CONFEDERATION OF PHARMA DEALERS ASSOCIATION, RAIPUR V. COMMISSIONER OF INCOME TAX, EXEMPTION, BHOPAL

ITA 219/RPR/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 2790 (ITAT-RAIPUR)
• Duration Of Justice: 1 year(s) 11 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-10-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2019-2020
• Appeal Filed On: 25-11-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R K SINGH
• Keywords: Charitable institution; Set aside
• Section: 12AA; 73; 13; 12; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH, RAIPUR BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SHRI PAWAN SINGH, JUDICIAL MEMBER ./ I.T.A. NO. 219/RPR/2019) CONFEDERATION OF PHARMA DEALERS ASSOCIATION 11. G. E. ROAD, BAJRANG MARKET, RAIPUR (C.G.) - 492001 / VS. THE COMMISSIONER OF INCOME TAX (EXEMPTION) ROOM NO. 201, II FLOOR, INCOME TAX OFFICE, II, III & IV FLOORS, METRO WALK BUILDING, E-5, ARERA COLONY, BITTAN MARKET, BHOPAL 462016 (M.P.) ./ ./PAN/GIR NO. : AAABC1140R ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI VEEKAAS S SHARMA, C.A. / RESPONDENT BY : SHRI R. K. SINGH, CIT.-D.R. / DATE OF HEARING 11/08/2021 !'# / DATE OF PRONOUNCEMENT 27/10/2021 / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF I NCOME TAX(EXEMPTION), BHOPAL (CIT(E) IN SHORT), DATED 2 7.09.2019 PASSED UNDER S. 12AA(1)(B)(II) OF THE INCOME TAX AC T, 1961 (THE ACT). ITA NO. 219/RPR/2019 (CONFEDERATION OF PHARMA DEALERS ASSOCIATION VS. CIT(E) - 2 - 2. AS PER THE GROUNDS OF APPEAL, THE ASSESSEE HAS E SSENTIALLY CHALLENGED THE DENIAL OF REGISTRATION UNDER S.12AA OF THE ACT ON THE GROUND THAT ACTIVITIES UNDERTAKEN BY THE ASSESSEE D O NOT FALL WITHIN THE DEFINITION OF SECTION 2(15) OF THE ACT. 3. BRIEFLY STATED, THE ASSESSEE IS A TRADE ASSOCIAT ION MEANT FOR PROMOTING THE BUSINESS OF PHARMA DEALERS AND PROTEC TING THE RIGHTS AND INTEREST OF ITS MEMBERS WHO ARE ENGAGED IN PHAR MA BUSINESS. THE OBJECT CLAUSE AS CONTAINED IN THE MEMORANDUM/BY E LAWS OF THE ASSESSEE SOCIETY ARE NOTED HEREUNDER: (1) TO PROTECT THE RIGHTS AND INTERESTS OF DRUG D EALER MEMBERS, MAKE THEM AWARE OF THEIR DUTIES ARID MAKE A COMPLETE AND EFFECTIVE ORGANIZATION FOR THEIR ALL ROUND DEVELOPMENT. (2) TO CONSTRUCT COMPLEX RELATED TO PHARMACEUTICAL BUSINESS AND SOLVE ALL THE PROBLEMS RELATED TO PHARMACEUTICAL BU SINESS FROM TIME TO TIME. (3) TO PROMOTE AND SPREAD THE SPIRIT OF BROTHERHOO D, FRATERNITY, PATRIOTISM, TRUE SELF-RESPECT AND PUBLIC SERVICE AM ONG DRUG DEALERS MEMBERS. (4) TO DEVELOP PHYSICAL, MENTAL, LITERARY, SOCIAL, CULTURAL STATUS OF DRUG DEALER MEMBERS AND ORGANIZE SEMINARS AND WORKS HOPS RELATED FOR PHARMACEUTICALS BUSINESS FOR INCREASING KNOWLEDGE OF MEMBERS. (5) TO GET THE LAWS DETRIMENTAL TO THE INTEREST OF DRUG DEALER MEMBERS AMENDED, MAKE THE NEW LAWS THAT ARE NECESSA RY AND ADMINISTER THE IMPLEMENTATION OF THESE LAWS. (6) TO ABSTAIN FROM INITIATING THE MOVEMENT NOR SANCTIONING IT TILL THE LEGAL REMEDIES FOR RESOLVING EACH BUSINESS RELA TED PROBLEM ARE EXHAUSTED, DECISION TO BE TAKEN BY GOVERNING BO DY BASED ON MAJORITY IF DEEMED NECESSARY. (7) TO INCULCATE THE SPIRIT OF WORKING FOR PUBLIC INTEREST WITH HONESTY, DEDICATION AND ENTHUSIASM AMONGST THE DRUG DEALERS MEMBERS. (8) TO PUBLISH REGULAR NEWSLETTERS AND PUBLICATIO NS FOR SPREADING INFORMATION AND 'KNOWLEDGE AMONG DRUG DEALERS AND M AKE THEM AWARE. (9) TO CONDUCT ELECTIONS IN THE PRESENCE OF SUPER VISOR AND PRESENT THE DETAILS OF INCOME AND EXPENDITURE IN THE SPECIF IED TIME PERIOD. ITA NO. 219/RPR/2019 (CONFEDERATION OF PHARMA DEALERS ASSOCIATION VS. CIT(E) - 3 - (10) TO ACHIEVE THE AFORESAID OBJECTIONS ONLY LAW ABIDING, TRUTH AND NON-VIOLENCE MEANS AND PRINCIPLES SHALL BE ADOPTED AND FOLLOWED. 