TaxTMI 
TaxTMI 
2026 (2) TMI 208
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....red, the tangible material submitted during the proceeding u/s 12AB of Income Tax Act, 1961. 3. Without prejudice to the above, the CIT has also erred in not considering the fact that the conference expenses as incurred by the appellant the spread of knowledge of best practices and new medicines/ treatments among the doctors includes the public at large, who are affected by the services of such doctors and as such charitable in nature as 'advancement of an object of general public utility'. 4. That the Worthy CIT(A) has erred in not considering the fact that in the absence of the above activities made, in addition to the free distribution of medicines to the poor and free medical camps for the public, the object and purpose of the Medical Relief, Relief to Poor and Advancement of an object of General Public Utility to the public at large i.e. the objects of the assessee society, cannot be met effectively. 5. That CIT has also erred in rejecting the application for registration of the trust us 12AB only on the basis of volume of the, only alleged, charitable activity undertaken by the assessee society, being the distribution of the free medicines f....
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....al charitable activity was negligible. 6. It is further observed from the financials, that the gross receipts from various pharma companies for the FY 2021-22, 2022-23 and 2023-24 was Rs. 10 lakhs Rs. 18.95 lakhs and Rs. 10.60 lakhs, respectively ( totalling nearly 40 lakhs in three years ), out of which expenditure for FY 2021-22 (as per break up contained in page 146 and 147 of pb), was Rs. 2.31 lakhs paid to event management company and Rs. 3.42 lakhs paid for conference at Hotel Novotel which also included entertainment shows by professional singers (Razia Sultana and Soni Singh, as per noting in page 109 of PB) and actual charity expenditure was NIL. 7. For the FY 2022-23, the breakup of expenses as provided was Rs. 8.73 lakhs for digital marketing to one Gagan Colour images, event managers, anchor etc. Rs. 5.20 lakhs paid to Sepal Hotels for Governing body meeting Rs. 1.03 lakhs as lecture fees at Novotel Hotel event and the only semblance of charity work is the amount of Rs. 2.51 lakhs paid to Friends Medicine shop for expenditure on account of "insulin for Type - 1 diabetic children". 8. The break - up of expenses for FY 2023-24 (as provided in pb page -147) was st....
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.... other doctors for their upgradation of knowledge and in turn will benefit the patients to be treated by them. 10.3 The Ld. AR further submitted that objects of the society is holding of conference and seminars for upgradation of members as well as for the general public and there is nothing wrong in holding seminars in five star category hotels and to meet the travel expenses of participating doctors (in support he relied on the decision of Heart Care management vs DIT (E) 2012 22taxmann.com105( Delhi). 10.4 The Ld. AR further submitted that documentary evidences in form of audit reports, newspaper clippings, brochures, photographs of various events and seminars and health camps were also filed before the Ld. CIT (E), which has not been given proper cognizance. He further explained that in the instant case since the funds are pooled from different pharma companies (a mixed group, ) and not from any particular one, it is not possible for any single company to exert undue influence on the participating doctors and gain any benefit out of the same, but on the other hand it leads to upgradation of professional and technical knowledge of doctors with information about advancement....
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....ercial interests and it seems that the society is used as a conduit to promote the products. 11.1 He further relied on the decision of the coordinate Chandigarh Bench of the ITAT in the case of "Endocrine and Breast Surgery Foundation" ITA 244 and 245 (CHD) of 2025, order dated 8th October, 2025, in support of his contention that in an almost identical situation, where no charitable activity is actually carried out for the benefit of the general public or the community as a whole, and where majority of the expenses has been incurred for organising seminars and conference for medical practitioners at various places, the same is in violation of The Medical Councils Regulations 2002, which points towards the sole purpose of networking between doctors and pharma companies which is unethical and contrary to public policy and he prayed for upholding the findings and the order of the Ld. CIT(E). 12. We have heard the rival submissions and considered the materials on record. We find that in the instant case out of the total grants of Rs. Forty lakhs ( approx ) received from various pharma companies by the assessee society, in the aforesaid three financial years, only a meagre amount ....
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....tudy etc. can only be received through approved institutions by modalities laid down by law / rules / guidelines adopted by such approved institutions, in a transparent manner. It shall always be fully disclosed." The regulation further lays down corresponding action or sanction which can be taken against, or imposed upon, the medical practitioner for violation of each stipulation, based on the monetary value of the same. Thus, acceptance of freebies given by pharmaceutical companies is clearly an offence on part of the medical practitioner, punishable with varying consequences. 12.3 In the instant case as rightly pointed out by the Ld CIT ( E ), the actual charitable activity conducted by the society is negligible (being only Rs. 2.51 lakhs against total grants received from pharma companies amounting to Rs. Forty lakhs), and the rest of the amount are expended for various activities involving the medical practitioners for activities which are other than for charitable purpose as stipulated u/s 2(15) of the act 61, and as such we are in agreement with the view of the Ld CIT ( E ) that funds received from pharma companies has been expended for the doctors in violation of the gui....