2022 (1) TMI 26 - AT - Income Tax

Exemption u/s 11 - Rejection of application filed for registration u/s 12AA - charitable object u/s 2(15) - activity of holding conferences on new innovations / developments in professional field - HELD THAT - The main Objects of the applicant trust are to pursuing the medical education to its members and holding free medical camps in various schools in the city for students of these schools with the help and coordination of management - the assessee is pursuing the objects namely medical education and medical relief to the medical students and medical doctors in Malwa Region.The members get the benefit of latest technique, medicines and machinery in the medical world by attending over various conferences on new innovations in the medical field. In the present scenario, now every professional person whether doctor, advocate, or CA will have to remain up to date with new technology where such knowledge is acquired/gained through web conferences which are being held on line through webinars. The submitted that such conferences/webinars are being conducted both free and nominal charges. In our view, the contention of the Ld. AR that the activities of the association of holding conferences etc. amount to charitable activities has merits and therefore, the Ld. CIT(E) was justified inassuming that the assessee society was to be guided by the principles of mutuality and does not bestow upon the society the characters inherent in Charitable Purpose . The Coordinate Bench in the case of Seth Vinod Kumar Somani Charitable Trust, Bathinda 2016 (8) TMI 1557 - ITAT AMRITSAR held that at the time of registration, the Commissioner has to satisfy himself about the objects of trust and genuineness of its activities - we approve the objects of the assessee society as charitable and it s a genuine trust and accordingly, the order under appeal is unsustainable and thus reversed. CIT(E) is directed to grant registration to the appellant forthwith, preferably within one month time of furnishing copy of this order.

Summary

Issues:
1. Registration u/s 12AA of the Income Tax Act, 1961 denied by CIT(E), Chandigarh.
2. Whether the activities of the appellant society qualify as charitable purposes.
3. Interpretation of the law regarding registration of professional bodies under section 12A of the Act.
4. Judicial precedents supporting registration of professional bodies as charitable institutions.

Analysis:
1. The appeal was against the order of CIT(E), Chandigarh denying registration u/s 12AA of the Income Tax Act, 1961 to the appellant society, an association of physician doctors of Malwa Region registered under the Societies Registration Act, 1860. The CIT(E) rejected the application stating that the society's activities did not bestow upon it the characteristics inherent in "Charitable Purpose."

2. The Ld. AR argued that the CIT(E) erred in denying registration by not considering that the society's objects were charitable and genuine. The AR provided various case laws where professional bodies were granted registration u/s 12A of the Act, emphasizing that even professional bodies can engage in charitable activities. The appellant society focused on medical education, holding free medical camps, and organizing conferences for medical students and doctors in the region.

3. The Tribunal acknowledged the importance of professional development through conferences and webinars for doctors, advocates, and CAs to stay updated with new technology. It was noted that holding conferences and webinars could be considered charitable activities, supporting the AR's contention. The Tribunal found merit in the argument that the society's activities were charitable and not merely guided by the principles of mutuality.

4. Referring to judicial precedents, the Tribunal cited cases where registration was granted to trusts pursuing educational and medical relief activities. The Tribunal highlighted a case where the High Court ruled in favor of an urology society, emphasizing the importance of assessing the trust's objects and genuineness of activities during registration. Based on these precedents and the nature of the appellant society's activities, the Tribunal reversed the order denying registration and directed the CIT(E) to grant registration promptly.

In conclusion, the Tribunal found the appellant society's activities to be charitable and genuine, overturning the CIT(E)'s decision and instructing immediate registration.