF THE INCOME -TAX ACT, 1961 (IN SHORT 'THE ACT'). 2. THE BRIEF FACTS OF THE CASE ARE THAT THE APPELLA NT-SOCIETY IS REGISTERED WITH THE REGISTRAR OF FIRMS AND SOCIETIES VIDE NO. 4433 OF 2014. THE SOCIETY IS OPERATIONAL SINCE YEAR 2014. AS PER THE MEMORANDUM OF ASSOCIATION, THE AIMS AND OBJECTS OF THE SOCIETY AR E AS UNDER:- ITA NO. 1104/CHD/2016- SOCIETY FOR THE STUDY OF LIVER DISEASES, CHANDIGAR H 2 I) TO HELP IN THE TREATMENT OF PATIENTS WITH LIVER DISEASE. II) TO PROMOTE, EDUCATE AND SPREAD KNOWLEDGE OF LIV ER DISEASE. III) TO CONDUCT SURVEYS ON LIVER PROBLEMS. IV) TO HOLD CONFERENCES, SYMPOSIA, SEMINARS, WORKS HOPS ETC. TO DISSEMINATE KNOWLEDGE ON THE SUBJECT OF LIV ER DISEASE. V) TO HELP IN THE TREATMENT OF NEED POOR PATIENTS SUFFERING FROM LIVER DISEASES. VI) TO ACCEPT DONATIONS, GRANTS, LOANS FROM INTERE STED PERSONS, WELFARE ORGANIZATIONS, BANKS OTHER CHARITA BLE SOCIETIES, TRUSTS ETC. AND FROM STATE AND CENTRAL GOVERNMENTS AND OTHER NATIONAL AND INTERNATIONAL INSTITUTIONS / BODIES SUBJECT TO THE RULES AND REGU LATIONS OF THE GOVERNMENT AND OTHER AUTHORITIES, TO INVEST THE FUNDS OF THE SOCIETY WITH SUCH INDIVIDUALS, SOCIETI ES, FIRMS OR COMPANIES FOR PROVIDING INCOME TO THE SOCI ETY, ON SUCH TERMS AND CONDITIONS AS MAY DEEM PROPER AN D NECESSARY FOR THE FULFILLMENT OF THE AIMS AND OBJEC TS OF THE SOCIETY AND TO FURTHER ITS INTEREST AS ENUMERAT ED ABOVE. VII) TO PUBLISH SCIENTIFIC PAPERS, JOURNALS, MONOG RAPHS AND TEXT BOOKS AIMED AT UPGRADING KNOWLEDGE AND SKI LL. VIII) TO SEEK AFFILIATION WITH NATIONAL AND INTERNA TIONAL ASSOCIATIONS AND SOCIETIES OR SEMINAL BODIES TO ACH IEVE THE OBJECTIVES OF THE SOCIETY. IX) TO PURCHASE THE LAND AND / OR THE BUILDING AND / OR VEHICLE IN THE NAME OF THE SOCIETY FOR THE UPLIFTME NT AND FULFILLMENT OF THE AIMS AND OBJECTS OF THE SOCIETY. 3. THE SOCIETY APPLIED TO THE LD. CIT(E) FOR GRANT OF REG ISTRATION U/S 12A OF THE I.T. ACT PLEADING THAT THE OBJECTS AS WE LL AS THE ACTIVITIES OF THE ASSESSEE SOCIETY FALLS UNDER THE DEFINITION OF CHA RITABLE PURPOSES AS ITA NO. 1104/CHD/2016- SOCIETY FOR THE STUDY OF LIVER DISEASES, CHANDIGAR H 3 DEFINED IN SECTION 2(15) OF THE ACT. HOWEVER, LD. C IT(E) REJECTED THE APPLICATION OF THE APPELLANT SOCIETY OBSERVING THAT THE SOCIETY MAINLY WAS ENGAGED IN HOLDING OF CONFERENCES AND THAT MAJOR PA RT OF THE EXPENDITURE WAS INCURRED ON CONFERENCE EXPENSES WHICH INCLUDED PAYMENTS MADE TO THE HOTELS AND CATERING SERVICES ETC. HE