The Chartered Accountants Study Circle, CHENNAI V. DIT, CHENNAI

ITA 1971/CHNY/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 4790 (ITAT-CHENNAI)
• Duration Of Justice: 7 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-07-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 04-07-2011
• Assessment Year: misc
• Appeal Filed On: 19-11-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANIRUDH RAI
• Assessee Lawyers: T BANUSEKAR
• Section: 80G

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BENCH D CHENNAI (BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, JUDICIAL MEMBER) .. I.T.A. NO. 1971/MDS/2010 THE CHARTERED ACCOUNTANTS STUDY CIRCLE, PRINCE ARCADE, 2-L, REAR BLOCK, II FLOOR, 22-A, CATHEDRAL ROAD, CHENNAI 600 086. PAN : AAATT0469J (APPELLANT) V. THE INCOME TAX OFFICER (EXEMPTIONS), CHENNAI 600 034. (RESPONDENT) APPELLANT BY : SHRI T. BANUSEKAR RESPONDENT BY : SHRI ANIRU DH RAI, CIT-DR O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER : IN THIS APPEAL FILED BY THE ASSESSEE, IT ASSAILS T HE ORDER OF DIT (EXEMPTIONS), CHENNAI, REFUSING TO RENEW APPROVAL U NDER SECTION 80G OF INCOME-TAX ACT, 1961 (IN SHORT THE ACT). 2. ASSESSEE HAD FILED FORM NO.10G ON 15.12.2009 FOR RENEWAL OF APPROVAL UNDER SECTION 80G OF THE ACT. LD. DIT (EX EMPTIONS) WAS OF THE OPINION THAT ASSESSEE WAS CONDUCTING REGULAR CO URSES, SEMINARS, ETC. WHICH HAD RESULTED IN SURPLUS INCOME AND HAD A LSO ENGAGED IN I.T.A. NO. 1971/MDS/10 2 PUBLISHING AND SELLING OF BOOKS OF PROFESSIONAL INT EREST FOR BEING USED AS REFERENCE MATERIAL BY GENERAL PUBLIC AS WELL AS PROFESSIONALS IN RESPECT OF BANK AUDIT, TAX AUDIT, ETC. THEREFORE, AS PER LD. DIT (EXEMPTIONS), THE ACTIVITIES WERE COMMERCIAL IN NAT URE AND IN VIEW OF AMENDMENT TO SECTION 2(15) OF THE ACT, ASSESSEE DID NOT MERIT RENEWAL OF APPROVAL UNDER SECTION 80G OF THE ACT. IN THIS VIEW OF THE MATTER, HE REJECTED THE APPLICATION FILED BY THE AS SESSEE. 3. NOW BEFORE US, LEARNED A.R., ASSAILING THE ORDER OF LD. DIT (EXEMPTIONS), SUBMITTED THAT ASSESSEE IS A STUDY CI RCLE OF CHARTERED ACCOUNTANTS AND CATERING TO IMPROVEMENT OF KNOWLEDG E THROUGH SUCH STUDIES AND THE ACTIVITIES ARE FULLY EDUCATIONAL IN NATURE. LEARNED A.R. ARGUED THAT SINCE BOOK PUBLISHING WAS DONE AS A PART OF EDUCATIONAL ACTIVITY, SUBSTITUTED SUB-SECTION (15) OF SECTION 2 OF THE ACT VIDE FINANCE ACT, 2008 WITH EFFECT FROM 1.4.200 9, WOULD NOT APPLY IN ASSESSEES CASE. AS PER THE LEARNED A.R., ASSES SEE WAS DOING A CHARITABLE ACTIVITY, ESSENTIALLY IN THE NATURE