Amandeep Educational Society, Amritsar. V. The Commissioner of Income-tax-I, Amritsar.

ITA 634/ASR/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 8805 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 4 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 10-03-2016
• Assessment Year: misc
• Appeal Filed On: 20-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: U S ARORA
• Section: 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. A.D. JAIN, JUDICIAL MEMBER AND SH. T.S. KAPOOR, ACCOUNTANT MEMBER ITA NO.634(ASR)/2014 ASSESSMENT YEAR: PAN:AADAA1817D AMANDEEP EDUCATIONAL SOCIETY VS. COMMISSIONER OF I NCOME TAX-1, I/S AMANDEEP HOSPITAL, AMRITSAR. MODEL TOWN, G.T. ROAD, AMRITSAR. (APPELLANT) (RESPONDENT) APPELLANT BY:SH. U.S.ARORA, CA RESPONDENT BY: SH. TARSEM LAL, DR DATE OF HEARING: 10/03/2016 DATE OF PRONOUNCEMENT: 15/03/2016 ORDER PER A.D. JAIN, JM: THIS IS THE ASSESSEES APPEAL AGAINST THE LD. CIT S ORDER DATED 22.08.2014, REJECTING THE ASSESSEES APPLICATION FO R GRANT OF REGISTRATION U/S 12AA OF THE INCOME TAX ACT, 1961. 2. BEFORE THE LD. CIT, THE ASSESSEE SUBMITTED THAT THE SOCIETY HAS FORMED MAINLY WITH THE OBJECTIVE OF DISSEMINATION O F KNOWLEDGE IN THE FIELD OF MEDICAL SCIENCE. IN FURTHERANCE THEREOF, A ND IN CONSONANCE WITH CLAUSE 11 OF THE OBJECTS OF THE SOCIETY, THE SOCIET Y ORGANIZED A TWO DAY RESIDENTIAL COURSE IN ANKLE AND FOOT SURGERY IN AMR ITSAR. THE COURSE WAS ATTENDED BY ALMOST 100 DOCTORS/DELEGATES FROM ALL O VER THE COUNTRY. THE FACULTY COMPRISED OF REPUTED DOCTORS FROM INDIA AND ABROAD. THE EFFORTS ITA NO.634(ASR)/2014 2 OF THE SOCIETY TO ORGANIZE THE CONFERENCE WERE APPL AUDED BY MEDIA AS WELL AS MEDICAL FRATERNITY AND THERE HAD BEEN DEMAND TO ORGANIZE MORE SUCH EVENTS. THE SOCIETY IS ALSO CONSIDERING SETTING UP A NURSING COLLEGE AT VILLAGE JETHUWAL IN DISTRICT AMRITSAR. PROPOSALS TO SPONSORS/DELEGATES TO SEMINARS/WORKSHOPS WERE ALSO UNDER CONSIDERATION. FURTHER, IT WAS SUBMITTED THAT THE SOCIETY HAD CHARGED RS.1,00,000/ - AS SPONSORSHIP FREE FROM AMANDEEP HOSPITAL FOR SPONSORING THE RESI DENTIAL COURSE ON FOOT AND ANKLE SURGERY HELD IN AMRITSAR ON 28 TH & 29 TH JUNE, 2014. THE SAID FEE WAS DRAWN BY CHEQUES DRAWN ON STATE BANK O F INDIA AND RECEIPT THEREOF WAS ALSO ENCLOSED. 3. THE LD. CIT, HOWEVER, REJECTED THE APPLICATION H OLDING AS UNDER: 1. THAT THE SOCIETY HAD RECEIVED A SUM OF RS.1,00, 000/- ON 27.03.2014 FROM AMANDEEP HOSPITAL, G.T.ROAD, MODEL TOWN AMRITSAR AND RETURNED THE SAME AMOUNT TO AMANDEEP HOSPITAL, AMRITSAR ON 31.05.2014. NO REASON HAS BE EN GIVEN FOR RAISING SUCH LOAN. AS PER MEMORANDUM OF THE ASSOCIATION, THE MANAGING COMMITTEE OF THE SOCIETY IS EMPOWERED TO RAISE LOANS FROM ANY BANK/FINANCIAL INSTITUTION FOR THE CONSTRUCTION OF COLLEGE BUILDIN GS, IMPLEMENTATION OF THE PROJECT ETC. TO PROVIDE THE G UARANTEES OF MANAGING COMMITTEE TO SECURE THE CREDIT FACILITI ES AND TO MORTGAGE THE PROPERTIES OF THE SOCIETY. MEMORANDUM OF THE ASSOCIATION DOESNT EMPOWER THE SOCIETY TO RAISE LO AN FROM ANY OF ITS MEMBERS OR FROM ANY INSTITUTION LIKE AMA NDEEP HOSPITAL. 