Christian Medical College Ludhiana Society Vs CIT (Exemptions) (ITAT Chandigarh)
The Income Tax Appellate Tribunal (ITAT), Chandigarh, allowed two appeals filed by the assessee-society concerning its registration under Section 12AB and approval under Section 80G(5) of the Income Tax Act.
The first appeal challenged the order granting registration under Section 12AB(1)(b) for Assessment Years 2027-28 to 2031-32 by classifying the assessee as a religious entity instead of a religious-cum-charitable entity. The second appeal challenged the order denying approval under Section 80G(5) on the ground that the assessee was engaged in religious activities.
The assessee submitted that none of its actual activities could be categorized as religious. It relied upon its financial statements, supporting documents, and the Tribunal’s earlier decision in its own case granting approval under Section 80G(5), which had subsequently been affirmed by the Punjab & Haryana High Court.
The Tribunal noted that the assessee-society was established in 1894 and had developed into a medical institution engaged in healthcare, education, and research. It operated medical colleges, collaborated with Government bodies and institutions, provided free or subsidized treatment to vulnerable and underserved groups, and offered undergraduate, postgraduate, and super-specialty education. According to the Tribunal, the services were rendered without discrimination, and patients and students belonged to different religions and social backgrounds. Financial concessions were extended based on economic considerations.
The Tribunal further observed that the assessee had held registration under Section 12A as a charitable entity since 1999 and had been granted approval under Section 80G, except for Assessment Year 2012-13, when renewal was refused on the ground that it was a religious entity. That refusal had been set aside by the Tribunal, and the High Court had affirmed the Tribunal’s decision.
The Tribunal examined the assessee’s Memorandum of Association, registration documents, approvals under Sections 10(23C)(vi), 12A, and 80G, applications filed under the new registration regime, audited financial statements, and notes on activities. It found that the assessee earned income from hospital operations, medical colleges, research donations, and other welfare activities. Its expenditure related to pharmacy consumables, employee costs, finance costs, research and development, depreciation, and other operating expenses. Based on these records, the Tribunal concluded that the assessee’s activities were not religious in nature.
The Tribunal noted that while the registration order under Section 12AB described the nature of activities as “religious cum charitable,” the annexure classified the assessee as a religious entity. It also found that approval under Section 80G(5) had been denied solely by relying upon one object clause in the Memorandum of Association authorizing the construction and maintenance of churchyards and related properties. The Commissioner (Exemptions) concluded that this clause indicated religious objects and invoked Section 80G(5)(iii) and Explanation 3.
The Tribunal observed that there was no factual finding that the assessee had undertaken any religious activity during the relevant period. No reference had been made to the financial statements to establish that any religious activity was carried out. The denial of approval was based only on a selective interpretation of one general object clause, although the Tribunal had already found from the records that none of the assessee’s activities were religious and that its hospital, educational, and welfare activities benefited the general public without restriction to any particular religious community.
The Tribunal also referred to its earlier order granting approval under Section 80G(5), in which it had held that although the institution functioned in the spirit of Christian service, its educational and medical facilities were available to all persons irrespective of caste, race, creed, language, or religion. It noted that the Punjab & Haryana High Court had dismissed the Revenue’s appeal and had not admitted any substantial question of law. The Tribunal further found that there had been no change in the assessee’s activities since the earlier decision and that similar evidence demonstrating concessional medical care for all sections of society had been placed on record and remained uncontroverted.
Accordingly, the Tribunal directed the appropriate authority to grant approval under Section 80G(5) in accordance with the assessee’s application. It also directed that the registration granted under Section 12AB(1)(b) be categorized as that of a religious-cum-charitable entity and instructed the Commissioner (Exemptions) to amend the annexure accordingly.
Both appeals were allowed.
FULL TEXT OF THE ORDER OF ITAT CHANDIGARH
1. Aforesaid appeal by the assessee ITA No.241/Chandi/2026 arises out of an order passed by Ld. Commissioner of Income Tax (Exemption), Chandigarh, [CIT(E)] on 29-01-2026 granting registration to the assessee-trust u/s 12AB(1)(b) for AYs 2027-28 to 2031-32. The only grievance of the assessee is that it has been accorded the status of Religious Entity as against the claim of the assessee that it was religious cum charitable trust. The assessee’s appeal ITA No.242/Chandi/2026 arises out of an order passed by same authority on 30-01-2026 denying approval to the assessee u/s 80G(5) on the ground that the assessee was engaged in religious activities.
