DCIT (Exemptions), Circle-2, Ahmedabad V. M/s.United WayOf Baroda, Vadodara

ITA 2656/AHD/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 8018 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 6 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-06-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 30-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAMES KURIAN S N SOPARAKAR
• Keywords: Business income; Charitable institution; Set aside
• Section: 80G; 12AA; 63; 12; 11

Judgement Text

ITA NOS.: 772 AND 2656/AHD/17, 3565/AHD/16, 426, 265 7 AND 2658/AHD/17 ASSESSMENT YEARS: 2009-10, 10-11, 11-12, 12-13, 13- 14 AND 14-15 PAGE 1 OF 15 IN THE INCOME TAX APPELLATE TRIBUNAL, AHMEDABAD A BENCH, AHMEDABAD [CORAM: JUSTICE P P BHATT, PRESIDENT AND PRAMOD KUM AR, VICE PRESIDENT] ITA NOS.: 772 AND 2656/AHD/17, 3565/AHD/16, 426, 2 657 AND 2658/AHD/17 ASSESSMENT YEARS: 2009-10, 10-11, 11-12, 12-13, 13- 14 AND 14-15 DEPUTY COMMISSIONER OF INCOME TAX (EXEMPTIONS) CIRCLE 2, AHMEDABAD ....APPELLANT VS UNITED WAY OF BARODA ..........RESPONDENT 9 TH FLOOR, SIDCUP TOWER, RACE COURSE CIRCLE VADODARA 390 007 [PAN: AAATU0414E) APPEARANCES BY JAMES KURIAN FOR THE APPELLANT S N SOPARAKAR AND URVASHI SHODAN FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : APRIL 2, 2019 DATE OF PRONOUNCEMENT : JUNE 25, 2019 O R D E R PER BENCH: 1. THESE SIX APPEALS PERTAIN TO THE SAME ASSESSEE, INVOLVE SOME COMMON ISSUES AND WERE HEARD TOGETHER. AS A MATTER OF CONVENIENCE, THEREFO RE, ALL THE SIX APPEALS ARE BEING DISPOSED OF BY WAY OF THIS CONSOLIDATED ORDER. 2. THE LEAD ORDER IN THIS CASE IS PASSED BY THE CIT (A) FOR THE ASSESSMENT YEAR 2011-12, AND IN ALL OTHER CASES THE SAME HAS BEEN FOLLOWED. WE WILL, THEREFORE, TAKE UP THE ASSESSMENT YEAR 2011-12 FIRST. THE RELATED APPEAL IS ITA NO 35 65/AHD/16. ITA NO. 3565/AHD/16 ASSESSMENT YEAR 2011-12 3. THIS APPEAL IS DIRECTED AGAINST THE ORDER DATED 1 ST SEPTEMBER 2016 PASSED BY THE CIT(A) IN THE MATTER OF ASSESSMENT UNDER SECTION 14 3(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT), FOR THE ASS ESSMENT YEAR 2011-12, ON THE FOLLOWING GROUNDS: ITA NOS.: 772 AND 2656/AHD/17, 3565/AHD/16, 426, 265 7 AND 2658/AHD/17 ASSESSMENT YEARS: 2009-10, 10-11, 11-12, 12-13, 13- 14 AND 14-15 PAGE 2 OF 15 I. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE IS LD. CIT(A) JUSTIFIED IN GIVING THE BENEFIT OF SECTION 11 OF TH E ACT BY DELETING THE ADDITION OF RS.1,85,46,802/- WHICH THE DISALLOWED BY INVOKING T HE PROVISION OF SECTION 2(15) OF- THE ACT. II. WHETHER ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE IS THE LD. CIT(A) JUSTIFIED IN TREATING THE EXPENSES LIKE ASSISTANCE TO VOLUNTARY AGENCIES, MANAGEMENT ASSISTANCE & TRAINING, PUBLIC EDUCATION PROGRAMME, RESEARCH & PUBLICATIONS AND EXPENSES FOR COMMUNITY SERVICE AS APPLICATION OF INCOME. III. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. COMMISSIONER OF INCOME- TAX (APPEALS) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. IV. IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE LD. COMMISSIONER OF INCOME-TAX (APPEALS) MAY BE SET ASIDE AND THAT OF THE ASSESSIN G OFFICER BE RESTORED. 4. THERE ARE THUS TWO ISSUES REQUIRING OUR ADJUDICA TION IN THIS APPEAL- FIRST, WHETHER OR NOT THE CIT(A) WAS JUSTIFIED IN HOLDING THAT PROVIS O TO SECTION 2(15) WILL NOT HAVE ANY APPLICATION ON THE FACTS OF THIS CASE AND THUS BENE FIT OF SECTION 11 CANNOT BE DECLINED TO THE ASSESSEE; AND, SECOND- WHETHER OR NOT THE CIT(A) WA S JUSTIFIED THE EXPENSES, LIKE ASSISTANCE TO VOLUNTARY AGENCIES, MANAGEMENT ASSISTANCE AND TR AINING, PUBLIC EDUCATION PROGRAMME, RESEARCH AND PUBLICATIONS AND EXPENSES FOR COMMUNIT Y SERVICE, AS APPLICATION OF INCOME FOR THE PURPOSES OF SECTION 11 OF THE ACT. 5. TO ADJUDICATE ON THESE ISSUES, ONLY A FEW MATERI AL FACTS NEED TO BE TAKEN NOTE OF. THE ASSESSEE BEFORE US IS A SOCIETY REGISTERED AS A CHA RITABLE INSTITUTION REGISTERED UNDER SECTION 12AA OF THE ACT. THE ASSESSEE FILED A RETURN OF INC OME ON 26.9.2011 SHOWING NIL INCOME. DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEEDING S, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS SHOWN GROSS RECEIPTS OF RS 3,81,01,051 , AND A SURPLUS OF RS 39,94,650. IN THE COMPUTATION OF INCOME, THE ASSESSEE HAD CLAIMED APP LICATION OF FUNDS FOR CHARITABLE PURPOSES TO THE EXTENT OF RS 3,81,16,559 AND CLAIMED EXEMPTI ON UNDER SECTION 11 OF THE ACT. WHEN THE ASSESSING OFFICER PROBED THE MATTER FURTHER, HE FOU ND THAT OUT OF TOTAL RECEIPTS OF RS 3,81,01,051, A SUM OF RS 2,73,26,591 (I.E. 71.72% O F REVENUES) IS IN RESPECT OF GARBA EVENT ONLY. THE ASSESSING OFFICER ALSO NOTED THAT THE ASS ESSEE ORGANIZES ONE OF THE MOST POPULAR AND PRESTIGIOUS GARBA EVENT IN BARODA IN A HIGHLY P ROFESSIONAL MANNER, THAT THE ASSESSEE CHARGES ENTRY FEES FROM THE PARTICIPANTS AS ALSO TH E STALL OWNERS, AND THAT IT IS IN THE NATURE OF A BUSINESS ACTIVITY. IT WAS IN THIS BACKDROP THAT T HE ASSESSEE REQUIRED THE ASSESSEE TO JUSTIFY THE ELIGIBILITY FOR EXEMPTION OF INCOME UNDER SECTI ON 11, IN THE LIGHT OF THE PROVISIONS OF ITA NOS.: 772 AND 2656/AHD/17, 3565/AHD/16, 426, 265 7 AND 2658/AHD/17 ASSESSMENT YEARS: 2009-10, 10-11, 11-12, 12-13, 13- 14 AND 14-15 PAGE 3 OF 15 SECTION 13(8) READ WITH PROVISO TO SECTION 2(15). IN RESPONSE TO THIS REQUISITION, THE ASSESSEE EXPLAINED AT LENGTH ABOUT THE ACTIVITIES OF THE UNI TED WAY OF BARODA, WHICH INCLUDES SUPPORTING 120 NGOS AND VOLUNTEER DRIVEN