Commissioner Of Income Tax (Exemption), Aaykar Bhawan,Houshangabad Road, Bhopal, Madhya Pradesh v. Association Of Physicians, Durg Bhilai Branch

Page 1 of 6 {Tax Case No.49/2019} Digitally signedby SISTASISTASOMAYAJULUSOMAYAJULUDate:2024.09.2515:28:23 +0530 2024:CGHC:36686-DB AFR HIGH COURT OF CHHATTISGARH AT BILASPUR TAXC No. 49 of 2019 Commissioner of Income Tax (Exemption), Aaykar Bhawan,Houshangabad Road, Bhopal, Madhya Pradesh. ... Appellant Versus Association of Physicians, Durg Bhilai Branch, C/o Dr. Prabhat Pandey,Saubhagya Medical Complex, Opp New Bus Stand, G.E. Road, Durg,Chhattisgarh. ... Respondent For Appellant: Mr. Amit Chaudhari, Advocate.For Respondent : Mr. Mool Chand Jain, Advocate through videoconferencing and Mr. Vijay Shanker Mishra, Advocate. -Division Bench: Hon'ble Shri Sanjay K. Agrawal and Hon'ble Shri Amitendra Kishore Prasad, JJ. Order on Board (19/09/2024) Sanjay K. Agrawal, J. 1. This tax appeal preferred under Section 260A of the Income Tax,1961 (for short, ‘the IT Act’) was admitted for hearing on 15-3-2023 by formulating the following substantial question of law: -1961 (for short, ‘the IT Act’) was admitted for hearing on 15-3-2023 by formulating the following substantial question of law: - {Tax Case No.49/2019} “Whether on facts & circumstances of the case, theorder of the Ld. Tribunal is correct in law and on factsin directing the Ld. CIT to grant the registration u/s 12AA of the IT Act irrespective of non-genuineness of theactivities of the institution evidenced in the impugnedorder of the Commissioner of Income Tax dated 28-09-2015, thereby rendering the decision which isperverse?” 2. The Association of Physicians, Branch: Durg-Bhilai i.e. therespondent herein has filed an application for registration underSection 12AA(1)(b)(i) of the IT Act in appropriate form before thecompetent authority and the said application was rejected by theCommissioner of Income Tax (Exemption) by order dated 28-9-2015 holding that the case of the Association of Physicians is notcovered by the provisions contained in Section 12AA(1)(b)(i) of theIT Act. Feeling dissatisfied with the order of the Commissioner ofIncome Tax (Exemption) dated 28-9-2015, the respondent hereinpreferred an appeal before the Income Tax Appellate Tribunal(ITAT) and the ITAT by its impugned order, allowed the appeal filedby the respondent Association holding that the issue raised in theappeal is covered by the decision of this Court in the matter of Commissioner of Income Tax v. Chhattisgarh Urology Society1and directed the CIT(E) to grant registration in favour of therespondent Association / assessee under Section 12AA of the Actagainst which this appeal has been preferred. 3. Mr. Amit Chaudhari, learned counsel appearing for the appellant,would submit that the learned ITAT has committed legal error indirecting for registration holding that it is covered by the decision ofthis Court in ’sChhattisgarh Urology Societycase (supra),would submit that the learned ITAT has committed legal error indirecting for registration holding that it is covered by the decision ofthis Court in ’sChhattisgarh Urology Societycase (supra),therefore, the impugned order is liable to be set aside. 4. Mr. Mool Chand Jain, learned counsel appearing for the respondentthrough video conferencing, would submit that the case of therespondent herein is squarely covered by the decision of this Courtin ’sChhattisgarh Urology Society case (supra) which was alsotaken up in review on review petition being filed by the Revenueand by order dated 11-3-2019, the coordinate Bench of this Courthas dismissed the review petition, thereafter, SLP was filed by theRevenue being SLP (Civil) Diary No. 33995/2019 which was alsodismissed by the Supreme Court on 18-10-2019, as such, the instanttax appeal deserves to be dismissed. 4. Mr. Mool Chand Jain, learned counsel appearing for the respondentthrough video conferencing, would submit that the case of therespondent herein is squarely covered by the decision of this Courtin ’sChhattisgarh Urology Society case (supra) which was alsotaken up in review on review petition being filed by the Revenueand by order dated 11-3-2019, the coordinate Bench of this Courthas dismissed the review petition, thereafter, SLP was filed by theRevenue being SLP (Civil) Diary No. 33995/2019 which was alsodismissed by the Supreme Court on 18-10-2019, as such, the instanttax appeal deserves to be dismissed. 5. We have heard learned counsel for the parties and considered theirrival submissions made herein-above and also went through thematerial available on record minutely and thoroughly as well.rival submissions made herein-above and also went through thematerial available on record minutely and thoroughly as well. 6. Section 12AA(1)(b)(i) of the IT Act states as under: - “12AA. Procedure for registration.