The Chhattisgarh High Court, in the case of Commissioner of Income Tax Central Revenue v. Chhattisgarh Urology Society recently announced that a society consists of urologist doctors eligible for registration under Section 12A of the Income Tax Act.
The sole grievance of the Revenue in the instant case was that the Appellate authority allowed the Assessee, a trust consists of urologist doctor for grant of registration under 12A despite the fact that before the Commissioner of Income Tax (CIT), the respondent has failed to produce books of accounts for FY 2013-14.
While perusing the records it was found that Assessee produced an application for grant of approval under section 12A of the Income Tax Act. Subsequently, CIT issued a notice to Assessee for producing audited accounts and other documents together with the books of accounts for the impugned year.
But the Assessee failed to produce the account; therefore, by order, CIT rejected the respondent’s application under Section 12A of the Income Tax Act and further stated that the charitable activity is for promoting the Urologist. Eventually, it is for the benefit of the urologist to get more and more patience, it is not entitled to registration.
The purpose of getting registration under Section 12A is a pre-condition for availing all the benefit under Sections 11 and 12 especially which enables for exemption of income of the charitable trust for the purpose of levy of income tax.
The Tribunal bench reversed the order of CIT on the basis that the said concern conducted a pre-medical checkup and to reach out the public at large to educate them about healthy life and benefit of cleanliness, amongst other objects.
The court endorsed the decision of Commissioner of Income Tax vs Vijay Vargiya Vani Charitable Trust1 wherein held that at the stage of Section 12A, the Commissioner is not to examine the application of income only to examine the requirements needed for granting registration.
Justice Prashant Kumar Mishra and Justice Ram Prasanna Sharma observed “Merely because the trust consists of Urologist Doctors and the charitable activity may mutually benefit those members, the object itself would not cease to be charitable in nature”.
Finally Court restored the order of Appellate Tribunal and granted registration under 12A.
Subscribe Taxscan Premium to view the Judgment
