Dismissed

Commissioner of Income Tax v. Association of Physicians

Chhattisgarh HC18 Sept 2024TAXC/49/2019

Case brief

AI extract

What is this about?

The High Court of Chhattisgarh dismissed this tax appeal filed by the Commissioner of Income Tax challenging the ITAT's order granting Section 12AA registration to the Association of Physicians. The Court held that the ITAT correctly relied on its own precedent in Chhattisgarh Urology Society's case, which remains binding as the Supreme Court had dismissed a subsequent SLP.

What did the court decide?

The substantial question of law is answered against the appellant and in favour of the respondent. The present tax appeal is dismissed.

Commissioner of Income Tax Vs Association of Physicians — Income Tax | Chhattisgarh HC (2024)

¶1

Page 1 of 6

¶2

{Tax Case No.49/2019}

¶3

Digitally signed by SISTA SISTA SOMAYAJULU SOMAYAJULU Date: 2024.09.25 15:28:23 +0530

¶4

2024:CGHC:36686-DB

¶5

AFR

¶6

HIGH COURT OF CHHATTISGARH AT BILASPUR

¶7

TAXC No. 49 of 2019

¶8

Commissioner of Income Tax (Exemption), Aaykar Bhawan, Houshangabad Road, Bhopal, Madhya Pradesh.

¶9

... Appellant

¶10

Versus

¶11

Association of Physicians, Durg Bhilai Branch, C/o Dr. Prabhat Pandey, Saubhagya Medical Complex, Opp New Bus Stand, G.E. Road, Durg, Chhattisgarh.

¶12

... Respondent

¶13

For Appellant : Mr. Amit Chaudhari, Advocate.

¶14

For Respondent : Mr. Mool Chand Jain, Advocate through video conferencing and Mr. Vijay Shanker Mishra, Advocate.

¶15

Division Bench: - Hon'ble Shri Sanjay K. Agrawal and Hon'ble Shri Amitendra Kishore Prasad, JJ.

¶16

Order on Board

¶17

(19/09/2024)

¶18

Sanjay K. Agrawal, J.

¶19

This tax appeal preferred under Section 260A of the Income Tax,

¶20

1961 (for short, ‘the IT Act’) was admitted for hearing on 15-32023 by formulating the following substantial question of law: -

¶21

Page 2 of 6

¶22

{Tax Case No.49/2019}

¶23

“Whether on facts & circumstances of the case, the order of the Ld. Tribunal is correct in law and on facts in directing the Ld. CIT to grant the registration u/s 12 AA of the IT Act irrespective of non-genuineness of the activities of the institution evidenced in the impugned order of the Commissioner of Income Tax dated 28-092015, thereby rendering the decision which is perverse?”

¶24

The Association of Physicians, Branch: Durg-Bhilai i.e. the respondent herein has filed an application for registration under Section 12AA(1)(b)(i) of the IT Act in appropriate form before the competent authority and the said application was rejected by the Commissioner of Income Tax (Exemption) by order dated 28-92015 holding that the case of the Association of Physicians is not covered by the provisions contained in Section 12AA(1)(b)(i) of the IT Act. Feeling dissatisfied with the order of the Commissioner of Income Tax (Exemption) dated 28-9-2015, the respondent herein preferred an appeal before the Income Tax Appellate Tribunal (ITAT) and the ITAT by its impugned order, allowed the appeal filed by the respondent Association holding that the issue raised in the appeal is covered by the decision of this Court in the matter of Commissioner of Income Tax v. Chhattisgarh Urology Society 1 and directed the CIT(E) to grant registration in favour of the respondent Association / assessee under Section 12AA of the Act against which this appeal has been preferred.

¶25

1 TAXC No.159/2017, decided on 17-1-2018

¶26

Page 3 of 6

¶27

{Tax Case No.49/2019}

¶28

Mr. Amit Chaudhari, learned counsel appearing for the appellant, would submit that the learned ITAT has committed legal error in directing for registration holding that it is covered by the decision of this Court in Chhattisgarh Urology Society’s case (supra), therefore, the impugned order is liable to be set aside.

¶29

Mr. Mool Chand Jain, learned counsel appearing for the respondent through video conferencing, would submit that the case of the respondent herein is squarely covered by the decision of this Court in Chhattisgarh Urology Society’s case (supra) which was also taken up in review on review petition being filed by the Revenue and by order dated 11-3-2019, the coordinate Bench of this Court has dismissed the review petition, thereafter, SLP was filed by the Revenue being SLP (Civil) Diary No. 33995/2019 which was also dismissed by the Supreme Court on 18-10-2019, as such, the instant tax appeal deserves to be dismissed.

¶30

We have heard learned counsel for the parties and considered their rival submissions made herein-above and also went through the material available on record minutely and thoroughly as well.

