Society for Clinical Gastroenterology, Chandigarh v. CIT(E), Chandigarh

ITA 1373/CHANDI/2019 | misc
Pronouncement Date: 31-08-2021 | Result: Allowed

Appeal Details

RSA Number 137321514 RSA 2019
Assessee PAN AAXTS2427E
Bench Chandigarh
Appeal Number ITA 1373/CHANDI/2019
Duration Of Justice 1 year(s) 10 month(s) 12 day(s)
Appellant Society for Clinical Gastroenterology, Chandigarh
Respondent CIT(E), Chandigarh
Appeal Type Income Tax Appeal
Pronouncement Date 31-08-2021
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted B
Tribunal Order Date 31-08-2021
Date Of Final Hearing 10-06-2021
Next Hearing Date 10-06-2021
Last Hearing Date 15-04-2020
First Hearing Date 01-04-2021
Assessment Year misc
Appeal Filed On 18-10-2019
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH B CHANDIGARH BEFORE SHRI N.K. SAINI VICE PRESIDENT & SHRI R.L NEGI JUDICIAL MEMBER ./ ITA NO. 1373/CHD/2019 U/S 12A(1)(B)(II) SOCIETY FOR CLINICAL GASTROENTEROLOGY BLOCK F PGI SECTOR 12 CHANDIGARH-160012 THE CIT (EXEMPTIONS) CHANDIGARH ./PAN NO: AAXTS2427E / APPELLANT /RESPONDENT HEARING THROUGH VIDEO CONFERENCING /ASSESSEE BY : SHRI HARISH NAYYAR C.A. / REVENUE BY : SMT. KUSUM BANSAL CIT ' /DATE OF HEARING : 26.08.2021 ' / DATE OF PRONOUNCEMENT : 31. 08.2021 / ORDER PER R.L. NEGI JUDICIAL MEMBER: THE ASSESSEE HAS FILED THE PRESENT APPEAL AGAINST T HE ORDER DATED 24.09.2019 PASSED BY COMMISSIONER OF INCOME TAX (EX EMPTIONS) CHANDIGARH WHEREBY THE LD. CIT(E) HAS REJECTED THE APPLICATION FILED BY THE APPELLANT/APPLICANT FOR GRANT OF REGISTRATIO N U/S 12AA OF THE INCOME TAX ACT 1961 (FOR SHORT THE ACT) 2. BRIEF FACTS OF THE CASE ARE THAT APPELLANT SOCIE TY WAS FORMED UNDER SOCIETY REGISTRATION ACT 1860 BY EXPERT AND EXPERI ENCED DOCTORS OF THE POST GRADUATE INSTITUTE OF MEDICAL EDUCATION AND RE SEARCH (PGIMER) ITA NO. 137 3-CHD-2019- SOCIETY FOR CLINICAL GASTROENTEROLOGY CHANDIGARH 2 CHANDIGARH FOR RENDERING MEDICAL SERVICES TO PUBLI C AT LARGE PARTICULARLY TO THE POOR SEGMENT BY PROMOTING AWARE NESS OF EARLY SIGNS OF CANCER IN COMMON PEOPLE BY CONDUCTING SCREENING PROGRAM HOLDING CAMPS AND DEVELOPING AWARENESS FOR PREVENTION OF CA NCER BY CONDUCTING SURVEYS ON NEOPLASTIC AND NON-PLASTIC DI SEASE AND CONDUCTING RESEARCH IN THE SAID FIELD UPDATING KNOWLEDGE IN C LINICAL GASTROENTEROLOGY BY ORGANIZING CONFERENCES SYMPOSI A SEMINARS WORKSHOPS CEM ETC. AND BY FINANCIALLY HELPING POSTG RADUATE STUDENTS FOR ATTENDING CONFERENCES SYMPOSIA SEMINARS WORK SHOPS CEM ETC. THE SOCIETY FILED APPLICATION IN FORM NO.10A BEFORE