R.S. Syal, Accountant Member - This appeal by the assessee is directed against the order dated 31.05.2013 passed by the Commissioner of Income-tax denying registration u/s 12AA(1)(b)(ii) of the Income-tax Act, 1961 (hereinafter also called 'the Act').
2. Briefly stated, the facts of the case are that the assessee applied for registration of the Trust u/s 12A(a) of the Act by means of application which was filed on 20.11.2012. The ld. Commissioner of Income-tax required the assessee to file certain details. The representative of the assessee appeared before the Commissioner of Income-tax and furnished necessary details. On perusal of such material, the ld. Commissioner of Income-tax noticed that the society was registered since 1997 and has various objectives such as preservation of environment, preservation of Indian Hilly culture etc. It was seen that the assessee was pursuing only one object relating to medical relief which was being undertaken since 2010 by organizing free medical camps. A register was produced as evidence showing a list of 36 camps arranged by the assessee from 20.4.2011 to 31.3.2012. The ld. Commissioner of Income-tax noticed that apart from the names in such register, there were no other substantial particulars of the persons who got treatment through such camps. It was also seen that the subscription received from the beneficiaries was more or less the same as other laboratories were charging commercially for medical treatment given for X-Ray, Ultrasound, blood test, etc. Since bills for the activities done by the assessee were mainly issued by Doon Trauma Center, the ld. Commissioner of Income-tax called upon the assessee to explain the relationship of Doon Trauma Center with Dr. Luvkush as the prescribing doctor. A certificate on behalf of Doon Trauma Center was furnished which has been reproduced in the impugned order by which it was certified that Doon Trauma Center was privileged to be associated with the noble cause undertaken by the assessee society for providing medical relief to the deprived sections of the society. The ld. Commissioner of Income-tax, considering the facts in entirety, denied registration u/s 12AA by holding that there was no evidence of organizing camps by way of advertisement, publicity or otherwise; the registers do not have even a single complete address; doctor's certificate prescribing medicines in bulk made no sense since the medicines were available without prescription; there was no clear relationship between Dr. Sunanda Kalra and Doon Trauma Centre; Dr. Lavkush of Doon Trauma Centre was not able to clarify as to how many camps were attended by him. In the light of above facts, the ld. Commissioner of Income-tax opined that the primary claim of the assessee in providing medical relief was not substantiated. He, therefore, refused to grant registration to the assessee society, against which the assessee has come up in appeal before us.
3. We have heard rival submissions and perused the relevant material on record. There is no dispute on the fact that the assessee was carrying out charitable activities by organizing medical relief camps for the underprivileged sections of the society. The registration came to be denied by the ld. Commissioner of Income-tax broadly for the reasons which have been noticed above. The first reason given by the ld. Commissioner of Income-tax is that the assessee did not have any evidence of holding camps by way of advertising, publicity or otherwise. We are unable to find any bar under the law to organize any medical relief camp without issue of advertisement or publicity. The essence of the matter is that charitable activities should be persued and the manner of conducting such activities cannot be prescribed by the Revenue. The second reason given by the ld. Commissioner of Income-tax for denying registration is that the register did not have a single complete address which could help him to verify the genuineness of the relief camps. On this score, we again find that the assessee did file a register before the Commissioner of Income-tax which had the necessary details under three broad heads viz. Treatment, Attendant's name and Subscription. When such details were available, the ld. Commissioner of Income-tax ought not to have denied registration for lack of complete address. Ordinarily, when camps are organized in far flung places, such as, villages etc., the name of the village itself represents the address of the persons getting treatment. The next reason adduced by the ld. Commissioner of Income-tax for not granting registration is that the doctor's certificate prescribing medicines in bulk made no sense since the medicines were available without prescription for common diseases. We fail to comprehend as to how this reason can come in the way of refusing registration when the assessee is otherwise engaged in carrying on charitable activities. The other point, being that Dr. Sunanda Kalra was attending the camps on honorary basis and all the test reports filed before him stated so, does not bring the case of ld. Commissioner of Income-tax any further justifying the registration. In so far as the connection between Doon Trauma Center and Dr. Luvkush is concerned, it is seen that Dr. Luvkush gave a certificate, which was duly produced before the ld. Commissioner of Income-tax as well indicating his privilege of being associated with the assessee society imparting medical relief to the underprivileged sections of the society. In view of the foregoing reasons, we are satisfied that the ld. Commissioner of Income-tax did not have any justifiable reason to refuse registration to the assessee society which was otherwise engaged in doing charitable activities.
4. The ld. DR submitted that section 12AA empowers the CIT to conduct inquiries in order to satisfy himself about the genuineness of activities of the trust and in the present case, the ld. CIT was not beyond his powers to conduct such inquiries about the activities of the trust, which divulged that the assessee was not engaged in charitable activities. We fully endorse the point argued by the ld. DR. However, it is relevant to note that such power has been given to him in the backdrop of his jurisdiction to grant or refuse registration, which stage can quite possibly be before the espousing of the actual activities. Law permits an assessee to seek registration before the actual taking up of charitable and religious activities. The inquiry contemplated at this juncture is basically 'objects focused' primarily meant for satisfying himself about the objectivity of the charitable or religious objects of the trust or institution and in order to reach such satisfaction also conduct inquiries which are 'activities focused', if the activities have been embarked upon. The principal focus is on the examination of objects of the trust or institution and 'activities focused' inquiry is only subsidiary or supplementary to the 'objects focused' inquiries. That apart, there are sufficient safeguards under the Act to turn heat on the assessee and protect the exploitation of the benefit of grant of registration, if the assessee fails to comply with the necessary requirements after securing such registration. Provisions of section 11 read with section 13 are there to take away the benefit of exemption otherwise available u/s 11 pursuant to grant of registration u/s 12AA. Even sub-section (3) of section 12AA is in the nature of another protection, which unequivocally empowers the CIT himself to cancel the registration of trust or institution after his granting the same under sub-section (1), if he is satisfied that the activities of such trust or institution are not genuine or are not being carried out in accordance with the objects of the trust or institution, as the case may be. This power given u/s 12AA(3) is wide enough to have a check on the societies which are otherwise registered as charitable but not pursuing such activities as per law. It thus follows that the focus of investigation at the stage of grant of registration is chiefly on the objects of trust or institution.
5. Adverting to the facts of the instant case, we find that there is no doubt about the charitable objects of the assessee. No 'objects focused' investigation by the ld. CIT yielded any results jeopardizing the charitable character of the assessee. Even the ld. CIT has not made out a case on this line. The 'activities focused' inquiries conducted by the ld. CIT do not in any manner whatsoever thwart the charitable objects of the assessee. This leads us to irresistible conclusion that the refusal to the grant of registration by the ld. CIT led to the miscarriage of justice. We, therefore, overturn the impugned order and direct the granting of registration contemplated u/s 12AA(1)(b)(i).
6. In the result, the appeal of the assessee is allowed.