2. The Ld. AR advanced arguments and drew attention to assessee’s financial statements and other documents to contend that none of the activities of assessee trust could be categorized as religious activities. The Ld. AR has also referred to the decision of Tribunal in assessee’s own case ITA No.620/Chd/2012 dated 30-082013 granting similar approval u/s 80G(5). A copy of the same has been placed on record. This decision has been upheld by Hon’ble High Court of Punjab & Haryana by not admitting substantial question of law as raised by the revenue. The Ld. AR has also filed detailed written submissions supporting the case of the assessee. The Ld. CIT-DR, on the other hand, referred to the findings of Ld. CIT(E) in the impugned orders. Having heard rival submissions, the appeal is disposed-off as under.
3. From case records and assessee’s written submissions, it emerges that the assessee-society was established in the year 1894 and it is one of India’s oldest and most reputed medical institutions founded by Dame Edith Mary Brown. The assessee institution has evolved into a comprehensive center for healthcare, education and research. The assessee-society established medical colleges in the year 1949-50 and since then, its institutions operate with a clear commitment towards social welfare, primarily through its three core pillars i.e., healing, education and research aimed at improving health standards for all sections of the society. The assessee has entered into multiple collaborations with Government bodies and institutions ensuring that critical and specialized treatments are available either free of cost or at highly subsidized rates especially for vulnerable and underserved groups. Further, the assessee institution functions as an academic hub comprising multiple colleges and offer wide spectrum of undergraduate, post graduate and super specialty courses which are governed by national regulatory bodies. The assessee strives to provide accessible and affordable medical care especially through Government Collaboration and Charitable initiatives which reflect its enduring commitment to social welfare. The services rendered by the assessee institutions are completely non-discriminatory in nature. The patients as well as students belong to all religions and diverse social backgrounds. The financial concessions and aid are extended purely on economic considerations which would demonstrate that the assessee institution operates for the benefit of general public at large and not for any particular religious community.
4. In the above background, it could be seen that the assessee holds valid registration u/s 12A as Charitable entity since 1999 and has duly been approved u/s 80G without any fail except for the year 2012-13 wherein its renewal application was rejected by Ld. CIT(E) on the ground that the assessee was a religious entity. The assessee succeeded before Tribunal and Hon’ble High Court affirmed the decision of the Tribunal. These facts are discussed in the later part of this order.
5. The assessee’s Memorandum and Association (MOA) and rules & regulations governing the assessee-society have been placed on page nos. 9 to 30 of the paper book. These were last revised on 1003-2011 and since then, there has been no change in these documents. It could also be seen that the assessee was accorded approval u/s 10(23C)(vi) on 08-01-2008 (Page No.31 of the paper book) and approval u/s 80G(5) on 28-07-2008 (Page No.32 of the paper book). In the new regime of registration, the assessee applied for re-registration which was granted to the assessee in Form No.10AC u/s 12A(1)(ac)(i) for AYs 2022-23 to 2026-27 (Page Nos. 33 to 35 of the paper book). It was also granted approval u/s 80G(5) on 23-09-2021 for AYs 2022-23 to 2026-27 (Page Nos. 36 to 37 of the paper book).
6. Thereafter, the assessee applied for regular registration on 2909-2025 u/s 12A(1)(ac)(ii) in Form No.10AB (Page No.38 to 48 of the Paper book) wherein the object of the assessee-society was mentioned as education, medical relief, advancement of any other objects of general public utility. Along with this form, the assessee furnished copy of Memorandum of Association (MOA), Society Registration certificate, FCRA certificate, copy of existing registration u/s 12A and 80G, annual accounts of the assessee for FYs 2022-23 to 2024-25 and notes on its activities. Another Form No.10AB was filed for approval under clause (ii) of first proviso to Sec. 80G(5) enclosing similar documents. The copies of financial statements for AYs 202223 to 2024-25 have also been placed on Page Nos.57 to 102 of the paper book. Upon perusal of latest audited financial statements for FY 2024-25, it could be seen that the assessee has earned patients income and college income and donations for research and development. The substantial expenditure includes expenditure on consumable pharmacy, employees cost, finance cost, cost on R & D, depreciation and other expenses. It could thus be concluded that the assessee’s activities are not religious in nature but the assessee is generating income from hospital, medical colleges and other welfare activities which is not restricted to any particular section of the society.
