Albert Einstien Society of Human Gametes, Hyderabad V. DIT(E), Hyderabad

ITA 1764/HYD/2012

• Counselvise Citation: 176422514 RSA 2012
• Duration Of Justice: 2 year(s) 8 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 29-07-2015
• Assessment Year: 2012-2013
• Appeal Filed On: 07-12-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D SRINIVASA
• Assessee Lawyers: A V RAGHURAM
• Keywords: Business income; Charitable institution; Corroborative evidences
• Section: 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO. 1764/HYD/2012 ASSESSMENT YEAR: 2012-13 ALBERT EINSTIEN SOCIETY OF HUMAN GAMETES, HYDERABAD. PAN AABAA5114B VS. DIRECTOR OF INCOME-TAX (EXEMPTION), HYDERABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI A.V. RAGHURAM REVENUE BY : SHRI D. SRINIVASA DATE OF HEARING : 29-07-2015 DATE OF PRONOUNCEMENT : 26-08-2015 O R D E R PER SAKTIJIT DEY, J.M.: THIS APPEAL BY ASSESSEE IS DIRECTED AGAINST THE OR DER DATED 27/09/2012 OF LD. DIT(E), HYDERABAD REJECTING ASSES SEES APPLICATION FOR GRANT OF REGISTRATION U/S 12AA OF THE ACT, FOR THE AY 2012-13. 2. BRIEFLY THE FACTS ARE, ASSESSEE IS A SOCIETY REG ISTERED UNDER THE A.P. SOCIETIES REGISTRATION ACT. CLAIMING ITSELF TO HAVE BEEN CREATED FOR CHARITABLE PURPOSE, ASSESSEE SUBMITTED AN APPLI CATION BEFORE LD. DIT(E), HYDERABAD, SEEKING REGISTRATION U/S 12AA OF THE ACT. AFTER RECEIVING ASSESSEES APPLICATION, LD. DIT(E) RAISED CERTAIN QUERIES IN HIS LETTER DATED 02/07/2012. HE ALSO CALLED UPON T HE SOCIETY TO PRODUCE BOOKS OF ACCOUNT, BILLS & VOUCHERS FOR VER IFICATION. IN RESPONSE TO THE QUERY RAISED BY LD. DIT(E), IT WAS SUBMITTED BY ASSESSEE SOCIETY VIDE LETTER DATED 17/07/2012 THAT ITS ACTIVITY IS MAINTENANCE OF SPERM AND EGG BANK AND COLLECTION OF SPERM AND EGGS 2 ITA NO. 1764 /HYD/2012 ALBERT EINSTIEN SOCIETY OF HUMAN GAMETES FROM ELIGIBLE DONORS, WHICH IS USED IN CASE OF CHIL DLESS COUPLES FOR REPRODUCTION. IT WAS SUBMITTED BY ASSESSEE THAT FO R THIS PURPOSE IT HAS A TIE UP WITH M/S DIANA MEDICAL SERVICES PVT. L TD. A RESEARCH INSTITUTE IN INFERTILITY. IT WAS SUBMITTED BY ASSES SEE SOCIETY, INFERTILITY IS ONE OF THE MEDICAL PROBLEMS AFFECTING MANKIND A S EVERY HUMAN BEING HAS A DREAM OF PRODUCING OFFSPRING. EXPLAINI NG THE DETAILS OF MAINTAINING A EGG AND SPERM BANK BY COLLECTING FROM DONORS, IT WAS SUBMITTED THAT INDIAN COUNCIL OF MEDICAL RESEARCH ( ICMR) HAS EVOLVED AND FRAMED CERTAIN GUIDELINES REGULATING TH E PROCEDURE OF EGG AND SPERM DONATION TOWARDS TREATMENT OF INFERTILITY OF CHILDLESS COUPLES. IT WAS SUBMITTED, THOUGH, PARLIAMENT HAS NOT ENACTED ANY LAW IN THIS