THE CIT(E)FOR REGISTRATION U/S 12AA OF THE ACT ON 06.03.2019. THE LD. CIT(E) AFTER PERUSING THE DETAILS AND DOCUMENTS FILED BY THE SOC IETY DENIED THE REGISTRATION HOLDING THAT SOCIETY HAS BEEN CREATED FOR ADVANCEMENT AND SUPPORTING THE QUALIFIED DOCTORS THEREFORE THE AIM S AND OBJECTS ARE NOT FOR THE WELFARE OF PUBLIC AT LARGE. FURTHER THE SOC IETY HAS NOT STATED ANY ACTIVITY THEREFORE IT IS NOT POSSIBLE TO VERIFY THE GENUINENESS OF THE ACTIVITIES OF THE SOCIETY FOR THE PURPOSE OF GRANTI NG REGISTRATION. 3. THE ASSESSEE HAS CHALLENGED THE ACTION OF THE LD . CIT(A) ON THE FOLLOWING GROUNDS - 1. THAT THE ORDERS OF THE CIT(EXEMPTIONS) CHANDIG ARH HAVE BEEN PASSED IN HASTE AND HAVE IGNORED BASIC AS PECTS AND FACTS OF THE CASE THUS CAUSING UNDUE HARDSHIP T O THE APPLICANT. 2. THAT THE CIT (EXEMPTIONS) CHANDIGARH HAS ERRED BOTH ON FACTS AND LAW IN REJECTING THE APPLICATION FILED UNDER ITA NO. 137 3-CHD-2019- SOCIETY FOR CLINICAL GASTROENTEROLOGY CHANDIGARH 3 SECTION 12A OF THE INCOME TAX ACT 1961 AND DENYING TO THE APPELLANT ITS RIGHT TO SEEK REGISTRATION UNDER SECTION 12 OF THE INCOME TAX ACT. 3. THAT THE CIT (EXEMPTIONS) CHANDIGARH HAS ERRED B OTH ON FACTS AND LAW IN HOLDING THAT THE OBJECTIVES OF THE APPELLANT ARE NOT FOR ADVANCEMENT OF OBJECTS OF GEN ERAL PUBLIC UTILITY FOR PUBLIC AT LARGE BUT RESTRICTED T O QUALIFIED SECTION OF PUBLIC I.E. DOCTORS ONLY. 4. THAT THE CIT (EXEMPTIONS) CHANDIGARH HAS ERRED BOTH ON FACTS AND LAW IN REJECTING THE APPLICATION FOR G RANT OF REGISTRATION UNDER SECTION12A OF THE INCOME TAX ACT ON THE GROUND THAT THE SOCIETY HAS YET NOT COMMENTED I TS FUNCTIONING AND IN THE ABSENCE OF ACTIVITIES IT IS NOT POSSIBLE TO VERIFY THE GENUINENESS OF THE ACTIVITIE S. 5. THAT THE APPELLANT CRAVES TO ADD DELETE CONCED E MODIFY ANY OR ALL THE GROUNDS OF APPEAL AT THE TIME OF HEARING OF APPEAL 4. AT THE OUTSET THE LD. COUNSEL FOR THE APPELLANT /APPLICANT SUBMITTED THAT THE LD. CIT(E) HAS REJECTED THE APPLICATION IN A MECHANICAL MANNER WITHOUT APPLICATION OF MIND. THE LD. CIT(E) HAS REJ ECTED THE APPLICATION WRONGLY HOLDING THAT THE SOCIETY HAS BEEN FORMED FO R ADVANCEMENT AND SUPPORT OF QUALIFIED DOCTORS AND NOT FOR PUBLIC AT LARGE. THE LD. COUNSEL FURTHER SUBMITTED THAT THE AIMS AND OBJECTS OF THE SOCIETY CLEARLY REVEAL THAT THE SOCIETY HAS BEEN ESTABLISHED FOR PREVENTIO N/TREATMENT OF CANCER BY DEVELOPING AWARENESS ORGANIZING CONFERENCES SE MINARS WORKSHOPS ETC. FOR UPDATING KNOWLEDGE IN RECENT DIAGNOSTIC FA CILITIES AVAILABLE CONDUCTING RESEARCH IN THE FIELD OF NEOPLASTIC