ACTIVITIES THAT LINK, SUPPORT AND DELIVER HEALTH AND HUMAN SERVICES TO IMPROVE THE QUALITY OF LIFE IN TH E SOCIETY. ITS MISSION WAS SAID TO BE TO IMPROVE AND MAKE BARODA A BETTER PLACE TO LIVE IN AND ITS VISION WAS STATED TO BE TO INCREASE THE ORGANIZED CAPACITIES OF PEOPLE AND TO TAKE CARE OF ONE ANOTHER. IT WAS ALSO POINTED OUT THAT THE OBJECTIVES OF THE SOCIETY INCLUDE MOBILIZ ING RESOURCES FROM THE LOCAL COMMUNITIES AND THE PEOPLE HAVING AFFILIATION AND CONCERN FOR I NDIA IN GENERAL, AND GUJARAT IN PARTICULAR, RESIDING IN INDIA OR ABROAD AND TO APPLY THEM FOR S TRENGTHENING THE SERVICES IN EDUCATION, HEALTH AND HUMAN CARE AND OTHER SOCIAL SECTORS EXIS TING IN BARODA AND STATE OF GUJARAT AND ASSESSING ON A CONTINUING BASIS THE NEED FOR HUMAN SERVICE PROGRAMS, TO SEEK SOLUTION TO HUMAN PROBLEMS, TO ASSIST IN THE DEVELOPMENT OF NEW OR THE EXPANSION OR MODIFICATION OF EXISTING HUMAN SERVICES PROGRAMS, AND TO FOSTER COO PERATION AMONG LOCAL, STATE AND NATIONAL AGENCIES FOR PROVIDING SERVICE TO THE COMMUNITY. I T WAS ALSO POINTED OUT THAT THE ASSESSEE CONTRIBUTES BY STRENGTHENING THE SERVICES IN EDUCAT ION, BY PROVIDING VOCATIONAL TRAINING TO THE DISABLED, HELPING ORPHANS, EMPOWERING WOMEN THROUGH VARIOUS PROGRAMS AND PROVIDING MID MEAL TO POOR STUDENTS. THE DETAILS OF THE EYE CAMP AND THALASSEMIA SCREENING AND DETECTION CAMP CONDUCTED BY THE ASSESSEE WERE ALSO FURNISHED. THE ASSESSEE ALSO GAVE DETAILS OF HOW THE MONIES ARE SPENT TO THESE ENDS. AS REGARDS THE APPLICATION OF PROVISO TO SECTION 2(15), IT WAS POINTED OUT THAT ONLY WHEN THE INSTITUTIONS ARE CARRYING OUT ACTIVITIES ON COMMERCIAL LINES WITH PROFIT MOTIVE, THIS PROVISION COMES INTO PLAY. IT WAS POINTED OUT THAT SURPLUS FUNDS ARE PURELY INCIDENTAL AND THE INSTITUTION IS NOT RUN ON THE COMMERCIAL LINES AT ALL. ELABORATE LEGAL SUBMISSIONS WERE MADE ON THE SCOPE OF PROVISO TO SE CTION 2(15) AND ITS LEGISLATIVE HISTORY AND BACKGROUND. A REFERENCE WAS ALSO MADE TO CBDT C IRCULAR NO. 11/2008 DATED 29 TH DECEMBER 2008 IN SUPPORT OF THE PROPOSITION THE PRO VISO TO SECTION 2(15) WILL NOT APPLY IN RESPECT OF ACTIVITIES INVOLVING RELIEF TO POOR, EDU CATION OR MEDICAL RELIEF, EVEN IF IT INCIDENTALLY INVOLVES THE CARRYING ON OF COMMERCIAL ACTIVITIES. IT WAS THEN POINTED OUT THAT MAIN OBJECT OF THE TRUST IS TO MOBILIZE THE RESOURCES FROM LOCAL C OMMUNITIES AND THE PEOPLE HAVING AFFILIATION AND CONCERN FOR INDIA IN GENERAL, AND GUJARAT IN PA RTICULAR, RESIDING IN INDIA OR ABROAD, AND TO APPLY THEM FOR STRENGTHENING THE SERVICES IN EDUCAT ION, HEALTH AND HUMAN CARE AND THE OTHER SOCIAL SECTORS OF THE UNDERPRIVILEGED. IT WAS THUS CONTENDED THAT THE PROVISO TO SECTION 2(15) WILL HAVE NO APPLICATION IN THIS CASE. THE ASSESSEE ALSO MADE ELABORATE SUBMISSIONS ON THE CONNOTATIONS OF EXPRESSIONS BUSINESS ACTIVITIES A ND MADE OUT A CASE AS TO HOW THE ACTIVITIES ITA NOS.: 772 AND 2656/AHD/17, 3565/AHD/16, 426, 265 7 AND 2658/AHD/17 ASSESSMENT YEARS: 2009-10, 10-11, 11-12, 12-13, 13- 14 AND 14-15 PAGE 4 OF 15 OF THE ASSESSEE, EVEN WITH RESPECT TO HOLDING THE G ARBA EVENT, DO NOT CONSTITUTE BUSINESS ACTIVITIES. 