REGARD, BUT, THE GUIDELINES PROVIDED BY ICMR REGULATES THE PROCEDURE. IT WAS SUBMITTED, TO SPREAD AWARENESS A MONGST PROSPECTIVE DONORS AND PUBLIC AT LARGE SO THAT THEY WILL COME FORWARD AND DONATE SPERM AND EGGS FOR UTILIZING IN TREATMEN T OF INFERTILITY OF CHILDLESS COUPLES, ASSESSEE IS PROVIDING YEOMEN SER VICES TO THE SOCIETY. IT WAS SUBMITTED THAT ASSESSEE IN CONNECTI ON WITH ITS ACTIVITIES WORKS IN CLOSE ASSOCIATION WITH DR. RAMA S INSTITUTE FOR FERTILITY FOR THE PURPOSE OF UTILIZING MEDICAL INFR ASTRUCTURE AVAILABLE THERE FOR TESTING AND STORING SPERMATOZOA AND OOCY TES. IT WAS SUBMITTED, FOR THIS PURPOSE ASSESSEE ALSO COMPENSAT E THE SAID INSTITUTE. IT WAS SUBMITTED THAT SPERM AND EGG STOR ED IN THE BANK BY ASSESSEE ARE ULTIMATELY USED BY M/S DIANA MEDICAL S ERVICES PVT. LTD. IN THE TREATMENT OF CHILDLESS COUPLES AS PER THEIR REQUIREMENT. IN THIS CONTEXT, ASSESSEE PLACED ON RECORD AN MOU ENTERED W ITH M/S DIANA MEDICAL SERVICES PVT. LTD. 3. LD. DIT(E) AFTER PERUSING MOU ENTERED BY ASSESSE E WITH M/S DIANA MEDICAL SERVICES PVT. LTD. FOUND THAT AS PER THE SAID MOU, ASSESSEE IS MAINTAINING A SEMEN BANK ESTABLISHED TO SCREEN AND IDENTIFY SPERM/EGG DONORS AND SURROGATES AND TO STO RE GAMETES WHEREAS M/S DIANA MEDICAL SERVICES PVT. LTD. IS A H OSPITAL WORKING ON INFERTILITY USING VARIOUS METHODS OF ASSISTED REPRO DUCTIVE 3 ITA NO. 1764 /HYD/2012 ALBERT EINSTIEN SOCIETY OF HUMAN GAMETES TECHNOLOGIES (ART). LD. DIT(E) OBSERVED THAT WHILE THE MOU IS SIGNED BY BOTH THE PARTIES, HOWEVER, UNDER THE WITN ESS COLUMN ONLY NAME OF ONE PRASANNA HAS BEEN MENTIONED, WITHOUT FURNISHING ADDRESS. HE, THEREFORE, OBSERVED THAT IN ABSENCE OF SIGNATURE OF TWO WITNESSES WITH THEIR COMPLETE ADDRESS, MOU CANNOT B E ACCEPTED AS A VALID DOCUMENT. FURTHER, ON ANALYZING THE AIMS AND OBJECTS OF THE SOCIETY AS MENTIONED IN PARA 3 OF MEMORANDUM OF ASS OCIATION, LD. DIT(E) OBSERVED, ACTIVITIES OF ASSESSEE DO NOT COME UNDER THE PURVIEW OF CHARITABLE PURPOSE AS DEFINED IN SECTION 2(15) OF THE ACT, HENCE, ASSESSEE CANNOT BE GRANTED REGISTRATION U/S 12AA OF THE ACT. FURTHER, IT WAS OBSERVED BY LD. DIT(E), THE ENTIRE GAMUT OF ACTIVITY OF COLLECTING SPERM, EGGS, ARRANGING FACILITY FOR SURR OGACY ETC., WHICH COME UNDER THE FIELD OF MEDICAL SERVICES ARE ACTUAL LY UNDERTAKEN SOLELY BY M/S DIANA MEDICAL SERVICES PVT. LTD. THE CONSIDERATION RECEIVED FROM SUCH ACTIVITIES, WHICH IS IN THE NATU RE OF COMMERCIAL RECEIPT IS, THEREFORE, LIABLE FOR TAXATION IN THE H ANDS OF HOSPITAL M/S DIANA MEDICAL SERVICES PVT. LTD. HE NOTED THAT SHRI P. SATYANARAYANA PRASAD, WHO IS THE PRESIDENT OF