AND NON-NEOPLASTIC DISEASES. THE LD. COUNSEL PLACING RELIANCE ON THE D ECISION OF THE ITA NO. 137 3-CHD-2019- SOCIETY FOR CLINICAL GASTROENTEROLOGY CHANDIGARH 4 CHANDIGARH BENCH OF THE ITAT SUBMITTED THAT SINCE T HE FINDINGS OF THE LD. CIT(E) ARE CONTRARY TO THE DECISION OF THE JURI SDICTIONAL TRIBUNAL IN THE CASE OF SOCIETY FOR THE STUDY OF LIVER DISEASES VS. CIT(E) ITA NO. 1104/CHD. /2016 AND IN THE CASE OF PEDIATRIC PULMONOLOGY PROGRAMME TRUST VS. CIT ITA NO 779/CHD/2014 THE SAME IS LIABLE TO BE SET ASIDE. THE LD. COUNSEL FURTHER POINTED OUT THAT IN THE SAI D CASES THE SAID SOCIETY/TRUST HAVING AIMS AND OBJECTS SIMILAR TO TH E AIMS AND OBJECTS OF THE PRESENT SOCIETY FILED APPLICATIONS FOR GRANT O F REGISTRATION U/S 12AA OF THE ACT. THE CONCERNED CIT(E) REJECTED THE APPLI CATIONS FOR SAID SOCIETY/TRUST HOLDING THAT THE AIMS AND OBJECTS DO NOT FALL WITHIN THE DEFINITION OF CHARITABLE PURPOSES UNDER SECTION 2(1 5) OF THE ACT. THE CHANDIGARH BENCH OF THE TRIBUNAL SET ASIDE THE IMPU GNED ORDERS PASSED BY THE CONCERNED AUTHORITIES HOLDING THAT THE SOCIE TY/TRUST ARE ENTITLED FOR REGISTRATION U/S 12AA OF THE ACT. 5. THE LD. COUNSEL FURTHER CONTENDED THAT IN THE PR ESENT CASE THE LD. CIT(E) HAS WRONGLY OBSERVED THAT SINCE THE SOCIETY HAS NOT COMMENCED ITS ACTIVITIES GENUINENESS OF ITS OBJECTS AND ACTI VITIES CANNOT BE SEEN FOR THE PURPOSE OF GRANTING REGISTRATION. THE LD. COUNS EL PLACING RELIANCE ON THE JUDGMENT OF THE HON'BLE SUPREME COURT IN THE CA SE OF M/S ANANDA SOCIAL AND EDUCATIONAL TRUST VS. THE CIT AND ANOTHE R 2020(2) TMI 1293 (SC) SUBMITTED THAT SINCE THE FINDINGS OF THE LD. CIT(E ) ARE CONTRARY TO THE LAW LAID DOWN BY THE HON'BLE SUPREME COURT THE IMPUGNED ORDER IS BAD IN LAW THEREFORE LIABLE TO BE SET ASIDE. ITA NO. 137 3-CHD-2019- SOCIETY FOR CLINICAL GASTROENTEROLOGY CHANDIGARH 5 6. ON THE OTHER HAND THE LD. DEPARTMENTAL REPRESEN TATIVE (DR) SUPPORTING THE ORDER PASSED BY THE LD. CIT(E) SUBMI TTED THAT SINCE THE AIMS AND OBJECTS OF THE SOCIETY DO NO FALL UNDER TH E DEFINITION OF CHARITABLE ACTIVITIES AND SINCE THE SOCIETY HAD NOT COMMENCED ANY ACTIVITY THE LD. CIT(E) HAS RIGHTLY REJECTED THE AP PLICATION FOR REGISTRATION U/S 12AA OF THE ACT. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS OF THE PARTI ES AND PERUSED THE MATERIAL ON RECORD INCLUDING THE CASES RELIED UPON BY THE LD. COUNSEL FOR THE ASSESSEE. THE LD. CIT(E) HAS REJECTED THE APPLI CATION OF THE APPELLANT/ SOCIETY BASICALLY ON THE TWO GROUNDS I.E . THE AIMS AND OBJECTS OF THE SOCIETY DO NOT FALL WITHIN THE DEFINITION OF CHARITABLE PURPOSES AS DEFINED IN SECTION 2(15) OF THE ACT AND SINCE THE SOCIETY HAS NOT COMMENCED ANY ACTIVITIES IT IS NOT POSSIBLE TO ASC ERTAIN THE GENUINENESS OF THE ACTIVITIES FOR THE PURPOSE OF GRANTING REGIS TRATION. 