Creative Museum Designers, Kolkata V. ITO(Exemptions), Ward - 1(1), Kolkata , Kolkata

ITA 1147/KOL/2018

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 9322 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 2 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-08-2020
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 25-05-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RANU BISWAS
• Assessee Lawyers: SIDDHARTHA P DUTTA
• Keywords: Charitable institution; Corroborative evidences
• Section: 12A; 12AA; 194J; 13; 22; 12; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A, BENC H KOLKATA BEFORE SHRI P. M. JAGTAP, HONBLE VICE-PRESIDENT (KZ) & SMT. MADHUMITA ROY, HONBLE JM ./ITA NO S .1147 & 1148/KOL/201 8 ( / ASSESSMENT YEAR S :2013-14 & 2014-15) CREATIVE MUSEUM DESIGNERS BLOCK: GN. SECTOR-V, BIDHANNAGAR, KOLKATA-7000091 VS. ITO, EXEMPTION, WARD-1(1), KOLKATA ./ ./PAN/GIR NO.: AAECC 7738 E (APPELLANT) .. (RESPONDENT) ./ITA NO.1608/KOL/201 9 ( / ASSESSMENT YEAR S :2015-16) CREATIVE MUSEUM DESIGNERS BLOCK: GN. SECTOR-V, BIDHANNAGAR, KOLKATA-7000091 VS. ITO, EXEMPTION, WARD-1(1), KOLKATA ./ ./PAN/GIR NO.: AAECC 7738 E (APPELLANT) .. (RESPONDENT) APPELLANT BY : SHRI SIDDHARTHA P DUTTA, ADVOCATE RESPONDENT BY : SMT. RANU BISWAS, ADDL. CIT SR. DR / DATE OF HEARING : 04/08/2020 /DATE OF PRONOUNCEMENT : 14/08/2020 CREATIVE MUSEUM DESIGNERS ITA NOS. 1147 & 1148/KOL/2018 ITA NO. 1608/KOL/2019 ASSESSMENT YEARS:2013-14, 2014-15 & 2015-16 P PP PA AA AG GG GE EE E | || | 2 22 2 / O R D E R PER SMT. MADHUMITA ROY, JM: THE INSTANT BUNCH OF APPEAL PREFERRED BY THE ASSESS EE IS DIRECTED AGAINST THE ORDER PASSED BY THE LEARNED CIT(A)-25 KOLKATA, ARIS ING OUT OF THE ORDER PASSED BY THE ITO, EXEMPTION, WARD-1(1), ,KOL UNDER SECTION 1 43(3) OF THE INCOME TAX ACT, 1961(HEREINAFTER REFERRED TO AS THE ACT) FOR ASSE SSMENT YEAR 2013-14, 2014- 15& 2015-16 RESPECTIVELY WHEREBY AND WHEREUNDER DE NIAL OF EXEMPTION UNDER SECTION 11 OF THE ACT TO THE APPELLANT APPLYING TH E PROVISO TO SECTION 2(15) READ WITH SECTION 13(8) OF THE ACT HAS BEEN CHALLENGED. 2. FOR THE SAKE OF CONVENIENCE WE TAKE REVENUES A PPEAL IN ITA NO. 1147/KOL/2018 FOR A.Y. 2013-14 AS A LEAD CASE. THIS BRIEF FACTS LEADING TO THE CASE IS THIS THAT T HE ASSESSEE COMPANY UPON BEING GRANTED LICENSE UNDER SECTION 25 OF THE ERSTW HILE COMPANIES ACT, 1956(SECTION 8 OF THE COMPANIES ACT, 2013) AS A NON -PROFIT ENTITY, UNDER THE MEMBERSHIP OF NATIONAL COUNCIL OF SCIENCE MUSEUM (N CSM) AN AUTONOMOUS BODY, FORMED UNDER THE MINISTRY OF CULTURE, (GOVT. OF INDIA), IS REGISTERED UNDER SECTION 12(A) OF THE ACT VIDE ORDER NO. DIT(E)/388/ 2012-13/C-223/3482-84 DATED 04.03.2013. THE ASSESSEE ENGAGED IN THE PARTI CULAR ACTIVITIES OF TAKING UP ALL KINDS OF MUSEUM/SCIENCE CENTRE PROJECTS ON TURNKEY BASIS, FILED ITS RETURN OF INCOME FOR ASSESSMENT YEAR 2013-14 