THE SOCIETY IS CLOS ELY RELATED TO DR. MRS. P. RAMA DEVI, MANAGING DIRECTOR OF M/S DIANA M EDICAL SERVICES PVT. LTD.. THUS, LD. DIT(E) CONCLUDED THAT ASSESSEE SOCIETY HAS BEEN CREATED ONLY ON PAPER WITH SOLE INTENTION OF DIVERT ING COMMERCIAL/BUSINESS RECEIPTS ARISING FROM THE ACTIV ITIES OF DONATION OF SPERM/EGGS AND TREATMENT OF INFERTILITY IN THE HAND S OF M/S DIANA MEDICAL SERVICES PVT. LTD. AND CLAIMING EXEMPTION F ROM TAX OF SUCH RECEIPTS IN THE HANDS OF ASSESSEE SOCIETY. HE WAS O F THE VIEW THAT AS THE ENTIRE MEDICAL INFRASTRUCTURE FOR CREATING SEME N BANK AND FOR STORAGE OF GAMETES ETC BELONGS TO THE HOSPITAL ALON G WITH ALL EQUIPMENTS USED FOR SUCH PURPOSE, ACTIVITY RELATING TO MAINTENANCE OF SPERM/EGG BANK BELONGS TO HOSPITAL, EXISTENCE OF A SSESSEE SOCIETY IS TOTALLY IRRELEVANT, THEREFORE, ASSESSEE SOCIETY CAN NOT BE GRANTED REGISTRATION U/S 12AA OF THE ACT. BEING AGGRIEVED OF THE AFORESAID ORDER, ASSESSEE IS BEFORE US. 4 ITA NO. 1764 /HYD/2012 ALBERT EINSTIEN SOCIETY OF HUMAN GAMETES 4. LD. AR INVITING OUR ATTENTION TO THE AIMS AND OB JECTS OF THE SOCIETY AS MENTIONED IN MOA SUBMITTED, THE OBJECTS OF THE SOCIETY WOULD CLEARLY SHOW THAT THEY ARE IN THE NATURE OF M EDICAL SERVICES, HENCE, COMES WITHIN THE DEFINITION OF CHARITABLE PU RPOSE AS PER SECTION 2(15) OF THE ACT. IT WAS SUBMITTED, CONSIDE RING THE SENSITIVE NATURE OF SUBJECT, UNLESS AN AWARENESS IS CRATED AM ONGST GENERAL PUBLIC, NO ONE WILL COME UP VOLUNTARILY FOR DONATIN G SPERM/EGG, WHICH IS ESSENTIAL REQUIREMENT FOR MAINTAINING A SPERM/EG G BANK. HE SUBMITTED, CONSIDERING THE INFERTILITY PROBLEM AMON GST COUPLES IN THE PRESENT AGE, MAINTENANCE OF A SPERM/EGG BANK IS VER Y MUCH ESSENTIAL TO TREAT INFERTILITY. THUS, IT WAS SUBMITTED, UNL ESS, THE DONORS ARE PERSUADED BY MAKING THEM AWARE OF THE NOBLE NATURE OF THE ACTIVITY, NOBODY WILL VOLUNTARILY COME FORWARD FOR DONATION O F SPERM/EGG. THUS, THE ACTIVITY UNDERTAKEN BY ASSESSEE FOR MAINTAINING SPERM/EGG BANK FOR FACILITATING TREATMENT OF INFERTILITY IS IN THE NATURE OF MEDICAL SERVICES. IT WAS SUBMITTED, ASSESSEE SOCIETY IS A N O PROFIT ORGANIZATION AND ONLY RECEIVES VOLUNTARY CONTRIBUTI ON TOWARDS CARRYING OUT ITS ACTIVITY. IT WAS SUBMITTED, AS ASSESSEE HAS NOT INDULGED IN THE ACTIVITY OF MAINTAINING SPERM/EGG BANK WITH PROFIT MOTIVE, IT IS A CHARITABLE INSTITUTION. LD. AR SUBMITTED, ALLEGATIO N OF LD. DIT(E) THAT THE ENTIRE ACTIVITY IS BEING CARRIED ON BY M/S DIAN A MEDICAL SERVICES PVT. LTD. IS ON THE BASIS OF PRESUMPTION AND SURMI SES AND HAS NO TRUTH. IT WAS SUBMITTED, SINCE ASSESSEE DOES NOT HA VE FUND TO INVEST IN