GVK EMRI (UP), Secunderabad V. Director of Income Tax (Exemption), Hyderabad

ITA 1382/HYD/2013

• Counselvise Citation: 138222514 RSA 2013
• Duration Of Justice: 4 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-03-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 24-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D SUDHAKAR RAO
• Assessee Lawyers: Y R RAO
• Keywords: Charitable institution
• Section: 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B : HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA.NO.1382/HYD/2013 GVK EMRI (UP) SECUNDERABAD-003 PAN AAECG5037G VS. DIT(E) HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : MR. Y.R. RAO FOR REVENUE : MR. D. SUDHAKAR RAO DATE OF HEARING : 18.02.2014 DATE OF PRONOUNCEMENT : 21.03.2014 ORDER PER B. RAMAKOTAIAH, A.M. THIS APPEAL BY ASSESSEE IS AGAINST THE ORDER OF DIRECTOR OF INCOME TAX (EXEMPTION), HYDERABAD DATED 30 TH AUGUST, 2013 REJECTING THE APPLICATION FOR REGISTRA TION UNDER SECTION 12AA OF THE INCOME TAX ACT, 1961. 2. ASSESSEE IS A COMPANY REGISTERED UNDER SECTION 25 OF THE COMPANIES ACT, 1956 AS A NON-PROFIT COMPANY FOR OPERATION OF MEDICAL AND TRANSPORT SERVICES IN THE STATE OF UTTAR PRADESH. AS PART OF NATIONAL MISSION FOR PROV IDING MEDICAL TRANSPORT SERVICES, GVK EMERGENCY MANAGEMEN T AND RESEARCH INSTITUTE (IN SHORT GVKEMRI) WAS REGISTE RED AS A SOCIETY IN THE YEAR 2005. GVKEMRI IS HAVING REGISTR ATION UNDER SECTION 12AA OF THE INCOME TAX ACT, 1961 VIDE THE ORDER DATED 13.09.2005 BY THE DIT(E), HYDERABAD. IT HAS P ARTICIPATED 2 ITA.NO.1382/HYD/2013 M/S. GVKEMRI (UP) SECUNDERABAD IN THE TENDER BID AND WON THE CONTRACT FOR PROVIDIN G EMERGENCY MEDICAL TRANSPORT SERVICES (IN SHORT EMT S) IN THE STATE OF UTTAR PRADESH. ONE OF THE CONDITIONS OF TH E TENDER WAS THAT THE SELECTED BIDDER SHOULD FORM A SPECIAL PURP OSE VEHICLE (IN SHORT SPV) TO CREATE EMTS IN U.P. ACCORDING T O THAT, GVKEMRI FLOATED AN SPV, GVKEMRI PVT. LTD. WHICH WAS INCORPORATED AS PRIVATE LIMITED COMPANY ON 11.12.20 11 AND ENTERED INTO TRIPARTITE AGREEMENT WITH GVKEMRI (UP) PVT. LTD. AND GOVERNMENT OF UTTAR PRADESH ON DECEMBER 21, 201 1. SINCE GVKEMRI IS HAVING 51% SHARE IN THE SPV, IT WA S DECIDED TO CONVERT THE PRIVATE LIMITED COMPANY TO A NON-PROFIT ONE UNDER SECTION 25 OF THE COMPANIES ACT, 1956 AND ACCORDINGLY MADE AN APPLICATION TO THE REGISTRAR OF COMPANIES ON 1 ST DECEMBER, 2012 AND FRESH REGISTRATION WAS ACCORDED TO THE COMPANY ON 27.12.2012 ACCORDING TO WHICH, NAME OF THE COMPANY HAS BEEN CHANGED TO GVKEMRI (UP). 