7. Pertinently, upon perusal of impugned order granting registration to the assessee u/s 12AB(1)(b) in Form No.10AD, it could be seen that assessee’s nature of activities, in Column No. 2A, has been mentioned as religious cum charitable only. However, in the attached annexure, the assessee has been granted registration as religious entity. This is sole grievance of the assessee in ITA No.241/Chandi/2026. Upon perusal of impugned order denying approval u/s 80G(5), it could be seen that approval has been denied to the assessee merely by referring to one of the objects of the assessee trust (Clause-III(b)(7) of MOA) which read as under: –
7. To construct or otherwise acquire, lay out, maintain, repair, construct, develop and use any buildings, roads, church yards, burial grounds, recreation and pleasure grounds and all other works necessary or convenient for any of the objects of the society and to remove, extend, demolish, alter or otherwise dealt with the same as occasion may arise.
On the basis of the same, Ld. CIT(E) has concluded that the objects of the assessee were not confined exclusively to charitable purposes but expressly include religious objects and the activities carried out were found to be in furtherance of such religious projects. The Ld. CIT(E) invoked the provisions of Sec.80G(5)(iii) and Explanation-3 to deny approval to the assessee which provide that a trust could not be said to be established for charitable purpose if it includes any purpose / object, the whole or substantially the whole of which is of religious nature. However, there is no factual finding on the religious activities which are supposedly carried out by the assessee during the year. There is no such reference to assessee’s financial statements and there is no adverse finding on any of the activities being carried out by the assessee. The registration has been denied merely by quoting one of assessee’s general objects which has not, at all, been carried out by the assessee during the year. Upon perusal of relevant documents and annual accounts, we have already concluded in para-6 that none of the assessee’s activities are religious in nature but the assessee is generating income from hospital, medical colleges and other welfare activities which is not restricted to any particular section of the society. Quite clearly, Ld. CIT(E) has gone by selective interpretation of one of the general objects of the assessee trust while forming an opinion that the assessee was carrying out religious activities. The same cannot be held to be justified.
8. We further find that similar apprehension was raised by registration authority against the assessee in AY 2012-13 by referring to the same object clause of the assessee trust. The Tribunal granted registration to the assessee vide order dated 30-08-2013, wherein the substantive adjudication of co-ordinate bench was as under: –
8. We have heard the rival contentions and perused the record. The assessee society was established since 1949-50. The assessee society was granted registration u/s 12A of the Income-tax Act vide order dated 21.10.1999. The assessee was also granted exemption u/s 80G(5) of the Act and the last renewal of the said exemption was vide order dated 28.2.2008 upto 31.3.2011. The application for renewal of exemption u/s 80G of the Act was made by the assessee in form No. 10G on 22.12.2010 which was refused by the Commissioner of Income-tax-I, Ludhiana on the ground that the objects of the assessee society were religious innature, which were not eligible for exemption u/s 80G(5) of the Act.
9. The aims and objects of the society are as under :
“III. “The Society, is an educational and research institution of an all India character established and run by the Minority Christian community. Its primary aim is to educate and train Christian men and women as health professionals, in the spirit of Jesus Christ for the healing ministry of the Church in India”.
a) The main objectives of the Society shall be as follows:
1. To manage, maintain and run the Christian Medical College, Christian Dental College Christian College of Nursing, Christian College of Physiotherapy, Institute of Allied Health Sciences and similar such other institutions which might be established by the Society in future, in Ludhiana, in the true spirit of Christian service, ideals and principles in order to equip men and women for service in the promotion of health and the relief of suffering.
2. To establish, manage, administer, maintain, control and own Institutions of Health Services, Research Centres, Allied Hospitals, Universities and rural dispensaries in any state of India or abroad.
