2015 (1) TMI 1423 - AT - Income Tax

Registration u/s 12A - charitable activity u/s 2(15) - CIT (Appeals) denied the registration because no activities have yet started - HELD THAT - The aims and objects of the assessee trust clearly show that the assessee trust came into existence for providing medical assistance to the poor patients and to promote research work on medical side and to hold conference etc. to create awareness and educating the doctors especially Pediatricians about the respiratory disorders/ disease of children which are on a rise these days. The aims and objects of the assessee and explanation given before the learned Commissioner of Income Tax clearly support the contention of learned counsel for assessee that the assessee trust is created for charitable purpose only. Copy of registration granted under section 12AA in respect of Society of AROI-2001 Department of Radiotherapy PGI Chandigarh-PB-59 and order of Commissioner of Income Tax Chandigarh granting registration under section 12AA of charitable Hematology Education Research Trust of Chandigarh-PB-68. When the learned Commissioner of Income Tax had granted registration under section 12AA to these societies the learned Commissioner of Income Tax should not distinguish the case of the assessee from the similarly situated assesses. Thus assessee trust existed for charitable purpose only and had done some activities in achieving its aims and objects also. Therefore the assessee trust is eligible for registration under section 12AA CIT(E) has not disputed in the impugned order as to the nature of the aims and objects of the society which are covered under the definition of charitable purposes as defined u/s 2(15) of the Income Tax Act. Further as discussed above it cannot be said that the appellant society is not doing the activities in pursuance of its main objects or that the aims and objects of the society are not genuine. no justification on the part of the Ld. CIT (E) for rejecting the application of the appellant society for registration u/s 12A - Decided in favour of assessee.

Summary

Issues Involved:
1. Eligibility for registration under section 12AA of the Income Tax Act.
2. Charitable nature of the activities of the trust.
3. Genuineness of the activities of the trust.
4. Comparison with similar cases granted registration under section 12AA.

Issue-wise Detailed Analysis:

1. Eligibility for registration under section 12AA of the Income Tax Act:
The primary issue is whether the assessee trust qualifies for registration under section 12AA of the Income Tax Act. The trust applied for registration, and its memorandum of association outlined its objectives, including providing medical relief, promoting medical research, and educating medical professionals. The learned Commissioner of Income Tax (CIT) initially denied the registration, citing that the trust's activities appeared to be in the nature of trade, commerce, or business, which does not qualify as charitable under section 2(15) of the Act.

2. Charitable nature of the activities of the trust:
The CIT's refusal was based on the assertion that the activities of the trust did not fall within the definition of "charity" as per section 2(15) of the Act. The CIT noted that except for a small amount spent on medicines for poor patients, the majority of the expenses were related to conferences, which could be seen as commercial activities. However, the assessee argued that these conferences were intended to educate medical professionals about pediatric pulmonology, which is a charitable activity aimed at improving public health.

3. Genuineness of the activities of the trust:
The CIT questioned the genuineness of the trust's activities, noting that the trust had only recently been established and had not yet demonstrated significant charitable work. The CIT compared this case to other cases where societies had not performed any charitable activities and were denied registration. However, the assessee provided evidence of its activities, including organizing workshops and conferences to educate doctors and providing medical assistance to poor patients, which align with its charitable objectives.

4. Comparison with similar cases granted registration under section 12AA:
The assessee cited the case of Shishu Suchinta Educational Society, where the Income Tax Appellate Tribunal (ITAT) and the Hon'ble Punjab & Haryana High Court granted registration under section 12AA despite the society not having performed any charitable work at the time of application. The ITAT noted that the objectives of the assessee trust were similar to those of other societies that had been granted registration, and there was no material evidence to suggest that the trust's activities were commercial in nature.

Conclusion:
The ITAT concluded that the assessee trust's objectives were charitable, focusing on providing medical relief and education, which fall within the definition of "charity" under section 2(15) of the Act. The ITAT found that the CIT had not provided sufficient evidence to classify the trust's activities as commercial. The ITAT directed the CIT to grant registration under section 12AA, recognizing the trust's charitable purpose and the activities it had already undertaken.

Order:
The appeal filed by the assessee was allowed, and the CIT was directed to grant registration under section 12AA within one month from the date of receipt of the order. The order was pronounced in the open court on January 28, 2015.