3. ASSESSEE MADE AN APPLICATION UNDER SECTION 12AA FOR REGISTRATION WHICH THE LEARNED DIT(E) REJECTED HOLDING THAT ASSESSEE IS A CONTRACT SERVICE PROVIDER AND THUS IS A BUSINESS ENTITY AND NOT A CHARITABLE ORGANIZATION. IN ANALYZ ING THE OPERATIONS OF THE ASSESSEE, THE LEARNED DIT(E) CONS IDERED SOME OF THE TERMS OF THE AGREEMENT AND CAME TO THE CONCL USION THAT ASSESSEE WAS FORMED AND OPERATING AS A CONTRACT SER VICE PROVIDER FOR WHICH IT RECEIVES CONSIDERATION AT STI PULATED RATE FROM THE SAID AUTHORITY. THEREFORE, HE WAS OF THE V IEW THAT ASSESSEE CANNOT BE GRANTED REGISTRATION UNDER SECTI ON 12AA, NOT WITHSTANDING THE CONTENTION OF ASSESSEE THAT CO MPANY IS REGISTERED AS NON-PROFIT COMPANY UNDER SECTION 25 O F THE COMPANIES ACT. ASSESSEE IS AGGRIEVED AND RAISED FOU R GROUNDS ON THE ISSUE OF REGISTRATION UNDER SECTION 12AA. 3 ITA.NO.1382/HYD/2013 M/S. GVKEMRI (UP) SECUNDERABAD 4. LD. COUNSEL REFERRING TO THE AGREEMENT BETWEEN GVKEMRI AND GOVERNMENT OF UTTAR PRADESH AND ASSESSE E SUBMITTED THAT THE OBJECTIVES OF THE PROJECT IS TO PROVIDE AND MANAGE EMERGENCY MEDICAL TRANSPORT SERVICES IN THE AREA OF OPERATIONS I.E., IN THE JURISDICTION OF UTTAR PRADE SH STATE, RESPONDING TO THE MEDICAL EMERGENCY AND TRANSPORTIN G THE PATIENT TO THE NEAREST COMMUNITY HEALTH CENTRE OR D ISTRICT HOSPITAL WITHIN THE SHORTEST POSSIBLE TIME. THE OBJ ECTIVE ITSELF REQUIRED TO FUNCTION FOR A SOCIAL CAUSE AND REACHIN G MUCH NEEDED EMERGENCY SERVICES TO THE POPULATION AT LARG E. THE SERVICES ARE OFFERED FREE OF COST TO THE RESIDENTS OF UTTAR PRADESH. SINCE THIS ACTIVITY IS MEANT FOR THE BENEF IT OF THE GENERAL PUBLIC, ASSESSEE IS IN THE AREA OF MEDICAL RELIEF AS PROVIDED UNDER THE DEFINITION OF CHARITABLE ACTIVIT Y. IT WAS FURTHER SUBMITTED THAT ASSESSEE OPERATES VARIOUS AM BULANCES AND PROVIDE EMERGENCY MEDICAL RELIEF TO THE PEOPLE IN DISTRESS. GVKEMRI IS ALSO HAVING SIMILAR OBJECTS AND IT HAS B EEN GRANTED REGISTRATION UNDER SECTION 12AA BY THE DIT( E), HYDERABAD. JUST BECAUSE A SEPARATE SPECIAL PURPOSE VEHICLE WAS CONSTITUTED FOR OPERATION IN THE STATE OF U.P. ASSESSEE WAS DENIED AS IT WAS REGISTERED AS A NON-PROFIT COMPANY . IT WAS SUBMITTED THAT THE LEARNED DIT(E) HAS ANALYZED FEW OF THE ARTICLES OF AGREEMENT TO COME TO THE OPINION THAT I T IS A CONTRACT SERVICE PROVIDER IGNORING THE FULL TERMS O F AGREEMENT WHEREIN ASSESSEE HAS TO PROVIDE BASIC AMBULANCE, FI RST AID, CRITICAL CARE AND ALSO TRANSPORT THE PATIENTS TO TH E NEAREST MEDICAL CENTRE AVAILABLE. SINCE, ENTIRE OPERATIONS ARE COORDINATED, IT REQUIRES CONTINUOUS MANAGING AND AS PER THE TERMS, ASSESSEE SHOULD HAVE AMBULANCES WITH BASIC F ACILITIES AND EMPLOY QUALIFIED PERSONS SO AS TO MANAGE NOT ON LY THE 4 ITA.NO.1382/HYD/2013 M/S. GVKEMRI (UP) SECUNDERABAD AMBULANCE FLEET BUT ALSO COORDINATE WITH VARIOUS OT HER AUTHORITIES IN PROVIDING MEDICAL RELIEF. AS PER THE TERMS, IT ALSO REQUIRED TO HAVE A CENTRE TO RESPOND TO THE TELEPHO NE LINE WITHIN 20 