Radiological & Imaging Association, Ahmedabad V. The Dy.DIT(Exempn.), Ahmedabad

ITA 2891/AHD/2014

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5787 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 4 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-03-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 27-09-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 31-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MUDIT NAGPAL HEARING CONCLUDED
• Keywords: Business income
• Section: 143(3); 12AA; 12; 11

Judgement Text

ITA NO.2891/AHD/2014 ASSESSMENT YEAR: 2010-11 PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH, AHMEDABAD [CORAM: PRAMOD KUMAR AM AND S S GODARA JM] ITA NO.2891/AHD/2014 ASSESSMENT YEAR: 2010-11 RADIOLOGICAL & IMAGING ASSOCIATION ..................APPELLANT 1 ST FLOOR, SAMVED HOSPITAL, NAVRANGPURA, AHMEDABAD. [PAN : AABTR 4414 N] VS. D.D.I.T. (EXEMPTION), AHMEDABAD. ............................RESPONDENT APPEARANCES BY TUSHAR HEMANI FOR THE APPELLANT MUDIT NAGPAL FOR THE RESPONDENT HEARING CONCLUDED ON: 09.01.2018 ORDER PRONOUNCED ON : 28.03.2018 O R D E R PER PRAMOD KUMAR, AM: 1. BY WAY OF THIS APPEAL, THE ASSESSEE APPELLANT HA S CHALLENGED CORRECTNESS OF LEARNED CIT(A)S ORDER DATED 25 TH AUGUST 2014, IN THE MATTER OF ASSESSMENT UNDER SECTION 143(3) OF THE INCOME TAX ACT 1961 (THE ACT HEREINAFTER), FOR THE ASSESSMENT YEAR 2010-11. 2. GRIEVANCES RAISED BY THE ASSESSEE ARE AS FOLLOWS :- 1. THE LEARNED CIT(A) HAS GROSSLY ERRED IN LAW AND ON FACTS IN CONFIRMING THE ACTION OF AO IN HOLDING THAT THE APPELLANT IS NOT E NTITLED TO EXEMPTIONS U/S 11 & 12 OF THE ACT ON THE GROUND THAT THE ACTIVITIES CAR RIED OUT BY THE APPELLANT IS NOT FALLING WITHIN S.2(15) OF THE ACT. 2. THE LEARNED CIT(A) HAS GROSSLY ERRED IN LAW AN D ON FACTS WHILE NOT CONSIDERING THAT THE 63 RD NATIONAL CONFERENCE OF THE INDIAN RADIOLOGICAL AND IMAGING ASSOCIATION WAS HELD BY THE APPELLANT TRUST IN AHMEDABAD WAS IN CONTEXT OF ITS OBJECTS AS PER RULES OF ASSOCIATION. ITA NO.2891/AHD/2014 ASSESSMENT YEAR: 2010-11 PAGE 2 OF 4 3. THE LEARNED CIT(A) HAS GROSSLY ERRED IN LAW AN D ON FACTS IN CONSIDERING EXTRANEOUS AND IRRELEVANT MATERIALS WHICH IS SEARCH ED FROM GOOGLE WITHOUT PUTTING IT TO THE ASSESSEE. MOREOVER, THE SAID FACT S OR MATERIALS HAVE EVEN NOT BEEN CONSIDERED OR TAKEN INTO ACCOUNT BY THE AO. 4. THE LEARNED CIT(A) HAS GROSSLY ERRED IN LAW AN D ON FACTS IN CONFIRMING THE ACTION OF AO IN TAKING A NARROW VIEW AS REGARDS TO MEANING OF EDUCATION AND NOT CONSIDERING ITS WIDER MEANING WHICH IS NOT JUST RES TRICTED TO PROVIDING SYSTEMATIC OR FORMAL INFORMATION OR TRAINING OR ASSOCIATION WI TH ANY UNIVERSITY OR ANY GOVERNMENT AGENCY. 