6. NONE OF THESE SUBMISSIONS, HOWEVER, IMPRESSED TH E ASSESSING OFFICER. 7. THE ASSESSING OFFICER WAS OF THE VIEW THAT HOW T HE INCOME IS APPLIED IS ONE THING, BUT WHAT IS MUCH MORE IMPORTANT IS, WHAT HE TERMED AS, GRAVITY OF GENERATION OF INCOME. HE REFERRED TO THE PROVISIONS OF SECTION 2(15), AS AMENDED WITH EFFECT FROM 1 ST APRIL 2009, AND OBSERVED THAT AFTER THE INSERTION OF THE ABOVE PROVISO, THE ADVANCEMENT OF ANY OTHER OBJECT OF PUBLIC UTILITY SHALL NOT BE A CHARITABLE PURPOSE, IF IT INVOLVES CARRYING ON OF (I) ANY ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINE SS; (II) ANY ACTIVITY OF RENDERING ANY SERVICES IN RELATION TO ANY TRADE, COMMERCE OR BUSI NESS, FOR CESS OR FEE OR ANY OTHER CONSIDERATION, IRRESPECTIVE OF THE NATURE OF USE OR APPLICATION OR RETENTION OF INCOME FROM SUCH ACTIVITY. HE THEN REFERRED TO THE MONETARY TH RESHOLD LIMITS BROUGHT ABOUT BY THE FINANCE ACT, 2010, WITH RESPECT TO REVENUES GENERATED BY SU CH ACTIVITIES. THE ASSESSING OFFICER THEN REFERRED TO, AND RELIED UPON, THE MEMORANDUM EXPLAI NING THE PROVISIONS OF FINANCE ACT, 2008. HE THEN NOTED THAT THE MAIN ACTIVITY OF THE A SSESSEE IS TO ORGANIZE GARBA EVENT WHICH GENERATES MORE THAN 71% OF ITS REVENUES AND SUCH A PREDOMINANT OBJECT CAN AT BEST BE AN OBJECT OF GENERAL PUBLIC UTILITY. IT WAS THEN NOTED THAT THE APPLICATION OF EARNINGS FROM THIS ACTIVITY WILL NOT END THE NATURE OF PRIME ACTIVITY. HE THEN REFERRED TO THE PROVISIONS OF SECTION 13(8) AND OBSERVED THAT THE BENEFITS OF SECTION 11 AND 12 WILL NOT BE APPLICABLE EVEN IN A CASE OF REGISTERED CHARITABLE INSTITUTION IN A SITUATION IN WHICH THE PROVISIONS OF SECTION 2(15) COME INTO PLAY AS IN THIS CASE. THE ASSESSING OFFIC ER REITERATED THAT SALE OF ENTRY TICKETS AND HIRING OUT OF STALLS IS CLEARLY A COMMERCIAL ACTIVI TY. THE ASSESSING OFFICER THUS REJECTED THE CLAIM OF EXEMPTION UNDER SECTION 11. WHILE HE ALLOW ED DEDUCTION, IN COMPUTATION OF INCOME, OF SUCH EXPENSES AS WERE INCIDENTAL TO EARNING OF T HE INCOME, THE ASSESSING OFFICER DISALLOWED THE FOLLOWING EXPENSES : SR. NO. PARTICULARS AMOUNT (RS.) 1 FSF DOUBTFUL LOAN PROVIDED 2205000 2 ASSISTANCE TO VOLUNTARY AGENCIES 10822700 3 MANAGEMENT ASSISTANCE & TRAINING 120317 4 PUBLIC EDUCATION PROGRAMME 468116 5 RESEARCH & PUBLICATIONS 37179 6 EXPENSES FOR COMMUNITY SERVICE 898840 