ON 30.09.2013 DE CLARING INCOME AT NIL. DURING THE COURSE OF ASSESSMENT PROCEEDING, UPON PE RUSAL OF THE DOCUMENTS FURNISHED BY THE ASSESSEE, PARTICULARLY THE AUDITED ACCOUNTS, IT REVEALED THAT THE ASSESSEE RECEIVED AN AMOUNT OF RS. 1,06,30,400/-AS SALE OF SERVICES. IT WAS FURTHER FOUND THAT DIFFERENT ORGANIZATIONS HAD DEDUCTED TAX AT SOURCE UNDER SECTION 194J OF THE ACT WHILE MAKING PAYMENT TO THE ASSESSEE. FU RTHER THAT, THE ASSESSEE HAD BOOKED AMOUNT RECEIVED FROM RBI IN ITS REVENUE. UP ON FURTHER EXAMINATION OF THE MATTERS, IT WAS FOUND THAT THE ASSESSEE DECIDED TO SET UP A MUSEUM IN THE CREATIVE MUSEUM DESIGNERS ITA NOS. 1147 & 1148/KOL/2018 ITA NO. 1608/KOL/2019 ASSESSMENT YEARS:2013-14, 2014-15 & 2015-16 P PP PA AA AG GG GE EE E | || | 3 33 3 PREMISES BELONGS TO RESERVE BANK OF INDIA AT 8, COU NCIL HOUSE STREET IN TERMS OF AN AGREEMENT ENTERED INTO BY AND BETWEEN THE ASSES SEE AND THE RESERVE BANK OF INDIA (IN SHORT RBI). IN FACT THE ASSESSEE BECOME S THE SUCCESSFUL BIDDER IN AN OPEN TENDER PROCESS FLOATED BY RBI FOR SETTING UP T HE SAID MUSEUM PROJECT ON TURNKEY BASIS AND HENCE AWARDED WITH THE SAID CONTR ACT FOR EXECUTING THE WORK. 3. TAKING INTO CONSIDERATION THIS PARTICULAR ASPECT OF THE MATTER, THE LEARNED ASSESSING OFFICER CAME TO A FINDING THAT THE ASSES SEE IS ENGAGED IN FULL-FLEDGED COMMERCIAL ACTIVITIES DURING THE YEAR AND APPLYING THE 6 TH LIMB OF THE DEFINITION OF CHARITABLE PURPOSE UNDER THE 1 ST PROVISO OF SECTION 2(15) READ WITH SECTION 13(8 ) OF THE ACT DENIED THE CLAIM OF THE ASSESSEE UNDER S ECTION 11 OF THE ACT AND ASSESSED THE ASSESSEES INCOME AT RS. 99,23,870/-, WHICH WAS IN TURN, CONFIRMED BY THE FIRST APPELLATE AUTHORITY. HENCE, THE INSTANT A PPEAL BEFORE US. 4. AT THE TIME OF HEARING OF THE INSTANT APPEAL THE LEARNED COUNSEL APPEARING FOR THE ASSESSEE SUBMITTED BEFORE US THAT THE OBJEC T OF THE ASSESSEE IS TO TAKE UP ALL KINDS OF MUSEUM/SCIENCE CENTRE PROJECTS ON TURNKEY BASIS INCLUDING CONCEPTUALIZATION DESIGN AND DEVELOPMENT OF EXHIBIT S, EXHIBITION OF GALLERY, CONSTRUCTION OF BUILDING AND STRUCTURES INCLUDING I NSTALLATION AND SUPPLY OF RELATED TECHNOLOGY TO CLIENT INSTITUTION FOR AND ON BEHALF OF GOVERNMENT CONCERNS, LOCAL MUNICIPAL BODY, BANK AND PSU FOR INCREASING THE EDU CATION AND KNOWLEDGE ALL OVER THE NATION FOR THE UTILITY OF CITIZEN/PUBLIC W HICH IS NOTHING BUT IMPARTING EDUCATION IN THE FORM OF FINANCIAL LITERACY AND AWA RENESS ABOUT MUSEUMS. HE FURTHER ADDED THAT THE ACTIVITIES OF THE ASSESSEE I S ONLY CHARITABLE IN NATURE AND THUS ENTITLED TO THE EXEMPTION AVAILABLE UNDER SECTION 1 1 OF THE ACT; NEITHER THE ACTIVITY IS ATTRACTED BY THE 1 ST PROVISO TO SECTION 2(15) READ WITH SECTION 13 (8 ) OF THE ACT. THE ORDER OF REJECTION OF THE CLAIM OF EXEMPTION U/ S 11 OF THE ACT, IS THEREFORE, NOT SUSTAINABLE IN THE EYES OF LAW AS ARGUED BY THE LD. AR. IN