TaxTMI 
TaxTMI 
2012 (6) TMI 327
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....nd no body would give donations without the benefit of S. 80-G. 4. The learned DIT has erred on facts and in law in failing to link the papers of his own file and coming to the incorrect conclusion that the appellant has not complied with the requirements, which had already been complied. 5. The learned DIT has erred on facts and in law in failing to understand that for attracting the conference for medical development, there was no fee to be paid by delegates. It was an educational conference without fee. The sponsors donated the funds to the trust which was utilized for meeting the expenses of the conference, which is a common practice recognized by law for such charitable activities. 2. Brief facts are: The assessee is a registered charitable trust, created on 28-11-2011 by eminent cardiologist Dr. Balbir Singh Makkar, Patron Dr. Naresh Trehan along with other renowned cardiologists. The trust was constituted with object of research in the field of medicines in general and cardiac medicines in particular by way of research, experiment, treatment and awareness about the latest trend in medical field. The objects as enshrined in the Trust deed are as und....
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....ity of medical services and training of Indian doctors. (xiv) To publish a journal/Newsletter for disseminating knowledge and expertise in the field of medical and surgical research and treatment. (xv) To do all such other things as are cognate to the objectives of the Trust or are incidental to or conducive to the attainment of the above objectives." 2.1. Apart from these main objects, there are various incidental and ancillary objects. Assessee trust applied for registration u/s 12AA and 80G respectively on 31-3-2011 along with relevant documents, which reflected that the assessee trust had received donation of Rs. 81 lacs from various companies. Substantial part of the donation was utilized by the assessee trust in holding a two day conference on 19/20-2-2011 of the doctors called as "Rhythm to revival 2011". 2.2. The Director of Income-tax (Exemptions) ["DIT(E)"], asked for the details about the donations and the expenditure, incurred for two days' annual conference at hotel Leela, Gurgaon, where physicians from Rajasthan, Punjab, Haryana, Utter Pradesh, Uttrakhand and J&K participated. The assessee had incurred expenditure on accommodation and holding of the co....
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.... hither to in the activities of general public utility, if engaged in any activity of trade, commerce or business or providing services in respect of any trade, commerce or business; benefits of exemption u/s 12A will not be available. It was held that assessee's activity of holding conference being commercial in nature, it was not qualified to be registered u/s 12A as well as u/s 80G. 2.6. Aggrieved, assessee is before us. 3. Learned counsel for the assessee contends that: (a) the entire issue has been misconceived by the DIT(E). It has been projected as if holding the conference was the only object of the trust. It is reflected by the trust deed that there are various objects of the trust which are all charitable in nature. The charitable objects of the trust empowers the trustees to hold research, medical education, periodical scientific meetings including live demonstration workshops particularly on treatment of cardiac rhythm disorders. It has not been disputed that the conference in question was for providing economical methods for treatment of cardiac rhythm disorders. This conference is not the only object of the trust Apart from the above specific objects, various....
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....shrined in the trust deed. The conference was widely advertised and reported by the newspapers about its utility in awareness about cardiac rhythm disorders and its early detection, copy of which is on the paper book. (e) There was no ban for attending the conference and the conference was organized with a particular object that the general public goes to govt. hospitals and other hospitals at smaller places instead of going to costly private and big city hospitals. This could have been possible by training the field doctors in the latest techniques and studies of cardiac diseases and disorders by holding this conference. The conference was held for equipping small town cardiologist which will help in reducing the cost of medical treatment for general public. It aimed to spread awareness for early detection and economical local treatment for cardiac patients. Conference intended to increase the confidence of field doctors and boost the confidence of the general public about their capacity. A purpose of general public utility holding the cardiac patients and their families quick recourse to local treatment and lesser cost thus reducing their suffering and saving on medical ex....
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...., which includes: (a) call for such documents or information from the trust or institution as he thinks necessary in order to satisfy himself about the genuineness of activities of the trust or institution and may also make such inquiries as he may deem necessary in this behalf; and (b) after satisfying himself about the objects of the trust or institution and the genuineness of its activities, he - (i) shall pass an order in writing registering the trust or institution; (ii) shall, if he is not so satisfied, pass an order in writing refusing to register the trust or institution. 4.1. It is pleaded that - (i) the DIT(E) was not satisfied about the objects of the trust being charitable in nature as the activity of conference amounts to a commercial activity. (ii) The donors were found to be pharmaceutical companies who otherwise please doctors by giving advertisements and offering free bees. The receipts were in fact commercial receipts and not donations which is reflected by TDS deducted by the donors. (iii) Trust is nothing but a device adopted by some eminent cardiologists to promote their own brand/ profile by arranging the....
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....nd there is no benefit to the common public. Except holding of this conference and corresponding donation, the charitable objects, as per the trust deed, have not been challenged by the DIT(E). If the objects of the trust are duly incorporated and charitable in nature and conform to the various rules and regulations; the assessee trust maintains its books of account and the genuineness of the account is established by the society, in normal circumstances the registration should be granted to the Trust u/s 12AA and 80-G of the I.T. Act. The scheme of the Income-tax Act provides - (i) procedure at the time of registration and thereafter (ii) rules for assessment of trusts. Since at the time of registration assessee trust is newly formed, therefore, only the objects of the trust and the accounts of the trust and activities of the trust till registration are to be inquired into. In the given facts and circumstances the conference organized by the assessee is authorized by the objects of the Trust; there is no ban or embargo whether conference can be held in five star hotel or not. Therefore, the adverse inference drawn by the DIT(E) is not proper inasmuch as the trustees will have a di....