ITA NOS.: 772 AND 2656/AHD/17, 3565/AHD/16, 426, 265 7 AND 2658/AHD/17 ASSESSMENT YEARS: 2009-10, 10-11, 11-12, 12-13, 13- 14 AND 14-15 PAGE 5 OF 15 8. THE ASSESSING OFFICER THUS COMPUTED TAXABLE PROF ITS AT RS 1,85,46,802. AGGRIEVED, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CI T(A). LEARNED CIT(A), IN A VERY ELABORATE AND WELL REASONED ORDER, REVERSED THE STAND OF THE ASSESSING OFFICER AND HELD THE ASSESSEE TO BE ELIGIBLE FOR SECTION 11 AND 12 BENEFITS AS, IN H IS CONSIDERED OPINION, THE PROVISO TO SECTION 2(15) HAD NO APPLICATION IN THE MATTER. WHILE HOLDI NG SO, LEARNED CIT(A), INTER ALIA, REASONED AS FOLLOWS: 5.3 I HAVE CAREFULLY CONSIDERED THE FACTS AND CIRC UMSTANCES OF THE CASE, THE OBSERVATIONS OF THE ASSESSING OFFICER, THE SUBMISSI ONS OF THE ASSESSEE, MATERIAL AVAILABLE ON RECORD AND THE JUDICIAL PRONOUNCEME NTS ON THE SUBJECT. THE ASSESSEE IS REGISTERED AS A TRUST UNDER BOMBAY PUBLIC TRUST ACT WITH THE CHARITY COMMISSIONER AND ALSO HAS REGISTRATION U/S 12AA AND 80G OF THE I NCOME-TAX ACT. THE ASSESSING OFFICER NOTED THAT THE ASSESSEE WAS ORGANIZING ANNU AL GARBA EVENT DURING NAVRATRI FESTIVAL AND 71.72% OF ITS ANNUAL RECEIPT WAS GENER ATED FROM THAT SINGLE EVENT. BASED ON THIS OBSERVATION, THE ASSESSING OFFICER INFERRED THAT THE PRIME OBJECTIVE OF THE ASSESSEE WAS TO ORGANIZE ITS ANNUAL GARBA EVENT , WHICH WAS A COMMERCIAL ACTIVITY, HIT BY THE FIRST PROVISO TO SECTION 2(15) OF THE ACT. HE ALSO DENIED EXEMPTION U/S 11 OF THE ACT TO THE ASSESSEE, ON THIS GROUND. HOWEVER, THE ASSESSING OFFICER HAS NOWHERE REFERRED TO THE OBJECTS OF THE ASSESSEE, WH ICH ARE THE GUIDING POINTS FOR ASSESSEE'S ACTIVITIES. 5.4 PERUSAL OF THE MEMORANDUM OF ASSOCIATION OF TH E ASSESSEE REVEALS THAT ASSESSEE'S FIRST AND FOREMOST AIM AND OBJECTIVE OF THE ASSESSE E IS 'TO MOBILIZE RESOURCES FROM LOCAL COMMUNITIES AND PEOPLE HAVING AFFILIATION TO GUJARAT AND BARODA IN PARTICULAR RESIDING IN INDIA AND ABROAD; AND TO APPLY THEM IN EDUCATION, HEALTH, HUMAN CARE AND SOCIAL SECTORS EXISTING IN BARODA AND THE STATE OF GUJARAT.' FROM THE ABOVE, IT IS CLEAR THAT ASSESSEE'S OBJECTIVE IS TO PROVIDE EDUCA TION AND MEDICAL RELIEF (HEALTH AND HUMAN CARE) TO ITS TARGET POPULATION AND TO THAT EN D, ITS AIM WAS ALSO TO MOBILISE AND GENERATE RESOURCES FROM THE LOCAL COMMUNITIES. IT I S OBVIOUS FROM ASSESSEE'S MEMORANDUM OF ASSOCIATION THAT ITS OBJECTS VIZ. PRO VIDING EDUCATION AND HEALTH ARE INCLUDED IN THE SECOND AND THIRD LIMB OF THE DEFINI TION OF 'CHARITABLE PURPOSE' AS DEFINED U/S 2(15) OF THE ACT. NO CHARITABLE ACTIVIT Y CAN BE CONDUCTED IN VACUUM, WITHOUT FINANCIAL RESOURCES. THEREFORE, THE ASSESSE E IS ALSO ENGAGED IN ORGANISING ANNUAL GARBA EVENTS IN BARODA, WHICH PROVIDE