4. THE ASSESSEE SOCIETY CLAIMS TO BE ENGAGED IN THE CHARITABLE ACTIVITIES FALLING WITHIN THE AMBIT OF EXPRESSION THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY AS CONT AINED UNDER S. 2(15) OF THE ACT. BASED ON THIS PREMISE, THE ASSES SEE FILED APPLICATION ON 30.03.2019 ELECTRONICALLY BEFORE THE CIT(E) SEEKING REGISTRATION OF THE SOCIETY UNDER S. 12AA OF THE AC T TO ENABLE IT TO AVAIL THE BENEFITS OF SECTION 11 & SECTION 12 OF TH E ACT. AFTER RAISING QUERIES ON THE APPLICATION, THE CIT(E) PASS ED THE IMPUGNED ORDER UNDER S.12AA(1)(B)(II) OF THE ACT DATED 27.09 .2019 AND REJECTED THE APPLICATION OF THE ASSESSEE FOR REGIST RATION UNDER S.12AA OF THE ACT. 5. AGGRIEVED, THE ASSESSEE PREFERRED APPEAL BEFORE THE TRIBUNAL. THE LEARNED COUNSEL FOR THE ASSESSEE REFERRED TO TH E APPLICATION FORM, THE OBJECT CLAUSE ETC. AND SUBMITTED THAT THE CIT(E) HAS MISAPPLIED THE LAW IN THE FACTS OF THE CASE WHILE D ENYING THE REGISTRATION. IT WAS SUBMITTED THAT FOR DENIAL OF R EGISTRATION, THE CIT(E) HAS MAINLY OBSERVED THAT: (A) THE ASSESSEE IS A MUTUAL CONCERN AND THE BENEFI TS OF THE ASSESSEE SOCIETY ARE LIMITED TO ITS MEMBERS AND THU S IT IS A MUTUAL CONCERN OPERATING ON THE PRINCIPLES OF MUTUA LITY, AS SUCH, THE BENEFIT IS NOT MEANT FOR PUBLIC AT LARGE. (B) THE ASSESSEE SOCIETY HAS DEVELOPED THE MARKET P LACE AFTER PURCHASING THE LAND IN ITS NAME AND THE LAND SO PUR CHASED HAS BEEN LEASED OUT TO ITS MEMBERS. THE CONTRIBUTI ON FROM THE MEMBERS IS JUST LIKE DONATION AND THE MEMBERS H AVE DERIVED THE BENEFIT FROM DONATION BY WAY OF LAND/DE VELOPED PLOTS LEASED OUT TO THE MEMBERS. (C) FOR DENIAL OF EXEMPTION, THE CIT(E) HAS ALSO OB SERVED THAT THE ASSESSEE SOCIETY PURCHASED THE LAND OUT OF THE CONTRIBUTIONS MADE BY THE MEMBERS, HOWEVER, IN RECIPROCATION OF THE CONTRIBUTION, THE ASSESSEE GAV E THE LAND ITA NO. 219/RPR/2019 (CONFEDERATION OF PHARMA DEALERS ASSOCIATION VS. CIT(E) - 4 - AFTER DEVELOPMENT OF MARKET AND DEVELOPMENT OF PLOT S TO ITS MEMBERS, AND, CONSEQUENTLY, THE LAND IS NOT APPEARI NG IN THE BALANCE SHEET. 6. IN DEFENSE, THE LEARNED COUNSEL FOR THE ASSESSEE POINTED OUT THAT AS REGARDS DISCLOSURE OF LAND IN THE BALANCE S HEET, THE AUDITOR HAS GIVEN THE OBSERVATIONS IN HIS AUDIT REPORT AT P AGE NO.29 OF THE PAPER BOOK. THE ASSESSEE SOCIETY HAD PURCHASED LAN D OUT OF CONTRIBUTION PAID BY THE MEMBERS, RIGHT FROM THE BE GINNING, THE MEMBERS MADE CONTRIBUTIONS ESSENTIALLY FOR ALLOTMEN T OF DEVELOPED PLOTS AND THUS THE CONTRIBUTION WAS NOT WITHOUT CON SIDERATION OR AN ACT OF PHILANTHROPY. IT WAS THUS CONTENDED THAT TH E CIT(E) MISINTERPRETED THE FACTS AND DID NOT APPRECIATE THE DISTINCTION BETWEEN THE CONTRIBUTION AND DONATION INASMUCH AS THE MEMBERS NEVER INTENDED TO GIVE DONATION WHICH WOULD MEAN PA RTING MONEY WITHOUT CONSIDERATION. IT WAS FURTHER SUBMITTED TH AT THERE IS NO DISPUTE OVER THE FACT THAT THE ASSESSEE SOCIETY HAD PURCHASED THE LAND FOR DEVELOPING THE MARKET PLACE OUT OF THE CON TRIBUTION OF THE MEMBERS. ALSO THERE IS NO DISPUTE OVER THE FACT TH AT THE ASSESSEE PURCHASED THE LAND IN ITS OWN NAME VIDE THE REGISTE RED PURCHASED DEED. FURTHER, THERE IS NO DISPUTE OVER THE FACT T HAT THE ASSESSEE HAD DEVELOPED THE MARKET PLACE FOR ITS MEMBERS ENGAGED IN PHARMA BUSINESS. IT IS FURTHER AN UNDISPUTED FACT THAT DE VELOPED PLOTS WERE ALLOTTED TO ITS MEMBERS IN PROPORTION TO THEIR CONT RIBUTIONS BY WAY OF LEASE AGREEMENT FOR 99 YEARS. LEARNED COUNSEL A LSO POINTED OUT THAT THE LAND PURCHASED HAS BEEN DULY RECORDED IN T HE REGULAR BOOKS OF ACCOUNTS AND ALL THE EXPENSES INCURRED ON DEVELO PMENT OF LAND HAVE ALSO BEEN ACCOUNTED FOR IN THE BOOKS OF ACCOUN TS AND DISCLOSED IN THE BALANCE SHEET. THE STATUTORY APPROVALS AND CLEARANCE WERE