SECONDS OF THE CALL AND THIS REQUIRE LOT OF COORDINATION, BY HAVING CENTRE PROCESS CENTER ETC. THE AMOUNTS PROVIDED BY THE GOVERNMENT ARE ONLY FOR BAS IC CAUSE AND ASSESSEE IS RENDERING SERVICES TO THE PUBLIC F REE OF COST AS PER THE TERMS OF THE AGREEMENT. IT WAS FURTHER SUBM ITTED THAT THE GVKEMRI ITSELF HANDLES ON AN AVERAGE MORE THAN 20,000 EMERGENCY CASES PER DAY THROUGH 108 EMERGENCY AMB ULANCE SERVICE. THIS SERVICE IS RENDERED ACROSS 14 STATES AND 2 UNION TERRITORIES. IN THE CASE OF U.P. EVEN THOUGH THE GV KEMRI WAS A SUCCESSFUL BIDDER, AS PER THE TERMS OF THE AGREEMEN T, IT HAS TO FORMULATE A SPV SPECIFICALLY FOR THE ABOVE PURPOSE. THUS, THERE IS NO REASON TO HOLD THAT ASSESSEE IS A CONTRACT SE RVICE PROVIDER. FURTHER AS PER THE PROVISIONS OF SECTION 2(15) OF IT ACT EVEN IF ASSESSEE IS INCIDENTALLY IN COMMERCIAL ACTIVITY, IT IS STILL CONSIDERED AS CHARITABLE ACTIVITY SINCE ASS ESSEE IS INVOLVED IN MEDICAL RELIEF. LD. COUNSEL RELIED ON T HE DECISION OF THE COORDINATE BENCH IN THE CASE OF SOCIAL PEDIA KN OWLEDGE FOUNDATION VS DIT(EXEMPTIONS) 141 ITD 398 ALSO FOR THE PROPOSITION THAT SINCE ASSESSEE WAS REGISTERED UNDE R SECTION 25 OF THE COMPANIES ACT FOR PROMOTING CHARITY, THE SAME IS ALSO ELIGIBLE FOR REGISTRATION AND CONSEQUENT EXEMP TION. 5. LEARNED D.R. RELIED ON THE ORDERS OF THE DIT(E ) TO SUPPORT THAT ASSESSEE IS A CONTRACT SERVICE PROVIDE R AND THEREFORE, CANNOT BE ALLOWED REGISTRATION AS A CHAR ITABLE INSTITUTION. 5 ITA.NO.1382/HYD/2013 M/S. GVKEMRI (UP) SECUNDERABAD 6. WE HAVE CONSIDERED THE RIVAL CONTENTIONS. THERE IS NO DISPUTE WITH THE FACT THAT GVKEMRI IS A CHARITAB LE ORGANIZATION AND HAS BEEN GRANTED REGISTRATION BY T HE DIT(E), HYDERABAD. IT PARTICIPATED IN THE TENDER FLOATED BY GOVERNMENT OF U.P. FOR PROVIDING EMERGENCY MEDICAL SERVICES AN D WAS SUCCESSFUL IN THE BIDDING PROCEDURE. SINCE THE GOVE RNMENT OF U.P. WANTED AN SPV EXCLUSIVELY FOR THE STATE OF U.P ., THE SAID GVKEMRI FORMED A PRIVATE LIMITED COMPANY INITIALLY WHICH WAS CONVERTED TO NON-PROFIT ORGANIZATION BY THE REV ISED REGISTRATION GRANTED TO IT UNDER COMPANIES ACT. THE REFORE, AS FAR AS THE ASSESSEE WHO IS SEEKING REGISTRATION UND ER SECTION 12AA IS CONCERNED, IT IS REGISTERED AS NON-PROFIT C OMPANY UNDER THE COMPANIES ACT. A PERUSAL OF THE OBJECTS C LAUSE SHOWS THAT IT HAS BEEN INCORPORATED TO PROVIDE AND MANAGE EMERGENCY MEDICAL TRANSPORT SERVICES IN THE STATE O F U.P. FOR RESPONDING TO MEDICAL EMERGENCIES AND TRANSPORTING THE PATIENT TO THE NEAREST COMMUNITY HEALTH CENTRE OR D ISTRICT HOSPITAL WITHIN THE SHORTEST POSSIBLE TIME. THE AMB ULANCE SERVICES WILL BE COORDINATED THROUGH AN EMERGENCY R ESPONSE CENTRE (IN SHORT ERC) WHICH SHALL BE ACCESSIBLE T HROUGH A TOLL FREE NUMBER. AS PART OF THE