3. To affiliate, collaborate and enter into agreements, arrangements and contracts, with Institutions of health services, research centres and Universities in India or abroad.
Further, allied objects of the assessee society are as under :
“b) Without prejudice to the generality of the above and to that end in furtherance of the alms and objectives of the Society.
1. To provide medical, nursing and paramedical education according to standards Said down from time to time by the Government, University or other Statutory bodies, and to arrange for the admission of students and their courses of instruction and to provide all necessary facilities possible in connection therewith.
2. To provide non-formal and continuing education programmes in the health sciences.
3. To provide facilities for research into the causes of disease, their prevention and treatment
4. To care for the sick and the suffering with love and compassion as commanded by Jesus Christ, and to restore them to health of body and mind, giving due recognition to spiritual need in its relation to health without consideration of caste, race, creed, religion and language.
Provided further that the facilities of health professional training and medical care are also available to all others without consideration of caste, race, creed, language and religion.”
10. The issue arising in the present appeal is in relation to the renewal of registration granted under section 80G(5) of the Act. The ld. AR forthe assessee fairly pointed out that in view of the provisions of section 293C of the Income Tax Act, the Commissioner of Income Tax is empowered to look into the renewal of registration already granted under section 80G(5) of the Act. In the present case, the CIT had issued a show cause notice dated 09.04.2012 for withdrawal of exemption granted under section 80G(5) of the Income Tax Act. The Commissioner of Income Tax was of the view that the primary aim of the assessee society was to educate and train the Christian men and women as professionals in the spirits of Jesus Christ. The Commissioner of Income Tax, Ludhiana, in view of the point No.5 of Memorandum of Association observed that the assessee was engaged in training primarily Christians in medical, dental, nursing and other health professional students by providing health services to the community and the nation. As per the Commissioner of Income Tax, the assessee society was being run for providing the health services to particular community of Christians only and the main object of the assessee society was observed to be “welfare of particular religion and community i.e. Christians.” The main object of the society was held to be religious under section 80G(5)(iii) read with Explanation 3 below section 80G(5C). The society was held to be not covered under charitable purposes. Rejecting the explanation of the assessee, the Commissioner of Income Tax held the society of not having fulfilled the conditions necessary for continuation of exemption under section 80G(5)(iii) read with Explanation 3 under section 80G(5C) of the Act and Rule 11AA(5) of the Income Tax Rules.
11. Section 80G(5) provides as under :
“80G(5) This section applies to donations to any institution or fund referred to in sub-clause (iv) of clause (a) of sub-section (2), only if it is established in India for a charitable purpose and if it fulfils the following conditions, namely :—
(i) where the institution or fund derives any income, such income would not be liable to inclusion in its total income under the provisions of sections 11 and or clause (23AA)] [or clause (23C)] of section 10 :
Provided that where an institution or fund derives any income, being profits and gains of business, the condition that such income would not be liable to inclusion in its total income under the provisions of section 11 shall not apply in relation to such income, if—
a. the institution or fund maintains separate books of account in respect of such business;
b. the donations made to the institution or fund are not used by it, directly or indirectly, for the purposes of such business; and
c. the institution or fund issues to a person making the donation a certificate to the effect that it maintains separate books of account in respect of such business and that the donations received by it will not be used, directly or indirectly, for the purposes of such business;
(ii) the instrument under which the institution or fund is constituted does not, or the rules governing the institution or fund do not, contain any provision for the transfer or application at any time of the whole or any part of the income or assets of the institution or fund for any purpose other than a charitable purpose;
(iii) the institution or fund is not expressed to be for the benefit of any particular religious community or caste;
(iv) the institution or fund maintains regular accounts of its receipts and expenditure;
(v) the institution or fund is either constituted as a public charitable trust or is registered under the Societies Registration Act, 1860 (21 of 1860), or under any law corresponding to that Act in force in any part of India or under section 25of the Companies Act, 1956 (1 of 1956), or is a University established by law, or is any other educational institution recognised by the Government or by a University established by law, or affiliated to any University established by law, or is an institution financed wholly or in part by the Government or a local authority
(vi) in relation to donations made after the 31st day of March, 1992, the institution or fund is for the time being approved by the Commissioner in accordance with the rules made in this behalf and
[(vii) where any institution or fund had been approved under clause (vi) for the previous year beginning on the 1st day of April, 2007 and ending on the 31st day of March, 2008, such institution or fund shall, for the purposes of this section and notwithstanding anything contained in the proviso to clause (15) of section 2, be deemed to have been,—
a. established for charitable purposes for the previous year beginning on the 1st day of April, 2008 and ending on the 31st day of March, 2009; and
b. approved under the said clause (vi) for the previous year beginning on the 1st day of April, 2008 and ending on the 31st day of March, 2009.]
