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Income Tax Appellate Tribunal, AMRITSAR BENCH, AMRITSAR
Before: DR. M. L. MEENA & SH. ANIKESH BANERJEE
This appeal has been filed by the assessee against the order dated 19.09.2019 passed by the Ld. Commissioner of Income Tax (Exemptions), Chandigarh, in respect of the Assessment Year 2019-20, challenging the Association of Radiation Oncologists of India v. CIT rejection of its application for grant of registration u/s 12A of the Income Tax Act, 1961.
The ld. CIT(E) has stated that the assessee-society was constituted with the object to promote the study, practice and advancement of Radiation Oncology, Cancer Chemotherapy, Radiation Physics, Radiation Medicine, Radio-Biology and related disciplines. He has mentioned that the applicant-society has failed to submit the copy of the registered MOA certified from the Registrar in order to establish the genuineness of the activity carried out in lieu of objectives. He has further discussed that the assessee-society is engaged in the activity to upgrade and broaden knowledge of its members by providing travel fellowships for visiting centers of excellence within India and abroad to greatly benefit a large number of trainees, radiation oncologists, medical physicists and technologies etc. and that number of teachings and scientific programs were conducted yearly in collaboration with ESTRO, ASTRO and FARO to benefit the members of the society to a large extent in updating their knowledge. Considering the reply of the assessee-society, the ld. CIT(E) while rejecting the application u/s 12A for grant of registration has observed as under:
Association of Radiation Oncologists of India v. CIT “Enhancing the skills & knowledge of the members of the society and whose outcomes not manifest in any immediate tangible effect on the public at large doesn’t qualify as charitable. It’s also pertinent that the applicant in its reply dated 07.09.2019 stated that its activities would have impact on general public but actually the activities are restricted to its members only. The expenses on travelling for members in no sense gets covered under the definition of charity as defined u/s 2(15) of I.T. Act. There is no evidence adduced how the outcomes of the enhancing the skills & knowledge of the members of the society have percolated down to the public at large. The claims of the assessee contended that these activities are contributing towards the long term benefit of larger masses. Prima facie none of the activities get covered by any of the limbs of “charitable purpose” envisaged in section 2(15) of I.T. Act, 1961. Moreover these activities would be restricted to specific group of professionals and the same cannot be claimed to be enuring to the benefit of the general public. This issue further gets exacerbated by the fact that apart from the expenses on travelling & refinement of skill, education and knowledge of the various members of the society, no other major expenditure that could be attributable to the stated objects of the society has been claimed by the applicant in the financial statements for the last Years. This arrangement of the applicant clearly leads to conclude that the applicant is not pursuing the charitable objects for which it was incorporated. The other stated charitable objects are merely ostensible.
On perusal of Income & Expenditure for F.Y. 2015-16, 2016-17 & 2017- 18, it is noticed that the applicant has received income of Rs. 2862785/- under the head “By gross receipts (as per 26AS)”. The applicant was asked to provide the details of gross receipt (as per 26 AS) mentioned in the income and expenditure account & the details for the same were furnished by the applicant. As per Form 26AS submitted by the applicant, the TDS u/s 194C of the IT Act, 1961 was deducted on the payments received by the applicant. It is worthwhile to mention that 194C provides for deduction of tax from payment of works contract made to contractor or sub-contractor. Any person carrying out any work in pursuance of a contract between a specified person and the resident contractor is required to deduct tax at source. It can be safely concluded from above that the payments received are for business purposes not the charitable one.
In the absence of any charitable activities covered u/s 2(15) of the IT Act, 1961 non -production of certified copy of MOA of the society and business nature of income received, there is no way the genuineness of activities of the society can be corroborated with the stated aims and objects as per the documents
Association of Radiation Oncologists of India v. CIT submitted by the applicant. Accordingly, the application under section 12A for grant of registration is rejected.”
The ld. counsel for the assessee has submitted that the ld. CIT(E) has erred and rejecting the application u/s 12A without considering the submissions of the assessee-society, explanation and evidence put-forth during the proceedings. He argued that it is well settled law that an object beneficial to the section of the public in an object of the general public utility and that it is sufficient if the intention benefit, a section of the public. The counsel argued that the CIT(E) has erred in treating the TDS u/s 194C as business receipts of the society without taking note of the object of the society which includes such contractual activity of holding conferences of members, which is small part of another charitable purposes. He has further argued that the ld. CIT(E) has not accepted the digitally signed copy of MOA Registrar of the firms, Punjab as non production of certified copy of MOA. He has filed a written submission in support of its contention which reads as under:
“Association of Radiation Oncologists of India is a charitable organization. The society was registered under Societies Registration Act XX1 of 1860 in 1973. The society is in the fore front in sensitizing the public regarding the awareness of cancer disease, its causes and also the various treatments available. In this regards the many chapters of AROI are actively involved in organizing public rallies, conducting health camps and educational activities for general public. The Association of Radiation Oncologists of India v. CIT society is extremely active in propagating research and ensuring high quality post graduate training & education for its members.
An application was electronically filed in form 10A on 04.03.2019 seeking registration under section 12A of the income tax act, 1961. This has been refused stating absence of charitable activities u/s 2(15) of the act, non production of certified copy of MOA and business nature of income received.
These grounds are superficial and rebuttable. As per section 2(15) of Income Tax Act, 1961, ‘Charitable Purpose’ includes the advancement of any other object of general public utility and we affirm that we carry out aforesaid activities for the same purpose. Our registration as a trust would facilitate betterment of the profession to greater extent and help us in promoting our charitable objects further. Also, The Id. Commissioner of income tax (exemptions) has erred in treating TDS u/s 194c as business receipts of society, without taking note of objects of the society, which includes such contractual activity of holding conferences and meetings for studies as a small part of entire charitable purpose. . The aforementioned activities are not in nature of trade, commerce or profession but are focused on imparting knowledge and making our brethren more professionally competent. Moreover, Digitally signed copy of MOA registered with registrar of firms Punjab has been treated as non production of certified copy of MOA. Further now registration u/s 12A granted on 06.04.2022 for Assessment Year 2022-23 to AY 2024-25. Copy of the same attached.”