OBTAINED BY THE ASSESSEE SOCIETY FOR DEVELOPMENT OF THE MARKET PLACE. ITA NO. 219/RPR/2019 (CONFEDERATION OF PHARMA DEALERS ASSOCIATION VS. CIT(E) - 5 - 6.1 IN THIS FACTUAL BACKDROP, THE LEARNED COUNSEL P OINTED OUT THAT THE EXPRESSION PUBLIC EMPLOYED IN SECTION 2(15) O F THE ACT INCLUDES SECTION OF PUBLIC AND THUS THERE IS NO I MPEDIMENT FOR REGISTRATION MERELY ON THE GROUND THAT THE TRUST IS MEANT FOR THE ADVANCEMENT OF PHARMA DEALERS. REFERENCE IN THIS R EGARD WAS MADE TO THE FOLLOWING DECISIONS: I. DIT VS. BHARAT DIAMOND BOURSE (2003) 259 ITR 028 0 (SC) II. ADDL. CIT VS. SURAT ART SILK CLOTH MANUFACTURER S ASSOCIATION (1980) 121 ITR 1 (SC) III. AHMEDABAD RANA CASTE ASSOCIATION VS. CIT (1971 ) 82 ITR 704 (SC) IV. CIT VS. ANDHRA CHAMBER OF COMMERCE (1965) 55 IT R 722 (SC) V. CIT VS. FEDERATION OF INDIAN CHAMBERS OF COMMERC E AND INDUSTRY (1981) 130 ITR 186 (SC) VI. ALL INDIA RUBBER INDUSTRIES ASSOCIATION VS. ADD L.CIT & ORS. (2018) 173 ITD 615 (MUMBAI-TRIB.) VII. CEO CLUBS INDIA VS. DIT (EXEMPTION) (2012) 32 CCH 0405 (MUMBAI-TRIB.) VIII. AGRICULTURAL PRODUCE & MARKET COMMITTEE, TELH ARA & ORS. VS. CIT (2005) 24 CCH (MUMBAI) 0350 (NAGPUR-TRIB.) IX. CIT VS. CHHATTISGARH UROLOGY SOCIETY (2018) 303 CTR 299 (CG) 6.2 THE LEARNED COUNSEL NEXT SUBMITTED THAT THE ASS ESSEE SOCIETY AS PER ITS MAIN OBJECTS AND OTHER OBJECTS INTER ALIA SEEKS TO PROMOTE PATRIOTISM , FEELINGS OF BROTHERHOOD, LOVE TOWARDS NATION AND AT TITUDE OF PUBLIC SERVICE ON THE PRINCIPLE OF CHARITY AMONG ST ITS MEMBERS FOR THEIR ALL ROUND DEVELOPMENT AND GROWTH IN EVERY SPHERE OF LIFE AND IN ORDER TO ACHIEVE ITS OBJECT. THE ASSESSEE S OCIETY ORGANIZES SEMINAR/ WORKSHOP TO ACHIEVE SUCH SACRED PURPOSES. THE LEARNED COUNSEL ADVERTED OUR ATTENTION TO ONE OF SUCH SEMIN ARS CONDUCTED BY THE INCOME TAX OFFICIALS FOR CREATING AWARENESS AMO NGST MEMBERS ABOUT THEIR STATUTORY DUTIES UNDER THE PROVISIONS O F ACT IN PARTICULAR AND DUTIES TOWARDS THE NATION IN GENERAL AND ROLE O F INCOME TAX IN NATION BUILDING. 6.3 OTHER LINE OF ARGUMENTS RAISED ON BEHALF OF THE ASSESSEE ARE LISTED HEREUNDER: ITA NO. 219/RPR/2019 (CONFEDERATION OF PHARMA DEALERS ASSOCIATION VS. CIT(E) - 6 - (A) THE OBJECT OF THE ASSESSEE SOCIETY INCLUDES ITS AIM TO INCULCATE THE SPIRIT OF WORKING FOR PUBLIC INTEREST WITH HONESTY, DEDICATION AND ENTHUSIASM AMONG DRUG DEALER MEMBERS. TO ACHIEVE S UCH OBJECT, THE ASSESSEE SOCIETY ORGANIZES DONATION CAMP ALSO. THE ASSESSEE SOCIETY STRIVES TO PROVIDE HYGIENIC AND HEALTHY INF RASTRUCTURE TO ENABLE MEMBERS TO CARRY ON TRADE IN ORGANIZED MANNE R UNDER WELL- DEVELOPED INFRASTRUCTURE. (B) THE ACTIVITIES OF ASSESSEE SOCIETY FALL WITHIN THE FOURTH LIMB OF SECTION 2(15) OF THE ACT I.E. THE ADVANCEMENT OF A NY OTHER OBJECT OF GENERAL PUBLIC UTILITY WHICH CARRIES A VERY WID E CONNOTATION. (C) THE AREA OF OPERATION OF THE ASSESSEE SOCIETY E XTENDS TO THE WHOLE STATE OF CHHATTISGARH AS CAN BE SEEN FROM MEMORANDU M OF ASSOCIATION OF THE ASSESSEE SOCIETY. (D) THE ASSESSEE IS ESSENTIALLY A TRADE ASSOCIATION FORMED WITH THE OBJECT OF PROTECTING THE RIGHTS AND INTEREST OF MEM BERS ENGAGED IN THE PHARMA BUSINESS. THE SIMILARLY PLACED TRADE AS SOCIATION WITH LIKE OBJECTS HAVE BEEN HELD TO BE ELIGIBLE FOR REGI STRATION UNDER S.12AA OF THE ACT ON THE GROUND THAT THEIR OBJECTS WERE FOUND TO BE FALLING WITHIN THE EXPRESSION ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY AS EMPLOYED IN SECTION 2(15) OF THE ACT. (E) A REFERENCE WAS MADE TO THE DECISION OF SURAT B ENCH IN ACIT VS. GUJARAT HIRA BOURSE DATED 22.06.2021, WHEREIN THE FINANCE MINISTERS SPEECH IN PARLIAMENT WAS QUOTED WITH REF ERENCE FOURTH LIMB TO THE SAID PROVISO TO SECTION 2(15) OF THE AC T. THE FINANCE MINISTER IN THE SAID