Praise be to Allah, the Lord of the Worlds; and may His blessings and peace be upon our Prophet Muhammad and upon all his Family and Companions.
For the Fatwa on reading Qur'an intending that its reward reaches a dead person please read Fatwa No. 82681.As for gathering to read Qur'an and make Du'a for the deceased in the way described in the question, it is lawful if people do not make that a habit or a Sunnah in some fixed times. But if people keep on doing this as if it were a Sunnah determining a fixed time for it, then it becomes an innovation that must be avoided.
On the other hand, know that supplicating for dead people is legal regardless of whether one asks Allah to forgive them or to raise up their status in Paradise. There is enough evidence for this in the Sunnah.
Allah knows best.