¶31

Section 12AA(1)(b)(i) of the IT Act states as under: -

¶32

“ 12AA. Procedure for registration .—(1) The Principal Commissioner or Commissioner, on receipt of an application for registration of a trust or institution made under clause (a) or clause (aa) or clause (ab) of sub-section (1) of section 12A, shall—

¶33

Page 4 of 6

¶34

{Tax Case No.49/2019}

¶35

(a) xxx xxx xxx

¶36

(b) after satisfying himself about the objects of the trust or institution and the genuineness of its activities as required under sub-clause (i) of clause (a) and compliance of the requirements under sub-clause (ii) of the said clause, he—

¶37

(i) shall pass an order in writing registering the trust or institution;

¶38

and a copy of such order shall be sent to the applicant:”

¶39

A careful perusal of the aforesaid provision would show that the Principal Commissioner or the Commissioner has to satisfy himself about the objects of the trust or institution and the genuineness of its activities as required under sub-clause (i) of clause (a) and compliance of the requirements under sub-clause (ii) of the said clause, and has to pass an order in writing registering the trust or institution and a copy of the order so passed will be sent to the applicant.

¶40

In Chhattisgarh Urology Society’s case (supra), a coordinate Bench of this Court has considered the issue and held that the said provision nowhere empowers the Commissioner of Income Tax to assess the objects vis-a-vis the books of accounts and even otherwise, it is not to be seen at this stage as to whether the fulfillment of the charitable trust would eventually benefit the

¶41

Page 5 of 6

¶42

{Tax Case No.49/2019}

¶43

members of the society, and observed in paragraphs 10, 11, 12 and

¶44

13 as under: -

¶45

“10. The provision contained under Section 12A nowhere empowers the CIT to assess the objects vis-a-vis the books of accounts. Even otherwise, it is not to be seen at this stage as to whether the fulfillment of the charitable trust would eventually benefit the members of the society. If the constituent of the trust engage in some genuine charitable activity which may benefit them in some other aspect of their personality which may include their vocation in life, it would not affect the genuineness of the objects of the trust. A person does not engage in charity for not doing anything in the other walks of life. A charity for one particular object is not for destroying the career for an individual which he is otherwise entitled to profess. If this ground is considered to be affecting the genuineness of the trust, people successful in different walks of life would never engage in charitable activity.

¶46

In the matters of Commissioner of Income Tax vs Vijay Vargiya Vani Charitable Trust² and Fifth Generation Education vs Commissioner Income Tax³ , it is held that at the stage of Section 12A, the Commissioner is not to examine the application of income. All that he may examine is whether the application is made in accordance with the requirements of Section 12A read with Rule 17A and whether Form No.10A has been properly filled up. He may also see whether the objects of the trust are charitable or not. At this Stage, it is not proper to examine the application of income.

¶47

In the case at hand, the order passed by the CIT does not say in definite terms, that the objects of the society are not charitable in nature. Merely because the trust consists of Urologist Doctors and the charitable activity may mutually benefit those members, the object itself would not cease to be charitable in nature.

¶48

2 (2014) 271 CTR 0698 (Raj)

¶49

3 (1990) 185 ITR 634 All

¶50

Page 6 of 6

¶51

{Tax Case No.49/2019}

¶52

For the foregoing, we are satisfied that the Appellate Tribunal has rightly interfered with the order passed by the CIT. No substantial question of law arises in this appeal for determination in view of the plain language of Section 12A of the Act, 1961. The appeal being sans substance, it deserves to be and is hereby dismissed.”

¶53

Thereafter, against the order passed in the said tax appeal i.e. in Chhattisgarh Urology Society’s case (supra), review petition was filed by the Revenue and ultimately, the review petition was also dismissed on 11-3-2019 against which SLP (Civil) Diary No. 33995/2019 was filed which was also dismissed by the Supreme Court. As such, the impugned order of the ITAT relying upon the order of this Court in Chhattisgarh Urology Society’s case (supra), which holds the field, is in accordance with law, as the ultimate object of the respondent Association is extension of medical facilities to the public at large. In that view of the matter, the substantial question of law is answered against the appellant and in favour of the respondent. Accordingly, the present tax appeal deserves to be and is accordingly dismissed leaving the parties to bear their own cost(s).

¶54

Sd/Sd/(Sanjay K. Agrawal) (Amitendra Kishore Prasad) Judge Judge

¶55

Soma

Commissioner of Income Tax v. Association of Physicians

Case brief

What is this about?

What did the court decide?

Commissioner of Income Tax v. Association of Physicians

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

The Pr. Commissioner of Income Tax, Vs Chhattisgarh State Beverages Corporation Limited

Deshiram Kamar Vs Stateof Chhattisgarh

Shankar Nag Vs State of Chhattisgarh

Panchlal Vs State of Chhattisgarh

Kumar Singh Bhuarya Vs State of Chhattisgarh

Jamuram Lekami Vs State of Chhattisgarh