ASSOCIATION OF MAXILLOFACIAL SURGEONS OF INDIA,,PUNE vs. COMMISSIONER OF INCOME-TAX, (EXEMPTION),, PUNE

The solitary grievance of the assessee in this appeal before us is the refusal by the Ld. CIT(Exemption) for granting of registration u/s.12AA of the Income Tax Act, 1961 (hereinafter referred to as „the Act‟).

The brief facts in this case are that the assessee E-filed Form 10A for registration of the Trust u/s.12A of the Act on 07.08.2018. The assessee trust is established under BPT Act, 1950 with registration No. F-21581/Pune dated 28.11.2006. On perusal of the Memorandum of Association uploaded along with Form 10A, it was noticed by the Ld. CIT(Exemption) that the main object of the assessee association of persons (AOP) is to endeavor to attain higher oral and maxillofacial surgical standards and to promote research in oral and maxillofacial surgery. Thereafter, clarifications were required from the assessee Trust to furnish information and other evidences for the purpose of verifying the genuineness of the activities and utilization of Trust fund towards objects of the Trust. In respect of this, the assessee made necessary submissions on ITBA portal on 03.10.2018. These submissions were downloaded and were perused by the Ld. CIT(Exemption). It was observed that the assessee is mainly engaged in conducting seminar and workshop for the maxillofacial surgeons i.e. members of the AOP only. Also financial statements of last three years uploaded from assessment year 2015-16 to 2017-18, there is a huge surplus in all years and no details have been furnished regarding the status of return of income filed for respective years. Thus, no audited accounts were filed with the Department for the respective years as required by the provision of Section 139(1) or 139(4) of the Act as no return has been filed.

Further, it was verified from the charity Commission website that no documentation have been filed with them for the last two years. It was also found by the Ld. CIT(Exemption) that prima facie, the assessee was engaged in activities which are beneficial to the specific individuals or group of individuals which are the members of that assessee Trust and not for the public at large. Further, profit motive of the assessee could not be denied in

That after scrutinizing the factual report of the ITO, Ward-1, Pune it was observed by the Ld. CIT(Exemption) that the activities of the assessee were sponsored by various Corporate/drug manufacturers. The sponsorship of activities by corporate/drug manufacturers are nothing more than the promotional events organized by the drug manufacturers for their products. Moreover, the assessee has shown surplus from the conferences/seminars financed by the drug manufacturers in financial statements of the last three

At the time of hearing, the Ld. AR of the assessee vehemently argued that the Ld.CIT(Exemption) has acted beyond his scope of jurisdiction as permissible within the Act. The Ld. CIT(Exemption) should look into the activities and objects of the assessee Trust at the time of granting registration u/s.12AA of the Act and not more than that. It was further submitted by the Ld. AR that they are conducting various campaigns for public awareness like anti-tobacco campaign. They are also providing awareness regarding protection of environment by planting of saplings and prevention and maintenance of garden within the target area. They are also undertaking health check up and blood donation camps and enlightening the public at large regarding health and hygene. That for these activities, it is the Corporate who sponsors these events. The assessee trust is only a channel to provide benefit to the society and public at large on behalf of these Corporate houses and in association with them, the assessee Trust are only doing charitable activities which are beneficial for the entire society. The Ld. AR has also placed reliance on the object Clause in Memorandum of Association of the assessee Trust.

Per contra, the Ld. DR contended that from the report of ITO, Ward-1, Pune, it does not transpire factually that the details of the charitable activities conducted by the assessee trust were placed on record before the ITO since in his report no such direct reference is made with regard to charitable activities

We have perused the case records and heard the rival contentions. We have also analyzed the facts and circumstances in this case. The Ld. CIT(Exemption) has obtained report from ITO, Ward-1, Pune regarding actual work of the Trust and to what extent they are involved in charitable activities. That before us, no financial statements were placed on record by the Ld. AR to demonstrate for what charitable purpose, receipts were spent and also no list of Corporate doners who contribute to the cause of the assessee Trust as claimed by the assessee were also not produced before us. The Ld. CIT(Exemption) has only harped upon the excess surplus received by the assessee Trust and huge income element of the assessee Trust but has not analyzed the expenditure part so as to clearly establish whether the expenses were for charitable purpose which ultimately benefits the public at large or not. Therefore, in the interest of justice, we set aside the order of the Ld. CIT(Exemption) and restore the matter back to his file for analyzing the receipts components along with expenditure components of the assessee Trust with the financial statement and also for verification of the Corporate people from whom the assessee trust received the fund for doing activities as enshrined in their object Clause in the Memorandum of Association. The Ld. CIT(Exemption) should also look into the facts whether activities done by the

In the result, appeal of the assessee is allowed for statistical purposes.