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TMI Blog2014 (3) TMI 101X X X X Extracts X X X X X X X X Extracts X X X X ..... IT Act, 1961, whereas the activities carried out by the assessee fell outside the purview of charitable purpose as per section 2 (15) of the IT Act, 1961. 2. On the facts and in the circumstances of the case and in law, the ld. CIT (A) has erred in holding that the activities out by the assessee dos not falls under 4th limb of section 2 (15), as the research activity conducted by the society has been found to be in the nature of education which falls under 2nd limb of section 2 (15) of the IT Act." 2. As per the material on record, the Memorandum of Association of the Society states the following to be the main aims and objects of the Society:- "a) To facilitate and implement essential research for prevention of diseases, deficiencies a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had been unable to do some part of the research work, they had entered into the agreement with the Assessee Society to give techno-medical research support in the project called "ROTA VIRUS"; and that the receipt in question could not be termed as a contract receipt. 4. The Assessing Officer, however, observed that a perusal of the agreement entered into by the assessee with SAS showed that SAS had provided expertise services to the assessee and had taken consideration for the same from the assessee, rendering the transaction totally commercial in nature; that the Proviso to Section 2 (15) of the Act is applicable to charitable organizations engaged in the carrying on of 'any other public utility'; that the said Proviso is not applicable t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onducted by the assessee on 'ROTA VIRUS' project which was an activity in the field of medical research and this was found to be one of the main objects of the assessee Society; that the research activity conducted by the assessee Society was in the nature of education; and that the Assessing Officer was wrong in treating such activity of the assessee Society to be in the nature of advancement of any other object of general public utility. 6. Challenging the impugned order, the Ld. DR has contended that the Ld. CIT (A) has erred in allowing exemption under Sections 11 and 12 of the IT Act to the assessee, ignoring the fact that the activities carried on by the assessee fall squarely outside the purview of 'charitable purpose' within the me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts of the assessee Society, as per its Memorandum of Association, as reproduced at page 2, para 2 of the assessment order, are as follows:- "a) To facilitate and implement essential research for prevention of diseases, deficiencies and disabilities of public health significance with special emphasis on mothers and children. b) To support activities for development and strengthening of man power through training, educational tool development and other related activities in the field of essential health and related research and in programme implementation. c) To facilitate informal education and communication activities on health and nutritional issues for urban slums and rural communities. d) To carry out research or other activities to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of whether it resulted in profit or loss; and that as such, the assessee had violated the provisions of Section 2 (15) of the IT Act; that since the assessee did not fall within the scope of 'charitable purpose', as defined in Section 2(15) of the Act, the benefit of Sections 11/12 of the Act was being disallowed to the assessee for the year under consideration. The Assessing Officer also sent a proposal for withdrawal of registration to the assessee u/s 12AA of the Act, to the DIT (E), separately. 11. By virtue of the impugned order, the Ld. CIT (A) deleted the disallowance, treating the activity carried on by the assessee as falling under 'education' within the meaning of Section 2 (15) of the Act and thus, a charitable activity. While d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come-tax (Exemption), Delhi' (supra) is squarely applicable and the Ld. CIT (A) has correctly applied it. As per this decision, as correctly noted by the Ld. CIT (A), charitable institutions registered u/s 12A of the IT Act and doing the activity in the nature of charity, cannot be held to be engaged in the activity of advancement of any other object of general public utility. The Ld. CIT (A) has specifically noted that the research report of the assessee, which was published in medical journals, was in the nature of doing education activity. The department has not been able to refute this finding, as also the finding that the assessee is mainly engaged in the field of medical research and during the year under consideration, it has done re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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