2018 (3) TMI 1760 - AT - Income Tax

Exemptions u/s 11 12 denied - as alleged the activities carried out by the appellant is not falling within S.2(15) - assessee is in the activity of promoting the study and practice of radio diagnosis, ultrasound, radio therapy, oncology, radiation medicine and interventional radiology etc. - HELD THAT - We reverse the action of the authorities below, in treating the income from holding conferences business income. In our considered view, the income from holding the conference, on the facts of this case, which are admittedly in pari materia with the facts of Heart Care Management 2012 (6) TMI 327 - ITAT DELHI ought to have been treated as income eligible for exemption under section 11. The Assessing Officer, accordingly, is directed to do so. -Decided in favour of assessee.

Summary

Issues:
Challenging correctness of CIT(A)'s order on exemptions under sections 11 & 12 of the Income Tax Act, 1961; Consideration of activities under Section 2(15) of the Act; Relevance of holding the 63rd National Conference of Indian Radiological and Imaging Association; Use of extraneous materials from Google without informing the assessee; Interpretation of the meaning of education for charitable activities; Proper appreciation of submissions and information by the CIT(A).

Analysis:

Issue 1: Challenging CIT(A)'s order on exemptions under sections 11 & 12 of the Income Tax Act, 1961:
The appellant challenged the correctness of the CIT(A)'s order regarding the entitlement to exemptions under sections 11 & 12 of the Act. The Assessing Officer held that the income generated from hosting the 63rd National Conference was not of charitable nature due to charging participants on a commercial basis. The AO viewed the activity as a means for eminent radiologists to promote their brand, which was not considered charitable. The CIT(A) upheld this decision, leading to the further appeal.

Issue 2: Consideration of activities under Section 2(15) of the Act:
The Assessing Officer determined that the trust's activity of holding the conference was commercial due to charging participants and receiving substantial amounts for stalls and participation charges. The AO believed this activity was not charitable as it aimed to increase participants' income, which was not in line with charitable activities. The CIT(A) confirmed this view, leading to the appeal before the ITAT.

Issue 3: Relevance of holding the 63rd National Conference of Indian Radiological and Imaging Association:
The appellant, a trust registered under section 12AA of the Act, hosted the conference as part of its activities. The AO considered the income generated from the conference as commercial due to charging participants and receiving payments treated as rent. The ITAT, however, referred to a similar case where holding conferences at five-star hotels was considered charitable if aligned with the trust's objects, emphasizing that the conference's location did not affect its charitable nature.

Issue 4: Use of extraneous materials from Google without informing the assessee:
The appellant raised concerns about the CIT(A) considering extraneous and irrelevant materials found on Google without informing the assessee or the AO. The ITAT emphasized the importance of considering only relevant and disclosed materials in making decisions regarding the trust's charitable activities.

Issue 5: Interpretation of the meaning of education for charitable activities:
The CIT(A) was criticized for taking a narrow view of education and not considering its wider meaning beyond formal training or association with universities. The ITAT stressed the need to appreciate the broader scope of education for charitable purposes, which goes beyond traditional definitions.

Issue 6: Proper appreciation of submissions and information by the CIT(A):
The appellant argued that the CIT(A) did not properly appreciate the submissions, explanations, and information provided throughout the proceedings. The ITAT highlighted the importance of considering all relevant information before passing orders, ensuring a fair and thorough evaluation of the trust's activities and eligibility for exemptions under the Income Tax Act.

In conclusion, the ITAT reversed the lower authorities' decision, holding that the income from holding the conference should be treated as eligible for exemption under section 11. The judgment emphasized aligning activities with the trust's charitable objects and considering the broader interpretation of charitable activities beyond traditional definitions.