SUPPORT OF HIS ARGUMENT THE LEARNED COUNSEL APPE ARING FOR THE ASSESSEE RELIED UPON THE JUDGMENTS PASSED BY THE CO-ORDINAT E BENCH IN ITA NOS. 37- 38/KOL/2018 IN THE MATTER OF INDIAN LEATHER TECHNOL OGIES ASSOCIATION-VERSUS- ITO(EXEMPTION)- KOLKATA, IN ITA NO. 1491/KOL/2012 I N THE MATTER OF INDIAN CREATIVE MUSEUM DESIGNERS ITA NOS. 1147 & 1148/KOL/2018 ITA NO. 1608/KOL/2019 ASSESSMENT YEARS:2013-14, 2014-15 & 2015-16 P PP PA AA AG GG GE EE E | || | 4 44 4 CHAMBER OF COMMERCE - VERSUS -ITO(EXEMPTION)-1, KOL KATA AND IN I.T.A NO. 381/ KOL/ 2016, IN THE MATTER OF M/S CREDAI BENGAL VS. CIT(EXEMPTION), KOLKATA. A COPY OF EACH OF THE JUDGMENT PASSED BY T HE COORDINATE BENCH HAVE BEEN ANNEXED TO THE PAPER BOOK FILED BEFORE US. 5. ON THE OTHER HAND THE LEARNED DEPARTMENTAL REPRE SENTATIVE SUBMITTED BEFORE US THAT THE ACTIVITIES OF THE ASSESSEE WER E PERFORMED OUT OF THE CONTRACT BEING AN AGREEMENT ENTERED INTO BETWEEN THE ASSESSE E AND THE RESERVE BANK OF INDIA. HE FURTHER REITERATED THAT NO CHARITABLE ELE MENT IS REFLECTING IN THE ACTIVITIES OF THE ASSESSEE AND THEREFORE THE LEARNED DEPARTMEN TAL REPRESENTATIVE RELIES UPON THE ORDER PASSED BY THE AUTHORITIES BELOW IN REJECT ING THE CLAIM OF EXEMPTION OF THE ASSESSEE AVAILABLE UNDER SECTION 11 OF THE ACT. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS OF THE RESPE CTIVE PARTIES, WE HAVE ALSO PERUSED THE RELEVANT MATERIALS AVAILABLE ON RECORD INCLUDING THE JUDGMENTS RELIED UPON BY THE LEARNED AR. 7. THE SHORT POINT INVOLVED IN THIS PARTICULAR CAS E IS THIS AS TO WHETHER THE ACTIVITIES OF THE ASSESSEE IN THE YEAR UNDER CONSID ERATION IS COMING UNDER THE PURVIEW OF ITS CLAIM U/S 11 OF THE ACT OR IT IS WIT HIN THE PERIPHERY OF THE LAST LIMB OF THE FIRST PROVISO OF SECTION 2(15) OF THE ACT UN DER THE DEFINITION OF CHARITABLE PURPOSE I.E. ADVANCEMENT OF ANY OTHER OBJECT OF GE NERAL PUBLIC UTILITY. 8. THE CASE OF THE ASSESSEE IS THIS THAT SINCE THE ACTIVITY IN THE YEAR UNDER CONSIDERATION RELATES TO CONSTRUCTION OF THE BUILDI NG AND STRUCTURE OF THE RESERVE BANKS MUSEUM CUM - FINANCIAL LITERACY CENTRE AT KOLKATA ALTHOUGH UNDER ,THE GUIDANCE OF THE RBI THE SAME IS CHARITABLE IN NATUR E SINCE ULTIMATELY IT RELATES TO NON-FORMAL SCIENCE EDUCATION/PROGRAMS/ACTIVITIES AN D SCHEME AND THEREFORE,THE INCOME IS ENTITLED TO EXEMPTION UNDER SECTION 11 OF THE ACT. THE FURTHER PLEA OF THE ASSESSEE IS THIS THAT WHETHER THE ACTIVITY IS CARRI ED OUT BY IT IS IN LINE OF ITS OBJECTIVES HAS NOT RELEVANT AT ALL OTHERWISE THE RE GISTRATION U/S 12AA WOULD HAVE BEEN CANCELLED AND CONSEQUENTLY THE BENEFIT U/S 11 READ WITH SECTION 13 WOULD HAVE BEEN AUTOMATICALLY DENIED WITHOUT SHOWING ANY FURTHER REASON THEREOF. HOWEVER, SUCH CONTENTIONS MADE BY THE ASSESSEE WAS FOUND TO BE AN ACCEPTABLE BY THE REVENUE. THE LEARNED ASSESSING OFFICER REJECTE D THE CLAIM OF THE ASSESSEE CREATIVE