Endocrine And Breast Surgery Foundation Vs CIT (ITAT Chandigarh)
The Income Tax Appellate Tribunal (ITAT), Chandigarh Bench, delivered a consolidated order on two appeals filed by the Endocrine And Breast Surgery Foundation against the orders of the Commissioner of Income Tax (Exemptions) [CIT(E)], Chandigarh, both dated January 6, 2025. The applications seeking registration under Section 12A(1)(ac)(iii) and approval under Section 80G(5) of the Act were both dismissed by the CIT(E).
Appeal 1: Rejection of Section 12A Registration (ITA No. 244/Chd/2025)
The petitioner, the Endocrine And Breast Surgery Foundation, initially sought registration under Section 12AB(1)(ac)(iii) of the Act, claiming to be engaged in providing relief to the poor, education, and medical relief.
Assessee’s Contention:
The petitioner argued that the CIT(E) rejected the application without issuing a show-cause notice and without affording a reasonable opportunity of being heard, thus violating the principles of natural justice. The Foundation claimed to be carrying out genuine charitable activities in the field of medical relief and general public utility, and contended that rejecting the application without examining these facts was arbitrary.
CIT(E) Findings (Upheld by ITAT):
Upon reviewing the submissions and financial statements, the CIT(E) made several adverse observations:
- The Foundation shared its address with Trinity Hospital.
- The activities appeared to be fundamentally conducted by Trinity Hospital.
- The Foundation’s expenses were primarily for conference expenses, professional expenses, salary/wages, and tour and training expenses, rather than substantial charitable activities.
- The Foundation received donations from pharma companies, laboratories, and medical instrument companies, along with registration fees from doctors.
- The expenses were used mainly to hold conferences or to sponsor members’ participation in conferences, covering air tickets and stay expenses.
- The activities were seen as being contrary to the Medical Council (Professional conduct, Etiquette and Ethics) Regulations, 2002, which prohibit medical practitioners from taking monetary benefits from pharma companies.
The CIT(E) concluded that the Foundation’s work was “solely for the purpose of networking between the doctors and the pharma companies, labs and medical instrument companies” which was deemed unethical and contrary to public policy, and not for “Charitable purposes” as defined under Section 2(15) of the Act.