A LARG E PART OF ITS FINANCIAL REQUIREMENTS FOR ITS ACTIVITIES. IT IS SEEN FROM TH E MATERIAL AVAILABLE ON RECORD THAT THE ASSESSEE'S ACTIVITIES INCLUDE PROVIDING AYURVEDIC M EDICINES AT NOMINAL CHARGES TO BENEFICIARIES AND ON FURTHER DISCOUNT OF 15% TO SEN IOR CITIZENS, PROVIDED TRAINED MEDICAL PERSONNEL TO KGP CHILDREN HOSPITAL FOR SCRE ENING OUT SCHOOL CHILDREN FOR OPHTHALMIC PROBLEMS, PROVIDED FUNDS FOR EDUCATION, RECREATION, PREVOCATIONAL TRAINING FOR MENTALLY CHALLENGED CHILDREN, HAS PROV IDED STUDY LOANS TO ACADEMICALLY BRIGHT STUDENTS OF FINANCIAL WEAKER SECTIONS, HAS P ROVIDED FUNDS FOR PROVIDING MID- DAY MEALS TO SCHOOL CHILDREN FOR THEIR BETTER HEALT H AND NUTRITION ETC. IT IS THEREFORE, SEEN THAT THE ACTIVITIES OF THE ASSESSEE ARE IN THE NATURE OF EDUCATION AND MEDICAL RELIEF, WHICH ARE IN CONSONANCE WITH ITS STATED OBJ ECTIVES. IT IS SEEN THAT THE ASSESSEE ORGANIZES ITS ANNUAL GARBA EVENT AS A PART OF ITS F UND RAISING ACTIVITY AND THE FUNDS RAISED BY SUCH EVENT ARE USED FOR ASSESSEES OBJECT S. IT IS TRUE THAT NOT ALL THE ACTIVITIES ITA NOS.: 772 AND 2656/AHD/17, 3565/AHD/16, 426, 265 7 AND 2658/AHD/17 ASSESSMENT YEARS: 2009-10, 10-11, 11-12, 12-13, 13- 14 AND 14-15 PAGE 6 OF 15 OF THE ASSESSEE RELATE TO EITHER EDUCATION OR MEDIC AL RELIEF, BUT THE FACT LEMONS THAT THE ASSESSEE IS ACTUALLY INVOLVED IN EDUCATIONAL AND ME DICAL RELIEF ACTIVITIES IN A MAJOR WAY, WHICH IS IN CONGRUENCE WITH ITS AIMS AND OBJEC TIVES. 5.5 THE PROVISIONS OF SECTION 2(15) OF THE ACT R EAD AS UNDER- '(15) 'CHARITABLE PURPOSE' INCLUDES RELIEF OF THE P OOR, EDUCATION, MEDICAL RELIEF, PRESERVATION OF ENVIRONMENT (INCLUDING WATE RSHEDS, FORESTS AND WILDLIFE) AND PRESERVATION OF MONUMENTS OR PLACES OR OBJECTS OF ARTISTIC OR HISTORIC 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, IF IT INVOLVES T HE CARRYING ON OF ANY ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINESS, OR AN Y ACTIVITY OF RENDERING ANY SERVICE IN RELATION TO ANY TRADE, COMMERCE OR BUSIN ESS, FOR A CESS OR FEE OR ANY OTHER CONSIDERATION, IRRESPECTIVE 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 THEREI N IS TEN LAKH RUPEES OR LESS IN THE PREVIOUS YEAR;' 5.6 THE ASSESSING OFFICER HAS ALLEGED THAT ASSES SEE'S ACTIVITY OF ORGANIZING GARBA IS IN THE NATURE OF BUSINESS, TRADE AND COMMERCE. HOWE VER, THE ASSESSEE HAS COUNTERACTED THE SAME AND HAS SUBMITTED THAT IT'S N OTHING BUT MOBILIZATION OF FUNDS FOR THE AIMS AND OBJECTS OF THE ASSESSEE. THE ASSES SEE HAS ASSERTED THAT SINCE THERE IS NO PROFIT MOTIVE AND SINCE THE GARBA EVENT IS A FUN D RAISING ACTIVITY, THE SAME CANNOT BE CONSTRUED AS BUSINESS, TRADE OR COMMERCE. MANY A CTIVITIES OF GENUINE CHARITABLE PURPOSES MAY STILL GENERATE