12. Explanation 3 under section 80G(5C) reads as under :
“In this section ‘charitable purpose’ does not include any purpose the whole or substantially the whole of which is of religious nature.”
13.In the facts of the present case, we find that the assessee was registered as charitable institution under section 12A of the Income Tax Act and the said registration is being continued to be granted to the assessee society even for the year under consideration. The primary aim of the assessee society was to train men and women as health professionals in the spirit of Jesus Christ and the said facility of training health professionals and medical care was to be provided without consideration of cast, race, creed, language and region. Though in the primary para of the objects of the assessee society, it is mentioned that the primary aim was to educate and train Christians men and women as health professionals but in actual fact, the assessee society has been running and maintaining the Christian Medical College, Christian Dental College, Christian College of Nursing and other institutions, though on the ideals and principles in the spirit of Christian services, but for training the professionals of any caste, creed, race, religion etc. Similarly, the medical care is being provided by the assessee society to all irrespective of their caste, creed or religion etc. The ld. AR for the assessee was directed to furnish the information in respect of the concessions being allowed to the patients by the assessee society and necessary evidence has been filed on record in this regard which clearly establish the case of the assessee that the said facilities of providing concessional medical and health care is provided to persons of any caste, creed or religion. The assessee society was established and run by a minority Christian community, but as the aim and object of the assessee society is to train professionals in the field of medical and health-care nd also to provide medical facilities in their hospitals to all persons of any caste, creed, race, religion etc., we are of the view that the activities carried out by the assessee society are charitable in nature and consequently, the assessee is entitled to the registration under section 80G(5) of the Act. We find no merit in the order of the Commissioner of Income Tax in this regard and reversing the same, we hold that the renewal of registration under section 80G(5) is to be granted to the assessee society. The grounds of appeal raised by the assessee are, thus allowed. 14. In the result, appeal of the assessee is allowed.
The Tribunal thus allowed approval claim of the assessee u/s 80G on the finding that the facilities were being offered by the assessee without consideration of caste, race, creed, language and region. In actual fact, the assessee was running and maintaining educational colleges though on the ideals and principles in the spirit of Christian services but for training the professionals of any caste, creed, race, religion etc. Similarly, the medical care was being provided by the assessee society to all irrespective of their caste, creed or religion etc. The assessee filed necessary evidences to furnish the information in respect of the concessions being allowed to the patients by the assessee society. The perusal of the same would establish that concessional medical and health care was provided to persons of any caste, creed or religion. On these facts, the assessee was granted registration u/s 80G(5). We find that there is no change of assessee’s activities since then and similar evidences of concessional medical care to all irrespective of caste, creed or religion etc. has been placed on record by Ld. AR. The same could not be controverted before us. Therefore, in the absence of change in facts, similar view is to be taken in this year.
9. The revenue assailed the above decision of the Tribunal before Hon’ble Punjab & Haryana High Court which stood disposed-off on 11-09-2014 (reported as 61 com 68). The Hon’ble Court affirmed the decision of Tribunal and did not admit any substantial question of law. The appeal of the revenue stood dismissed. This being so, we see no reason to take a different view in the matter.
10. Finally on the facts and circumstances of the case, we direct appropriate authority to grant impugned registration u/s 80G(5) to the assessee as per its application. The registration as granted to the assessee u/s 12AB(1)(b) shall be under the category of religious cum charitable entity. The Ld. CIT(E) is directed to amend the annexure accordingly. We order so.
11. Both the appeals stand allowed in terms of our above order.
Order pronounced on 06th July, 2026
