Society Acting as Pharma Promotion Conduit Not Eligible for Section 12A Registration | ITAT

Case Details: C-Dot Forum vs. CIT (Exemptions) Chandigarh [2026] 183 taxmann.com 89 (Amritsar-Trib.)

Judiciary and Counsel Details

• Udayan Das Gupta, Judicial Member & Manoj Kumar Aggarwal, Accountant Member
• Rishabh Marwaha, CA for the Appellant.
• Sunil Gautam, CIT. DR for the Respondent.

Facts of the Case

The assessee was a society that organised seminars, conferences, and events to upgrade members and the general public. It received substantial grants from various pharma companies. It applied for registration under section 12A.

During the proceedings, the Commissioner (Exemptions) observed that the charitable activity carried on by the assessee was negligible compared to the gross amount of collection received from various pharma companies. Thus, he denied the registration under section 12A. The matter reached before the Amritsar Tribunal.

ITAT Held

The Amritsar Tribunal held that out of the total grants of Rs. Forty lakhs (approx.) received from various pharma companies by the assessee society has resulted in only a meagre expenditure of Rs. 2.51 lakhs for sponsoring free medicines for type-1 diabetic children, which is just 6.2% of the total receipts.

The rest of the amount received from the pharma companies has been expended for organising various seminars, conference, events, for practicing doctors, including star category hospitality, at luxurious hotels, entertainment by professional singers, travelling expenses, professional fees to the President of the society and relatives and for all other reasons, other than for “charitable purpose” as defined under section 2(15). Furthermore, note that the “Uniform Code for Pharmaceutical Marketing Practices (UCPMP) 2024” also explicitly prohibits the offering of gifts and incentives to doctors or their family members.

In the instant case, the actual charitable activity conducted by the society was negligible (being only Rs. 2.51 lakhs against total grants received from pharma companies amounting to Rs. Forty lakhs). The society acted to facilitate networking between doctors and pharma companies, and its activities were non-charitable and outside the scope of section 2(15). Thus, the Commissioner (Exemptions) was justified in refusing the application for registration under section 12A.

List of Cases Reviewed

• Apex laboratories Pvt Ltd. v. DCIT [2022] 135 taxmann.com 286/286 Taxman 200/442 ITR 1 (SC) (para 12.2) Followed.

List of Cases Referred to

• CIT (Exemptions) v. Gangadeen Niranjan Lal Data Charitable Trust [2024] 159 taxmann.com 208/297 Taxman 294/463 ITR 695 (SC) (para 10)
• Heart Care Management v. DIT (Exemption) [2012] 22 taxmann.com 105/52 SOT 277 (Delhi) (para 10.3)
• Addl. CIT v. Rajindra Flour & Allied Industries (P.) Ltd. [1981] 6 Taxman 1/128 ITR 402 (Delhi) (para 10.5)
• CIT v. Jodhpur Chartered Accountants Society [2003] 127 Taxman 90/[2002] 258 ITR 548 (Rajasthan) (para 10.5)
• CIT (Exemption) v. Anesthesia Society [2019] 101 taxmann.com 227/260 Taxman 375 (Rajasthan) (para 10.5)
• Indo-American Society v. Asstt. DIT (Exemption) [2005] 96 ITD 61 (Mumbai) (para 10.5)
• Endocrine and Breast Surgery Foundation v. CIT Exemptions [2025] 179 taxmann.com 426 (Chandigarh – Trib.) (para 11.1)
• Apex laboratories Pvt ltd v. DCIT [2022] 135 taxmann.com 286/286 Taxman 200/442 ITR 1 (SC) (para 12.2).