INDIAN MEDICAL ASSOCIATION , NAGPUR V. CIT(EXEMPTION), PUNE

ITA 18/NAG/2020

AI Insights

The Indian Medical Association (IMA), an affiliate of the apex body representing medical practitioners in India, appealed against the decision of the Commissioner of Income Tax (Exemption), Pune, which had rejected their application for registration under section 12AA of the Income Tax Act, 1961. The rejection was primarily based on the non-disclosure of details regarding a Building Fund of Rs.37.25 lakhs during the financial year 2018-19, which the CIT(E) argued should have been declared as income under section 2(24)(iia) of the Act. The IMA contended that they had provided all necessary details and documents in response to the questionnaires issued by the CIT(E). The tribunal found that the CIT(E) had not adequately addressed the charitable nature of the IMA's activities or the objects of the trust, leading to the decision to set aside the CIT(E)'s order for a fresh examination.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 133433 (ITAT-NAGPUR)
• Duration Of Justice: 3 year(s) 7 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-09-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 30-08-2023
• Assessment Year: misc
• Appeal Filed On: 19-01-2020
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 12AA

Judgement Text

आयकर अपीलीय अिधकरण Ɋायपीठ नागपुर मŐ। IN THE INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH : : NAGPUR [VIRTUAL HEARING AT PUNE] BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND DR. DIPAK P. RIPOTE, ACCOUNTANT MEMBER आयकर अपील सं. / ITA No.18/NAG/2020 िनधाᭅरण वषᭅ / Assessment Year : - Indian Medical Association, IMA Building, Station Road, Bhandara, Maharashtra – 441904. PAN: AABTI 7140 N Vs The CIT Exemption, Pune. Appellant / Assessee Respondent / Revenue Assessee by None Revenue by Shri Kailash Kanojiya – Sr.DR Date of hearing 31/08/2023 Date of pronouncement 12/09/2023 आदेश/ ORDER PER DR. DIPAK P. RIPOTE, AM: This is an appeal filed by the Assessee against the order of ld.Commissioner of Income Tax(Exemption), Pune rejecting the assessee’s application for registration under section 12AA(1)(b)(ii) of the Income Tax Act, 1961 dated 30.11.2019. The assessee has raised the following grounds of appeal : “1. The order passed is without basis and is bad in law. ITA No.18/NAG/2020 Indian Medical Association [A] 2 2. The order of rejection of application is arbitrary, without justification and has been passed in haste. 3. The assessee has not been given sufficient opportunity to the furnish further details/documents once the learned authority was not fully satisfied with the documents/details already furnished by the assessee before passing the rejection order. 4. The observations in the order “Z am not satisfied about the charitable nature of objects as well as the genuineness of activities of the trust / institution and hence. the request for grant of registration u/s 12AA of the Income-tax Act, 1961 cannot be accented 9 ' (Point No.4 Page No. 2) are without any basis and clearly reflect the haste in which the order has been passed considering the fact that the assessee is a part of the renowned and reputed organisation “Indian Medical Association” which is the apex body representing the Medical Practitioners across the country and thus there cannot be a case of doubting the either the Nature of Objects or the Genuineness of Activities. Further, the fact that the basic objects, as set out in the Memorandum of Association of the applicant, clearly reflect the nature and purpose of its objects has been overlooked although the copy of the same was furnished. 4. The fact that the applicant is engaged purely in the field of welfare service to the society and is carrying out various projects of social needs the details and documents pertaining to which were duly furnished to the learned authority has been completely overlooked / not taken into consideration. Thus, the order of rejecting the application for grant of registration u/s 12AA of the Income Tax Act, 1961 is arbitrary and is devoid of any basis. 5. Any other ground shall be prayed at the time of hearing.” 