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Madras Orthopaedic Society Versus The Director of Income Tax (Exemptions)

2015 (9) TMI 10 - ITAT CHENNAI

Registration under section 12AA denied - non charitable activities - Held that:- The facts in the present case are almost similar to that of the facts in The Chartered Accountants Study Circle which was formed for the benefit of professionals as well as students of Chartered Accountants. In this case, as submitted by the Authorized Representative, the memorandum of the society has been amended with retrospective effect and this was not placed before the Director of Income Tax (Exemptions). Accor .....

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e impugned order and remit the matter back to the file of the Director of Income Tax (Exemptions) for de novo consideration. - Decided in favour of assessee for statistical purposes. - ITA No. 1641/Mds/2013 - Dated:- 17-7-2015 - Chandra Poojari, AM And Challa Nagendra Prasad, JM,JJ. For the Petitioner : Mr G Seetharaman, CA For the Respondent : Mr Pathlaveth Peerya, CIT JUDGMENT Per Challa Nagendra Prasad, JM. This appeal is filed by the assessee against the order of the Director of Income Tax ( .....

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The Authorized Representative submits that assessee society has applied for registration under section 12AA of the Act with the Director of Income Tax(Exemptions). However, the Director of Income Tax(Exemptions) by order dated 31.05.2013 denied registration holding that society is formed for the benefit of its members only and not for the public. He submits that Director of Income Tax(Exemptions) also observed that society is providing services and benefits to its own members only which is viola .....

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on is not restricted to only surgeons and society is not a trade organization for doing any business, trade or commerce. The subscriptions are collected from members and the society is organizing various conferences and the members are attending as delegates and not as members. Authorized Representative submits that memorandum of association of the society has been amended with retrospective effect providing benefits not only to the members but also to the general public. When it was questioned .....

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itable activities, registration under section 12AA cannot be rejected on the ground that society is formed only for the benefit of its members. Authorized Representative places reliance on the decision of co-ordinate Bench of this Tribunal in the case of The Chartered Accountants Study Circle Vs. ITO(Exemptions) in ITA No.1971/Mds/2010 dated 4th July, 2011, which decision was affirmed by the jurisdictional High Court in the case of DIT(Exemptions) Vs. The Chartered Accountant Study Circle (250 C .....

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is formed with the following main objects: "a) propagation of knowledge of the science of orthopaedic speciality. b) provide academic training programmes to upcoming orthopaedic surgeons c) Create a sense of harmony and healthy co-existence amongst orthopaedic surgeons within the jurisdiction of Madras Orthopaedic Society and Orthopaedic surgeons in general. d) To conduct monthly clinical meeting. e) To organize CME programs for the postgraduates f) To organize live surgeries and workshops .....

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ling of fellowship, good friendly relationship among members, to unite under a common bond of such fellowship and to pursue and strive for recreational & cultural benefits of members. o) To promote professional, social, recreational, cultural, education and welfare activities of members. p) to do all things as are necessary or conducive to attainment of objects or any of them." 5. On examining the above objects of the society, we do not find any reason to hold that assessee society is f .....

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sentative for the assessee which was rendered in the case of The Chartered Accountants Study Circle, where the study circle was imparting knowledge to professionals and C.A. students . The assessee s study circle was catering improvement of knowledge through its activities and it was conducting courses and seminars which was also publishing and selling books of professional . The Director of Income Tax (Exemptions) denied renewal of approval under section 80G of the Act for the society holding t .....

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l as heard the rival submissions. Assessee is a Chartered Accountants Study Circle. Admittedly, assessee was conducting courses and seminars. Assessee was also publishing and selling books of professional interest. Ld. DIT (Exemptions) himself has admitted that such reference might be used by general public as well as professionals doing bank audit, tax audit, etc. These activities could only be considered as a part of on-going education of Chartered Accountants which, in turn, would necessarily .....

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e assessee since such proviso was applicable only with regard to charitable activities in the nature of advancement of object of general public utility. We are, therefore, of the opinion that the assessee was well entitled to approval under Section 80G of the Act. The order of ld. DIT (Exemptions) is quashed and he is directed to grant the assessee renewal of its approval under Section 80G of the Act as sought for." 7. This decision of the co-ordinate Bench has been upheld by the jurisdicti .....

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Central and State Governments, Public and Professional Institutions, etc. on matters involving professional and social problems; e. To receive and collect any subscriptions, gifts and donations, either in cash or in kind or acquire by any other lawful ways and means and spend the same in fulfillment of all or any of the aims and objects of the Society. The income and properties of the Society shall be applied solely for the promotion and fulfillment of the aims and objects of the Society, provid .....

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of renewal under Section 80G of the Income-tax Act. The said request was rejected on the ground that the assessee was publishing and selling books of professional interest to be used as a reference material by the general public as well as the professionals in respect of Bank Audit, Tax Audit, etc. and its activities are commercial in nature and will fall within the amended provision of Section 2(15) of the Income-tax Act. Being aggrieved by the said order, the assessee preferred an appeal to t .....

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the Tribunal allowed the appeal and held that the assessee was entitled to approval under Section 80G of the Act. 5. On a challenge to the said order, Mr.T.Ravikumar, learned standing counsel for the Revenue, would submit that in terms of first proviso to Section 2(15) of the Incometax Act, in the event the activities of the trust involve the carrying on of any activity in the nature of trade, commerce or business or any activity of rendering any service in relation to any trade, commerce or bu .....

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tic or historic interest,) and the advancement of any other object of general public utility: Provided that the advancement of any other object of general public utility shall not be a charitable purpose, if it involves the carrying on of any activity in the nature of trade, commerce or business, or any activity of rendering any service in relation to any trade, commerce or business, for a cess or fee or any other consideration, irrespective of the nature of use or application, or retention, of .....

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nterest, and the advancement of any other object of general public utility. If the activities are in the advancement of any other object of general public utility, such activities can be called as 'charitable purpose'. However, in terms of the first proviso to sub section 15 of Section 2 of the Act, if the trust involves the carrying on of any activity in the nature of trade, commerce or business, or any activity of rendering any service in relation to any trade, commerce or business, su .....

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lishing books, booklets, etc. on professional subjects, and selling the same only on the subjects related to audit and not on any other subject. Consequently, those books are primarily sold only to the members of the society. Of course, the books are also made available for sale to the general public aiming to help the society to get better, well-equipped and skilled set of Chartered Accountants for maintaining audit quality. 9. In our opinion, such activities of the assessee-trust cannot be con .....

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