MUSEUM DESIGNERS ITA NOS. 1147 & 1148/KOL/2018 ITA NO. 1608/KOL/2019 ASSESSMENT YEARS:2013-14, 2014-15 & 2015-16 P PP PA AA AG GG GE EE E | || | 5 55 5 HOLDING THE ASSESSEES ACTIVITIES FALLING UNDER THE PERIPHERY OF 6 LIMB OF THE DEFINITION OF CHARITABLE PURPOSE AS ENVISAGED UN DER SECTION 2 (15 ) OF THE ACT. THE ACTIVITY CARRIED OUT BY THE ASSESSEE WITH THE S OLE OBJECTIVE OF EARNING MOTIVE AS OF THE OBSERVATION MADE BY THE REVENUE. 9. IN ORDER TO ADDRESS THE ISSUE WE WOULD LIKE TO M ENTION THE LETTER DATED JUNE 8, 2012 ISSUED UNDER THE SIGNATURE OF THE CHIEFGENE RAL MANAGER, RESERVE BANK OF INDIA, KOLKATA, WHEREBY AND WHEREUNDER THE SELECTIO N OF VENDOR FOR THE RBI MUSEUM PROJECT AT KOLKATA IN FAVOUR OF THE APPELLAN T WAS INTIMATED. THE ASSESSEE WAS SELECTED TO EXECUTE THE PROJECT OF RESERVE BANK S MUSEUM, FINANCIAL LITERACY CENTRE AT KOLKATA ON A TURNKEY BASIS AS IT APPEARS FROM THE SAID LETTER ANNEXED AT PAGE 19 OF THE PAPER BOOK FILED BEFORE US. IT FURT HER APPEARS THAT THERE WAS ALSO A FINANCIAL BID CONDUCTED BY THE RBI WHERE THE APPELL ANT MENTIONED CERTAIN TERMS AND CONDITION FOR SUCH PROJECT. IT IS RELEVANT TO M ENTION THAT SUCH TERMS AND CONDITIONS GIVEN BY THE APPELLANT WAS NOT FINALISED RATHER KEPT PENDING BY THE RBI AUTHORITY AS IT ALSO REFLECTS FROM FOLLOWING CLAUSE OF THE SAID LETTER DATED 08.06.2012: 5. WE HAVE SOME CONCERNS ABOUT THE TERMS AND CONDI TIONS MENTIONED IN YOUR FINANCIAL BID. WE WILL SEPARATELY EMAIL GOES T O YOU FOR CLARIFICATIONS. FROM THE OTHER TERMS AND CONDITION, AS APPEARING TH EREIN, IT COULD BE IT GATHERED, THAT THE RBI IS ACTUALLY INCURRING THE EX PENDITURE TO SET UP THE SAID MUSEUM AND THE ASSESSEE IS TO EXECUTE SUCH WORK AS DICTATED BY THE RBI AS A CONTRACTOR IN LIEU OF MONEY AND THEN LEAVE. NO FURT HER ASSIGNMENT HAS BEEN GIVEN ON THE APPELLANT BY THE RBI IN THIS REGARD AS IT EV IDENT FROM THE SAID LETTER UNDER REFERENCE. NEEDLESS TO MENTION THAT THE APPELLANT I S WORKING AS AN AGENT DEPUTED BY RBI. FURTHER THAT IT WOULD NOT BE OUT OF PLACE TO MENTI ON THAT THE PRICE BID PROPOSED BY THE ASSESSEE CONNOTES SOME SORT OF PROF IT ELEMENT WHICH IS WHY THE RBI AUTHORITY KEPT IT PENDING FURTHER, NEGOTIATION . CREATIVE MUSEUM DESIGNERS ITA NOS. 1147 & 1148/KOL/2018 ITA NO. 1608/KOL/2019 ASSESSMENT YEARS:2013-14, 2014-15 & 2015-16 P PP PA AA AG GG GE EE E | || | 6 66 6 APART FROM THAT WE WOULD ALSO LIKE TO REPRODUCE TH E FOLLOWING RELEVANT CLAUSES OF THE MEMORANDUM OF ASSOCIATION FILED BY T HE ASSESSEE AS ON RECORD BEFORE US APPEARING AT PAGE 13 TO 18 OF THE PAPER B OOK: MEMORANDUM OF ARTICLE OF ASSOCIATION 4. TO APPLY FOR TENDER, PURCHASE OR OTHERWISE ACQUI RE ANY CONTRACT AND CONCESSIONS FOR OR IN RELATION TO THE CONSTRUCTION, EXECUTION, CARRYING OUT, EQUIPMENT, IMPROVEMENT, MANAGEMENT, ADMINISTRATION, OR CONTROL OR WORKS AND CONVENIENCES AND TO