SPEECH STATED THAT THE CHAMBER S OF COMMERCE AND SIMILAR ORGANIZATIONS RENDERING SERVICES TO THE IR MEMBERS WOULD NOT BE AFFECTED BY THE AMENDMENT AND THEIR AC TIVITIES WOULD CONTINUE TO BE REGARDED AS THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY. (F) CBDT CIRCULAR NO.11 OF 2008 DATED 19 TH DECEMBER, 2008 EXPLAINED THE AMENDMENT TO SECTION 2(15) OF THE ACT . AS PER THE CIRCULAR, WHERE THE INDUSTRIES OR TRADE ASSOCIATION S CLAIM BOTH TO BE CHARITABLE INSTITUTIONS AS WELL AS MUTUAL ORGANI ZATIONS AND THEIR ACTIVITIES ARE RESTRICTED TO CONTRIBUTIONS FROM AND PARTICIPATION OF ONLY THEIR MEMBERS, THIS WOULD NOT FALL UNDER THE P URVIEW OF PROVISO TO SECTION 2(15) OF THE ACT OWING TO THE PR INCIPLES OF MUTUALITY. HOWEVER, IF SUCH ORGANIZATIONS HAVE DEA LINGS WITH NON- MEMBERS, THEIR CLAIM TO BE CHARGEABLE ORGANIZATIONS WOULD NOW BE GOVERNED BY THE ADDITIONAL CONDITIONS STIPULATED IN THE PROVISO TO SECTION 2(15) OF THE ACT. THE CBDT CIRCULAR HAS AL SO OBSERVED THAT WHETHER THE OBJECT OF THE ASSESSEE FALLS WITHI N THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC U TILITY IS A QUESTION OF FACT AND THEREFORE, EACH CASE HAS TO BE DECIDED ON ITS OWN FACTS AND NO GENERALIZATION IS POSSIBLE. ITA NO. 219/RPR/2019 (CONFEDERATION OF PHARMA DEALERS ASSOCIATION VS. CIT(E) - 7 - (G) THE MUTUAL CONCERN OPERATING ON THE PRINCIPLES OF MUTUALITY IS NOT DEBARRED FROM CLAIMING EXEMPTION U/S.11 & 12 OF THE ACT BY VIRTUE OF REGISTRATION U/S.12AA OF THE ACT. THE DECISION OF THE CO- ORDINATE BENCH IN ALL INDIA RUBBER INDUSTRIES ASSOCIATION VS. ADD.CIT & ORS. (2018) 173 ITD 615 (MUMBAI-TRIBUNAL) WAS REFERRED TO AND RELIED UPON IN THIS REGARD. 6.4 THE LEARNED COUNSEL FURTHER CONTENDED THAT SIMI LARLY PLACED TRADE ASSOCIATIONS HAVE BEEN HELD TO BE ELIGIBLE FO R REGISTRATION UNDER S.12AA OF THE ACT: I. ADDL.CIT VS. SURAT ART SILK CLOTH MANUFACTURERS ASSOCIATION (1980) 121 ITR 1 (SC) II. CIT VS. GUJARAT MARITIME BOARD (2007) 295 ITR 5 61 (SC) III. CIT VS. ANDHRA CHAMBER OF COMMERCE (1965) 55 I TR 722 (SC) IV. CIT VS. CHHATTISGARH UROLOGY SOCIETY (2018) 303 CTR 299 (CG) V. SHRI SARAFA ASSOCIATION VS. CIT & ANR. (2007) 29 4 ITR 262 (MP) VI. CHHATTISGARH STATE CRICKET SANGH VS. DCIT (EXEM PTION) (2019) 56 CCH 73 (RAIPUR-TRIB.) VII. ALL INDIA RUBBER INDUSTRIES ASSOCIATION VS. AD DL.CIT & ORS. (2018) 173 ITD 615 (MUMBAI-TRIB.) VIII. CONFEDERATION OF REAL ESTATE DEVELOPERS ASSOC IATION OF INDIA VS. ACIT (EXEMPTION) (2021) 209 TTJ (MUMBAI) 160 6.5 DEALING WITH SCOPE OF ENQUIRY, THE LEARNED COUN SEL SUBMITTED THAT AT THE TIME OF CONSIDERING THE ELIGIBILITY FOR REGISTRATION UNDER S.12AA OF THE ACT, THE CIT(E) HAS TO ONLY EXAMINE T HE OBJECTS OF THE ASSESSEE SOCIETY AND GENUINENESS OF THE TRANSAC TION. THE SCOPE OF ENQUIRY DOES NOT GO BEYOND THIS AS PROVIDED UNDE R S.12AA(1)(AB) OF THE ACT. THE JUDGMENT RENDERED BY THE JURISDICT IONAL HIGH COURT IN CIT VS. CHHATTISGARH UROLOGY SOCIETY (2018) 303 CTR 299 (CG) WAS REFERRED. 6.6 THE LEARNED COUNSEL CONTENDED THAT THE ASSESSEE SOCIETY DO NOT BELONG TO A PARTICULAR COMMUNITY/FAMILY AND ANY PER SON ENGAGED IN PHARMA BUSINESS CAN BECOME MEMBER OF ASSESSEE SOCIE TY REGARDLESS OF HIS CAST, CREED OR RELIGION AND WITHOUT DISCRIMI NATION. ITA NO. 219/RPR/2019 (CONFEDERATION OF PHARMA DEALERS ASSOCIATION VS. CIT(E) - 8 - 6.7 IN SUMMATION, THE LEARNED COUNSEL SUBMITTED THA T THE TRADE ASSOCIATION HAS BEEN FORMED FOR THE ADVANCEMENT OF PUBLIC UTILITY WITH REFERENCE TO THE PHARMA DEALERS. IN THE WAKE OF LONG LINE OF JUDICIAL PRECEDENTS WHEREIN THE REGISTRATION WAS GR ANTED TO OTHER ASSOCIATIONS IN SIMILARLY PLACED SITUATIONS, IT WAS URGED THAT THE ASSESSEE SHOULD ALSO BE TREATED SIMILARLY AND REGIS TRATION CLAIMED W.E.F. 01.04.2018 BY AN APPLICATION DATED 30.03.201 9 IN TERMS OF PROVISIONS OF SECTION 12A(2) OF THE ACT SHOULD BE A LLOWED. 