AGREEMENT WITH THE GOVE RNMENT OF U.P. ASSESSEE STARTED ITS OPERATIONS AND IS OPERATI NG IN THE FIELD OF EMTS. AS SEEN FROM SCHEDULE-I OF THE AGREE MENT WITH THE GOVERNMENT OF U.P. THE ASSESSEES SCOPE OF OPER ATIONS ARE LISTED. IT SPECIFIES IN VARIOUS CLAUSES, (1) THE ST RUCTURE OF EMTS DELIVERY MODEL (2) EMERGENCY RESPONSE CENTRE (3) ST AFF AND TRAINING INCLUDING AMBULANCE PERSONNEL (4) EMERGENC Y RESPONSE CENTRE PERSONNEL AND (5) INFRASTRUCTURE. I N THAT AMBULANCE SPECIFICATIONS, IST PROCUREMENT OPERATION S AND MAINTENANCE ETC., MEDICAL CONSUMABLES AND DISPOSABL ES WERE 6 ITA.NO.1382/HYD/2013 M/S. GVKEMRI (UP) SECUNDERABAD ALSO SPECIFIED ALONG WITH TRAINING FOR COMMUNITY AW ARENESS AND EMERGENCY PREPAREDNESS. THE ENTIRE SCOPE OF OPE RATIONS OF THE EMERGENCY MEDICAL TRANSPORT SERVICES DO INDICAT E THAT ASSESSEE IS IN THE FIELD OF MEDICAL RELIEF AS PRO VIDED IN THE IT ACT. 6.2 THE TERM CHARITABLE PURPOSE HAS BEEN DEFINED IN SECTION 2(15) OF THE INCOME TAX ACT WHICH IS REPROD UCED HEREIN BELOW : (15) CHARITABLE PURPOSE INCLUDES RELIEF OF THE PO OR, EDUCATION, MEDICAL RELIEF, (PRESERVATION OF ENVIRON MENT (INCLUDING WATERSHEDS, FORESTS AND WILDLIFE) AND PR ESERVATION OF MONUMENTS OR PLACES OR OBJECTS OF ARTISTIC OR HI STORIC INTEREST) AND THE ADVANCEMENT OF ANY OTHER OBJECT O F GENERAL PUBLIC UTILITY. PROVIDED THAT THE ADVANCEMENT OF ANY OTHER OBJECT O F GENERAL PUBLIC UTILITY SHALL NOT BE A CHARITABLE PURPOSE, I F IT INVOLVES THE CARRYING ON OF ANY ACTIVITY IN THE NATURE OF TR ADE, COMMERCE OR BUSINESS, OR ANY ACTIVITY OF RENDERING ANY SERVICE IN RELATION TO ANY TRADE, COMMERCE OR BUSIN ESS, FOR A CESS OR FEE OR ANY OTHER CONSIDERATION, IRRESPECTIV E OF THE NATURE OF USE OR APPLICATION, OR RETENTION, OF THE INCOME FROM SUCH ACTIVITY.) PROVIDED FURTHER THAT THE FIRST PROVISO SHALL NOT A PPLY IF THE AGGREGATE VALUE OF THE RECEIPTS FROM THE ACTIVITIES REFERRED TO THEREIN IS (TEN LAKH RUPEES) OR LESS IN THE PREVIOU S YEAR;) 7. A BARE PERUSAL OF THE DEFINITION OF THE TERM CHARITABLE PURPOSE SHOWS THAT MEDICAL RELIEF I S A CHARITABLE ACTIVITY. SECTION 2(15) WAS AMENDED VIDE FINANCE AC T, 2008 BY EXPANDING MAIN DEFINITION AND INSERTING A PROVISO W HICH STATES THAT ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PU BLIC UTILITY SHALL NOT BE A CHARITABLE PURPOSE IF IT INVOLVES CA RRYING ON OF (A) ANY ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BU SINESS OR (B) ANY ACTIVITY OF RENDERING ANY SERVICE IN RELATION T O ANY TRADE, 7 ITA.NO.1382/HYD/2013 M/S. GVKEMRI (UP) SECUNDERABAD COMMERCE OR BUSINESS, FOR A CESS OR FEE OR ANY OTHE R CONSIDERATION, IRRESPECTIVE OF THE NATURE OF USE OR APPLICATION OR RETENTION, OF THE INCOME FROM SUCH ACTIVITY. CON SEQUENT TO THAT, IT HAS BEEN