—(1) The PrincipalCommissioner or Commissioner, on receipt of anapplication for registration of a trust or institution madeunder clause (a) or clause (aa) or clause (ab) of sub-section(1) of section 12A, shall— {Tax Case No.49/2019} (a) xxxxxxxxx (b) after satisfying himself about the objects of the trustor institution and the genuineness of its activities asrequired under sub-clause (i) of clause (a) andcompliance of the requirements under sub-clause (ii) ofthe said clause, he— (i) shall pass an order in writing registering the trustor institution; (ii) xxxxxxxxx and a copy of such order shall be sent to the applicant:” 7. A careful perusal of the aforesaid provision would show that thePrincipal Commissioner or the Commissioner has to satisfy himselfabout the objects of the trust or institution and the genuineness of itsactivities as required under sub-clause (i) of clause (a) andcompliance of the requirements under sub-clause (ii) of the saidclause, and has to pass an order in writing registering the trust orinstitution and a copy of the order so passed will be sent to theapplicant. 8. In Chhattisgarh Urology Society’s case (supra), a coordinateBench of this Court has considered the issue and held that the saidprovision nowhere empowers the Commissioner of Income Tax toassess the objects vis-a-vis the books of accounts and evenotherwise, it is not to be seen at this stage as to whether thefulfillment of the charitable trust would eventually benefit theBench of this Court has considered the issue and held that the saidprovision nowhere empowers the Commissioner of Income Tax toassess the objects vis-a-vis the books of accounts and evenotherwise, it is not to be seen at this stage as to whether thefulfillment of the charitable trust would eventually benefit the members of the society, and observed in paragraphs 10, 11, 12 and 13 as under: - “10.The provision contained under Section 12A nowhereempowers the CIT to assess the objects vis-a-vis the booksof accounts. Even otherwise, it is not to be seen at thisstage as to whether the fulfillment of the charitable trustwould eventually benefit the members of the society. If theconstituent of the trust engage in some genuine charitableactivity which may benefit them in some other aspect oftheir personality which may include their vocation in life, itwould not affect the genuineness of the objects of the trust.A person does not engage in charity for not doing anythingin the other walks of life. A charity for one particular objectis not for destroying the career for an individual which he isotherwise entitled to profess. If this ground is considered tobe affecting the genuineness of the trust, people successfulin different walks of life would never engage in charitableactivity. 11.In the matters of Commissioner of Income Tax vsVijay Vargiya Vani Charitable Trust[2] and FifthGeneration Education vs Commissioner Income Tax[3],itis held that at the stage of Section 12A, the Commissioner isnot to examine the application of income. All that he mayexamine is whether the application is made in accordancewith the requirements of Section 12A read with Rule 17Aand whether Form No.10A has been properly filled up. Hemay also see whether the objects of the trust are charitableor not. At this Stage, it is not proper to examine theapplication of income. 12.In the case at hand, the order passed by the CIT doesnot say in definite terms, that the objects of the society arenot charitable in nature. Merely because the trust consists ofUrologist Doctors and the charitable activity may mutuallybenefit those members, the object itself would not cease tobe charitable in nature. 2(2014) 271 CTR 0698 (Raj) 3(1990) 185 ITR 634 All Soma {Tax Case No.49/2019} 13.For the foregoing, we are satisfied that the AppellateTribunal has rightly interfered with the order passed by theCIT. No substantial question of law arises in this appeal fordetermination in view of the plain language of Section 12Aof the Act, 1961. The appeal being sans substance, itdeserves to be and is hereby dismissed.” 9. Thereafter, against the order passed in the said tax appeal i.e. in ’sChhattisgarh Urology Societycase (supra), review petition wasfiled by the Revenue and ultimately, the review petition was alsodismissed on 11-3-2019 against which SLP (Civil) Diary No.33995/2019 was filed which was also dismissed by the SupremeCourt. As such, the impugned order of the ITAT relying upon theorder of this Court in ’sChhattisgarh Urology Societycase (supra),which holds the field, is in accordance with law, as the ultimateobject of the respondent Association is extension of medicalfacilities to the public at large. In that view of the matter, thesubstantial question of law is answered against the appellant and infavour of the respondent. Accordingly, the present tax appealdeserves to be and is accordingly dismissed leaving the parties tobear their own cost(s). Sd/- Sd/-(Sanjay K. Agrawal) (Amitendra Kishore Prasad)JudgeJudge