OF E DUCATION. FURTHER ACCORDING TO HIM, THERE WAS NO FINDING BY LD. DIT ( EXEMPTIONS) THAT ASSESSEE WAS CARRYING ON ITS ACTIVITIES AND/OR PUBL ISHING PROFESSIONAL BOOKS, WHICH HELPED CHARTERED ACCOUNTANTS AND PUBLI C IN GENERAL WITH ANY COMMERCIAL INTENTION. I.T.A. NO. 1971/MDS/10 3 4. PER CONTRA, LEARNED D.R. SUBMITTED THAT BY ITS A CTIVITIES, THE ASSESSEE DID NOT HELP THE GENERAL PUBLIC, BUT ONLY THE CHARTERED ACCOUNTANTS AND HENCE, COULD NOT BE CONSIDERED AS D OING ANY CHARITABLE ACTIVITY FALLING WITHIN THE DEFINITION O F SUB-SECTION (15) OF SECTION 2 OF THE ACT. HENCE, ACCORDING TO HIM, APP ROVAL WAS RIGHTLY DENIED. 5. WE HAVE PERUSED THE ORDER OF LD. DIT (EXEMPTIONS ) AS WELL AS HEARD THE RIVAL SUBMISSIONS. ASSESSEE IS A CHARTER ED ACCOUNTANTS STUDY CIRCLE. ADMITTEDLY, ASSESSEE WAS CONDUCTING COURSES AND SEMINARS. ASSESSEE WAS ALSO PUBLISHING AND SELLING BOOKS OF PROFESSIONAL INTEREST. LD. DIT (EXEMPTIONS) HIMSEL F HAS ADMITTED THAT SUCH REFERENCE MIGHT BE USED BY GENERAL PUBLIC AS W ELL AS PROFESSIONALS DOING BANK AUDIT, TAX AUDIT, ETC. TH ESE ACTIVITIES COULD ONLY BE CONSIDERED AS A PART OF ON-GOING EDUCATION OF CHARTERED ACCOUNTANTS WHICH, IN TURN, WOULD NECESSARILY HELP SOCIETY TO GET BETTER, WELL-EQUIPPED AND SKILLED SET OF CHARTERED ACCOUNTANTS FOR MAINTAINING AUDIT QUALITY. SO, WE CANNOT SAY THAT SUCH ACTIVITIES WERE IN THE NATURE OF TRADE, COMMERCE OR BUSINESS, EVEN IF CONSIDER THE ACTIVITY DONE BY THE ASSESSEE AS ONE FOR ADVANCEMEN T OF OBJECT OF GENERAL PUBLIC UTILITY. IN ANY CASE, ASSESSEE, IN OUR OPINION, WAS ONLY I.T.A. NO. 1971/MDS/10 4 DOING EDUCATIONAL ACTIVITY AND THE SUBSTITUTED SECT ION 2(15) OF THE ACT WHICH EFFECTIVELY ADDED A PROVISO THERETO, WOULD NO T APPLY TO THE ASSESSEE SINCE SUCH PROVISO WAS APPLICABLE ONLY WIT H REGARD TO CHARITABLE ACTIVITIES IN THE NATURE OF ADVANCEMENT OF OBJECT OF GENERAL PUBLIC UTILITY. WE ARE, THEREFORE, OF THE OPINION THAT THE ASSESSEE WAS WELL ENTITLED TO APPROVAL UNDER SECTION 80G OF THE ACT. THE ORDER OF LD. DIT (EXEMPTIONS) IS QUASHED AND HE IS DIRECTED TO GRANT THE ASSESSEE RENEWAL OF ITS APPROVAL UNDER SECTION 80G OF THE ACT AS SOUGHT FOR. 6. IN THE RESULT, APPEAL OF THE ASSESSEE STANDS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT AFTER CONCLUSION OF HEARING ON THE FOURTH DAY OF JULY, 2011. SD/- SD/- (GEORGE MATHAN) (ABRAHAM P. GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 4 TH JULY, 2011. KRI. COPY TO: APPELLANT/RESPONDENT/DIT(EXEMPTIONS),CHENN AI-34/ DDIT(E)-I, CHENNAI/D.R./GUARD FILE