7. THE LEARNED DR FOR THE REVENUE, ON THE OTHER HAN D, RELIED UPON THE ORDER OF THE CIT(E). 8. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIO NS AND PERUSED THE ORDER PASSED BY THE CIT(E) UNDER S.12AA OF THE ACT. THE CASE LAWS REFERRED TO AND RELIED UPON AS WELL A S THE PAPER BOOK CONTAINING MATERIAL AS REFERRED, HAS BEEN TAKEN NOT E OF. 8.1 AT THE OUTSET, WE TAKE NOTE OF THE OBSERVATIONS MADE BY THE HONBLE CHHATTISGARH HIGH COURT IN CIT VS. CHHATTISGARH UROLOGY SOCIETY (2018) 303 CTR 299 (CG) . THE ESSENCE OF DECISION IS THAT THE PROVISIONS CONTAINED UNDER S.12A OF THE ACT NOW HERE EMPOWERS THE CIT(E) TO ASSESS THE OBJECTS VIS--VIS THE BOOKS OF ACCOUNTS. EVEN OTHERWISE, IT IS NOT TO BE SEEN AT THE STAGE O F APPLICATION AS TO WHETHER THE FULFILLMENT OF THE CHARITABLE TRUST WOU LD EVENTUALLY BENEFIT THE MEMBERS OF THE SOCIETY. SOME POSSIBLE BENEFITS TO THE MEMBERS WOULD NOT EFFECT THE GENUINENESS OF THE OBJ ECTS OF THE TRUST PER SE . THE ORDER PASSED BY THE CIT(E) DOES NOT SAY IN DEFINITE TERMS THAT THE OBJECTS OF THE SOCIETY ARE NOT CHARI TABLE IN NATURE. MERELY BECAUSE THE TRUST CONSISTS OF UROLOGIST DOCT ORS AND THE CHARITABLE SOCIETY MAY MUTUALLY BENEFIT THOSE MEMBE RS, THE OBJECT ITSELF WOULD NOT SEIZE TO BE CHARITABLE IN NATURE. THUS, AS PER ITA NO. 219/RPR/2019 (CONFEDERATION OF PHARMA DEALERS ASSOCIATION VS. CIT(E) - 9 - JUDGMENT OF JURISDICTIONAL HIGH COURT, THE LARGER A IM OF OBJECTS IS REQUIRED TO BE KEPT IN MIND. 8.2 ON PERUSAL OF THE ORDER OF THE CIT(E), WE ARE U NABLE TO FIND THE OBSERVATIONS OF THE CIT(E) ANYWHERE THAT THE OB JECTS OF THE ASSESSEE PER SE ARE NOT GENUINE. ON PERUSAL OF THE OBJECTS OF THE ASSESSEE SOCIETY AS NOTED IN PARAGRAPH NO. 3, ONE C ANNOT SAY THAT THE OBJECTS ARE NOT CHARITABLE IN NATURE. 8.3 THE HONBLE SUPREME COURT IN DIT VS. BHARAT DIAMOND BOURSE (2003) 259 ITR 0280 HAS HELD THAT IF THE PRIMARY OR DOMINANT PURPOSE OF INSTITUTION IS CHARITABLE AND A NOTHER OBJECT WHICH BY ITSELF MAY NOT BE CHARITABLE BUT IS MERELY ANCILLARY OR INCIDENTAL TO THE PRIMARY OR DOMINANT OBJECT, IT WO ULD NOT PREVENT THE INSTITUTION FROM VALIDLY BEING RECOGNIZED AS A CHARITY. THE TEST TO BE APPLIED IS WHETHER THE OBJECT WHICH IS SAID T O BE NON- CHARITABLE IS THE MAIN/ PRIMARY OBJECT OF THE TRUST / INSTITUTION OR IT IS ANCILLARY OR INCIDENTAL TO THE MAIN OBJECT WHICH IS CHARITABLE. 8.4 IN A MAJORITY JUDGMENT OF HONBLE SUPREME COURT IN ACIT VS. SURAT ART SILK CLOTH MANUFACTURERS ASSOCIATION (198 0) 121 ITR 1 (SC) , IT WAS OBSERVED THAT: 'THE TEST WHICH HAS, THEREFORE, NOW TO BE APPLIED I S WHETHER THE PREDOMINANT OBJECT OF THE ACTIVITY INVOLVED IN CARR YING OUT THE OBJECT OF GENERAL PUBLIC UTILITY IS TO SUBSERVE THE CHARITABL E PURPOSE OR TO EARN PROFIT. WHERE PROFIT MAKING IS THE PREDOMINANT OBJE CT OF THE ACTIVITY, THE PURPOSE, THOUGH AN OBJECT OF GENERAL PUBLIC UTI LITY WOULD CEASE TO BE A CHARITABLE PURPOSE. BUT WHERE THE PREDOMINANT OBJECT OF THE ACTIVITY IS TO CARRY OUT THE CHARITABLE PURPOSE AND NOT TO EARN PROFIT, IT WOULD NOT LOSE ITS CHARACTER OF A CHARITABLE PURPOS E MERELY BECAUSE SOME PROFIT ARISES FROM THE ACTIVITY. THE EXCLUSION ARY CLAUSE DOES NOT REQUIRE THAT THE ACTIVITY MUST BE CARRIED ON IN SUC H A MANNER THAT IT DOES NOT RESULT IN ANY PROFIT. IT WOULD INDEED BE D IFFICULT FOR PERSONS IN CHARGE OF A TRUST OR INSTITUTION TO SO CARRY ON THE ACTIVITY THAT THE EXPENDITURE BALANCES THE INCOME AND THERE IS NO RES ULTING PROFIT. THAT WOULD NOT ONLY BE DIFFICULT OF PRACTICAL REALISATIO N BUT WOULD ALSO REFLECT UNSOUND PRINCIPLE OF MANAGEMENT. WE, THEREF ORE, AGREE WITH ITA NO. 219/RPR/2019 (CONFEDERATION OF PHARMA DEALERS ASSOCIATION VS. CIT(E) - 10 - BEG. J. WHEN HE SAID IN SOLE TRUSTEE, LOKA SIKHSHAN A TRUST'S CASE [1975] 101 ITR 234, 256 (SC) THAT: 'IF THE PROFITS MUST NECESSARILY FEED A CHARITABLE PURPOSE UNDER THE TERMS OF THE TRUST, THE MERE FACT THAT THE ACTIVITI ES OF THE TRUST YIELD PROFIT WILL NOT ALTER THE CHARITABLE CHARACTER OF T HE TRUST. THE TEST NOW IS, MORE CLEARLY THAN IN THE PAST, THE GENUINENESS OF THE PURPOSE TESTED BY THE OBLIGATION CREATED TO SPEND THE MONEY EXCLUS IVELY OR ESSENTIALLY ON CHARITY.' THUS ESSENTIALLY, WHERE THE PURPOSE DOES NOT INVOLV E THE CARRYING ON OF ANY ACTIVITY FOR PROFIT AND WHERE THE PROFIT MAK ING IS NOT THE REAL OBJECT, THE TRUST WOULD BE ENTITLED TO AVAIL THE BE NEFITS EMANATING FROM REGISTRATION UNDER THE ACT. 8.5 THE CHENNAI BENCH OF THE TRIBUNAL IN JAPANESE CHAMBER OF COMMERCE INDUSTRY VS. DIT (EXEMPTIONS) (2014) 160 T TJ (CHENNAI) 356 REPRODUCED THE EXTRACTS FROM THE DECISION OF DELHI BENCH OF TRIBUNAL IN JAPAN CHAMBER OF COMMERCE & INDUSTRY IN INDIA VS. DIRECTOR OF IT (EXEMPTIONS) (2008) 116 TT J (DEL) 61 : (2008) 7 DTR (DEL)(TRIB) 277 WHICH READS AS UNDER:- ' SO FAR AS OBJECT NO. 6 IS CONCERNED, THERE CAN BE NO DOUBT THAT IT IS A CHARITABLE OBJECT SINCE INVITING INTELLECTUALS, IND USTRIALISTS, SCHOLARS, TENDS TO ENLIGHTEN THE FACULTIES OF THE MEMBERS WHI CH IS TO THEIR ULTIMATE BENEFIT AND MAY HELP THEM IN BECOMING MORE EVOLVED AND BETTER HUMAN BEINGS. IN FACT, THE RAJAS THAN HIGH C OURT IN C1T VS. JODHPUR CHARTERED ACCOUNTANTS SOCIETY (2002) 174 CT R (RAJ) 504 : (2002) 258 1TR 548 (RAJ) HAS HELD THAT ORGANIZING S UCH SEMINARS AND CONFERENCES TO EDUCATE PEOPLE IN DIFFERENT FIELDS O F KNOWLEDGE IS A CHARITABLE OBJECT OF GENERAL PUBLIC UTILITY WITHOUT ANY PROFIT MOTIVE.' CARRYING ON OF SIMILAR ACTIVITIES WERE THUS APPROVE D FOR REGISTRATION. 8.6 WE FIND THAT THE MUMBAI BENCH OF THE TRIBUNAL I N CONFEDERATION OF REAL ESTATE DEVELOPERS ASSOCIATION OF INDIA VS. ACIT (EXEMPTION) (2021) 209 TTJ (MUMBAI) 160 HAS HELD AS UNDER:- 'SINCE THE ASSES SEE-TRUST HAS BEEN SET UP WITH THE OBJECT TO ADDRESS THE NATIONAL ISSUES RELATED TO REAL ESTATE SECTOR AND B ETTER STANDARDS FOR ITS ALL MEMBER ASSOCIATIONS, HAVING 21 STATE CHAPTERS, 220 CITY CHAPTERS AND 20,000 MEMBERS, IT CAN SAFELY BE HELD TO BE FOR THE BENEFIT OF A ITA NO. 219/RPR/2019 (CONFEDERATION OF PHARMA DEALERS ASSOCIATION VS. CIT(E) - 11 - PARTICULAR SECTION OF THE PUBLIC AND NOT FOR ANY SP ECIFIED INDIVIDUAL. ACCORDINGLY, THE VIEW TAKEN BY THE LOWER AUTHORITIE S THAT AS THE ASSESSEE TRUST WAS SET UP FOR PROVIDING FACILITIES TO A LIMITED GROUP OF PEOPLE AND NOT FOR THE BENEFIT OF THE GENERAL PUBLI C AT LARGE, THEREFORE, IT COULD NOT BE HELD TO BE A TRUST SET UP FOR ADVAN CEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY CANNOT BE SUSTAINE D AND IS HERBY VACATED.AHMEDABAD RANA CASTE ASSOCIATION VS. CIT ( 1971) 82ITR 704 (SC) FOLLOWED. FOR THE ATTAINMENT OF ITS OBJECTS, VIZ., TO ACT AS A GROUP OF ASSOCIATIONS/FEDERATIONS FUNCTIONING AT NATIONAL AN D STATE LEVEL WITH AN OBJECT TO ADDRESS THE NATIONAL ISSUES RELATING TO R EAL ESTATE SECTOR AND BETTER STANDARD FOR ITS ALL MEMBER ASSOCIATIONS, TO ENCOURAGE FRATERNITY, FEELINGS OF CO-OPERATION AND MUTUAL HEL P AMONG THE MEMBERS OF THE CONFEDERATION IN RESPECT OF THE SUBJECTS CON NECTED WITH THE COMMON GOOD OF TRADE, INDUSTRY AND PROFESSION OF BU ILDING, CONSTRUCTION AND DEVELOPMENT OF FUNDS, AND TO ENCOU RAGE ADOPTION AND PROMOTION OF FAIR BUSINESS PRACTICES ACCORDING TO A N ETHICAL CODE OF FAIR BUSINESS PRACTICES AND TO MAINTAIN EFFICIENCY, DIGNITY AND INTEGRITY OF THE CONFEDERATION, THE ASSESSEE-TRUST HAD TO CAR RY OUT CERTAIN ACTIVITIES, I.E., HOLDING