8. AS POINTED OUT BY THE LD. COUNSEL THE FIRST ISS UE IS COVERED IN FAVOUR OF THE APPELLANT/SOCIETY BY THE DECISION OF THE COORDINATE BENCHES OF THE TRIBUNAL IN THE CASES OF SOCIETY FOR THE STUDY OF LIVER DISEASES VS. CIT(E) AND PEDIATRIC PULMONOLOGY PROGRAMME TRUST VS. CIT (SUPRA). THE AIMS AND OBJECTIVES OF THE PRESENT SOC IETY ARE ALMOST IDENTICAL TO THE AIMS AND OBJECTS OF THE AFORESAID CASES. IN THE CASE OF PEDIATRIC PULMONOLOGY PROGRAMME TRUST VS. CIT THE AIMS AND OBJECTS OF THE SOCIETIES WERE TO PROVIDE MEDICAL ASSISTANCE TO POOR PATIENTS TO PROMOTE RESEARCH IN THE FIELD OF PEDIATRIC PULMONOL OGY TO PURCHASE ITA NO. 137 3-CHD-2019- SOCIETY FOR CLINICAL GASTROENTEROLOGY CHANDIGARH 6 BOOKS AND OTHER MATERIALS FOR TRAINING OF POSTGRADU ATES IN PEDIATRIC PULMONOLOGY PROVIDING FELLOWSHIPS TO PHYSICIANS TO VISIT ABROAD TO ATTEND WORKSHOP SYMPOSIA AND CONFERENCES ETC. RELA TED TO PEDIATRIC PULMONOLOGY INVITING DOCTORS OF INTERNATIONAL REPU TE FOR SHARING KNOWLEDGE AND EXPERIENCES IN THE RELATED FIELDS. S IMILARLY IN THE CASE OF SOCIETY FOR THE STUDY OF LIVER DISEASES VS. CIT(E) THE AIMS AND OBJECTS WERE TO PROVIDE MEDICAL ASSISTANCE TO THE P ATIENTS SUFFERING FROM LIVER DISEASES AND TO HOLD CONFERENCES SYMPOSIA S EMINARS WORKSHOPS ETC. IN ORDER TO PROMOTE EDUCATE AND SPREAD AWAREN ESS AND KNOWLEDGE OF LIVER DISEASE. THE AIMS AND OBJECTS OF THE PRESE NT SOCIETY ARE ALMOST IDENTICAL TO THE AIMS AND OBJECTS OF THE SOCIETY AN D THE TRUST DISCUSSED ABOVE SINCE THE APPELLANT SOCIETY HAS BEEN FORMED F OR PREVENTION AND TREATMENT OF DIFFERENT KINDS OF CANCER BY DEVELOPIN G AWARENESS AND ACQUIRING KNOWLEDGE BY ORGANIZING CONFERENCES SYMP OSIA SEMINARS WORKSHOPS ETC. AND FACILITATING THE RESEARCH SCHOLA RS IN PURSUING ADVANCE STUDY IN THAT PARTICULAR FIELD. 9. SO FAR AS THE SECOND ISSUE IS CONCERNED THE SAM E IS ALSO COVERED IN FAVOUR OF THE APPELLANT/SOCIETY BY THE JUDGMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF M/S ANANDA SOCIAL AND EDUCATIONAL TRUST VS. THE CIT AND ANOTHER WHEREBY THE HON'BLE APEX COURT HAS UPHELD THE FINDINGS OF THE HON'BLE DELHI HIGH COURT HOLDING TH AT A NEWLY REGISTERED TRUST IS ENTITLED FOR REGISTRATION U/S 12AA OF THE ACT ON THE BASIS OF ITS ITA NO. 137 3-CHD-2019- SOCIETY FOR CLINICAL GASTROENTEROLOGY CHANDIGARH 7 