Poona Obstetrics and Gynaecological Society Vs PCIT (Central) (ITAT Pune)
Section 12A registration cannot be cancelled when the trust is engaged in genuine activities of imparting knowledge: ITAT Pune
ITAT held that that the assessee(s) trusts are genuinely and consistently carrying on the work for the charitable objects for which they have been granted registration u/s.12A(old regime)/12AA/12AB of the Act and the funds they have received from the pharmaceutical companies have been applied for the objects of the trusts. Further, it has been consistently held that denial of exemptions can only be to the extent of violation made by the assessee(s) trusts. Hon‟ble Bombay High Court in the case of Audyogik Shikshan Mandal (supra) has held that exemption u/s.11 ought to be denied only to the extent of violative portion. Further, since the assessee(s) trusts are genuinely carrying out the charitable activities, registration granted u/s.12A/12AA/12AB of the Act cannot be cancelled. However, the AOs while carrying out the assessment proceedings can decide on the merits of the case. Same analogy will be applicable on the pharmaceutical companies who have given the funds to the assessee societies and the doctors who have participated in the events organized by the assessee trusts and as discussed earlier, the assessment proceedings, if any, carried out in case of such other companies/doctors, the AOs are bound to decide in accordance with law. However, presently we are concerned with the assessee(s) trusts which are neither pharma companies nor doctors but are registered charitable associations formed by the doctors and the medical practitioners duly approved by the Maharashtra Medical Council and carrying out the genuine activities as per the guidelines made by Indian Medical Council and we fail to find any violation committed on their part so far as the facts of the case dealt with by ld. PCIT are concerned. Even in the judgment of Hon’ble Apex Court in the case of M/s. Apex Laboratories Pvt. Ltd. vs. DCIT (supra) reference was made for the claim of expenditure u./s.37(1) of the Act by pharma companies and the freebies received by the doctors but there is no reference to any professional association of doctors nor there is any issue of claim of expenditure u/s.37(1) for the purpose of business in the instant case. Before us, it only a professional association of persons who have formed the trusts duly approved by Maharashtra Medical Council and duly registered u/s.12A/12AA/12AB and working for the charitable objects and advancement of education and therefore ld.PCIT erred in applying the ratio laid down by the Hon’ble Apex Court in the case of M/s. Apex Laboratories Pvt. Ltd. vs. DCIT (supra) on the facts of the instant case alleging the assessee(s) trust of committing the ‗specified violation‘. In view the above, we are of the considered view that on merits of the case, assessee(s) trusts deserve to succeed and accordingly finding of ld.PCIT cancelling the registration of the assessee(s) trusts for the alleged violation provided in section 12AB(4) of the Act is hereby reversed and the registration granted u/s.12A/12AA/12AB of the Act are reinstated and will remain in force.