INFRASTRUCTURE LIKE MEDICAL EQUIPMENTS FOR TESTI NG, STORAGE, ETC. IT IS UTILIZING FACILITIES OF HOSPITAL FOR WHICH HOSPITAL IS ALSO COMPENSATED. LD. AR SUBMITTED, THE ACTIVITY OF ASSESSEE IS AIMED AT CREATING AWARENESS AMONGST GENERAL PUBLIC (DONORS FOR DONATI NG SPERM/EGG) FOR MAINTAINING THE SPERM/EGG BANK, WHICH IS SUPPLI ED TO THE HOSPITAL AS PER THEIR REQUIREMENT FOR TREATMENT OF INFERTILI TY OF CHILDLESS COUPLES STRICTLY IN TERMS WITH REGULATION FRAMED BY ICMR. L D. AR REFERRING TO THE MOU ENTERED WITH M/S DIANA MEDICAL SERVICES PVT . LTD., SUBMITTED, FOR PROVIDING REQUIRED SPERM/EGG FOR TRE ATMENT OF INFERTILITY, HOSPITAL PROVIDES OPERATIONAL GRANT TO ASSESSEE SOC IETY AND ASSESSEE 5 ITA NO. 1764 /HYD/2012 ALBERT EINSTIEN SOCIETY OF HUMAN GAMETES SOCIETY, IN TURN, INCURS VARIOUS EXPENDITURE LIKE PAYMENT TO DONORS, TESTING CHARGES, PAYMENT OF SALARY ETC, WHICH IS RE QUIRED FOR MAINTAINING SPERM/EGG BANK. LD. AR SUBMITTED, APART FROM OPERATIONAL GRANT RECEIVED FROM HOSPITAL, ASSESSEE SOCIETY ALSO RECEIVES VOLUNTARY CONTRIBUTIONS FROM PERSONS WHO H AVE BEEN TREATED FOR INFERTILITY, UTILIZING OF SPERM/EGG FROM ASSES SEES BANK. LD. AR SUBMITTED, IF AT ALL, THERE IS INCOME FROM ASSESSEE S ACTIVITY, THE SAME HAS ALSO BEEN UTILIZED FOR THE OBJECTS FOR WHICH AS SESSEE SOCIETY IS CREATED. AS FAR AS ALLEGATION OF LD. DIT(E) THAT TH E ENTIRE INCOME RELATING TO ACTIVITY OF COLLECTION OF SPERM/EGG AND UTILIZATION IN INFERTILITY TREATMENT BELONGS TO THE HOSPITAL, LD. AR SUBMITTED, SUCH ALLEGATION IS WITHOUT ANY BASIS AS HOSPITAL DOES N OT GET ANY ADVANTAGE BY DIVERTING A PART OF ITS RECEIPTS TO A SSESSEE SOCIETY. LD. AR SUBMITTED, RED CROSS SOCIETY, WHICH IS ALSO ENGA GED IN SIMILAR KIND OF MAINTAINING BLOOD BANK HAS ALSO BEEN GRANTE D REGISTRATION U/S 12AA OF THE ACT. THUS, IT WAS SUBMITTED, ASSESSEE B EING ELIGIBLE FOR REGISTRATION U/S 12AA, NECESSARY DIRECTION MAY BE I SSUED TO LD. DIT(E). 5. LD. DR, ON THE OTHER HAND, SUBMITTED BEFORE US, ARTIFICIAL REPRODUCTION TECHNOLOGY HAS BECOME A VERY THRIVING AND LUCRATIVE BUSINESS IN THE MODERN AGE. HE SUBMITTED, CHILDLESS COUPLES ARE SPENDING A FORTUNE FOR UNDERTAKING TREATMENT FOR RE MOVING INFERTILITY. IT WAS SUBMITTED, ASSESSEE IS NOTHING BUT A NAME LENDE R FOR THE HOSPITAL M/S DIANA MEDICAL SERVICES PVT. LTD., WHICH IS MAIN TAINING ALL FACILITIES/INFRASTRUCTURE INCLUDING THE SPERM/EGG B ANK BY COLLECTING, TESTING, AND STORING OF SPERM/EGG FROM DONORS. IT U TILIZES THE SAME IN THE INFERTILITY TREATMENT UNDERTAKEN IN THE HOSPITA L ON CHILDLESS COUPLES. THUS, IT WAS SUBMITTED, THOUGH, THE ENTIRE