OBJECTS WITHOUT ANY ACTIVITY HAVING BEEN UNDERTAKE N. THE OBSERVATIONS OF THE HON'BLE SUPREME COURTS ARE AS UNDER: - NO ACTIVITIES HAD BEEN UNDERTAKEN BY THE RESPONDEN T TRUST BEFORE THE APPLICATION WAS MADE. THE COMMISSIONER REJECTED THE APPLICATION ON THE SOLE GROUND THAT SINCE NO ACTIVITIES HAVE BEEN UNDERTAKE N BY THE TRUST IT WAS NOT POSSIBLE TO REGISTER IT PRES UMABLY BECAUSE IT WAS NOT POSSIBLE TO BE SATISFIED ABOUT WHETHER THE ACTIVITIES OF THE TRUST ARE GENUINE. TH E INCOME TAX APPELLATE TRIBUNAL DELHI (FOR SHORT TH E TRIBUNAL) REVERSED THE ORDER OF THE COMMISSIONER. T HE REVENUE DEPARTMENT APPROACHED THE HIGH COURT BY WAY OF FILING AN APPEAL. THE HIGH COURT UPHELD THE ORDER OF THE TRIBUNAL AND CAME TO THE CONCLUSION TH AT IN CASE OF A NEWLY REGISTERED TRUST EVEN THOUGH THE RE WAS NO ACTIVITIES IT WAS POSSIBLE TO CONSIDER WHET HER THE TRUST CAN BE REGISTERED UNDER SECTION 12AA OF T HE ACT. THIS JUDGMENT IS ASSAILED BEFORE US. SECTION 12AA UNDOUBTEDLY REQUIRES THE COMMISSIONER TO SATISFY HIMSELF ABOUT THE OBJECTS OF THE TRUST O R INSTITUTION AND GENUINENESS OF ITS ACTIVITIES AND G RANT A REGISTRATION ONLY IF HE IS SO SATISFIED. HE SAID S ECTION REQUIRES THE COMMISSIONER TO BE SO SATISFIED IN ORD ER TO ENSURE THAT THE OBJECT OF THE TRUST AND ITS ACTIVIT IES ARE CHARITABLE SINCE THE CONSEQUENCE OF SUCH REGISTRATI ON IS THAT THE TRUST IS ENTITLED TO CLAIM BENEFITS UNDER SECTIONS 11 AND 12 OF THE ACT. IN OTHER WORDS IF I T APPEARS THAT THE OBJECTS OF THE TRUST AND ITS ACTIV ITIES ARE NOT GENUINE THAT IS TO SAY NOT CHARITABLE THE COMMISISONER IS ENTITLED TO REFUSE AND IN FACT BOUN D TO REFUSE SUCH REGISTRATION. IT WAS ARGUED BEFORE US THAT THE COMMISSIONER IS REQUIRED TO BE SATISFIED ABOUT TWO OBJECTS OF THE T RUST AND SECONDLY ITS ACTIVITIES ARE GENUINE. IF THERE HAVE BEEN NO ACTIVITIES UNDERTAKEN BY THE TRUST THEN THE COMMISSIONER CANNOT ASSESS WHETHER SUCH ACTIVITIES ARE GENUINE AND THEREFORE THE COMMISSIONER IS BOUND TO REFUSE THE REGISTRATION OF SUCH A TRUST. ITA NO. 137 3-CHD-2019- SOCIETY FOR CLINICAL GASTROENTEROLOGY CHANDIGARH 8 WE HAVE GIVEN OUR ANXIOUS CONSIDERATION TO THE ABOV E SUBMISSIONS MADE BY MS. ASHWARYA BHATI LEARNED SENIOR COUNSEL APPEARING FOR THE APPELLANT DIRECT OR OF INCOME TAX AND FIND THAT IT IS NOT POSSIBLE TO A GREE WITH THE SAME. THE PURPOSE OF SECTION 12AA OF THE A CT I TO ENABLE REGISTRATION ONLY OF SUCH TRUST OR INSTIT UTION WHOSE OBJECTS AND ACTIVITIES ARE GENUINE. IN OTHER WORDS THE COMMISSIONER IS BOUND TO SATISFY HIMSELF THAT THE OBJECT OF THE