5. THE LEARNED C1T(A) HAS GROSSLY ERRED IN LAW AN D ON FACTS IN PASSING THE ORDERS WITHOUT PROPERLY APPRECIATING THE FACT AND T HAT HE FURTHER ERRED IN GROSSLY IGNORING VARIOUS SUBMISSIONS, EXPLANATIONS AND INFO RMATION SUBMITTED BY THE APPELLANT FROM TIME TO TIME WHICH OUGHT TO HAVE BEE N CONSIDERED BEFORE PASSING THE IMPUGNED ORDER. 3. THE ASSESSEE IS A TRUST REGISTERED UNDER SECTION 12AA OF THE ACT AND IS ENGAGED, INTER ALIA, IN THE ACTIVITY OF PROMOTING THE STUDY AND PRACTICE OF RADIO DIAGNOSIS, ULTRASOUND, RADIO THERAPY, ONCOLOGY, RADIATION MEDI CINE AND INTERVENTIONAL RADIOLOGY ETC. DURING THE RELEVANT PREVIOUS YEAR, THE ASSESSEE HOS TED 63 RD NATIONAL CONFERENCE OF INDIAN RADIOLOGICAL AND IMAGING ASSOCIATION. THE A SSESSING OFFICER WAS OF THE VIEW THAT INCOME GENERATED BY HOSTING OF THIS CONFERENCE WAS NOT OF CHARITABLE NATURE FOR THE REASON THAT THE ASSESSEE HAS CHARGED PARTICIPANTS O N A COMMERCIAL BASIS, THE ASSESSEE HAS RECEIVED HUGE AMOUNTS FOR STALLS AND P ARTICIPATION CHARGES, THAT THE COMMERCIAL ENTITIES MAKING PAYMENTS HAVE DEDUCTED T AX AT SOURCE BY TREATING THE PAYMENT AS FOR RENT ETC, AND THAT THE RECEIPTS ARE, AS SUCH, COMMERCIAL RECEIPTS. THE ASSESSING OFFICER WAS ALSO OF THE VIEW THAT ACTIVI TY OF THE TRUST IS NOTHING BUT DEVISE BY EMINENT RADIOLOGISTS TO PROMOTE THEIR OWN BRAND/PRO FILE ETC. BY ARRANGING THE COMFORTABLE STAY, FOOD AND OTHER FACILITIES TO PART ICIPANTS WHICH WILL LEAD TO INCREASE THE INCOME OF THE PARTICIPANTS WHICH CANNOT BE CONSIDER ED AS CHARITABLE ACTIVITY. ACCORDINGLY, THE INCOME FROM THE ACTIVITY OF HOLDIN G SEMINAR WAS HELD TO BE COMMERCIAL ACTIVITY. AGGRIEVED, ASSESSEE CARRIED THE MATTER I N APPEAL BEFORE THE LEARNED CIT(A) BUT WITHOUT ANY SUCCESS. THE ASSESSEE IS NOT SATISFIED AND IS IN FURTHER APPEAL BEFORE US. 4. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF APPLIC ABLE LEGAL POSITION. 