FURTHER OBSER VED THAT THERE WAS NO EVIDENCE OF ANY FINANCIAL CONTRIBUTION BY THE MEMBE RS OF THE SOCIETY THAT COULD HAVE GONE TO PROVE THEIR ALTRUISTIC INTENT, I F AT ALL. FURTHER, THAT THE MAJOR DONORS OF THE FUNDS WERE PHARMACEUTICAL COMPA NIES. THE LD. CIT(E), THEREFORE, OBSERVED THAT THOUGH THE SOCIE TY CLAIMED THAT ITS ACTIVITIES INCLUDE MEDICAL RELIEF AS WELL AS OTHER ACTIVITIES OF GENERAL PUBLIC UTILITY, HOWEVER, THE PREDOMINANT FOCUS, WAS RESTR ICTED TO HOLDING OF CONFERENCES, WHICH WAS NOT COVERED BY THE DEFINIT ION OF CHARITABLE PURPOSES AS DEFINED IN SECTION 2(15) OF THE ACT. HE THEREFORE, REJECTED THE APPLICATION OF THE SOCIE TY SEEKING REGISTRATION U/S 12A OF THE I.T. ACT. 4. BEING AGGRIEVED BY THE ABOVE ORDER OF THE LD. CI T(E), THE APPELLANT SOCIETY HAS PREFERRED APPEAL BEFORE THIS TRIBUNAL. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND HAVE ALS O GONE THROUGH THE RECORDS. A PERUSAL OF THE NAME AS WELL AS OF THE OB JECTS OF THE APPELLANT SOCIETY REVEALS THAT ITS MAIN OBJECT IS NOT ONLY TO HOLD TREATMENT OF PATIENTS WITH LIVER DISEASES BUT ALSO TO DISSEMINATE AND SPR EAD THE KNOWLEDGE TO THE TREATING DOCTORS, EXPERTS IN RELATION TO THE ADVANC EMENTS IN TREATMENT OF LIVER DISEASES. ITA NO. 1104/CHD/2016- SOCIETY FOR THE STUDY OF LIVER DISEASES, CHANDIGAR H 4 6. AT THE TIME OF REGISTRATION U/S 12A OF THE ACT, WHAT IS TO BE SEEN IS THE NATURE OF THE AIMS AND OBJECTS OF THE SOCIETY AND GENUINENESS OF THE ACTIVITIES OF SUCH TRUST OR SOCIETY, IF SUCH TRUST / INSTITUTION OR SOCIETY HAS ALREADY COMMENCED ITS OPERATIONS. THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT SOCIETY HAS BEEN FOUNDED IN THE YEAR 2014 BY TEAM OF DOCTORS CONCERNED ABOUT THE INCREASING INCIDENCE OF LIVER DISEASE IN THE COUNTRY. THAT IT IS A NON-PROFIT ORGANIZATION TO PR OVIDE SUPPORT FOR RESEARCH AND EDUCATION INTO THE CAUSES, DIAGNOSIS, PREVENTIO N AND TREATMENT OF LIVER DISEASES. ITS OBJECTIVE IS TO WORK TOGETHER FOR TH E TREATMENT OF PATIENTS OF LIVER DISEASE AND TO PROMOTE EDUCATION TO SPREAD KN OWLEDGE ABOUT THE LIVER DISEASE. AS DEFINED U/S 2(15) OF THE I.T. ACT, CHA RITABLE PURPOSES INTER ALIA INCLUDE RELIEF TO THE POOR, EDUCATION, MEDICAL RELI EF ETC. AND EVEN ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC U TILITY. A PERUSAL OF THE AIMS AND OBJECTS OF SOCIETY REVEALS THAT THE SAME F ALL IN THE DEFINITION OF CHARITABLE PURPOSES AS DEFINED U/S 2(15) OF THE A CT. 7. THE LD. COUNSEL FOR THE