UNDERTAKE, EXECUTE, CARRYOUT, D ISPOSE OF, OR OTHERWISE TURN TO ACCOUNT THE SAME. 5. TO ENTER INTO ANY CONTRACT OR ARRANGEMENT FOR EF FICIENT CONDUCT OF THE BUSINESS OF THE COMPANY OR ANY PART THEREOF AND TO SUB-LET A NY CONTRACTS FROM TIME TO TIME. 6. SUBJECT TO THE PROVISIONS OF THE COMPANIES ACT, 1956, TO INVEST, BUY OR OTHERWISE ACQUIRE AND HOLD SHARES IN ANY OTHER COMP ANY HAVING OBJECTS, ALTOGETHER OR IN PART, SIMILAR TO THOSE OF THIS COM PANY TO UNDERWRITE SOLELY OR JOINTLY WITH ANOTHER, SHARES IN SUCH COMPANY AND TO INVEST BUY OR OTHERWISE ACQUIRE SHARES IN ANY OTHER COMPANY IF THE ACQUISIT ION OF SUCH SHARES SEEMS LIKELY TO PROMOTE FURTHER OR BENEFIT THE BUSINESS O R INTERESTS OF THIS COMPANY. 7. TO SELL, LET OUT ON HIRE, OR OTHERWISE DEAL WITH , ALL OR ANY OF THE PROPERTY OF THE COMPANY, WHETHER IMMOVABLE OR MOVABLES INCLUDING AL L AND WHATEVER DESCRIPTION OF APPARATUS OR APPLIANCES, ON SUCH TER MS AND CONDITIONS AS THE COMPANY MAY THINK FIT. 8. TO ENTER INTO PARTNERSHIP OR INTO ANY ARRANGEMEN T FOR SHARING OR POOLING PROFITS, AND RESOURCES, AMALGAMATION, UNION OF INTE RESTS, CO-OPERATION, JOINT VENTURE, RECIPROCAL CONCESSIONS OR OTHERWISE OR AMA LGAMATE WITH ANY PERSON OR COMPANY CARRYING ON OR ENGAGED IN OR ABOUT TO CARRY ON OR ENGAGE IN ANY BUSINESS OR TRANSACTION WHICH THIS COMPANY IS AUTHO RIZED TO CARRY ON OR ENGAGE IN ANY BUSINESS UNDERTAKING OR TRANSACTION WHICH MA Y SEEM CAPABLE OF BEING CARRIED ON OR CONDUCTED SO AS TO DIRECTLY OR INDIRE CTLY BENEFIT THIS COMPANY OR OTHERWISE CALCULATED DIRECTLY OR INDIRECTLY TO REND ER ANY OF THE COMPANY'S PROPERTIES OR RIGHTS FOR THE TIME BEING PROFITABLE. 9. TO SELL LET. EXCHANGE OR OTHERWISE DEAL WITH THE UNDERTAKING OF THE COMPANY OR ANY PART THEREOF FOR SUCH CONSIDERATION AS THE COMP ANY MAY THINK FIT AND IN PARTICULAR FOR SHARES, DEBENTURES, BONDS, OR SECURI TIES OF ANY OTHER COMPANY HAVING OBJECTS ALTOGETHER OR IN PART SIMILAR TO THO SE OF THIS COMPANY. 10. TO PAY FOR ANY PROPERTIES, RIGHTS OR PRIVILEGES ACQUIRED BY THE COMPANY, EITHER IN SHARES OF THE COMPANY OR PARTLY IN SHARES AND PARTLY IN CASH OR OTHERWISE. 11. TO PROMOTE AND UNDERTAKE THE FORMATION OF ANY I NSTITUTION OR COMPANY FOR THE PURPOSE OF ACQUIRING ALL OR ANY OF THE ASSETS, PROP ERTIES AND LIABILITIES OF THE COMPANY OR FOR ANY OTHER PURPOSE WHICH MAY SEEM DIR ECTLY OR INDIRECTLY CREATIVE MUSEUM DESIGNERS ITA NOS. 1147 & 1148/KOL/2018 ITA NO. 1608/KOL/2019 ASSESSMENT YEARS:2013-14, 2014-15 & 2015-16 P PP PA AA AG GG GE EE E | || | 7 77 7 CALCULATED TO BENEFIT THIS COMPANY OR FORM SUBSIDIA RY COMPANY OR COMPANIES AND TO CARRY ON BUSINESS WHICH MAY SEEM CAPABLE OF CARRYING CONVENIENTLY THE BUSINESS OR OBJECTS OF THIS COMPANY AND TO ACQUIRE ANY INTEREST IN ANY INDUSTRY OR UNDERTAKING. 