The Institute of Chartered Accountants of India v. DGIT W.P.(C) No.3147/2012

THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA V. DGIT

Whether the Institute of Chartered Accountants of India (ICAI) is a charitable institution and is therefore exempt from income tax on its income?

A professional body can be a charitable institution if its primary object is to promote charitable purposes and its income is used solely for the advancement of its charitable objects.

The Institute of Chartered Accountants of India (ICAI) is a statutory body established under the Chartered Accountants Act, 1949.
It is responsible for regulating the profession of chartered accountancy in India.
The ICAI provides a number of services to its members and students, including education, training, and professional development.
The ICAI argued that it is a charitable institution because its primary object is to promote the education and training of chartered accountants.
The ICAI also argued that its income is used solely for the advancement of its charitable objects.
The Director General of Income Tax (DGIT) argued that the ICAI is not a charitable institution because it is a professional body that provides services to its members for a fee.
The DGIT also argued that the ICAI’s income is not used solely for the advancement of its charitable objects.

The Delhi High Court held in this case held that the Institute of Chartered Accountants of India (ICAI) is a charitable institution and is therefore exempt from income tax on its income.
The Court held that the ICAI satisfies both of the following criteria for being a charitable institution:
The ICAI’s primary object must be to promote charitable purposes.
The ICAI’s income must be used solely for the advancement of its charitable objects.
The Court found that the ICAI’s primary object is to promote the education and training of chartered accountants.
The Court also found that the ICAI’s income is used solely for the advancement of this charitable object.
The Court’s judgment is important because it clarifies that professional bodies can be charitable institutions if their primary object is to promote charitable purposes.
The judgment also clarifies that the fact that a professional body charges its members for its services does not necessarily mean that it is not a charitable institution.