NORTH INDIA SOCIETY OF METABOLISM LIPIDS DIABETES AND HYPERTENSION,CHANDIGARH vs. THE COMMISSIONER OF INCOME TAX,EXEMPTIONS, CHANDIGARH, CHANDIGARH

The Ld. AR advanced arguments and stated that the assessee has carried out charitable activities in medical field. The Ld. CIT-DR relied on the order of Ld. CIT(E) to state that no charitable activities are shown to have been carried out by the assessee. Having heard rival submissions and upon perusal of case records, the appeal is disposed-off as under.

The assessee filed registration application seeking registration u/s 12AB(1)(ac)(iii) r.w.s. 12AB of the Act on 30-09-2023. The Ld. CIT(E), upon perusal of assessee’s financial statements for FYs 2019-20 to 2021-22, held that the activities carried out by the assessee do not inspire confidence that the society existed for the benefit of general public at large. During FY 2019-20, the assessee received subscription from pharma companies and medical instrument companies like Abbot India, MSD Pharmaceuticals and Novartis Healthcare for Rs.23.75 Lacs on which TDS was deducted. Similarly, for FY 2020-21, subscription was received from MSD Pharmaceuticals and Sanofi India. Similarly, in AY 2021-22, subscription was received from Abbot India for Rs.2.94 Lacs. During FY 2022-23, similar subscription was received from Novo Nordisk and Sanofi India. These funds were then used to conduct meetings in five star hotels. The speakers at these conferences were from pharma companies who were paid either honorarium or for the event management. The Ld. CIT(A) then referred to Medical Council (Professional conduct, Etiquette and Ethics) Regulations, 2002 prohibiting medical practitioner from taking monetary benefits from pharma companies. The law recognizes no purpose as charitable unless it was of public character. A purpose to be charitable must be directed for the benefit of the community and not for the benefit of private individuals. The same was not the case here. The assessee clarified its activities as education and medical relief.

Upon perusal of assessee’s financial statements as placed on record, the subscription as received by the assessee during FYs 2019- 20 to 2021-22 could be tabulated as under: - FY Amount of Name of Subscribers TDS deducted Subscription (Rs.) u/s 2019-20 Rs.23.75 Lacs Abbott India Ltd., MSD Pharma. Pvt. Ltd., 194C Novartis Healthcare Pvt. Ltd. 2020-21 Rs.2.75 Lacs MSD Pharma Pvt. Ltd. & Sanofi India Ltd. 194C 2021-22 Rs.3 Lacs Abbott India Ltd. 194C We noted that these are the only substantive receipts for the assessee during FYs 2019-20 to 2021-22. After receiving the subscription from these pharma companies, the assessee has conducted meetings / conferences wherein, as per findings of Ld. CIT(A), speakers would be from these pharma companies who were paid honorarium or paid for the event management. On these facts, it could very well be concluded that there was direct nexus between the subscription as received by the assessee and meetings / seminars conducted by the assessee. The possibility of assessee-entity being used as a medium to promote the products of pharma companies could not be ruled out altogether.

The appeal stand dismissed. Order pronounced on 09-06-2025.