2012 (2) TMI 63 - AT - Income Tax

Charitable Trust trust created for the purpose of development of the STEMI programme, to give medical relief to poor/backward people and other objects - denial of registration u/s 12AA on the ground that meaning of STEMI was not provided and doctors (trustees) being busy cardiologists would not have time to attend to the objects of the trust Held that - Reasons provided by CIT are subsequent event to the granting of registration. At the time of registration of the trust all that is required to be verified is regarding the genuineness of the activities of the trust as also the objects of the trust. Both the objects and genuineness of the activities admitted by the CIT are charitable in nature. In the circumstances, we are of the view that the CIT erred in not granting the registration u/s 12AA Decided in favor of assessee.

Summary

Issues:
- Registration under section 12AA of the Income Tax Act, 1961 for a charitable trust.
- Criteria for granting registration based on charitable activities and genuineness of trust's intentions.
- Definition and treatment of STEMI heart attack as a charitable activity.
- Discrepancy regarding the charitable nature of diagnosing vs. treating STEMI heart attacks.
- Role of the founder trustees' expertise and availability in carrying out charitable activities.

Analysis:
1. The appeal pertained to the denial of registration under section 12AA of the Income Tax Act, 1961 to a charitable trust created by two renowned cardiologists for the development of the STEMI program and charitable medical activities. The trust applied for registration, but the Commissioner refused citing doubts on the trust's genuineness and the founders' ability to carry out charitable activities due to their busy schedules.

2. The trust argued that the purchase of necessary equipment for detecting STEMI heart attacks demonstrated their genuine intention to engage in charitable activities. They contended that the founders' expertise in cardiology did not preclude them from conducting charitable work, and the trust's objectives aligned with charitable purposes.

3. The Revenue, represented by the CIT-DR, raised concerns about the trust deed's lack of specifics on how the doctors would fulfill the trust's objectives. They argued that diagnosing STEMI heart attacks alone was not a charitable activity, emphasizing that providing treatment, like emergency angioplasty and stenting, would constitute charitable work.

4. The Tribunal analyzed the definition and treatment of STEMI heart attacks, noting that diagnosing alone was insufficient without providing necessary medical interventions like angioplasty and stenting. While diagnosing was not inherently charitable, emergency treatment through angioplasty and stenting could be considered charitable activities.

5. The Tribunal found that the CIT erred in refusing registration based on assumptions about the founders' availability and the nature of diagnosing STEMI cases. The Tribunal directed the CIT to grant registration under section 12AA, emphasizing that the trust's charitable intent and activities should be assessed during operation, with the option to withdraw registration if charitable activities were not carried out as intended.

6. The Tribunal's decision, delivered on 03/01/2012, highlighted the importance of verifying the trust's charitable activities post-registration and allowed the appeal, instructing the grant of registration under section 12AA of the Income Tax Act, 1961.