TRUST ARE GENUINE AND THAT I TS ACTIVITIES ARE IN FURTHERANCE OF THE OBJECTS OF THE TRUST THAT IS EQUALLY GENUINE. SINCE SECTION 12AA PERTAINS TO THE REGISTRATION OF THE TRUST AND NOT TO ASSESS OF WHAT HAS ACTUALLY DONE WE ARE OF THE VIEW THAT THE TERM ACTIVITIES IN THE PROVISION INCLUDES PROPOSED ACTIVITIES. THAT IS T O SAY A COMMISSIONER IS BOUND TO CONSIDER WHETHER THE OBJECTS OF THE TRUST ARE GENUINELY CHARITABLE IN NA TURE AND WHETHER THE ACTIVITIES WHICH THE TRUST PROPOSED TO CARRY ON AREA GENUINE IN THE SENSE THAT THEY ARE IN LINE WITH THE OBJECTS OF THE TRUST. IN CONTRAST THE POS ITION WOULD BE DIFFERENT WHERE THE COMMISSIONER PROPOSES TO CANCEL THE REGISTRATION OF A TRUST UNDER SUB-SECTIO N (3) OF SECTION 12AA OF THE ACT. THERE THE COMMISISONER WOULD BE BOUND TO RECORD THE FINDING THAT AN ACTIVI TY OR ACTIVITIES ACTUALLY CARRIED ON BY THE TRUST ARE NOT GENUINE BEING NOT IN ACCORDANCE WITH THE OBJECTS OF THE TRUST. SIMILARLY THE SITUATION WOULD BE DIFFERENT WHERE THE TRUST HAS BEFORE APPLYING FOR REGISTRATION FOUN D TO HAVE UNDERTAKEN ACTIVITIES CONTRARY TO THE OBJECTS OF THE TRUST. WE THEREFORE FIND THAT THE VIEW OF THE DELHI HIGH COURT IN THE IMPUGNED JUDGEMENT IS CORRECT AND LIAB LE TO BE UPHELD. 10. SINCE BOTH THE GROUNDS ON THE BASIS OF WHICH T HE LD. CIT(E) HAS REJECTED THE APPLICATION OF THE APPELLANT/SOCIETY A RE COVERED IN FAVOUR OF THE APPELLANT/SOCIETY BY THE DECISIONS OF THE COORD INATE BENCH AND THE JUDGMENT OF THE HON'BLE SUPREME COURT DISCUSSED IN THE FOREGOING ITA NO. 137 3-CHD-2019- SOCIETY FOR CLINICAL GASTROENTEROLOGY CHANDIGARH 9 PARAS WE FIND MERIT IN THE CONTENTION OF THE LD. C OUNSEL THAT THE IMPUGNED ORDER PASSED BY THE LD. CIT(E) IS ERRONEOU S AND LIABLE TO BE SET ASIDE. IN OUR CONSIDERED VIEW THE LD. CIT(E) H AS ERRED IN REJECTING THE APPLICATION OF THE APPELLANT SOCIETY. HENCE RE SPECTFULLY FOLLOWING THE DECISIONS OF THE COORDINATE BENCHES OF THE TRIB UNAL AND THE RATIO LAID DOWN BY THE HON'BLE SUPREME COURT IN THE CASE AFORESAID WE ALLOW THE PRESENT APPEAL AND SET ASIDE THE ORDER DATED 24 .09.2019 PASSED BY THE LD. CIT(E) AND ACCORDINGLY DIRECT THE LD. CIT(E ) TO GRANT REGISTRATION TO THE APPELLANT SOCIETY U/S 12AA OF THE ACT. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED ON 31.08.2021. SD/- SD/- ( N.K. SAINI) (R.L.NEGI) / VICE PRESIDENT / JUDICIAL MEMBER DATED : 08 .2021 .. + - / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. . / CIT 4. . ( )/ THE CIT(A) 5. 1 '1 3 / DR ITAT CHANDIGARH 6. / GUARD FILE / BY ORDER / ASSISTANT REGISTRAR