INTERPRETED THAT PROVISO TO SECTI ON 2(15) WILL NOT APPLY IN RESPECT OF THE FIRST THREE LIMBS OF SE CTION 2 (15) I.E., RELIEF OF THE POOR, EDUCATION OR MEDICAL RELI EF. CONSEQUENTLY, WHERE PURPOSE OF A TRUST OR INSTITUTI ON IS RELIEF OF THE POOR, EDUCATION OR MEDICAL RELIEF, IT WILL C ONSTITUTE CHARITABLE PURPOSE EVEN IF INCIDENTALLY INVOLVES CARRYING ON OF COMMERCIAL ACTIVITIES. EVEN THE BOARD CIRCULAR 11 O F 2008 DATED 19.12.2008 CLARIFIES THE ABOVE POSITION. AS P ER THE CIRCULAR, WHERE THE PURPOSE OF THE TRUST OR INSTITU TION IS, RELIEF OF THE POOR, EDUCATION OR MEDICAL RELIEF, PRESERVAT ION OF INVOLVEMENT OR PRESERVATION OF HISTORIC MONUMENTS P LACES OR OBJECTS OF ARTISTIC OR HISTORIC INTEREST, IT WILL C ONSTITUTE CHARITABLE PURPOSE, EVEN IF IT INVOLVES COMMERCIAL ACTIVITIES. THUS THE OBJECT OF PROVIDING MEDICAL RELIEF IS CH ARITABLE ACTIVITY EVEN IF CONSEQUENT TO CARRYING OF SUCH ACT IVITY, THE TRUST EARNS ANY COMMERCIAL BENEFIT OUT OF IT. 8. IN THE INSTANT CASE, A PERUSAL OF THE OBJECT CL AUSE OF THE COMPANY SHOWS THAT IT HAS BEEN INCURRED WITH THE AIM OF PROVIDING EMERGENCY MEDICAL TRANSPORT SERVICES. SIMILAR OBJECTS OF THE GVKEMRI HAS ALREADY BEEN APPROVED AS CHARITABLE AND REGISTRATION UNDER SECTION 12AA WAS ALREADY GRANTED. WE ARE OF THE OPINION THAT LEARNED DIT(E), IGNORING THE PROVISIONS OF SECTION 2(15) AND THE BOARD CIRCULAR ISSUED ON THIS SUBJECT, CONSIDERED THAT ASSESSEE IS INVOLVED IN COMMERCIAL ACTIVITIES, JUST BECAUSE ASSESSEE IS GET TING SOME FIXED REMUNERATION FOR OPERATING AMBULANCE, IGNORIN G THE FACT THAT THE SERVICES TO THE GENERAL PUBLIC IS FREE OF COST BY THE 8 ITA.NO.1382/HYD/2013 M/S. GVKEMRI (UP) SECUNDERABAD ASSESSEE COMPANY. THE PERSONS WHO ARE AVAILING THE BENEFIT ARE NOT PAYING ANY THING AND ASSESSEES MAIN OPERAT IONS ARE LINKED TO MEDICAL RELIEF. EACH AMBULANCE MAINTAINED AND PROVIDED BY ASSESSEE COMPANY AS PART OF THE AGREEME NT IS EQUIPPED WITH A DRIVER AND MEDICAL ATTENDANT. THE M EDICAL ATTENDANT SHOULD BE SUITABLY TRAINED TO HANDLE ANY MEDICAL EMERGENCIES. EMERGENCY RESPONSE CENTRE SHOULD ALSO EMPLOY PHYSICIAN WHO SHOULD BE TRAINED TO HANDLE SITUATION S OF EMERGENCY. THE BASIC LIFE SUPPORT AMBULANCE WAS D EFINED TO MEAN AN AMBULANCE WHICH CARRIES BASIC AND ESSENTIAL EQUIPMENT AND SUPPLIES FOR OPTIMAL EMERGENCY CARE A T THE SCENE AND THE ABILITY TO OFFER MEDICAL AID SUCH AS FIRST AID, IMMOBILIZATION, OXYGEN THERAPY AND OTHER EQUIPMENTS AS DESCRIBED IN GREATER DETAIL IN THE SCHEDULE-6. THIS INDICATES THAT THE ASSESSEE WAS INCORPORATED FOR CHARITABLE P URPOSE OF PROVIDING MEDICAL RELIEF. FURTHER ASSESSEE HAS BEEN , EVEN THOUGH INCORPORATED AS A PRIVATE LIMITED COMPANY OR IGINALLY, HAS CONVERTED ITSELF INTO A NON PROFIT COMPANY AND HAS BEEN INCORPORATED UNDER SECTION 25 OF THE COMPANIES ACT, 1956. THERE IS NO DOUBT WITH REFERENCE TO THE OBJECTS WHI CH ARE CHARITABLE IN NATURE. THEREFORE, IT HAS TO BE CONSI DERED AS A NON-PROFIT EARNING ORGANIZATION. 9. IN THE CASE RELIED BY ASSESSEE OF SOCIAL PEDI A KNOWLEDGE FOUNDATION (SUPRA), THE COORDINATE BENCH AT CHENNAI HAS CONSIDERED SIMILAR ISSUE AND HELD A PERUSAL OF THE OBJECT CLAUSE OF THE COMPANY SHOWS THAT IT HAS BEEN INCORPORATED WITH THE AIM OF PROVIDING EDUCATION, F ACILITATE SOCIAL AND ECONOMIC EMPOWERMENT, ECONOMIC DEVELOPMENT PROG RAMS, LITERACY PROGRAMS, TRAINING PROGRAMS FOR VILLAGERS AND DOWNTRODDEN PEOPLE. HOW THESE OBJECTS ARE TO BE ACH IEVED 9 ITA.NO.1382/HYD/2013 M/S. GVKEMRI (UP) SECUNDERABAD SHOULD BE LEFT TO THE ASSESSEE. THE FACT THAT THE A SSESSEE HAS BEEN INCORPORATED UNDER SECTION 25 OF THE COMPANIES ACT, 1956 SHOW THAT IT HAS BEEN FORMED FOR PROMOTING CHARITY OR ANY OTHER USEFUL OBJECT AND INTENDS TO APPLY ITS PROFITS, IF ANY OR OTHER INCOME IN PROMOTING ITS OBJECTS. IN OTHERWORDS, IT S A NON-PROFIT EARNING ORGANIZATION. THE COORDINATE BENCH CONCLUDED THAT WHERE THE OBJECT OF ASSESSEE-COMPANY WAS PROVIDING EDUCATION ETC., IT IS ENTITLED TO REGISTRATION UNDER SECTION 12AA, PARTICULARLY WHEN THE ASSESSEE HAS BEEN INCORPORATE D UNDER SECTION 25 OF THE COMPANIES ACT, 1956. THE FACTS IN THE ABOVE CASE AND PRINCIPLES LAID DOWN ARE SQUARELY APPLY TO THE FACTS OF THE PRESENT CASE. 10. IN OUR CONSIDERED VIEW THE DIT(E), MERELY ON CERTAIN ASSUMPTIONS HAS REJECTED THE APPLICATION OF THE ASSESSEE FOR REGISTRATION UNDER SECTION 12AA. AS SE EN FROM THE ORDER THE DIT(E), SELECTED SOME OF THE TERMS OF THE AGREEMENT SO AS TO CONSIDER THAT ASSESSEE IS A CONTRACT SERVI CE PROVIDER, IGNORING THE OVERALL OBJECT OF THE AGREEMENT AND TH E ACTIVITIES OF THE ASSESSEE. THE IMPUGNED ORDER OF THE DIRECTOR OF INCOME TAX (E) IS THEREFORE SET ASIDE. THE DIT(E) IS DIREC TED TO GRANT REGISTRATION TO THE ASSESSEE UNDER SECTION 12AA. HO WEVER, IT SHALL BE OPEN TO DIT(E) TO WITHDRAW THE SAME IF THE ACTIVITIES OF THE ASSESSEE ARE NOT FOUND IN ACCORDANCE WITH ITS O BJECTS AT ANY POINT OF TIME LATER. WITH THESE OBSERVATIONS, A SSESSEES GROUNDS ARE ALLOWED AND DIT(E) IS DIRECTED TO GRANT REGISTRATION TO THE ASSESSEE. 11. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOW ED. 10 ITA.NO.1382/HYD/2013 M/S. GVKEMRI (UP) SECUNDERABAD ORDER PRONOUNCED IN THE OPEN COURT ON 21.03.2014. SD/- SD/- (ASHA VIJAYARAGHAVAN) (B. RAMAKOTAIAH) JUDICIAL MEMBER ACOUNTANT MEMBER HYDERABAD, DATED 21 ST MARCH, 2014 VBP/- COPY TO : 1. GVK EMRI (UP) 156-159, PAIGAH HOUSE, SARDAR PATE L ROAD, HYDERABAD 500 003. 2. DIT(E), AAYAKAR BHAVAN, HYDERABAD 3. ADIT(E)-III, HYDERABAD 4. D.R. ITAT, B BENCH, HYDERABAD. 5. GUARD FILE