ACTIVITY IS BEING CARRIED ON BY HOSPITAL A PART OF INCOME HAS BEEN DI VERTED BY CREATING ASSESSEE SOCIETY. LD. DR SUBMITTED, THIS IS ONLY A COLORABLE DEVICE ADOPTED BY HOSPITAL TO CLAIM EXEMPTION AT THE HANDS OF SOCIETY. IN THIS CONTEXT, HE REFERRED TO THE DECISION OF HONBLE SUP REME COURT IN CASE 6 ITA NO. 1764 /HYD/2012 ALBERT EINSTIEN SOCIETY OF HUMAN GAMETES OF MCDOWELL AND CO. LTD., [1985] 154 ITR 148. LD. DR SUBMITTED, EVEN OTHERWISE ALSO, ACTIVITIES OF ASSESSEE BEING O F PURELY COMMERCIAL NATURE, CANNOT BE CONSIDERED TO BE A CHA RITABLE ACTIVITY. IN THIS CONTEXT, HE RELIED UPON THE DECISION OF HON BLE KARNATAKA HIGH COURT IN CASE OF CIT VS. P. KRISHNA, 84 ITR 119 AND THE DECISION OF THE HONBLE SUPREME COURT IN CASE OF INDIAN CHAMBER OF COMMERCE VS. CIT, 101 ITR 796. THUS, IT WAS SUBMITTED BY LD. DR, ASSESSEE NOT BEING A CHARITABLE INSTITUTION, ITS APPLICATION FOR GRANT OF REGISTRATION U/S 12AA HAS BEEN RIGHTLY REJECTED. 6. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PARTIE S AND PERUSED THE MATERIALS ON RECORD. ON A CAREFUL READING OF TH E IMPUGNED ORDER OF LD. DIT(E), IT IS VERY MUCH CLEAR THAT HE HAS RE FUSED TO GRANT REGISTRATION U/S 12AA OF THE ACT TO ASSESSEE BASICA LLY FOR THE FOLLOWING TWO REASONS: 1. OBJECTS OF ASSESSEE DO NOT COME UNDER THE PURVI EW OF CHARITABLE PURPOSE AS DEFINED U/S 2(15) OF THE ACT . 2. THE ENTIRE ACTIVITY OF COLLECTING SPERM/EGG, A RRANGING FACILITY FOR SURROGACY, ETC, WHICH IS IN THE NATURE OF MEDI CAL SERVICES ARE ACTUALLY UNDERTAKEN BY M/S DIANA MEDICAL SERVICES PVT. LTD. AND ASSESSEE HAS BEEN CREATED ONLY ON PAPER. AS FAR AS THE FIRST REASONING OF LD. DIT(E) IS CONC ERNED, HE HAS NOT ASCRIBED ANY REASONS WHY HE CONSIDERS OBJECTS OF T HE SOCIETY DO NOT COME WITHIN THE PURVIEW OF CHARITABLE PURPOSE AS DE FINED U/S 2(15). WHEN LD. DIT(E) ACCEPTS THAT COLLECTING SPERM/EGG A ND STORAGE OF THE SAME COMES WITHIN THE TERM MEDICAL SERVICES, THEN, THE OBJECTS OF THE ASSESSEE SOCIETY CLEARLY PROVIDE FOR SUCH SERVICES. HENCE, WE ARE UNABLE TO UNDERSTAND ON WHAT BASIS LD. DIT(E) HOLDS ASSESSEES OBJECTS AS NOT FOR CHARITABLE PURPOSE. ON A REFEREN CE TO OBJECTS OF ASSESSEE SOCIETY AS MENTIONED IN MOA, IT IS VERY MU CH EVIDENT THAT THE ACTIVITY OF ASSESSEE INVOLVES CREATING AWARENES S AMONGST PEOPLE FOR GAMETE DONATION TO NEEDY CHILDLESS PERSONS AND IT ALSO PROVIDES 7 ITA NO. 1764 /HYD/2012 ALBERT EINSTIEN SOCIETY OF HUMAN GAMETES FOR SETTING UP FACILITY FOR COUNSELING GAMETE DONOR S AND TECHNICAL SET UP FOR RECEIVING GAMETE DONATION WITHIN LEGAL FRAM E WORK. THEREFORE, IT APPEARS THAT ASSESSEES ACTIVITIES