Organizing meetings and giving awards is not charitable purpose
Income
Tax Appellate Tribunal (ITAT) in a recent order dated: 13th October
2017 [Sri Chukkapalli Pitchaiah Foundation Vs. CIT (Exemptions) (ITAT
Visakhapatnam) Appeal Number: I.T.A. No. 126/Vizag/2016, All ITAT (4274) ITAT
Visakhapatnam (25)] has held: “sole
activity of organizing meetings and giving awards to eminent people do not fit
into the definition of charitable purpose as per the Income Tax Act.”
Tax Appellate Tribunal (ITAT) in a recent order dated: 13th October
2017 [Sri Chukkapalli Pitchaiah Foundation Vs. CIT (Exemptions) (ITAT
Visakhapatnam) Appeal Number: I.T.A. No. 126/Vizag/2016, All ITAT (4274) ITAT
Visakhapatnam (25)] has held: “sole
activity of organizing meetings and giving awards to eminent people do not fit
into the definition of charitable purpose as per the Income Tax Act.”
The
appeal was filed by the Sri Chukkapalli Pitchaiah Foundation against order of
the Commissioner of Income Tax (Exemptions) {CIT}, Hyderabad, for refusal of
registration u/s 12AA as also 80G of the Income Tax Act, 1961.
appeal was filed by the Sri Chukkapalli Pitchaiah Foundation against order of
the Commissioner of Income Tax (Exemptions) {CIT}, Hyderabad, for refusal of
registration u/s 12AA as also 80G of the Income Tax Act, 1961.
The objects of the trust were:
a) To honor
outstanding personalities and those who have contributed in great measures to
Entrepreneurship, Industry, Commerce, Economics, Science & Technology,
Indian Culture, Heritage, Fine Arts, Literature, Sports Social Service, Indian
Polity, Moral conduct, Philosophy or any other field which has an impact on the
society in general.
outstanding personalities and those who have contributed in great measures to
Entrepreneurship, Industry, Commerce, Economics, Science & Technology,
Indian Culture, Heritage, Fine Arts, Literature, Sports Social Service, Indian
Polity, Moral conduct, Philosophy or any other field which has an impact on the
society in general.
b) To award a
citation and cash prize to deserving individuals or institutions who have made
a positive contribution to the society at large.
citation and cash prize to deserving individuals or institutions who have made
a positive contribution to the society at large.
c) To organize and
assist the organization of events or lectures in consonance with the objects
for which this trust is founded, in memory of Late Chukkapalli Pitchaiah.
assist the organization of events or lectures in consonance with the objects
for which this trust is founded, in memory of Late Chukkapalli Pitchaiah.
d) To inculcate
interest, promote study & appreciation in the fields of Entrepreneurship,
Industry, commerce, Economics, Science & Technology….”
interest, promote study & appreciation in the fields of Entrepreneurship,
Industry, commerce, Economics, Science & Technology….”
Commissioner
of Income Tax (Exemptions) after going through the above clauses took the view
that the objectives do not indicate that they are charitable in nature as
required u/s 2(15) of the Income Tax Act.
of Income Tax (Exemptions) after going through the above clauses took the view
that the objectives do not indicate that they are charitable in nature as
required u/s 2(15) of the Income Tax Act.
The
Authorized Representative of the Foundation argued that the by giving awards, felicitating
eminent people and organizing public debates on various subjects the foundation
is helping the country for public good and the activities falls under the
category “any other object of general public utility”.
Authorized Representative of the Foundation argued that the by giving awards, felicitating
eminent people and organizing public debates on various subjects the foundation
is helping the country for public good and the activities falls under the
category “any other object of general public utility”.
However,
ITAT has taken the view that none of the objectives are charitable in nature
and giving awards and felicitating eminent people and organizing public debates
on various subjects cannot be held to be charitable activity for the purpose of
Income Tax Act.
ITAT has taken the view that none of the objectives are charitable in nature
and giving awards and felicitating eminent people and organizing public debates
on various subjects cannot be held to be charitable activity for the purpose of
Income Tax Act.
Our View/Inference:
1.
ITAT has taken the view that the sole activity of organizing meetings and
giving awards to eminent persons does not fit into the definition of charitable
purpose as per the Income Tax Act. In other words, if organizing meetings and
giving awards to eminent persons was in addition or incidental to furthering other
objects such as education etc., it could perhaps have been more acceptable.
ITAT has taken the view that the sole activity of organizing meetings and
giving awards to eminent persons does not fit into the definition of charitable
purpose as per the Income Tax Act. In other words, if organizing meetings and
giving awards to eminent persons was in addition or incidental to furthering other
objects such as education etc., it could perhaps have been more acceptable.
2.
Sri Chukkapalli Pitchaiah Foundation has
the option to go into further appeal since “any other object of public utility”
covers a fairly wide spectrum of activities.
Sri Chukkapalli Pitchaiah Foundation has
the option to go into further appeal since “any other object of public utility”
covers a fairly wide spectrum of activities.
The statutory definition of ‘charitable
purpose’ is neither exhaustive nor exclusive. Even industry and trade
associations have been recognized as existing for ‘charitable purpose’ under
the category “any other object of general public utility” albeit with certain restrictions
on their business or commercial income.
purpose’ is neither exhaustive nor exclusive. Even industry and trade
associations have been recognized as existing for ‘charitable purpose’ under
the category “any other object of general public utility” albeit with certain restrictions
on their business or commercial income.