5. LEARNED REPRESENTATIVES FAIRLY AGREE, EVEN AS LE ARNED DEPARTMENTAL REPRESENTATIVE VEHEMENTLY RELIES ON AND JUSTIFIES T HE STAND OF THE AUTHORITIES BELOW, THAT THE ISSUE IS COVERED, IN FAVOUR OF THE ASSESSEE BY A CO-ORDINATE BENCHS DECISION IN THE ITA NO.2891/AHD/2014 ASSESSMENT YEAR: 2010-11 PAGE 3 OF 4 CASE OF HEART CARE MANAGEMENT VS. DIT (EXEMPTIONS) [(2012) 52 SOT 277 (DELHI)] WHEREIN THE CO-ORDINATE BENCH HAS, INTER ALIA, OBSE RVED AS FOLLOWS :- WE HAVE HEARD RIVAL CONTENTIONS AND GONE THROUGH T HE RELEVANT MATERIAL AVAILABLE ON RECORD. AS THE FACTS EMERGE, THE ASSES SEE IS A REGISTERED SOCIETY WITH SPECIFIED OBJECTS, AS MENTIONED HEREIN ABOVE. THE OBJECTS ARE MAINLY TOWARDS MEDICAL RESEARCH, EXPERIMENTS WORKSHOPS ETC . IN THE FIELD OF MEDICAL SCIENCES IN GENERAL AND HEART AILMENTS IN PARTICULA R AND TAKE IN THEIR FOLD THE WAYS AND MEANS FOR AFFORDABLE MEDICAL RELIEF. THE O BJECTS INCLUDE HOLDING OF SCIENTIFIC MEETINGS, WORKSHOPS, RESEARCH AND TRAINI NG PROGRAMS AND CREATE PUBLIC AWARENESS, LECTURE PROGRAMS AMONG DOCTORS AND THE G ENERAL PUBLIC. 5.1 . A PLAIN READING OF THE OBJECTS DOES NOT REFLECT T HAT ANY OBJECT IS NON- CHARITABLE IN NATURE. THE MAIN ISSUE RAISED BY THE DIT(E) IS IN RESPECT OF HOLDING OF CONFERENCE OF DOCTORS AT A FIVE STAR HOTEL AND T HE FACT THAT THE DONORS ARE PHARMACEUTICAL COMPANIES AND SOME OF THEM HAVE DEDU CTED TDS. ADVERSE INFERENCE HAS ALSO BEEN DRAWN FROM EXTRAVAGANCE OF EXPENSES THE FACT THAT THE CONFERENCE WAS OF DOCTORS AND THERE IS NO BENEFIT T O THE COMMON PUBLIC. EXCEPT HOLDING OF THIS CONFERENCE AND CORRESPONDING DONATI ON, THE CHARITABLE OBJECTS, AS PER THE TRUST DEED, HAVE NOT BEEN CHALLENGED BY THE DIT(E). IF THE OBJECTS OF THE TRUST ARE DULY INCORPORATED AND CHARITABLE IN NATUR E AND CONFORM TO THE VARIOUS RULES AND REGULATIONS; THE ASSESSEE TRUST MAINTAINS ITS BOOKS OF ACCOUNT AND THE GENUINENESS OF THE ACCOUNT IS ESTABLISHED BY THE SO CIETY, IN NORMAL CIRCUMSTANCES THE REGISTRATION SHOULD BE GRANTED TO THE TRUST U/S 12AA AND 80-G OF THE I.T. ACT. THE SCHEME OF THE INCOME-TAX ACT P ROVIDES (I) PROCEDURE AT THE TIME OF REGISTRATION AND THEREAFTER (II) RULES FOR ASSESSMENT OF TRUSTS. SINCE AT THE TIME OF REGISTRATION ASSESSEE TRUST IS NEWLY FORMED , THEREFORE, ONLY THE OBJECTS OF THE TRUST AND THE ACCOUNTS OF THE TRUST AND ACTIVIT IES OF THE TRUST TILL REGISTRATION ARE TO BE INQUIRED INTO. IN THE GIVEN FACTS AND CIRCUMS TANCES THE CONFERENCE ORGANIZED BY THE ASSESSEE IS AUTHORIZED BY THE OBJE CTS OF THE TRUST; THERE IS NO BAN OR EMBARGO WHETHER CONFERENCE CAN BE HELD IN FI VE STAR HOTEL OR NOT. THEREFORE, THE ADVERSE INFERENCE DRAWN BY THE DIT(E ) IS NOT PROPER INASMUCH AS THE TRUSTEES WILL HAVE A DISCRETION TO ORGANIZE THE CONFERENCE AT A PLACE AND IN THE MANNER WHICH IS BEFITTING INTO THE PARTICIPANTS AND OBJECTS. CONSEQUENTLY, WE ARE UNABLE TO DRAW ANY ADVERSE INFERENCE ONLY BECAU SE THE CONFERENCE WAS ORGANIZED IN A FIVE STAR HOTEL. 