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Facts
The assessee-society applied for registration under Section 12A(1)(ac)(vi) of the Income Tax Act, 1961, which was rejected by the CIT(E). The rejection was based on alleged inadequate details, discrepancies in bank transactions, and non-filing of the return of income, despite the assessee submitting details of a medical conference organized.
Held
The Tribunal held that at the stage of registration, the inquiry is limited to the objects of the trust and prima facie genuineness of activities, which were not doubted. It found the rejection based on insufficiency of evidence and bank transactions unjustified, as these fall under assessment proceedings, and directed the CIT(E) to grant registration.
Key Issues
The key legal issue was whether the CIT(E) was justified in rejecting the application for registration under Section 12A based on insufficient evidence and bank transactions, and if the assessee's activities qualified as 'education' under Section 2(15).
Sections Cited
Section 12A(1)(ac)(vi), Section 12AB(1)(b)(i), Section 2(15)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, NAGPUR BENCH :: NAGPUR
This appeal by the assessee is directed against the order of Ld. Commissioner of Income Tax (Exemptions), Pune (for short, “CIT(E)”), dated 07/03/2025; whereby application for registration u/s. 12(A)(1)(ac)(vi) of the Income Tax Act, 1961 (for short, “Act”) has been rejected. of Pediatric Neurology) 2. Brief facts of the case are that assessee-society has filed an application before the Ld. CIT(E) in Form No. 10AB for registration u/s. 12A(1)(ac) of the Act on 25.09.2024. The Ld. CIT(E) with a view to verify the genuineness of activities of the assessee and compliance to requirements of any other law for the time being in force, a notice was issued through ITBA portal on 06.11.2024 requesting the assessee to upload certain information under the provisions of section 12AB(1)(b)(i) of the Act. In response to the notice, assessee submitted certain details and the Ld. CIT(E) noticed various discrepancies and issued another notice on 23.01.2025. Though, assessee responded to the notice but not furnished any written clarification and only submitted a brochure of Annual Conference organized in September 2024 with a single photograph. The Ld. CIT(E) observed that no credible evidence is submitted in support of the claim of assessee and the assessee also failed to submit copy of annual account, bills, vouchers, photographs, details of beneficiaries, note on activities carried out etc. so as to verify the authenticity and genuineness of assessee’s claim. Ld. CIT(E) further observed 2 (Maha Academy of Pediatric Neurology) that large sums are credited to the account and are immediately utilized for payments, mostly to resorts and hospitality service. The assessee-trust, however, has not offered any explanation for any of the said transactions. Therefore, Ld. CIT(A) concluded that assessee trust has failed to prove its genuineness as a charitable trust and rejected the application filed u/s. 12A(1)(ac)(vi) of the Act. The Ld. CIT(E) failed to realize that a conference namely Neuropedicon 2024 was organized between 26th – 28th September, 2024 to create awareness about pediatric disorders coupled with discussion on intricate issues in medical science. The venue for the conference was Taj Cidade-de-Goa Horizon an exclusive hill shore resort. Workshops were held and payment was made for venue charges.
Learned counsel for the assessee submitted that assessee had sent a mail on 08.02.2025 to the Ld. CIT(E) wherein it was mentioned that trust was registered on 02.02.2024 and bank account opened on 21.06.2024 and there were no financial (Maha Academy of Pediatric Neurology) transactions and no balance sheet upto the year 2023-24 and for the same reason, assessee has not filed income tax return for AY 2024-25. He further submitted that on notices of activities, the assessee has held a conference at Goa in September 2024 attended by over 650 doctors from all over India. Brief note on activities given by the Secretary was attached to the mail and also invoices of conference expenses were attached from event manager. Thus, the activities were clearly indicated along with relevant photographs to effectively establish the functioning and attendance of the conference
Ld. Departmental Representation (DR) supported the order of Ld. CIT(E), but failed to pinpoint the specified violation with exactitude.
We have heard both the parties and perused the material placed before us. Learned counsel for the assessee furnished a paper book running into 75 pages. Page Nos.41-49 contains photographs. We notice that Ld. CIT(E) rejected the application (Maha Academy of Pediatric Neurology) under section 12A mainly due to inadequate details, certain bank transactions, and non-filing of return of income. It is settled law that at the stage of registration, the enquiry is limited to examine the objects of the trust and the genuineness of its activities on a prima facie basis. In the present case, the objects of the assessee have not been doubted. The rejection is based only on insufficiency of evidence, without any cogent material to establish that the activities are ingenuine or non- charitable. The observations regarding bank transactions and procedural lapses cannot, by themselves, justify denial of registration, as such aspects fall within the domain of assessment proceedings. Further, the assessee was not afforded a meaningful opportunity to explain its case. The Coordinate Bench of ITAT, Chennai Benches in Neuro Update Chennai vs. ITO (ITA No. 1480/Chny/2025, dated 30.10.2025) in a similar issue held as follows:-
“16. The expression “education” in section 2(15) has been interpreted liberally by various judicial authorities to include not merely formal schooling but also systematic dissemination of knowledge through seminars, workshops, and continuing education programmes.
(Maha Academy of Pediatric Neurology) 17. The Hon’ble Gujarat High Court in DIT (Exemption) v. Ahmedabad Management Association (366 ITR 85) held that conducting management development programmes, public talks, and conferences amounts to educational activity. Similarly, in CIT (Exemption) v. Anesthesia Society (260 Taxman 375), the Rajasthan High Court held that organising medical seminars and research conferences constitutes charitable activity even if primarily attended by medical professionals.
Applying the same principle, we hold that the assessee’s activities in organising neurology conferences and workshops squarely fall within the ambit of “education” under section 2(15).
The mere generation of surplus from an educational activity does not imply profit motive, so long as the surplus is applied solely towards the objects of the trust. This legal position has been clearly enunciated by the Hon’ble Supreme Court in Queen’s Educational Society v. CIT (372 ITR 699), wherein it was held that when surplus is ploughed back into educational purposes, the institution exists solely for education and not for profit.
In the present case, there is no material on record to suggest that any part of the income or property of the trust was diverted for private benefit. All receipts, including sponsorships and delegate fees, were utilised for conference- related expenses or donations to other registered charitable institutions having similar objects. Therefore, the existence of surplus cannot be a ground to deny exemption.
The CIT(A)’s conclusion that the proviso applies is misplaced. Even assuming, arguendo, that the assessee’s activities fall under “advancement of general public utility,” the condition precedent for invoking the proviso—receipts exceeding 20% of total income from commercial activities—is not satisfied, as delegate fees amount to only 12.6% of total receipts.
Moreover, since we have already held that the assessee’s activities fall under the independent head “education,” the proviso to section 2(15), which applies only to the residual limb, is irrelevant.
(Maha Academy of Pediatric Neurology) 6. In view of the settled legal position, including the ratio laid down by the Hon'ble Supreme Court in the case of CIT vs. Ananda Social and Educational Trust in Civil Appeal No(s).5437-5438/2012, dated 19.02.2020 and other judicial precedents, we hold that the rejection of registration is not justified. Accordingly, the impugned order is set aside and the Ld. CIT(E) is directed to grant registration under section 12A of the Act w.e.f. 01.04.2024 expeditiously.
In the result, appeal filed by the assessee stands allowed.