16. TO BORROW OR RAISE MONEY OR TO RECEIVE MONEY ON DEPOSIT AT INTEREST OR OTHERWISE FOR PURPOSE OF FINANCING THE BUSINESS OF THE COMPANY IN SUCH MANNER AS THE COMPANY MAY THINK FIT, AND IN PARTICULAR BY THE ISSUE OF DEBENTURE STOCK, PERPETUAL OR OTHERWISE, INCLUDING DEBENTURE OR DEBE NTURE STOCK CONVERTIBLE INTO SHARES OF THIS COMPANY, PERPETUAL ANNUITIES; AND IN SECURITY OF ANY SUCH MONEY SO BORROWED, RAISED OR RECEIVED, TO MORTGAGE, PLEDGE OR CHANGE THE WHOLE OR ANY PART OF THE PROPERTY, ASSETS OR REVENUE OF THE COMP ANY PRESENT OR FUTURE, INCLUDING ITS UNCALLED CAPITAL BY ASSIGNMENT OR OTHERWISE OR TO TRANSFER OR CONVEY THE SAME ABSOLUTELY OR IN TRUST AND TO PURCHASE, REDEEM OR P AY OFF ANY SUCH SECURITIES. IT APPEARS THAT THOSE ABOVE MENTIONED CLAUSES ARE INDICATIVE ENOUGH TO PROFIT ORIENTED INTENT; SUCH INDICATION IS FURTHER BEING CONFIRMED BY THE ASSESSEES ACTIVITIES AS DONE BY IT IN THE YEAR UNDER CONSIDER ATION AS ALREADY NARRATED HEREINBEFORE. ASSUMING THE ACTIVITIES OF THE APPELLANT IS FOR AD VANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY BUT UNDOUBTEDLY IT IS IN THE NATURE OF TRADE; COMMERCIAL ACTIVITIES IS GLARING ON THE FACE OF IT. THE CONSTRUCTION OF MUSEUM THOUGH DONE BY THE ASSESSEE THE SAME IS GUIDED BY T HE AGREEMENT ENTERED INTO BY AND BETWEEN THE ASSESSEE AND THE RBI. WE FIND THE ASSESSEE HAS BEEN DEPUTED BY RBI AS A MERE AGENT FOR THE CONSTRUCTION OF THE MUS EUM WHICH CONSTITUTES A COMMERCIAL ACTIVITY. THE ASSESSEE BEFORE US IS ONLY TO EXECUTE THE WORK ENDORSED TO IT IN LIEU OF MONEY AND THEN LEAVE. THOUGH THE ASSESSEE GOT REGISTERED UNDER SECTION 12 AA OF THE ACT, THE PRESENT ACTIVITIES, AS REFLECTED FROM THE SUBMISSIONS MADE BY THE ASSESSEE AND ALSO FROM THE CORROBORATIVE EVIDENCES ONLY SHOW THE COMMERCIA L ACTIVITIES PARTICULARLY IN THE ABSENCE OF ANY CORE PROJECT ENUNCIATED BY THE ASSES SEE FOR PUBLIC UTILITY DIRECTLY WITHOUT THE INFLUENCE OF ANY OTHER AUTHORITIES. NEE DLESS TO MENTION PARTICIPATING IN SOME PROJECT WORK AT THE INSTANCE OF RBI UPON BEEN SUCCESSFUL IN A TENDER PROCESS DOES NOT QUALIFY THE ACTIVITIES OF THE ASSESSEE AS CHARITABLE PURPOSES PARTICULARLY WHEN THE SAME IS DONE IN LIEU OF MONEY AND IF ANYO NE IS SPREADING FINANCIAL CREATIVE MUSEUM DESIGNERS ITA NOS. 1147 & 1148/KOL/2018 ITA NO. 1608/KOL/2019 ASSESSMENT YEARS:2013-14, 2014-15 & 2015-16 P PP PA AA AG GG GE EE E | || | 8 88 8 LITERACY THEN IT IS RBI WHO IS FUNDING THE PROJECT OF SETTING UP THE MUSEUM AND ON THE CONTRARY THE ASSESSEES EARNING UPON EXECUTION OF THE PROJECT WORK DEPUTED BY THE PRINCIPAL I.E. RBI. IN THIS REGARD, WE HAVE FURTHERED CONSIDERED THE JU DGMENT PASSED BY HONBLE CO- ORDINATE BENCH OF KOLKATA TRIBUNAL IN THE CASE OF I NDIAN LEATHER TECHNOLOGISTS ASSOCIATION VS. ITO (EXEMPTION) IN ITA NOS. 37 & 38 /KOL/2018 FOR A.YS. 2009- 10 & 2010-11 DATED 07.06.2019. THE FACTS OF THE CA SE IS COMPLETELY DIFFERENT THAN THAT OF THE FACT AS EVIDENCE ON RECORD IN THE CASE IN HAND