The ld. CIT(DR) strongly supported the impugned order. He has filed a written note in support of the contents raised before us which reads as under:
“It is submitted that the main activities of the society are to send their members to attend training in India 85 Abroad and refinement of skill, education and knowledge of the various members of the society which are also clear from the travel expenses & expenses incurred on refinement of skill, education and knowledge of the various members of the society as shown in income & expenditure account. It is worthwhile to mention here that the activities are restricted to members of the society who are professionals and not the general public. Further, as per the definition provided
Association of Radiation Oncologists of India v. CIT under tax provisions, charitable purpose defined u/s 2(15) of the IT Act, 1961 includes the following:
• Relief of the poor • Education • Yoga • Medical relief • Preservation of environment (monuments or places or objects of artistic or historic interest. • Advancement of any other object of general public utility. However, if any activity in the nature of trade, commerce or business, or any activity of rendering any service in relation to any trade, commerce or business for a cess or fee or any other consideration is not considered to be for charitable purposes, irrespective of the nature of use or application, or retention of the income from such activity unless: • Such activity of trade/commerce/business is undertaken in the course of the actual carrying out of such advancement of any other object of general public utility and • the aggregate receipt from such activity/activities during the financial year does not exceed 20% of the total receipt of the said trust or institution during that financial year.
Enhancing the skill & Knowledge of the members of the society and whose outcomes do not manifest in any immediate tangible effect on the public at large doesn’t qualify as charitable. The activities are restricted to its members only. The expenses on travelling for members in no sense gets covered under the definition of charity as defined u/s 2(15) of I.T. Act. There is no evidence adduced how the outcomes of the enhancing the skills & Knowledge of the members of the society have percolated down to the public at large. The claims of the assessee contended that these activities are contributing towards the long term benefit of larger masses. Prima facie none of the activities get covered by any of the limbs of “charitable purpose” envisaged in section 2(15) of I.T. Act, 1961. Moreover these activities would be restricted to specific group of professionals and the same cannot be claimed to be for the benefit of the general public. This issue further gets exacerbated by the fact that apart from the expenses on travelling 8s refinement of skill, education and knowledge of the various members of the society, no other major expenditure that could be attributable to the stated object of the society has been claimed by the applicant in the financial statement for the last Years. This Association of Radiation Oncologists of India v. CIT arrangement of the applicant clearly leads to conclusion that the applicant is not pursuing the charitable objects for which it was incorporated.”
We have considered the rival contention and perused the material on record, including the judgment cited at Bar during the course of virtual hearing by both the sides. It is noted at the time of hearing the matter that the applicant society has been granted registration u/s 12AA on 06.04.2022 for the assessment year 2022-23 to assessment year 2024-25 (a copy placed on record). The ld. CIT-DR for the department contended that what is granted to the assessee-society is provisional registration u/s 12AA for the assessment year 2022-23 to 2024-25 and such a provisional registration is granted automatically under the amended provisions of law u/s 12AA of the Act. Thus, the CIT-DR has contended that the assessee has filed another application for registration before the CIT(Exemptions), on which the assessee society has already been granted provisional registration vide order dated 06.04.2022. In our view, same being the objectives with subject matter for which provisional registration has been granted by the department as above, therefore, this Appeal No. 696/Asr/2019 for A.Y. 2019-20 get merged with subsequent application and becomes infructuous and is not maintainable. There is no provision under the law to grant separate registration for particular assessment years,
Association of Radiation Oncologists of India v. CIT unless the registration granted for the appellant for a particular assessment year is rejected as per provisions of statute.
Without prejudice to the above, admittedly, none of the objectives have any norms to the activities to be covered by any of limbs of the ‘charitable purposes’ as envisaged in section 2(15) of the I. T. Act, 1961.
Before us, the assessee has failed to produce any documentary evidences to establish that the societies objectives by way of promoting and advancement of radiation oncologists courses and providing travel fellowship to its member for visiting centers of excellence within India and abroad for enhancing the skills and knowledge of the members of the society would have percolated down to the public at large in order to contribute towards the long term benefit of large masses. In fact, the objectives enumerated by the ld. counsel would be restricted to the specific group of professionals. Most of them are members of the society and hence the benefit of its members cannot be claimed to be covered in the objectives of the benefit of the general public at large. Thus, observation of the CIT(E) that the applicants had merely made arrangements to carry out its activity, by way of work contract where TDS u/s 194C of the Act has been deducted. It is evident from the bills of the applicant receipt of the work contracts made to the contractors or sub-contractors as the payment
Association of Radiation Oncologists of India v. CIT received by the assessee society has rightly been concluded by the ld.
CIT(E), were for business purposes and not for charitable one for the year under consideration. Accordingly, we find no infirmity or perversity in the observation and finding the ld. PCIT(E) in rejecting appellant society application u/s 12A of the Act.
In the above view, the order of the ld. CIT(E) passed u/s 12AA of the Act is sustained.
In the result, the appeal filed by the assessee is rejected.
Order pronounced in the open court on 16.09.2022 Sd/- Sd/- (Anikesh Banerjee) (Dr. M. L. Meena) Judicial Member Accountant Member *GP/Sr/PS* Copy of the order forwarded to: (1) The Appellant: (2) The Respondent: (3) The CIT(Appeals) (4) The CIT concerned (5) The Sr. DR, I.T.A.T