COME WITHIN T HE PURVIEW OF MEDICAL SERVICES AS DEFINED U/S 2(15). EVEN OTHER WISE ALSO, THE VERY FACT THAT ASSESSEE CREATES AWARENESS AMONGST PUBLIC FOR DONATION OF SPERM/EGG, WHICH CAN BE UTILIZED FOR CURING INFERTI LITY IN CHILDLESS PERSONS ITSELF IS AN ACTIVITY TOWARDS ADVANCEMENT O F OBJECT OF GENERAL PUBLIC UTILITY, HENCE, COMES WITHIN THE PURVIEW OF CHARITABLE PURPOSE AS DEFINED U/S 2(15) OF THE ACT. AS FAR AS OTHER AL LEGATION OF LD. DIT(E) THAT ENTIRE ACTIVITY OF COLLECTION OF SPERM/EGG AND STORAGE OF THE SAME AS WELL AS UTILIZATION IN INFERTILITY TREATMENT IS SOLELY UNDERTAKEN BY M/S DIANA MEDICAL SERVICES PVT. LTD. AND ASSESSEE I S ONLY A NAME LENDER, WE HAVE TO OBSERVE THAT LD. DIT(E)S CONCLU SION APPEARS TO BE MORE ON PRESUMPTION AND SURMISES RATHER THAN ON EVI DENCES BROUGHT ON RECORD. ONLY BECAUSE, THE PRESIDENT OF THE SOCIE TY IS RELATED TO THE MANAGING DIRECTOR OF THE HOSPITAL OR SOME FACILITIE S OF HOSPITAL WERE USED BY SOCIETY FOR STORAGE AND TESTING OF GAMETE I T CANNOT BE SAID THAT ASSESSEE IS A MERE NAME LENDER OR HAS BEEN CRE ATED IN PAPER ONLY. UNLESS CORROBORATIVE EVIDENCES ARE BROUGHT ON RECORD TO ESTABLISH THAT THE ENTIRE ACTIVITY OF BRINGING DONO RS, COLLECTING SPERM/EGG, STORAGE ETC., HAS BEEN SOLELY UNDERTAKEN BY HOSPITAL, ASSESSEES ROLE CANNOT BE IGNORED. THEREFORE, WITHO UT MAKING ANY ENQUIRY TO FIND OUT THE EXACT NATURE OF ACTIVITY OF ASSESSEE AND THE HOSPITAL, IT CANNOT BE PRESUMED THAT THE ENTIRE ACT IVITY OF COLLECTION OF SPERM/EGG AND UTILIZATION IN TREATMENT OF INFERTILE COUPLES IS THE ACTIVITY OF HOSPITAL. FOR THE AFORESAID REASONS, WE ARE UNABLE TO APPROVE THE DECISION OF LD. DIT(E) IN REFUSING TO G RANT REGISTRATION U/S 12AA OF THE ACT TO ASSESSEE. IT IS SETTLED POSITION OF LAW, AT THE TIME OF GRANTING REGISTRATION THE REGISTERING AUTHORITY HAS TO SATISFY HIMSELF THAT AIMS AND OBJECTS OF THE TRUST/INSTITUTION ARE OF CHARITABLE NATURE AND ITS ACTIVITIES ARE GENUINE. AS FAR AS THE FIRST CONDITION IS CONCERNED, THERE CANNOT BE ANY DOUBT THAT AIMS AND OBJECTS OF ASSESSEE SOCIETY ARE OF CHARITABLE NATURE. THEREFOR E, THE ONLY OTHER 8 ITA NO. 1764 /HYD/2012 ALBERT EINSTIEN SOCIETY OF HUMAN GAMETES CONDITION WHICH IS REQUIRED TO BE SATISFIED IS GENU INENESS OF ITS ACTIVITIES. IN THIS CONTEXT, WE NEED TO OBSERVE, TH E SOCIETY ON ITS PART IS ALSO REQUIRED TO EXPLAIN IN DETAIL ITS ACTIVITIE S OF CREATING AWARENESS AMONGST GENERAL PUBLIC TO COME FORWARD FOR DONATION OF SPERM/EGG, ETC. FOR CREATING AND MAINTAINING A SPERM/EGG BANK. ON PERUSAL OF INCOME AND EXPENDITURE STATEMENT OF ASSESSEE AS WEL L AS OTHER