Assessee's Society Eligibility for Charitable Registration Remitted for Re-examination

The Tribunal found that the activities of the assessee society, involving maintaining a sperm and egg bank and creating awareness for gamete donation, align with the definition of "charitable purpose" under section 2(15) of the Income Tax Act. However, regarding the genuineness of its activities and allegations of being a name lender, the Tribunal set aside the DIT(E)'s order and remitted the matter for re-examination to determine the society's eligibility for registration under section 12AA. The appeal of the assessee was treated as allowed for statistical purposes.

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Issues Involved:
1. Whether the objects of the assessee society fall under the definition of "charitable purpose" as per section 2(15) of the Income Tax Act.
2. Whether the activities of the assessee society are genuine and not merely a name lender for M/s Diana Medical Services Pvt. Ltd.

Issue-wise Detailed Analysis:

1. Objects of the Assessee Society as Charitable Purpose:
The primary contention was whether the activities of the assessee society, which involve maintaining a sperm and egg bank and creating awareness for gamete donation, fall within the definition of "charitable purpose" under section 2(15) of the Income Tax Act. The assessee argued that their activities are aimed at medical services and are essential for treating infertility, which is a significant medical issue. The society claimed that creating awareness and facilitating gamete donation are activities that serve the general public utility and are thus charitable. The Tribunal observed that the aims and objects of the society, as mentioned in the Memorandum of Association (MoA), indeed involve creating awareness and setting up facilities for gamete donation, which align with the definition of medical services. Therefore, the Tribunal found that the activities of the assessee society come within the purview of "charitable purpose" as defined under section 2(15) of the Act.

2. Genuineness of Activities and Allegation of Being a Name Lender:
The second issue was whether the assessee society was genuinely carrying out its claimed activities or merely acting as a name lender for M/s Diana Medical Services Pvt. Ltd. The Director of Income Tax (Exemptions) [DIT(E)] had rejected the application for registration under section 12AA on the grounds that the entire activity of collecting sperm/egg and arranging surrogacy was undertaken by M/s Diana Medical Services Pvt. Ltd., and the assessee society was created only on paper. The Tribunal noted that the DIT(E)'s conclusion was based on presumptions and lacked corroborative evidence. The Tribunal emphasized that the relationship between the President of the society and the Managing Director of the hospital, or the use of hospital facilities by the society, does not necessarily imply that the society is a mere name lender. The Tribunal highlighted the need for a detailed examination of the society's activities, including how it creates awareness, maintains the sperm/egg bank, and the terms of its collaboration with the hospital. The Tribunal also pointed out that the society must provide evidence of its activities, such as conducting seminars or workshops, and details of contributions received from childless couples. The Tribunal concluded that the matter requires re-examination by the DIT(E) to determine the genuineness of the society's activities.

Conclusion:
The Tribunal set aside the impugned order of the DIT(E) and remitted the matter back for a fresh decision after providing the assessee society an opportunity to explain its case. The Tribunal directed the DIT(E) to re-examine the objects and activities of the society in detail, ensuring that all relevant aspects are considered to determine whether the society qualifies for registration under section 12AA of the Act.

Result:
The appeal of the assessee was treated as allowed for statistical purposes. The Tribunal pronounced its decision in the open court on 26.8.2015.

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