CONVENTIONS, EXHIBITIONS, MEETINGS, ETC. INSOFAR CARRYING OUT OF SUCH ACTIVITIES ARE CONCERNED, CARR YING ON OF THE SAME FOR THE FURTHERANCE OF THE OBJECTS OF THE ASSESSEE- TRUST ON A STANDALONE BASIS WOULD NOT TAKE THE COLOUR AS THAT OF A TRADE, COMMERCE OR BUSINESS. THE HOLDING OF CONVENTION BY THE ASSESSEE TRUST, AND THE RESULTANT RECEIPTS THEREIN GENERATED BY IT, I.E., P ARTICIPANT FEES, SPONSORSHIP FEES (FROM ADVERTISERS) ETC., WERE CLEA RLY IN THE NATURE OF ACTIVITIES THAT WERE CARRIED OUT BY THE ASSESSEE WI TH THE SOLE INTENT OF ATTAINING THE OBJECT FOR WHICH THE TRUST WAS ESTABL ISHED.' 8.7 WE FIND THAT THE HON'BLE SUPREME COURT IN CIT VS. GUJARAT MARITIME BOARD (2007) 295 ITR 561 HAS HELD THAT 'WHEN AN OBJECT IS TO PROMOTE OR PROTECT THE INTEREST OF A PARTICUL AR TRADE OR INDUSTRY THAT OBJECT BECOMES AN OBJECT OF PUBLIC UTILITY. S IMILAR VIEW EXPRESSED IN CIT VS. ANDHRA CHAMBER OF COMMERCE (1965) 55 ITR 722 (SC) . 8.8 IN THE LIGHT OF RATIO OF VARIOUS DECISIONS, SOM E OF WHICH HAVE BEEN QUOTED ABOVE, IT IS EVIDENT THAT THE OBJECTS O F THE ASSESSEE TRUST MEANT FOR BENEFIT OF PHARMA DEALERS WOULD UNDOUBTED LY FALL WITHIN THE FOURTH LIMB OF SECTION 2(15) OF THE ACT I.E. T HE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY WHICH H AS BEEN HELD TO BE VERY WIDE IN ITS CONNOTATION IN SEVERAL JUDICIAL PR ONOUNCEMENTS NOTED ABOVE. THE ASSESSEE SOCIETY IN THE INSTANT C ASE IS STATED TO BE ITA NO. 219/RPR/2019 (CONFEDERATION OF PHARMA DEALERS ASSOCIATION VS. CIT(E) - 12 - ENGAGED IN PROMOTION OF TRADE AND COMMERCE RELATED TO PHARMA BUSINESS, PROTECTING THE RIGHTS AND INTERESTS OF IT S MEMBERS, MAKING ITS MEMBERS AWARE ABOUT THEIR DUTIES, CONDUCTING SE MINARS AND WORKSHOPS AND ORGANIZING AWARENESS CAMPS AND EDUCAT ING THEM ABOUT HEALTH AND SAFETY, CLEANLINESS AND ALSO CREAT ING AWARENESS ABOUT THE LEGAL PROVISIONS AND DUTIES AND OBLIGATIO NS UNDER INCOME TAX ACT AND OTHER LAWS TO HELP THEM BECOMING A LAW ABIDING CITIZENS. IN THIS BACKGROUND, WE ARE OF THE OPINIO N THAT ENDEAVORS OF THE ASSESSEE SOCIETY TANTAMOUNTS TO ADVANCEMENT OF PUBLIC UTILITY AND HENCE MAKING SUCH OBJECTS CHARITABLE IN NATURE AND SUSCEPTIBLE TO S.2(15) OF THE ACT. SIGNIFICANTLY, WE SIMULTANE OUSLY NOTICE FROM THE JUDICIAL PRECEDENTS REFERRED TO IN PRECEDING PA RAGRAPHS THAT IT IS NOT NECESSARY THAT OBJECT OF GENERAL PUBLIC UTILITY SHOULD BE BENEFICIAL TO THE WHOLE MANKIND. THE OBJECT BENEFI CIAL TO A SECTION OF THE PUBLIC IS ALSO AN OBJECT OF GENERAL PUBLIC U TILITY. HENCE, THE CASE OF THE ASSESSEE GETS COVERED IN THE FOURTH LIM B OF SECTION 2(15) OF THE ACT I.E. THE ADVANCEMENT OF ANY OTHER OBJEC T OF GENERAL PUBLIC UTILITY. THIS BEING SO, THE ASSESSEE WOULD BE ENTITLED TO THE BENEFIT MEANT FOR CHARITABLE TRUST AS CONTEMPLATED IN THE SCHEME OF THE ACT. 9. WE ALSO ADVERT TO THE OTHER OBJECTION OF THE CIT (E) THAT ASSESSEE SOCIETY HAS PURCHASED THE LAND AND DISTRIB UTED THE SAME TO ITS MEMBERS BY WAY OF 99 YEARS OF LEASE. IN SIMILA R FACTS SITUATION, THE CO-ORDINATE BENCH OF TRIBUNAL IN ACIT VS. GUJARAT HIRA BOURSE ITA NO. 2917/AHD/2014 DATED 22.06.2021 OBSERVED AS UNDER: 'IF THE PRIMARY OBJECT OF AN ENTITY LIKE 'CHAMBER O F COMMERCE, PROFESSIONAL ASSOCIATION, A BAR COUNCIL, ETC' IS TH E PROMOTION OF ANY TRADE, INDUSTRY, PROFESSION, ETC. THE FACT THAT THE BUSINESS COMMUNITY OR THE PROFESSION AS THE CASE MAY BE WOULD BE BENEFIT THEREFROM, WOULD NOT TAKE AWAY THE OBJECT FROM THE REALM OF OBJECT OF GE NERAL PUBLIC UTILITY AND, THEREFORE, THEY WOULD BE HELD ESTABLISHED FOR A CHARITABLE PURPOSE. IN VIEW OF THE ABOVE FACTUAL AND LEGAL POSITION, IT IS QUITE CLEAR THAT THE ITA NO. 219/RPR/2019 (CONFEDERATION OF PHARMA DEALERS ASSOCIATION VS. CIT(E) - 13 - OBJECT OF THE ASSESSEE