ASSESSEE HAS FURTHER SUB MITTED THAT TO ACHIEVE ITS AIMS AND OBJECTS, THE APPELLANT SOCIETY HAS CARRIED OUT VARIOUS ACTIVITIES WHICH NOT ONLY INCLUDE HOLDING OF CONFER ENCES, SYMPOSIA, SEMINAR, WORKSHOPS ETC. OF MEDICAL EXPERTS TO SHAR E THE KNOWLEDGE IN THE MEDICAL FIELD FOR UPDATION AND TREATMENT WITH LATES T DEVELOPMENT OF THE PATIENTS WITH LIVER DISEASE AMONGST PHYSICIANS, GAS TROENTEROLOGISTS, HEPATOLOGISTS AND OTHER SPECIALTIES DEALING WITH P ATIENTS WITH LIVER DISEASE. FURTHER THAT THE SOCIETY, IN PURSUANCE TO ACHIEVE ITS OBJECTS, HAS UNDERTAKEN COMMUNITY SERVICE PROGRAM KNOWN AS ECHO (EXTENSION FOR COMMUNITY HEALTHCARE OUTCOMES) WHICH IS A PROJECT U NDERTAKEN BY ITA NO. 1104/CHD/2016- SOCIETY FOR THE STUDY OF LIVER DISEASES, CHANDIGAR H 5 PGIMER (POST GRADUATE INSTITUTE OF MEDICAL EDUCATIO N & RESEARCH), CHANDIGARH IN COLLABORATION WITH THE ECHO INSTITUTE AT THE UNIVERSITY OF NEW MEXICO HEALTH SCIENCE CENTRE (UNMHSC) TO DEVELO P THE CAPACITY TO SAFELY AND EFFECTIVELY TREAT CHRONIC, COMMON AND CO MPLEX DISEASES IN RURAL AND UNDERSERVED AREAS, AND TO MONITOR OUTCOME OF TH IS TREATMENT AND WHEREBY NECESSARY PROGRAMME AND SCHEDULE INCLUDING ORIENTATION TO INDIVIDUAL AND ORGANIZATIONS ARE TO BE PROVIDED BY ECHO INSTITUTE AT UNMHSC. THAT PROJECT IS BEING IMPLEMENTED BY PGIME R WITH THE AID AND UNDER THE AEGIS TO THE APPELLANT SOCIETY FOR WHICH THE APPELLANT SOCIETY HAS UNDERTAKEN THE ACTIVITY TO EDUCATE MEDICAL OFFICERS OF PRISONS OF PUNJAB SO THAT THEY CAN TREAT THE PRISONERS SUFFERING WITH HE PATITIS C AND OTHER LIVER DISEASES. THE SOCIETY HAS ALSO DONE SCREENING OF HC V AND HBV IN PUNJAB PRISONS. THE SOCIETY HAS BEEN HOLDING VIDEO CONFERE NCES WITH THE MEDICAL OFFICERS IN THE PRISONS OF PUNJAB EVERY 2 - 3 WEEKS FOR THE LAST FOUR YEARS. THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT HOLDING OF CONFERENCE OF MEDICAL EXPERTS AND WITH OTHER STAKE HOLDERS IS PART OF THE AIMS AND OBJECTS FOR DISSEMINATION OF KNOWLEDGE, RESEARCH AN D UPDATION ABOUT THE SPREAD OF TREATMENT OF LIVER DISEASE. HE HAS FURTHE R POINTED OUT THAT THE OBSERVATION OF THE LD. CIT(E) THAT THE SOCIETY IS S OLELY ENGAGED IN HOLDING CONFERENCES WAS WRONG. THE SOCIETY AS MENTIONED ABO VE HAS ALSO ASSISTING IN IMPLEMENTING THE ECHO PROJECT. HE IN THIS RESPEC T HAS PLACED RELIANCE ON THE LITERATURE OF ECHO PROJECT AS WELL AS PHOTOG RAPHS OF VIDEO CONFERENCING DONE BY THE ASSESSEE SOCIETY WITH THE MEDICAL OFFICERS OF THE PRISONS