MATERIALS, IT IS NOT VISIBLE HOW ASSESSEE HAS CREAT ED AWARENESS AMONGST GENERAL PUBLIC WHETHER BY HOLDING SEMINARS, WORKSHOPS ETC. OR THROUGH ANY OTHER MODE, FOR COLLECTING SPERM/EGG FROM DONORS. ASSESSEE HAS ALSO TO EXPLAIN HOW IT MAINTAINS THE S PERM/EGG BANK, SINCE, ACCORDING TO ITS OWN ADMISSION IT DOES NOT H AVE INFRASTRUCTURE FACILITY FOR STORAGE GAMETES. THAT BEING THE CASE, ASSESSEE HAS TO BRING ON RECORD THE TERMS AND CONDITIONS ON WHICH IT HAS UTILIZED THE FACILITIES OF A THIRD PARTY AND THE CONSIDERATION P AID FOR SUCH UTILIZATION. SIMILARLY, THOUGH, LD. AR SUBMITTED BE FORE US, THE AMOUNT COLLECTED FROM CHILDLESS COUPLES, WHO UNDERGO TREAT MENT FOR INFERTILITY ARE ONLY VOLUNTARY CONTRIBUTION BUT HE HAS NOT FURN ISHED DETAILS AS TO HOW MANY PATIENTS HAVE RECEIVED SPERM/EGG AND WHAT IS THE CONTRIBUTION MADE BY EACH PATIENT. THIS IS VERY MUC H ESSENTIAL TO PROVE THE FACT THAT ASSESSEE IS NOT UNDERTAKING ANY COMMERCIAL ACTIVITY OF TRADING IN SPERM/EGG, AND IT IS A NO PR OFIT ORGANISATION. FURTHER, NATURE AND PURPOSE OF OPERATIONAL GRANT RE CEIVED BY ASSESSEE FROM HOSPITAL ALSO NEEDS TO BE EXPLAINED C LEARLY BECAUSE THE MOU BETWEEN THE ASSESSEE AND THE HOSPITAL PROVI DES FOR PAYMENT OF CONSIDERATION TO ASSESSEE AT MUTUALLY AGREED RAT E FOR UTILIZATION OF ITEMS TAKEN FROM THE BANK. ALL THESE FACTS HAVE TO BE BROUGHT ON RECORD BY THE SOCIETY TO DISPEL THE DOUBTS ENTERTAI NED BY LD. DIT(E) THAT ENTIRE ACTIVITY RELATING TO COLLECTION AND STO RAGE OF GAMETES AND UTILIZATION IN TREATMENT OF INFERTILITY IS CARRIED ON BY THE HOSPITAL AND THE ACTIVITY IS OF A PURELY COMMERCIAL NATURE. SIN CE ALL THESE ASPECTS HAVE NOT AT ALL BEEN EXAMINED BY LD. DIT(E) WHILE R EJECTING ASSESSEES APPLICATION FOR GRANT OF REGISTRATION U/ S 12AA OF THE ACT, WE ARE OF THE CONSIDERED VIEW THAT MATTER REQUIRES RE-EXAMINATION BY 9 ITA NO. 1764 /HYD/2012 ALBERT EINSTIEN SOCIETY OF HUMAN GAMETES LD. DIT(E). THAT BEING THE CASE, WE ARE INCLINED TO SET ASIDE THE IMPUGNED ORDER OF LD. DIT(E) AND REMIT THE MATTER B ACK TO HIM FOR DECIDING AFRESH AFTER DUE OPPORTUNITY OF BEING HEAR D TO ASSESSEE SOCIETY TO EXPLAIN ITS CASE. 7. IN THE RESULT, APPEAL OF ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 26 TH AUGUST, 2015. SD/- SD/- (P.M. JAGTAP) (SAKTIJIT DEY) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED: 26 TH AUGUST, 2015 KV COPY TO:- 1) ALBERT EINSTIEN SOCIETY FOR HUMAN GAMETES, C/O M /S MAHESH, VIRENDER & SRIRAM, CAS., 6-3-788/36 & 37A, AMEER PET, HYD. 2) DIT(E), HYDERABAD 3) ADIT(E), HYDERABAD 4) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDE RABAD.