2. THAT THE SOCIETY HAD PLANNED TO HOLD INTERNATION AL CONFERENCE3 OF DOCTORS IN AMRITSAR ON 28 TH & 29 TH JUNE, 2014. A COPY OF THE INVITATION BROCHURE FOR THE CON FERENCE NAMED 2 ND MID YEAR PAREKH INDO-US FOOT AND ANKLE COURSE HAS ALSO BEEN ENCLOSED WITH HIS SUBMISSION DATED 22.08.2014. IT IS CLEAR FROM THIS BROCHURE THAT INV ITATION FOR THE CONFERENCE WAS GIVEN BY SOME PAREKH FAMILY FOUN DATION AND AMANDEEP HOSPITAL AND CLINICS AND ONLY THE BANK ACCOUNT OF THE SOCIETY WAS USED TO RECEIVE FUND FRO M THE DELEGATES, PG STUDENTS AND FOREIGN DELEGATES. ITA NO.634(ASR)/2014 3 3. IN VIEW OF ABOVE, I HAVE REACH THE CONCLUSION TH AT THE ASSESSEES SOCIETY HAS UTILIZED ITS FUNDS FOR THE B ENEFIT OF INTERESTS PERSON AND HENCE, THE EDUCATIONAL SOCIETY IS NOT DOING WORK THAT COULD BE CALLED AS CHARITABLE FALLI NG IN THE AMBIT OF SECTION 2(15) OF THE I.T. ACT, 1961. THERE FORE, KEEPING IN VIEW THE PROVISIONS OF SECTION 12AA(1)(B)(II) OF THE INCOME TAX ACT, 1961, THE APPLICATION OF THE INSTITUTION F OR GRANT OF REGISTRATION U/S 12AA OF THE ACT, IS HEREBY REJECTE D. 4. THE LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT THE LD. CIT HAS ERRED IN LAW AND ON FACTS IN REJECTING THE APPLICAT ION OF THE ASSESSEE FOR GRANT OF REGISTRATION U/S 12AA OF THE ACT. THE CONC LUSION ARRIVED AT BY THE LD. COMMISSIONER TO THE EFFECT THAT THE ASSESSE E IS NOT ENGAGED IN CHARITABLE ACTIVITIES FALLING WITHIN SECTION 2(15) OF THE ACT, IS PERVERSE AND IS NOT WARRANTED BY THE FACTS OF THE CASE. HE FURTH ER SUBMITTED THAT THE ORDER OF THE LD. CIT IS ILLEGAL, ARBITRARY AND BAD IN LAW. 5. THE LD. DR, ON THE OTHER HAND, STRONGLY RELIED U PON THE IMPUGNED ORDER. 6. THE PROCEDURE FOR REGISTRATION HAS BEEN PRESCRIB ED U/S 12AA OF THE ACT. THEREUNDER, THE PARAMETER FOR GRANT/NON-GRANT OF REGISTRATION IS THE SATISFACTION OF THE LD. CIT AS TO THE OBJECTS AND GENUINENESS OF ACTIVITIES OF THE APPLICANT TRUST/INSTITUTION. IN CASE THE LD. CIT(A) IS SATISFIED REGARDING BOTH THESE ASPECTS, THE REGISTRATION SOUG HT SHALL BE GRANTED. ELSE, IT SHALL BE REFUSED. 7. IN THE PRESENT CASE, NEITHER THE OBJECTS, NOR TH E GENUINENESS OF THE ACTIVITIES OF THE ASSESSEE HAVE BEEN DOUBTED BY THE LD. CIT. THE ASSESSEE- SOCIETY WAS FORMED MAINLY WITH THE OBJECTIVE OF DIS SEMINATION OF KNOWLEDGE IN THE FIELD OF MEDICAL SCIENCE. IT HAS N OT BEEN DISPUTED THAT IT ITA NO.634(ASR)/2014 4 WAS IN FURTHERANCE OF ITS AVOWED OBJECTS, IN CONSON ANCE WITH CLAUSE 11 OF THE OBJECTS OF THE SOCIETY; THAT IT ORGANIZED A TWO DAYS RESIDENTIAL COURSE IN ANKLE AND FOOT SURGERY IN AMRITSAR. THIS COURSE CAN BY NO MEANS BE SAID TO BE NOT IN FURTHERANCE OF THE ASSESSEES OBJ ECT OF DISSEMINATION IN THE FIELD OF MEDICAL SCIENCE. SUCH A COURSE WOULD O BVIOUSLY MAKE THE ATTENDING DOCTORS KNOWLEDGEABLE IN THE MEDICAL SCIE NCE FIELD OF FOOT AND ANKLE SURGERY. THE COURSE WAS ATTENDED BY ALMOST 10 0 DOCTORS/DELEGATES. 8. THE ASSESSEE SOCIETY CHARGED RS.1,00,000/- AS SP ONSORSHIP FEE FROM AMANDEEP HOSPITAL FOR SPONSORING THE AFORESAID COURSE. THE LD. CIT HAS OBJECTED THAT IT WAS THE SAID AMANDEEP HOSPITAL WHICH, ALONGWITH ONE PAREKH FAMILY FOUNDATION, WHICH GAVE THE INVITA TION FOR THE COURSE (WRONGLY MENTIONED BY THE CIT AS A CONFERENCE), AND THAT ONLY THE BANK ACCOUNT OF THE ASSESSEE SOCIETY WAS USED TO RE CEIVE FUND FROM THE DELEGATES, PG STUDENTS AND FOREIGN DELEGATES. THE C IT HAS OBJECTED THAT NO REASON WAS GIVEN FOR RAISING THE LOAN FROM AMAND EEP HOSPITAL; THAT THE METHOD OF ACCOUNTING OF THE SOCIETY DOES NOT EM POWER IT TO RAISE LOANS FROM ANY OF ITS MEMBERS OR FROM INSTITUTIONS LIKE AMANDEEP HOSPITAL. 9. THE LD. CIT HAS NOTED THAT THE LOAN OF RS.1,00,0 00/- FROM AMANDEEP HOSPITAL WAS RECEIVED BY THE SOCIETY, BY C HEQUES, ON 30.05.2014. THE LD. CIT HAS ALSO HIMSELF OBSERVED T HAT THIS AMOUNT WAS RETURNED ON THE VERY NEXT DATE, I.E., ON 31.05.2014 . THAT BEING SO, THERE REMAINED NO AMOUNT WITH THE ASSESSEE-SOCIETY. ITA NO.634(ASR)/2014 5 10. APROPOS THE FUNDS RECEIVED BY THE SOCIETY FROM THE DELEGATES, PG STUDENTS AND FOREIGN DELEGATES, THESE FUNDS HAVE NO T BEEN OBSERVED BY THE CIT TO HAVE BEEN TAKEN BY THE SOCIETY AS LOANS. THE LD. CIT HAS NOT POINTED OUT ANYTHING PRECLUDING THE SOCIETY FROM RE CEIVING THE FUNDS. 11. THE LD. CIT HAS OBSERVED THAT THE SOCIETY HAS U TILIZED ITS FUNDS FOR THE BENEFIT OF INTERESTED PERSONS. HOWEVER, AS TO H OW THIS IS SO, HAS NOT BEEN ELABORATED. 12. IN VIEW OF THE ABOVE, THE LD. CIT ERRED IN REJE CTING THE APPLICATION FILED BY THE SOCIETY FOR GRANT OF REGISTRATION. 13. ACCORDINGLY, ORDER UNDER APPEAL IS REVERSED. TH E LD. CIT IS DIRECTED TO GRANT THE REGISTRATION REQUESTED. 14. IN THE RESULT, THE APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 15/03/ 20 16. SD/- SD/- (T.S. KAPOOR) (A.D. JAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 15/03/2016 COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:AMANDEEP EDUCATION SOCIETY, AMRITSAR. 2. THE CIT-1, AMRITSAR. 3. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.