OF PUNJAB AND HARYANA. FURTHER THAT THE ASS ESSEE SOCIETY HAS DISTRIBUTED FREE OF COST THE TEST KITS FOR DIAGNOSI S OF HCV AND HBV IN PUNJAB PRISONS. THE COPIES OF THE BALANCE SHEETS AS WELL AS DETAILED ITA NO. 1104/CHD/2016- SOCIETY FOR THE STUDY OF LIVER DISEASES, CHANDIGAR H 6 INVOICES HAVE ALSO BEEN ATTACHED IN THE PAPER BOOK. FURTHER, FROM THE PERUSAL OF THE DOCUMENTS PLACED ON THE FILE REVEAL THAT NONE OF THE MEMBERS OF THE APPELLANT SOCIETY IS RECEIVING SALAR Y AND THAT PROPER DOCUMENTATION REGARDING THE INCOME & DONATIONS RECE IVED AND EXPENDITURE INCURRED IS MAINTAINED. THE LD. CIT(E) HAS NOT DISPUTED IN THE IMPUGNED ORD ER AS TO THE NATURE OF THE AIMS AND OBJECTS OF THE SOCIETY WHIC H ARE COVERED UNDER THE DEFINITION OF CHARITABLE PURPOSES AS DEFINED U/S 2( 15) OF THE INCOME TAX ACT. FURTHER AS DISCUSSED ABOVE, IT CANNOT BE SAID THAT THE APPELLANT SOCIETY IS NOT DOING THE ACTIVITIES IN PURSUANCE OF ITS MAI N OBJECTS OR THAT THE AIMS AND OBJECTS OF THE SOCIETY ARE NOT GENUINE. THE LD. COUNSEL FOR THE ASSESSEE HAS ALSO PLACED RELIANCE ON THE DECISION O F THE TRIBUNAL DATED 28.1.2015 IN ITA NO. 779/CHD/2014, IN THE CASE OF P EDIATRIC PULMONOLOGY PROGRAMME TRUST, CHANDIGARH VS. CIT-1, CHANDIGARH, WHEREIN, IN SOMEWHAT SIMILAR CIRCUMSTANCES, THE TRIBUNAL HAS A LLOWED THE RELIEF TO THE SAID SOCIETY DIRECTING THE LD. CIT (E) TO GRANT REG ISTRATION U/S 12AA OF THE ACT 8. IN VIEW OF OUR ABOVE DISCUSSION MADE AND ALSO CO NSIDERING THE DECISION OF THE COORDINATE BENCH OF TRIBUNAL PASSED VIDE ORDER DATED 28.1.2015 (SUPRA), WE DO NOT FIND ANY JUSTIFICATION ON THE PART OF THE LD. CIT (E) FOR REJECTING THE APPLICATION OF THE APPEL LANT SOCIETY FOR REGISTRATION U/S 12A OF THE ACT. THE ORDER OF TH E LD. CIT(E) IS, THEREFORE, SET ASIDE AND THE LD. CIT(E) IS DIRECTE D TO GRANT REGISTRATION TO THE APPELLANT SOCIETY U/S 12A / 12AA OF THE I.T. AC T WITHIN ONE MONTH OF DATE OF RECEIPT OF COPY OF THIS ORDER. ITA NO. 1104/CHD/2016- SOCIETY FOR THE STUDY OF LIVER DISEASES, CHANDIGAR H 7 THE APPEAL OF THE APPELLANT SOCIETY IS HEREBY ALLOW ED. ORDER PRONOUNCED IN THE OPEN COURT ON 08.04.2019. SD/- SD/- ( $ % & '# / ANNAPURNA GUPTA) () / ACCOUNTANT MEMBER ( / SANJAY GARG) / JUDICIAL MEMBER DATED : 08.04.2019 .. %+ ,- .-( / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ! / / CIT 4. ! / ( )/ THE CIT(A) 5. - 0 1 2 , # 2) , 34516 / DR, ITAT, CHANDIGARH 6. 1 5 7 ' / GUARD FILE %+ ! / BY ORDER, 8 / ASSISTANT REGISTRAR