BEFORE US. IN THAT PARTICULAR CASE THE BUSINESS OR ACTIVITY WAS DONE F OR PROMOTION OF LEATHER BUSINESS WHERE THE MAIN OBJECT OF THE INSTITUTION WAS CHARIT ABLE IN NATURE, THEN THE ACTIVITIES CARRIED OUT TOWARDS THE ACHIEVEMENT OF THE SAID, BE ING INCIDENTAL OR ANCILLARY TO THE MAIN OBJECT, EVEN IF RESULTING IN PROFIT AND EVEN I F CARRIED OUT WITH NON MEMBERS, WHERE ALL HELD TO BE CHARITABLE IN NATURE. WE HAVE ALSO FURTHER CONSIDERED THE JUDGMENT PASSE D BY THE HONBLE CO-ORDINATE BENCH OF KOLKATA TRIBUNAL IN THE CASE OF INDIAN CHA MBER OF COMMERCE VS. ITO(EXEMPTION), KOLKATA IN ITA NOS. 1491 & 1284/ KO L/2012 FOR A.YS. 2008-09 & 2009-10 DATED 02.12.2014. THE SAID ORGANIZATION W AS AN ASSOCIATION OF VARIOUS INDUSTRIALISTS FORMED FOR DEVELOPMENT OF TRADE, IND USTRY AND COMMERCE HAVING OPERATION ALL OVER THE COUNTRY AND ABROAD. IT WAS S ET UP FOR THE PURPOSE OF PROTECTION OF INDIAN BUSINESS AND REGISTERED UNDER SECTION 12A OF THE ACT AS CHARITABLE ASSOCIATION. IT IS A FACT THAT IF THE PRIMARY PURPOSE OF AN INS TITUTION WAS ADVANCING OF OBJECT OF GENERAL PUBLIC UTILITY, IT WOULD REMAIN CHARITABLE EVEN IF AN INCIDENTAL ON OR ANCILLARY ACTIVITY OR PURPOSE FOR ACHIEVING THE MA IN PURPOSE WAS PROFITABLE IN NATURE WHICH WAS THE OBSERVATION MADE BY THE APEX C OURT AS WELL AS IN THE SAID ORDER AS RELIED UPON BY THE LD. AR. WE HAVE ALSO FURTHER CONSIDERED THE JUDGMENT OF CO -ORDINATE BENCH OF KOLKATA TRIBUNAL IN THE CASE OF M/S CREDAI BENGAL V S. CIT(E) IN ITA NO. CREATIVE MUSEUM DESIGNERS ITA NOS. 1147 & 1148/KOL/2018 ITA NO. 1608/KOL/2019 ASSESSMENT YEARS:2013-14, 2014-15 & 2015-16 P PP PA AA AG GG GE EE E | || | 9 99 9 381/KOL/2016 FOR A.Y. 2011-12 DATED 30.09.2016. IN THIS PARTICULAR MATTER THE FACT RELATES TO EXPENSES INCURRED TO ORGANIZE FAIR OUTSI DE INDIA WHERE IT WAS HELD BY THE HONBLE TRIBUNAL THAT WHERE ASSESSEES OBJECT OF PR OMOTION OF CONSTRUCTION INDUSTRY IN INDIA HAD BEEN ACCEPTED BY THE REVENUE FOR GRANTING REGISTRATION UNDER SECTION 12 AA MERELY BECAUSE THE ASSESSEE HELD FAIR S IN INDIA AND ABROAD WHICH GENERATED SURPLUS FUND TO THE ASSESSEE, IT BEING IN CIDENTAL TO MAIN OBJECT OF THE ASSESSEE COULD NOT BE SAID TO BE COMMERCIAL ACTIVIT Y OF THE ASSESSEE AND THERE WAS NO VIOLATION OF THE PROVISION OF SECTION 2 (15 ) OF THE ACT. IT IS PERTINENT TO MENTION THAT THE TYPE OF BUSINES S AND / OR ACTIVITIES RENDERED BY THE ASSESSEE AS REFERRED IN THOSE JUDGMENTS AS RELI ED UPON BY THE LEARNED AR IN ORDER TO CLAIM THE EXEMPTION U/S 11 IN THE YEAR UND ER CONSIDERATION IS COMPLETELY DIFFERENT FROM THAT OF THE FACT AVAILABLE BEFORE US IN THE PRESENT CASE. THESE JUDGEMENTS HAVE NO MANNER OF APPLICATION TO THE INS TANT CASE BEFORE US WHEN WE FIND THAT THE ACTIVITIES OF THE ASSESSEE BEFORE US IS INDICATIVE ENOUGH OF PROFIT ORIENTED INTENT MORESO WHEN THE ACTIVITIES /PROJECT BY THE ASSESSEE IS DONE AT THE