2018 (12) TMI 604 - HC - Income Tax

Charitable activity - Rejecting the application of the assessee u/s 12A - Held that - Adverting to the facts of the present case, indisputably, the assessee society has been constituted to bring the doctors dealing in Anaesthesia speciality entitled to be registered with the Medical Council of India together for the purpose of inter alia the development of medical science, publication of research magazine, to promote the research and practical work and to organise the seminars etc. Merely because the society is primarily created for the benefit and convenience of Anesthetists, it cannot be said that the object of the society is confined to its members practicing in Sriganganagar and Hanumangarh Districts. Obviously, the education programme and research work to be undertaken by the assessee society in larger perspective are going to benefit the public at large and therefore, the activities of the assessee society do fall within purview of general public utility so as to make it entitled for registration under Section 12A of the Act. We are firmly of the view that the issue involved in the present appeal stands squarely covered by decision of the Apex Court in Ahmedabad Rana Caste Association s case 1971 (9) TMI 8 - SUPREME COURT and decision of this court in Jodhpur Chartered Accountants Society s case 2002 (4) TMI 28 - RAJASTHAN HIGH COURT in favour of the assessee society and thus, no substantial question of law arises for consideration of this court in the present appeal.

Summary

Issues:
Appeal against denial of registration under Section 12A of the Income Tax Act, 1961.

Detailed Analysis:

1. Issue of Denial of Registration: The appeal challenged the order of the Income Tax Appellate Tribunal (ITAT) granting registration under Section 12A to the respondent assessee, which was initially denied by the Commissioner of Income Tax (CIT) (Exemption). The contention was that the society was formed for the benefit of only one branch of medicine, Anaesthesia, and not for the entire medical fraternity. The appellant argued that the ITAT erred in extending the registration benefit to the society.

2. Interpretation of Beneficial Object: The ITAT found that while the society focused on a specific branch of medicine, the benefit was not limited to specified individuals but extended to all doctors practicing Anaesthesia in the relevant districts. Citing precedents like 'Ahmedabad Rana Caste Association vs. CIT' and 'CIT vs. Jodhpur Chartered Accountants Society,' the ITAT held that the society was eligible for registration under Section 12A as it aimed to benefit a section of the public, meeting the criteria of general public utility.

3. Legal Precedents and Interpretation: Referring to the Supreme Court decision in 'Ahmedabad Rana Caste Association,' the judgment emphasized that an object beneficial to a section of the public qualifies as an object of general public utility. The court highlighted the need for beneficiaries to be united by a common, impersonal quality. Additionally, the judgment in 'Jodhpur Chartered Accountants Society' reiterated the importance of disseminating knowledge for the benefit of the general public without profit motive, aligning with the principles of public utility.

4. Decision and Rationale: Considering the legal principles established by the Apex Court and previous court decisions, the High Court concluded that the society's activities, aimed at promoting medical science, research, and education in Anaesthesia, were of general public utility. The court noted that the society's initiatives would benefit the public at large, justifying its eligibility for registration under Section 12A. As a result, the appeal was dismissed, as no substantial question of law arose for consideration.

In summary, the High Court upheld the ITAT's decision to grant registration under Section 12A to the society, emphasizing the broader public utility aspect of the society's activities despite its focus on a specific medical specialty.