2. None appeared for the assessee at the time of hearing. However, as per statement of facts enclosed by assessee along with appeal memo, the assessee’s submission is as under: “The assessee is a society/trust that is an affiliate of Indian Medical Association, the apex body of doctors in India. It is engaged in organizing various events / programs for the benefit of community ITA No.18/NAG/2020 Indian Medical Association [A] 3 as well as conducting workshops & seminars for the professional skill development of Doctors. It has its office at IMA Building, Station Road, Bhandara - 441 904. The assessee had applied for grant of registration u/s 12AA of the Income Tax Act, 1961 vide application in form 10A on 24/05/2019 vide Ackn. No. 481142430240519. A questionnaire was issued thereafter seeking certain documents/details. The assessee had filed a submission seeking time to furnish the required information/documents on 13/08/2019. Thereafter again a fresh questionnaire was issued on 02/11/2019 in response to which the assessee had duly filed all the required details/documents through its responses filed on 07/11/2019 and 08/11/2019. Later there was a change in the incumbent and hence a fresh notice was issued on 22/11/2019 intimating the change and asking to upload response on or before 25/11/2019. Since the assessee had already furnished all the required details/documents and since neither new details / documents were sought nor any shortfall in details/documents already furnished was pointed out hence, no further documents/details were uploaded. Thereafter, the application was summarily rejected even without providing any opportunity to the assessee to either furnish the required information/document/detail or to explain their position on the matter once the learned authority was not frilly satisfied with the documents/details already furnished by the applicant.” ITA No.18/NAG/2020 Indian Medical Association [A] 4 3. The ld.Departmental Representative(ld.DR) for the Revenue relied on the order of the ld.CIT(E). Findings & Analysis : 4. The ld.CIT(E) in the order under section 12AA of the Act dated 30.11.2019 has mentioned that assessee has shown Building Fund of Rs.37.25 lakhs during the F.Y.2018-19. However, no details were filed by the assessee. The ld.CIT(E) stated the such income of Rs.37.25 lakhs should have been offered by assessee as income under section 2(24)(iia) of the Act. Therefore, ld.CIT(E) concluded that assessee is not eligible for registration under section 12AA of the Act. 4.1 However, assessee has pleaded that assessee had filed all the details before the ld.CIT(E). However, ld.CIT(E) stated in the order that no details were filed about the Building Fund. Other than the issue of Building Fund, ld.CIT(E) has not discussed anything about the objects of the assessee Trust and activities carried out by the assessee. At the time of registration under section 12AA, ld.CIT(E) needs to verify object of the Trust and activities of the Trust. The ld.CIT(E) needs to verify whether objects and activities are charitable as defined under ITA No.18/NAG/2020 Indian Medical Association [A] 5 section 2(15) of the Act. However, in this case ld.CIT(E) has not bothered to discuss anything about the objects of the trust and activities of the Trust. In these facts and circumstances of the case, we set-aside the order of the ld.CIT(E) to ld.CIT(E) for denovo adjudication. The ld.CIT(E) shall provide opportunity to the assessee. Accordingly, grounds of appeal raised by the assessee are allowed for statistical purpose. 5. In the result, appeal of the assessee is allowed for statistical purpose. Order pronounced in the open Court on 12 th Sept. 2023. Sd/- Sd/- (S.S.GODARA) (DR. DIPAK P. RIPOTE) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / Pune; ᳰदनांक / Dated : 12 th September, 2023/ SGR* आदेश कᳱ ᮧितिलिपअᮕेिषत / Copy of the Order forwarded to : 1. अपीलाथᱮ / The Appellant. 2. ᮧ᭜यथᱮ / The Respondent. 3. The CIT(A), concerned. 4. The Pr. CIT, concerned. 5. िवभागीयᮧितिनिध, आयकर अपीलीय अिधकरण, नागपुर बᱶच, नागपुर/ DR, ITAT, Bench, Nagpur. 6. गाडᭅफ़ाइल / Guard File. आदेशानुसार / BY ORDER, // TRUE COPY // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे/ITAT, Pune.