Tamil Film Producers Council, CHENNAI V. DDT, CHENNAI

ITA 2087/CHNY/2013

• Counselvise Citation: 208721714 RSA 2013
• Duration Of Justice: 1 year(s) 7 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-07-2015
• Appeal Filed By: Assessee
• Bench Allotted: C
• Next Hearing Date: 17-06-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 02-12-2013
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH
• Assessee Lawyers: S SEETHARAMAN
• Keywords: Charitable institution
• Section: 12AA; 12; 11

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : CHENNAI . . . , . ! , ' # $ [ BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ] ./ I.T.A.NO.2087/MDS/2013 / ASSESSMENT YEAR : 2009-10 M/S TAMIL FILM PRODUCERS COUNCIL NO.606, ANNA SALAI CHENNAI 600 006 VS. THE DY. DIRECTOR OF INCOME- TAX(EXEMPTIONS)-I CHENNAI [PAN AAATT 5547 M] ( %& / APPELLANT) ( '(%& /RESPONDENT) / APPELLANT BY : SHRI S. SEETHARAMAN, CA /RESPONDENT BY : SHRI A.V. SREEKANTH, JCIT / DATE OF HEARING : 17 - 0 6 - 2015 ! / DATE OF PRONOUNCEMENT : 03 - 07 - 2015 / O R D E R PER N.R.S.GANESAN, JUDICIAL MEMBER THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-VII, CHEN NAI, DATED 25.09.2013 AND PERTAINS TO ASSESSMENT YEAR 2009-10. 2. SHRI S. SEETHARAMAN, LD. REPRESENTATIVE FOR THE AS SESSEE SUBMITTED THAT THE ASSESSEE IS A REGISTERED CHARI TABLE TRUST U/S 12AA OF THE ACT. HOWEVER, IN THE ASSESSMENT PROCEEDING S, THE ASSESSING ITA NO.2087/13 :- 2 -: OFFICER DISALLOWED THE CLAIM OF THE ASSESSEE FOR E XEMPTION U/S 11 OF THE ACT. THE ASSESSING OFFICER FOUND THAT THE ACTI VITY OF THE ASSESSEE AMOUNTS TO RENDERING SERVICE IN RELATION TO TRADE, COMMERCE OR BUSINESS, THEREFORE, IN VIEW OF THE AMENDMENT INTRO DUCED BY THE PARLIAMENT BY FINANCE ACT, 2008, THE ASSESSEE IS N OT ELIGIBLE FOR EXEMPTION U/S 11 OF THE ACT. THE LD. REPRESENTATI VE PLACED HIS RELIANCE ON THE JUDGMENT OF HON'BLE MADRAS HIGH COU RT IN ADDL. CIT VS SOUTH INDIA HIRE PURCHASE ASSOCIATION, 116 ITR 793 AND SUBMITTED THAT EVEN THOUGH THE ASSESSEE WAS PROVIDING SERVIC E TO THE TRADE, COMMERCE, OR BUSINESS, THE ASSESSEE IS ELIGIBLE FO R EXEMPTION U/S 11 OF THE ACT. 3. THE LD. REPRESENTATIVE HAS ALSO PLACED HIS RELIANCE ON THE JUDGMENT OF THE HON'BLE DELHI HIGH COURT IN INDIA TRADE PROMOTION ORGANIZATION VS DIRECTOR GENERAL OF INCOME-TAX (EXE MPTIONS) [2015] 53 TAXMANN.COM 404. THE LD. REPRESENTATIVE HAS ALS O PLACED HIS RELIANCE ON THE STATEMENT MADE BY THE HON'BLE FINAN CE MINISTER ON THE FLOOR OF THE PARLIAMENT WHILE MOVING FINANCE BILL, 2008. 4. ON THE CONTRARY, SHRI A.V. SREEKANTH, LD. DEPARTMEN TAL REPRESENTATIVE SUBMITTED THAT THE ASSESSEE IS PROV IDING SERVICE TO THE TAMIL FILM PRODUCERS AND COLLECTING MONEY IN THE NA ME OF FEES. REFERRING TO FIRST PROVISO TO SECTION 2(15),THE LD. DR SUBMITTED THAT ITA NO.2087/13 :- 3 -: WHEN THE ASSESSEE IS ENGAGED IN ADVANCEMENT OF GEN ERAL PUBLIC UTILITY FOR CARRYING ON ANY SERVICE IN RELATION TO TRADE, C OMMERCE OR BUSINESS, THEN IT CANNOT BE CONSTRUED AS CHARITABLE PURPOSE. THIS FIRST PROVISO OF SECTION 2(15) OF THE ACT WAS INTRODUCED BY THE PARL IAMENT BY FINANCE ACT, 2008 WITH EFFECT FROM 1.4.2009. IN VIEW OF TH E DEVELOPMENT OF LAW, ACCORDING TO THE LD. DR, THE CIT(A) HAS RIGHTL Y CONFIRMED THE ORDER OF THE ASSESSING OFFICER. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ASSESSMENT YEAR UNDER CONSIDERATION IS 2009-10. THE PARLIAMENT BY FINANCE ACT, 2008 INTRODUCED FIRST PROVISO TO SECTION 2(15) OF THE AC T CLARIFYING THAT THE SERVICES RENDERED IN RELATION TO TRADE, COMMERCE OR BUSINESS ARE NOT ELIGIBLE FOR EXEMPTION SINCE THE SAME CANNOT BE CON SIDERED TO BE AS CHARITABLE PURPOSE. THIS FIRST PROVISO TO SECTION 2(15) OF THE ACT CAME INTO OPERATION WITH EFFECT FROM 1.4.2009. IN OTHER WORDS, IT IS APPLICABLE FROM FINANCIAL YEAR 2009-10. THEREFORE, THIS FIRST PROVISO COULD BE CONSIDERED FROM THE ASSESSMENT YEAR 2010-1 1. IN OTHER WORDS, THE FIRST PROVISO INTRODUCED BY FINANCE AC T, 2008 CANNOT BE MADE APPLICABLE FOR ASSESSMENT YEAR 2009-10 WHICH I S UNDER CONSIDERATION. ITA NO.2087/13 :- 4 -: 6. IT IS NOT IN DISPUTE THAT THE ACTIVITY OF THE ASSE SSEE WAS CONSIDERED TO BE A GENERAL PUBLIC UTILITY AND THE DIT(E) HAS GRANTED REGISTRATION U/S 12AA OF THE ACT. THEREFORE, FOR THE YEAR UNDER CONSIDERATION, THE ASSESSEE IS ELIGIBLE FOR EXEMPT ION U/S 11 SUBJECT TO FULFILLMENT OF FURTHER CONDITIONS AS LAID DOWN IN S ECTIONS 11,12 AND 13 OF THE ACT. SINCE THE LOWER AUTHORITIES HAVE NOT C ONSIDERED THE CONDITIONS LAID DOWN IN SECTIONS 11, 12 & 13 OF THE ACT, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE ASSESSING OFFICE R HAS TO RECONSIDER THE ISSUE AFRESH. IT IS MADE CLEAR THAT THE FIRST PROVISO TO SECTION 2(15) OF THE ACT WOULD BE APPLICABLE FROM ASSESSMENT YEAR 2010-11, THEREFORE, IN VIEW OF THE CHANGING SCENARIO, THE EL IGIBILITY OF THE ASSESSEE HAS TO BE EXAMINED BY THE ASSESSING OFFICE R AFRESH FROM ASSESSMENT YEAR COMMENCING FROM 2010-11. WE ARE NO T EXPRESSING ANY OPINION WITH REGARD TO EXEMPTION FOR ASSESSMENT YEAR 2010-11. SUFFICE TO SAY THAT SUBJECT TO FULFILLMENT OF CONDI TIONS OF SECTION1 11,12 & 13 OF THE ACT, THE ASSESSEE IS ELIGIBLE FOR EXEM PTION FOR ASSESSMENT YEAR 2009-10. ACCORDINGLY, THE ORDERS OF THE LOWER AUTHORITIES ARE SET ASIDE AND THE ENTIRE ISSUE IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER SHALL RECONSIDER TH E ISSUE AFRESH IN THE LIGHT OF THE PROVISIONS OF SECTIONS 11, 12 & 13 OF THE ACT AND THEREAFTER DECIDE THE SAME IN ACCORDANCE WITH LAW A FTER GIVING A REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. ITA NO.2087/13 :- 5 -: 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLO WED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 03 RD OF JULY, 2015, AT CHENNAI. SD/- SD/- ( . ! ) (A. MOHAN ALANKAMONY) ' / ACCOUNTANT MEMBER ( . . . ' ) (N.R.S. GANESAN) / JUDICIAL MEMBER #$ / CHENNAI %& / DATED: 03 RD JULY , 2015 RD &' ()*) / COPY TO: 1 . / APPELLANT 4. + / CIT 2. / RESPONDENT 5. ),- . / DR 3. +/' / CIT(A) 6. -01 / GF