×Latest Case Laws on Income Tax by various Income Tax Appellate Tribunals in India
These are the latest case laws decided by various Income Tax Appellate Tribunals (ITAT) of India on Income Tax which have been published recently. The case laws are open for discussion and we invite expert comments from our members on its applicability and effect on relevant issues.
This appeal is filed by the assessee against the order of the Commissioner of Income Tax (Exemptions) [CIT(E)], Hyderabad vide F.No.CIT(E)/HYD/113(7)/12A & 80G/2015-16 dated 30.12.2015.
2. Ground No.1 and 8 are general in nature which does not require specific adjudication.
3. All the remaining grounds of appeal are related to the rejection of registration of society u/s 12AA of Income Tax Act, 1961 (in short ‘Act’). The assessee is a society, filed its application in From No.10A and 10G on 21.07.2015 seeking registration u/s 12AA and approval u/s 80G of the Act.
The CIT(E) issued letter dated 01.10.2015 for production of Memorandum of Association (MoA) and other details and in response to notice, the assessee filed the details. After going through the information filed by the Society, the CIT(E) observed that the objects from Sl.No. (i) to (viii) are completely mutual in nature and are not charitable. During the course of hearing, the Ld.CIT(E) informed that the objects are aimed at mutually beneficial to all the private medical and dental colleges. Subsequently, the Ld.AR submitted the amended objects and it was found by the Ld.CIT(E) that the amended objects also are of non-charitable nature except the objects in 3(i)(c) and 3(i)(d). Since the major objects are mutually beneficial to the members of the society and are not charitable, the Ld.CIT(E) rejected the registration sought u/s 12AA of the Act.
3.1. From the details furnished by the assessee, the Ld.CIT(E) found that the Private medical and Dental colleges have donated the sum of Rs.10.00 lakhs to the Society and the assessee paid a sum of Rs.15,98,715/- to Concept Communications. The assessee explained that the expenditure was in nature of advertisement / communication expenses incurred by the assessee relating to the admissions in Private Medical/Dental colleges for common examination conducted by TCS. The Ld.CIT(E) viewed that the analysis of bank account is also shows that the society is for mutually beneficial to the members of the society, hence, the application for registration u/s 12AA was rejected by the Ld.CIT(E).
4. Against the order of the CIT(E), the assessee filed appeal before this Tribunal. During the appeal hearing, the Ld.AR submitted that the assessee is a Society registered under Societies Act, established for the benefit of all the members of the society as well as the public at large. The Ld.AR further stated that the CIT(E) expressed certain reservations with regard to some of the objects in the MoA and the Society has amended the objects making the main objects of the Society as charitable activities and the Society is rendering services to the public at large, making efforts to remove the unhealthy competition among the Medical and Dental colleges to make the Medical/dental education available to the students who are aspiring for medical education. The society plays vital role in proposing legislative measures for development of medical and dental education in the state, maintain good libraries and amicably resolve controversies among the colleges to avoid the unnecessary inconvenience to the stake holders. Therefore, argued that the Ld.CIT(E)’s reasoning for rejecting the application u/s 12AA of the Act sating that the objects of the Society are not charitable in nature and the Society existed solely for mutual benefit of the members is incorrect and far from the truth and requested to grant registration u/s 12AA of the Act. The Ld.AR further stated that as per sub section 15 of section 2 charity means advancement of any other object of general public utili y. The case of society is engaged in advancement of education and advancement of any other object of general public utility. Therefore, requested to set aside the order of the Ld.CIT(E) and grant registration u/s 12AA of the Act. The Ld.AR relied on the following decisions :
(i) Andhra Pradesh State Seed Certification Agency Vs Chief Commissioner of Income Tax –III, Hyderabad (2012) 356 ITR 360 (AP)
(ii) Commissioner of Income Tax Vs. Gujarat Maritime Board (2007) 295 ITR 561 (SC)
(iii) Commissioner of Income Tax Vs. Andhra Chamber of Commerce (1965) 55 ITR 722 (SC)
(iv) Commissioner of Income Tax Vs. State Urban Development Agency (SUDA) (2013) 218 Taxman 146 (All)
(v) Commissioner of Income Tax Andhra Pradesh-II Vs. Andhra Pradesh Police Welfare Society (1971) 82 ITR 704(SC)
(vi) Bangalore Urban & Rural District Co-operative Milk Producers Societies Members and Employees Welfare Trust Vs. DIT (2016) 382 ITR 528 (Karn)
(vii) Commissioner of Income Tax Vs. Bar Council of Maharashtra (1981) 130 ITR 28 (SC)
(viii) Commissioner of Income Tax Vs. Andhra Pradesh Riding Club (1987) 168 ITR 393 (AP)
(ix) Gujarat State Plastic Manufacturers Association Vs. Commissioner of Income Tax. (1998) 150 CTR 97 (Guj)
(x) New Life in Christ Evangelistic Association (NLC) Vs. Commissioner of Income Tax (2001) 165 CTR 0446 (Mad)
5. On the other hand, the Ld.DR supported the orders of the Ld.CIT(E).
6. We have heard both the parties and perused the material placed on record. The assessee is a Society registered under Societies Act and formed to cater to the needs of the requirement of medical and dental colleges