5.2 . COMING TO THE ISSUE ABOUT SOME OF THE DONORS BEIN G PHARMACEUTICAL COMPANIES AND HAVING DEDUCTED TDS. IN OUR VIEW WHIL E ACCEPTING DONATION, A DONEE HAS LIMITATIONS AND IF THE DONOR OFFERS THE D ONATION IN CASH KIND OR IN A MANNER WHICH IT THINKS LEGAL, GENERALLY THE DONEE W OULD NOT REFUSE THE DONATION. THIS IS SO BECAUSE TDS CAN BE CLAIMED BY TRUST TOWA RDS THE TAX PAID. IT HAS NOT BEEN DISPUTED THAT FOR THESE AMOUNTS ONLY DONATION RECEIPTS WERE ISSUED. THERE WAS NO LOSS TO TRUST AS ON APPLICATION OF INCOME I. E. UTILIZATION OF DONATION, THE TDS BECOMES REFUNDABLE TO IT. ONLY BECAUSE DONORS A RE PHARMACEUTICAL COMPANIES AND THEY DEDUCTED TDS, WILL NOT CONVERT A DONATION INTO A COMMERCIAL RECEIPT ON THE BASIS OF PRESUMPTIVE INFERENCES. AS LONG AS THE ASSESSEE HAS CREDITED THE AMOUNT AS DONATIONS AND ISSUED DONATIO N RECEIPTS, IN OUR VIEW, THE SAME CANNOT BE HELD TO BE COMMERCIAL RECEIPT. 5.3. ASSESSEE HAS DEMONSTRATED THAT NO CESS OR FEE WAS CHARGED FROM THE PARTICIPANTS OF CONFERENCE, THEREFORE, THERE IS NO CONTRAVENTION OF SEC. 2(15). ITA NO.2891/AHD/2014 ASSESSMENT YEAR: 2010-11 PAGE 4 OF 4 BESIDES, EVEN IF THE DELEGATES ARE CHARGED WITH SOM E FEE IT GOES TO THE DEFRAYING OF THE EXPENSES ON CONFERENCE, THUS, ON THIS ISSUE ALSO NOTHING TURNS AGAINST THE ASSESSEE. 6. WE SEE NO REASONS TO TAKE ANY OTHER VIEW OF THE MATTER THAN THE VIEW SO TAKEN BY THE CO-ORDINATE BENCH. RESPECTFULLY FOLLOWING T HE SAME, WE REVERSE THE ACTION OF THE AUTHORITIES BELOW, IN TREATING THE INCOME FROM HOLD ING CONFERENCES BUSINESS INCOME. IN OUR CONSIDERED VIEW, THE INCOME FROM HOLDING THE CO NFERENCE, ON THE FACTS OF THIS CASE, WHICH ARE ADMITTEDLY IN PARI MATERIA WITH THE FACTS OF HEART CARE MANAGEMENT (SUPRA), OUGHT TO HAVE BEEN TREATED AS INCOME ELIGIBLE FOR E XEMPTION UNDER SECTION 11. THE ASSESSING OFFICER, ACCORDINGLY, IS DIRECTED TO DO S O. 7. IN THE RESULT, THE APPEAL IS ALLOWED IN THE TERM S INDICATED ABOVE. PRONOUNCED IN THE OPEN COURT ON THIS 28 TH DAY OF MARCH, 2018. SD/- SD/- S S GODARA PRAMOD KUMAR (JUDICIAL MEMBER) (ACCOUNTANT MEM BER) DATED: 28 TH MARCH, 2018 PBN/* COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) CIT (4) CIT(A) (5) DR (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD