CHHATISGARH UROLOGY SOCIETY, RAIPUR (CG) V. CIT, RAIPUR (CG)

ITA 84/BIL/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9104 (ITAT-RAIPUR)
• Duration Of Justice: 2 year(s) 11 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-05-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: misc
• Appeal Filed On: 26-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P K MISHRA
• Assessee Lawyers: R B DOSHI
• Keywords: Charitable institution
• Section: 12A; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, RAIPUR BENCH, RAIPUR BEFORE S/SHRI N.S SAINI, ACCOUNTANT MEMBER AND GEORGE GEORGE K, JUDICIAL MEMBER ITA NO.84 /RPR /201 4 CHHATISGARH UROLOGY SOCIETY, B - 04, JAGLIVIAN UROLOGY CENTRE, MAIN ROAD, SAMTA COLONY, RAIPUR VS. CIT, CENTRAL REVENUE BUILDING, CIVIL LINES, RAIPUR PAN/GIR NO. AABAC 5916 F (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI R.B.DOSHI, AR REVENUE BY : SHRI P.K.MISHRA, CIT DR DATE OF HEARING : 4 /05 / 2017 DATE OF PRONOUNCEMENT : 04 /05 / 2017 O R D E R PER N.S.SAINI, AM THIS IS AN APPEAL FILED BY THE ASSESSEE AGA INST THE ORDER OF CIT, RAIPUR , DATED 29.4.2014. 2. THE SOLE GROUND TAKEN BY THE ASSESSEE SOCIETY IS THAT THE LD CIT ERRED IN REJECTING THE APPLICATION FOR GRANT OF APPROVAL U/S.12A OF THE INCOME TAX, 1961. 2 ITA NO.84/RPR/2014 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED APPLICATION FOR GRANT OF REGISTRATION U/S. 12A OF THE INCOME TAX ACT, 1961 ON 18.10.2013. THE COMMISS IONER OF INCOME TAX CALLED FOR A REPORT FROM THE ASSESSING OFFICER ABOUT THE GENUINENESS OF THE SOCIETY AND ITS ACTIVITIES. THE DCIT - 1 (1) IN HER REPORT DATED 28.4.2014 HAS STATED THAT THE ASSESSEE SOCIETY HAS NOT SUBMITTED ANY INFORMATION AND, THEREF ORE, THE GENUINENESS OF THE ACTIVITIES COULD NOT BE ESTABLISHED. THE ADDL. CIT, RANGE - 1 IN HIS REPORT STATED THAT THE ASSESSEE SOCIETY FAILED TO ESTABLISH THAT IT IS ENGAGED IN CHARITABLE ACTIVITIES AND HAS NOT RECOMMENDED FOR THE APPROVAL OF GRANT OF REGI STRATION U/S.12A OF THE ACT. ACCORDINGLY, A SHOW CAUSE NOTICE WAS ISSUED ON 22.4.2014 AS TO WHY THE SOCIETY SHOULD NOT BE CONSIDERED AS A MUTUAL SOCIETY, UNDER SECTION 2(15), THE ACTIVITIES OF THE SOCIETY ARE TO BE CONSIDERED AS CHARITABLE ACTIVITY AND TO PRODUCE THE BOOKS OF ACCOUNT FOR FINANCIAL YEAR 2013 - 14. THE CIT OBSERVED THAT THE REPLY OF THE ASSESSEE SUBMITTED ON 25.4.2014 IS FOUND TO BE NOT SATISFACTORY FOR THE REASON THAT THE ASSESSEE FAILED TO PRODUCE THE BOOKS OF ACCOUNT FOR FINANCIAL YEAR 201 3 - 14, CHARITABLE ACTIVITY CLAIMED TO HAVE BEEN CARRIED ON IS BASICALLY HOLDING OF A CAMP FOR PROMOTION OF UROLOGIST SO THAT MORE AND MORE PATIENTS VISIT THESE UROLOGISTS, THE SOCIETY IS IN THE NATURE OF CLUB OF UROLOGIST DOCTORS FOR THE MUTUAL BENEFIT OF D OCTORS WHO ARE THE MEMBERS OF THE SOCIETY. THEREFORE, HE REJECTED THE APPLICATION FOR REGISTRATION U/S.12A OF THE ACT TO THE ASSESSEE SOCIETY. 3 ITA NO.84/RPR/2014 4. LD AUTHORISED REPRESENTATIVE OF THE ASSESSEE ARGUED THAT FROM PAGE 2 OF PAPER BOOK FILED BY THE ASSESSEE, IT CAN BE OBSERVED THAT THE OBJECTS OF THE SOCIETY ARE STATED THEREIN. THE CIT HAS, IN HIS ORDER, NOT FOUND ANY OF THE OBJECTS AS NON - CHARITABLE IN NATURE. HE ARGUED THAT U/S.12AA, THE SCOPE OF ENQUIRY BY THE CIT IS TO SATISFY HIMSELF ABOUT THE GENUINENESS OF THE TRUST WITH RESPECT TO THE OBJECTS OF THE TRUST AND THAT THE OBJECTS OF THE TRUST ARE CHARITABLE. HE ARGUED AND SUBMITTED THAT IT IS FOR THE ASSESSING OFFICER DURING THE COURSE OF REGULAR ASSESSMENT TO SATISFY HIMSELF THAT THE AMOUNTS ARE SPENT BY THE ASSESSEE SOCIETY ARE FOR CHARITABLE OBJECTS OR NOT AND THEREAFTER TO ALLOW EXEMPTION U/S.11 OF THE ACT TO THE ASSESSEE SOCIETY. HE ALSO POINTED OUT FROM PAGE 25 OF THE PAPER BOOK, WHEREIN IS PLACED A LETTER DATED 9.4.2014 ADDRESS ED TO THE CIT, RAIPUR AND SPECI FICALLY REFERRED TO PARA 2(II ) , WHEREIN, THE ASSESSEE STATED THAT THE SOCIETY HAS ORGANIZED FREE UROLOGY CAMP ON 25.9.2013 FOR THE PATIENTS WHO HAD COMPLEX UROLOGY PROBLEMS. PAPER CUTTING AND PHOTOGRAPHS OF THE CAMP ARE ENC LOSED FOR YOUR KIND PERUSAL. LIST OF THE PATIENTS WHO WERE EXAMINED AND TREATED BY VARIOUS DOCTORS IS ALSO ENCLOSED FOR YOUR KIND REFERENCE. . HE ARGUED THAT THE CIT HAS NOT AFTER EXAMINING THE SAME FOUND THE ABOVE DETAILS AND SUBMISSIONS OF THE ASSESSEE AS NOT CORRECT. THEREFORE, HE ARGUED THAT THE CIT WAS NOT JUSTIFIED IN REJECTING THE GRANT OF REGISTRATION U/S.12A OF THE ACT TO THE ASSESSEE ON THE GROUND THAT THE ASSESSEE FAILED TO PRODUCE BOOKS OF ACCOUNT FOR FINANCIAL YEAR 2013 - 14, THE ASSESSEE WAS HOLDING OF A CAMP FOR 4 ITA NO.84/RPR/2014 PROMOTING UROLOGIST SO THAT MORE AN D MORE PATIENTS VISIT THESE UROLOGISTS AND THAT IT WAS A CLUB OF UROLOGIST DOCTORS FOR MUTUAL BENEFITS OF THE DOCTORS. HENCE, HE PRAYED THAT THE ORDER OF THE CIT SHOULD BE SET ASIDE AND REGISTRATION U/S.12 A SHOULD BE GRANTED TO THE ASSESSEE. 5. ON THE OTHER HAND, LD D.R. RELIED ON THE ORDER OF THE CIT. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD. IN THE INSTANT CASE, THE ASSESSEE SOCIETY FILED AN APPLICATION FOR GRANT OF REGISTRATION U/S.12A OF THE ACT ON 18.10.2013, WHICH WAS REJECTED BY THE CIT ON THE GROUND THAT BOOKS OF ACCOUNT OF FINANCIAL YEAR 2013 - 14 ARE NOT PRODUCED. THE ASSESSEE WAS HOL DING A CAMP TO PROMOTE UROLOGIST TO GET MORE AND MORE PATIENTS AND THAT IT WAS A CLUB OF UROLOGIST DOCTORS FOR MUTUAL BENEFIT OF DOCTORS. THE CONTENTION OF LD A.R. OF THE ASSESSEE IS THAT THE ASSESSEE FILED BEFORE THE CIT, COPY OF AIMS AND OBJECTS OF THE SOCIETY, A COPY OF WHICH IS PLACED AT PAGE 2 OF THE PAPER BOOK, WHICH READS AS UNDER: THE AIMS AND OBJECTS FOR WHICH THE ASSOCIATION IS ESTABLISHED ARE AS UNDER: ( 1 ) TO PROPAGATE, PREACH, FAMILARISE ABOUT THE VARIOUS SCHEMES, PROGRAMMES RELATED TO HEALTH. ( 2 ) TO CONDUCT FREE MEDICAL CHECK - UP CAMPS FOR PUBLIC AT LA RGE WITHOUT DIS - CRIMINATING ON THE BASIS OF CASTE, CREED, COLOR OR RELIGION. 5 ITA NO.84/RPR/2014 (3) TO REACH OUT PUBLIC AT LARGE TO EDUCATE THEM ABOUT HEALTHY LIFE AND BENEFITS OF CLEANLINESS. (4) TO ENCOURAGE AND ADVANCE THE KNOWLEDGE STUDY AND PRACTI CE OF THE SCIENCE UROLOGY IN ALL POSSIBLE WAYS. (5) TO PROMOTE SCIENTIFIC COLLABORATION OF AMONGST MEMBERS AND MADE RULES REGARDING STANDARDS FOR THEIR PROFESSIONAL CONDUCT (6) TO ORGANIZE, ESTABLISH, CO NDUCT SUPERINTEND OR CONTROL INSTITUTIONS FOR PRO MOTING DIRECTLY OR INDIRECTLY, PRACTICE, STUDY AND RESEARCH IN UROLOGY IN ANY OF ITS ASPECTS. (7) TO ESTABLISH AND MAINTAIN LI BRARIES, READING ROOMS, LABORATORIES AND RESEARCH CENTRES FOR THE PROMOTION OF ITS OBJECTIVES. (8) TO PROVIDE FACILITIES TO STUDENTS, SCHOLARS AND INSTITUTIONS FOR THE STUDY OF OR RESEARCH IN UROLOGY IN ANY OF ITS ASPECTS BYWAY OF SCH OLARSHIPS, FELLOWSHIPS, GRANTS, ENDOWMENTS, ETC. (9) TO FOUND, MAINTAIN OR AWARD, EITHER ITSELF OR - OPERATION WITH OTHER BODIES OR PERSONS FELLOWSHIPS, PRIZES, CERTIFICATES, DIPLOMA OF PROFICIENCY IN THE SCIENCE OF UROLOGY AND CONDUCT SUCH TESTS, EXAMINATIONS OR OTHER SCRUTINY AS MAY BE PRESCRIBED FROM TIME TO TIME. (10) TO PRI NT AND PUBLISH OFFICIAL JOURNALS OF THE SOCIETY, BOOKS, PERIODICALS OR PUBLICATIONS ON UROLOGY AND ALLIED SUBJECTS WHICH THE SOCIETY, THINKS DESIRABLE FOR THE PROMOTION OF ITS OBJECTIVES. (11) TO TRAIN UP PERSONNEL FOR CARRYING OUT THE OBJECTIVES OF THE S OCIETY AND TO INCUR NECESSARY EXPENSES. (12) TO ORGANIZE CONFERENCE, LECTURES, MEETINGS, SEMINARS, CMES, EXHIBITIONS FOR THE PROMOTION OF ITS OBJECTIVES. (13) TO FACILITATE FORMATION OF BRANCHES/SUB - SPECIALTY CHAPTERS OF THE SOCIETY WHETHER IN STATE OR E LSEWHERE, FOR PROMOTING ALL OR ANY OF THE OBJECTIVES OF THE SOCIETY. (14) TO CO - OPERATE, AFFILIATE WITH OTHER BODIES AND ALSO TO ENGAGE IN SUCH OTHER FORMS OF ACTIVITIES AS MAY BY DECIDED UPON BY THE SOCIETY FROM TIME TO T IME FOR THE PURPOSE OF CARRYING OUT AL L OR ANY OF THE OBJECTS OF THE SOCIETY. 6 ITA NO.84/RPR/2014 (15) T O CONSIDER AND EXPRESS ITS VIEWS ON ALL QUESTIONS AFFECTING CHILD H EALTH IN S TATE AND TO STUDY, SUGGEST, CRITICIZ E OR OTHERWISE, ADVISE OR TAKE PART IN THE FRA MING OF LAWS AFFECTING THE SCIENCE AND PRAC TICE OF UROLOGY. (16) T O APPOINT OFFICERS AND OTHER STAFF A S MAY BE FOUND NECESSARY OR CONVENIENT FOR THE CONDUCT AND M ANAGEMENT OF THE AFFAIRS OF THE SOCIETY AND PAY THEM SUCH REMUNERATION AS MAY BE PRESCRIBED FROM TIME. (17) TO DO ALL SUCH OTHER THIN GS AS MA Y BE NECESSARY, INCIDENTAL, CONDUCIVE OR CONVENIENT TO THE ATTAINMENT OF THE ABOVE OBJECTIVES OR ANY OF THE M. (18) TO FACILITATE DEVELOPMENT OF UROL OGY SPECIALTIES INCLUDING ACCREDITATION OF UROLOGY SPECIALTY COURSES BY INSTITUTIONS. 7. HE SUBMITTED THAT NONE OF THE OBJECTS OF THE SOCIETY HAS BEEN FOUND BY THE CIT TO BE NON - GENUINE OR ARE NOT CHARITABLE IN NATURE. HE SUBMITTED THAT WHILE GRANTING REGISTRATION U/S.12A OF THE ACT, THE CIT HAS TO SATISFY HIMSELF ABOUT THE OBJECTS OF THE TRUST AND GENUINENESS OF ITS ACTIVITIES. HE IS NOT TO EXAMINE WHETHER THE ASSESSEE HAS UTILIZED THE AMOUNTS RECEIVED FOR CHARITABLE PURPOSES OF THE TRUST AS THAT FALLS WITHIN THE DOMAIN OF THE ASSESSING OFFICER WHILE ASSESSING THE INCOME OF THE ASSESSEE AND ALL OWING EXEMPTION U/S.11 OF THE ACT. HE SUBMITTED THAT AFTER EXAMINING THE OBJECTS OF THE TRUST, THE CIT HAS NOT FOUND ANY OF ITS OBJECTS TO BE NON - GENUINE OR NOT CHARITABLE IN NATURE AND, THEREFORE, REFUSAL TO GRANT REGISTRATION U/S.12A OF THE ACT TO THE A SSESSEE SOCIETY IS NOT PROPER AND, THEREFORE, THE ORDER OF THE CIT SHOULD BE REVERSED AND REGISTRATION U/S.12A SHOULD BE GRANTED TO THE ASSESSEE SOCIETY. FOR THIS, HE PLACED RELIANCE ON THE DECISION OF DELHI 7 ITA NO.84/RPR/2014 BENCHES OF THE TRIBUNAL IN THE CASE LORD KRISHN A CHARITABLE TRUST VS CIT, (2016) 48 CCH 0020 (DEL TRIB), WHEREIN, IT WAS HELD THAT SECTION 12AA PRESCRIBED SCOPE AND AMBIT OF ENQUIRY THAT THE COMMISSIONER WAS AUTHORIZED TO CARRY OUT AT THE TIME OF GRANT OF REGISTRATION TO TRUST OR INSTITUTION AND THE SC OPE AND AMBIT OF ENQUIRY REVOLVED AROUND NATURE OF OBJECTS BEING CHARITABLE OR RELIGIOUS, AND GENUINENESS OF ACTIVITIES OF TRUST OR INSTITUTION AND IF THESE ARE FAULTY, REGISTRATION CANNOT BE GRANTED TO THE ASSESSEE. 8. HE RELIED ON THE DECISION OF JAI PUR BENCH OF THE TRIBUNAL IN THE CASE OF JAIPUR RURAL HEALTH & D EVELOPMENT VS CIT, (2016) 47 CCH 0762 (JAIPUR TRIB), WHEREIN, IT WAS HELD THAT THE ASSESSEE SUBMITTED THAT THE OBJECTS OF THE ASSESSEE OF CLAUSE (A) AND (D) ARE FOR ESTABLISHMENT OF HOSPITALS AND COLLEGES. AS PER CLAUSE 16 OF THE TRUST DEED, NO INCOME OR PART OF INCOME OR ASSETS OF THE TRUST FUND CAN BE APPLIED OR TRANSFERRED FOR ANY PURPOSES OTHER THAN CHARITABLE PURPOSES. KEEPING THIS CLAUSE IN VIEW, THE ORDER OF THE CIT IS SET ASIDE AND DI RECT HIM TO CONSIDER THE APPLICATION OF THE ASSESSEE FOR REGISTRATION U/S.12AA OF THE ACT. 9. FURTHER, HE RELIED ON THE DECISION OF HONBLE ALLAHABAD HIGH COURT IN THE CASE OF FIFTH GENERATION EDUCATION SOCIETY VS CIT, 185 ITR 634 (ALL), WHEREIN, IT WAS HELD THAT AT THE TIME OF CONSIDERING APPLICATION FOR GRANT OF REGISTRATION UNDER SECTION 12A, THE CIT IS NOT REQUIRED TO EXAMINE THE 8 ITA NO.84/RPR/2014 APPLICATION O INCOME OR CARRYING ON OF ANY ACTIVITY BY THE ASSESSEE TRUST OR INSTITUTION. 10, FURTHER, HE RELIED ON THE DEC ISION OF HONBLE RAJASTHAN HIGH COURT IN THE CASE OF CIT VS. VIJAY VARGIYAVANI CHARITABLE TRUST, 369 ITR 360(RAJ), WHEREIN, IT WAS HELD THAT THE REGISTRATION MUST BE GRANTED U/S.12AA OF THE ACT TO THE ASSESSEE WHEN IT IS MEANT FOR CHARITABLE PURPOSES ON T HE BASIS OF GENUINENESS OF OBJECTS AND TRUST AND NOT INCOME OF TRUST. 11. WE FIND THAT NONE OF THE OBJECTS OF THE SOCIETY HAS BEEN FOUND AFTER EXAMINATION BY THE CIT AS NOT - GENUINE OR NOT CHARITABLE IN NATURE. IN VIEW OF ABOVE QUOTED DECISIONS OF THE TRI BUNALS AND HONBLE HIGH COURTS, THE CIT AT THE TIME OF GRANT OF REGISTRATION U/S.12A OF THE ACT, HAS TO CONSIDER WHETHER THE OBJECTS OF THE TRUST ARE CHARITABLE AND THE ACTIVITIES OF THE TRUST ARE GENUINE. IF HE FINDS THAT THE OBJECTS OF THE TRUST ARE CHA RITABLE AND THE ACTIVITIES OF THE TRUST ARE GENUINE, THEN HE SHOULD GRANT REGISTRATION U/S.12A OF THE ACT TO THE ASSESSEE SOCIETY. IT HAS BEEN HELD THAT AT THE TIME OF REGISTRATION, THE CIT IS NOT TO EXAMINE THE APPLICATION OF INCOME OR CARRYING ON ANY AC TIVITY BY THE ASSESSEE TRUST OR INSTITUTION. IN VIEW OF FOREGOIN G, WE HOLD THAT THE REJECTION OF REGISTRATION APPLICATION OF THE ASSESSEE SOCIETY U/S.12A BY THE CIT IS NOT JUSTIFIED AND HENCE, WE SET ASIDE HIS ORDER AND DIRECT HIM TO GRANT REGISTRATION U/S.12A OF THE ACT TO THE ASSESSEE AND ACCORDINGLY ALLOW THE GROUND OF APPEAL OF THE ASSESSEE. 9 ITA NO.84/RPR/2014 12 IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCE D IN THE OPEN COURT ON 04 /05 /2017 IN THE PRESENCE OF PARTIES. SD/ - SD/ - (GEORGE GEORGE K ) ( N.S. SAINI) JUDICIAL MEMBER A CCOUNTANT MEMBER RAIPUR ; DATED 04 /05 /2017 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER, SR.PRIVATE SECRETARY 1. THE APPELLANT :CHHATISGARH UROLOGY SOCIETY, B - 04, JAGLIVIAN UROLOGY CENTRE, MAIN ROAD, SAMTA COLONY, RAIPUR 2. THE RESPONDENT. CIT, RAIPUR. 3. THE CIT(A), RAIPUR . 4. DR, ITAT, RAIPUR 5. GUARD FILE. //TRUE COPY//