BEHEST OF THE RBI FOR GENERAL PUBLIC UTILITY. THE C LAUSES OF THE MEMORANDUM OF ASSOCIATION CLEARLY CLARIFY THE ACTUAL STATUS OF TH E APPELLANT READ WITH THE LETTER DATED 08.06.20 12 ISSUED BY RBI IT IS THE SETTLED PRINCIPLE OF LAW THAT THE CLAIM UNDER SECTION 11 IS TO BE EXTENDED TO A REGISTERED ORGANIZATION UNDER SECTION 12A OF T HE ACT PROVIDED THE ACTIVITIES OF SUCH ORGANIZATION SHOULD BE IN CONSONANCE WITH THE OBJECTS OF THE SECTION. IN THE CASE IN HAND THOUGH THE ASSESSEE IS A REGISTERED CO NCERN UNDER SECTION 12A OF THE ACT AS A CHARITABLE INSTITUTION, THE ACTUAL WORK DO NE BY THE ASSESSEE IN THE YEAR UNDER CONSIDERATION IS NOT CHARITABLE IN NATURE PAR TICULARLY WHEN NO FORMAL AND SYSTEMATIC EDUCATIONAL FUNCTION IS DISCHARGES BY IT RATHER COMMERCIAL IN VIEW OF THE RECEIPT ON TURNKEY PROJECT BASIS, FROM RBI IN LIEU OF THE SERVICE RENDERED BY THE ASSESSEE WHICH INVOLVES THE ACTIVITIES CARRYING ON IN THE NATURE OF TRADE, COMMERCE OR BUSINESS FOR CONSIDERATION COMING UNDER THE PERIPHERY OF FIRST PROVISO TO SECTION 2(15) OF THE ACT WHICH HAS ALREA DY BEEN CLARIFIED BY THE FIRST APPELLATE AUTHORITY. WE, THUS, FIND NO INFIRMITY IN THE ORDER IMPUGNED PASSED BY CREATIVE MUSEUM DESIGNERS ITA NOS. 1147 & 1148/KOL/2018 ITA NO. 1608/KOL/2019 ASSESSMENT YEARS:2013-14, 2014-15 & 2015-16 P PP PA AA AG GG GE EE E | || | 1 11 10 00 0 THE FIRST APPELLATE AUTHORITY OBSERVING THE PROJECT UNDER CONTRACT WITH RBI FOR SETTING UP OF THE FINANCIAL MUSEUM BY THE ASSESSEE DOES NOT REFLECT DISCHARGING OF ANY FORMAL AND SYSTEMATIC EDUCATION RATHER THE SAME IS ENOUGH INDICATIVE FOR THE COMMERCIAL PURPOSES, REJECTION THEREON, IN OUR CO NSIDERED OPINION, IS JUST AND PROPER SO AS TO WARRANT ANY INTERFERENCE. THUS, THE ASSESSEE HAS NO LEGS TO STAND UPON IN ORDER TO CLAIM THE RELIEF U/S 11 OF THE ACT AND HENCE IN THE ABSENCE OF ANY MERIT WE DISMISS THE APPEAL PREFERRED BY THE ASSESS EE. 10. ITA NOS. 1147 & 1147/KOL/2018 FOR A.Y. 2013-14 & 2014-15 - THE GROUND OF APPEAL RAISED HERE IS IDENTICAL TO THAT OF THE GROU ND ALREADY BEEN DEALT WITH BY US IN ITA NO. 1608/KOL/2019 FOR A.Y. 2015-16 AND IN TH E ABSENCE OF ANY CHANGED CIRCUMSTANCES THE SAME SHALL APPLY MUTATIS MUTANDIS . 11. IN THE RESULT, ALL THE THREE APPEALS OF THE ASS ESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE COURT ON 14.08.2020 SD/- ( P. M. JAGTAP ) / VICE-PRESIDENT SD/- (MADHUMITA ROY) / JUDICIAL MEMBER /KOLKATA; / DATE: 14/08/2020 ( SB, SR.PS ) COPY OF THE ORDER FORWARDED TO: 1. CREATIVE MUSEUM DESIGNERS 2. ITO, EXEMPTION, WARD-1(1), KOLKATA 3. C.I.T(A)- 4. C.I.T.- KOLKATA. 5. CIT(DR), KOLKATABENCHES, KOLKATA. 6. GUARD FILE. TRUE COPY BY ORDER ASSIST ANT REGISTRAR ITAT, KOLKA TA BENCHES CREATIVE MUSEUM DESIGNERS ITA NOS. 1147 & 1148/KOL/2018 ITA NO. 1608/KOL/2019 ASSESSMENT YEARS:2013-14, 2014-15 & 2015-16 P PP PA AA AG GG GE EE E | || | 1 11 11 11 1