IS OF GENERAL PUBLIC UTILITY AND DOES NOT HIT BY FIRST PROVISO TO SECTION 2(15) OF THE ACT. TO ESTABLISH A BOURSE FOR PROMOTION OF EXPORTS OF D IAMOND, GEMS, PEARL AND JEWELLERY AND TO PROVIDE INFRASTRUCTURE AND OTH ER FACILITY FOR THIS PURPOSE, TO DEVELOP AND ESTABLISH AN INTERNATIONAL TRADING, CENTER IN INDIA FOR ALL THOSE ENGAGED AS MANUFACTURERS, TRADE RS, EXPORTERS AND IMPORTERS, BROKERS, COMMISSION AGENT OF DIAMONDS, G EMS, PEARLS AND JEWELLERY, TO ESTABLISH FOR THE BENEFIT OF MEMBERS OF THE BOURSE, EFFECTIVE LIAISON WITH OTHER AGENCIES DEALING IN SA ME TRADE, TO ESTABLISH, CONSTRUCT AND RUN GEMS AND JEWELLERY PAR K TO PROVIDE ALL INFRASTRUCTURAL FACILITIES TO ITS MEMBERS AND TO HO ST AND ORGANIZE GEMS AND JEWELLERY TRADE FARES, EXHIBITIONS ETC. IN INDI A AND ABROAD. IT WAS FURTHER HIGHLIGHTED THAT THE ASSESSEE HAS AC QUIRED A LAND ON LEASE FROM GUJARAT INDUSTRIAL DEVELOPMENT CORPORATI ON (GIDC), A GOVERNMENT OF GUJARAT UNDERTAKING FOR THE SPECIFIC PURPOSE OF DEVELOPMENT OF GEMS AND JEWELLERY PARK WITH THE CON DITIONS THAT LAND CAN BE ALLOTTED TO MEMBERS ONLY AND NO PROFIT CAN B E MADE OF THE ACTIVITIES OF BOURSE. IT WAS ALSO MENTIONED MAT ME PLOTS WOULD BE ALLOTTED TO MEMBERS RELATED TO GEMS AND JEWELLERY B USINESS ONLY WHICH CANNOT BE SUBLET/TRANSFERRED WITHOUT THE APPROVAL O F BOURSE. THE ASSESSEE EXPLAINED THE LEGAL PROVISIONS OF SECTION 2(15) OF THE ACT ALSO RELYING ON THE VARIOUS DECISIONS OR HON'BLE SUPREME COURT AND OTHER HIGH COURTS AND ALSO THE CIRCULAR NO. 11/2008, DATE D 19.12.2008 ISSUED BY CBDT. ' HENCE, MERELY LEASING OF DEVELOPED PLOTS TO ITS MEM BERS ON THE BASIS OF THEIR RESPECTIVE CONTRIBUTIONS DOES NOT MA KE THE ASSESSEE INELIGIBLE FOR REGISTRATION AS A CHARITABLE ENTITY PER SE. WE ALSO DO NOT FIND MERIT IN THE CONTENTION OF THE CIT(E) THAT LAND PURCHASED BY THE SOCIETY IS NOT APPEARING IN THE BALANCE SHEE T. AS POINTED OUT ON BEHALF OF THE ASSESSEE, THE LAND PURCHASED BY TH E ASSESSEE SOCIETY HAS BEEN DULY DISCLOSED IN THE SCHEDULE A LAND A ND LAND DEVELOPMENT OF THE BALANCE SHEET AND THUS DISCLOSE D IN A PARTICULAR MANNER. 10. WHILE THE ASSESSEE IS A MUTUAL CONCERN AND OPER ATING ON THE PRINCIPLES OF MUTUALITY, THIS BY ITSELF WOULD NOT P LACE ANY EMBARGO FOR REGISTRATION UNDER S.12AA OF THE ACT AND TO AVA IL ASSOCIATED BENEFITS UNDER S.11 & S.12 OF THE ACT HAVING REGARD TO CBDT CIRCULAR NO. 11/2008 DATED 19.12.2008 COUPLED WITH THE DECISION OF ITA NO. 219/RPR/2019 (CONFEDERATION OF PHARMA DEALERS ASSOCIATION VS. CIT(E) - 14 - THE CO-ORDINATE BENCH IN ALL INDIA RUBBER INDUSTRIES ASSOCIATION VS. ADDL.CIT & ORS. (2018) 173 ITD 615 (MUMBAI). 11. THE OBJECTS OF THE ASSESSEE SOCIETY WHEN READ I N THE LIGHT OF JUDICIAL PRECEDENTS EXPOUNDING THE LAW IN THIS REGA RD, THE CONCLUSION IS INESCAPABLE THAT THE OBJECTS OF THE A SSESSEE IS FOR CHARITABLE PURPOSE WITHIN THE MEANING OF SECTION 2 (15) OF THE ACT AND THE ASSESSEE IS ENTITLED IN LAW FOR REGISTRATIO N UNDER S.12AA OF THE ACT. CONSEQUENTLY, WE SET ASIDE THE IMPUGNED O RDER OF THE CIT(E) DATED 27.09.2019 AND DIRECT THE CIT(E) / COM PETENT AUTHORITY TO GRANT REGISTRATION UNDER S.12AA OF THE ACT AS SOUGHT BY THE ASSESSEE SOCIETY. 12. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. SD/- SD/- (PAWAN SINGH) (PRADIP KUM AR KEDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER TRUE COPY S. K. SINHA / COPY OF ORDER FORWARDED TO:- &. / REVENUE 2. / ASSESSEE (. )*+ , / CONCERNED CIT 4. ,- / CIT (A) /. 012 33*+4 *+#4 / DR, ITAT, RAIPUR 5. 267 8 / GUARD FILE. BY ORDER 4 SR. PRIVATE SECRETARY ITAT 4 RAIPUR (ON TOUR) ORDER PRONOUNCED ON 27 / 1 0/2021 BY PLACING THE RESULT ON THE NOTICE BOARD AS PER RULE 34(4 ) OF THE INCOME TAX (APPELLATE TRIBUNAL) RULE, 1963.