SURPLUS, HOWEVER, THE S AME DOES NOT RENDER THE ACTIVITY AS TRADE, COMMERCE OR BUSINESS. THE OBJECTS OF THE ASS ESSEE TRUST CLEARLY ESTABLISH THAT THE PRIME OBJECT OF THE ASSESSEE WAS FOR CHARITABLE PURPOSE IN THE NATURE OF EDUCATION AND MEDICAL RELIEF. PROFIT MAKING IS NEITHER THE AI M NOR THE OBJECT OF THE ASSESSEE TRUST. IT WAS NOT THE PRINCIPLE ACTIVITY OF THE TRU ST. MERELY BECAUSE WHILE CARRYING OUT THE ACTIVITIES FOR THE PURPOSE OF ACHIEVING ITS OBJ ECTS, CERTAIN SURPLUS WAS GENERATED, IT CANNOT BE SAID THAT THE ASSESSEE TRUST IS ENGAGED I N TRADE , COMMERCE OR BUSINESS. SIMILAR VIEWS HAVE ALSO BEEN EXPRESSED BY HON'BLE G UJARAT HIGH COURT IN THE CASE OF DIT (EXEMPTION) VS SABARMATI ASHRAM GAUSHALA TRUST [2014] 44 TAXMANN.COM 141 (GUJ), HON'BLE ITAT, DELHI HAS, IN THE CASE OF DDIT (E) VS INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA [2016] 70 TAXMANN.COM 54 (DELH I-TRIB.), HELD THAT ICAI WAS AN EDUCATIONAL INSTITUTE AND ITS COACHING ACTIVITIES, WHICH GENERATED SURPLUS, FELL WITHIN MEANING OF CHARITABLE PURPOSE UNDER SECTION 2(15), HENCE IT WOULD BE ENTITLED TO EXEMPTION UNDER SECTION 11. THEREFORE, SIMPLY BECAU SE AN ACTIVITY HAS GENERATED SURPLUS, IT CANNOT BE SAID THAT THE SAME CONSTITUTE S TRADE, COMMERCE OR BUSINESS. 5.7 HON'BLE ITAT, DELHI HAS, IN THE CASE OF DDIT ( E) VS ALL INDIA FOOTBALL FEDERATION [2015] 62 TAXMANN.COM 362 (DELHI - TRIB. ), HAS HELD THAT THE ASSESSEE VIZ. ALL INDIA FOOTBALL FEDERATION WAS CONSTITUTED WITH AN OBJECTIVE OF PROMOTING SPORTS OF FOOTBALL. APART FROM GOVERNMENT AND FIFA GRANT, ASSESSEE EARNED INCOME FROM ALLOCATING SPONSORSHIP RIGHTS AND TELECASTING RIGHT S OF MATCHES AND THIS FUND WAS ITA NOS.: 772 AND 2656/AHD/17, 3565/AHD/16, 426, 265 7 AND 2658/AHD/17 ASSESSMENT YEARS: 2009-10, 10-11, 11-12, 12-13, 13- 14 AND 14-15 PAGE 7 OF 15 REQUIRED FOR ADVANCEMENT OF MAIN OBJECTIVES OF SPOR TS PROMOTION ACTIVITY AS GRANTS WERE VERY INSUFFICIENT, HON'BLE ITAT HELD THAT THE MERE FACT THAT ASSESSEE HAD GENERATED SPONSORSHIP FUNDS DURING COURSE OF CARRYI NG ON ANCILLARY OBJECTS, WOULD NOT ALTER CHARACTER OF MAIN OBJECTS WHICH CONTINUED TO BE CHARITABLE, AND NOT TO EARN PROFITS AND PROVISO TO SECTION 2(15) COULD NOT BE A PPLIED TO ASSESSEE SOCIETY AND ASSESSEE WAS ENTITLED TO EXEMPTION UNDER SECTION 11 . 5.8 FROM THE PERUSAL OF THE MATERIAL AVAILABLE O N THE RECORD, IT IS CLEAR THAT THE FIRST AND FOREMOST OBJECT OF ASSESSEE'S. EXISTENCE IS EDU CATION, HEALTH AND HUMAN CARE AND A LARGE PART OF THE ACTIVITIES CARRIED OUT BY THE A SSESSEE, ARE IN THE NATURE OF EDUCATION, MEDICAL RELIEF AND RELIEF TO THE POOR, W HICH ARE COVERED BY THE FIRST THREE LIMBS OF THE 'CHARITABLE PURPOSE1 DEFINITION U/S 2( 15) OF THE ACT. I AGREE WITH THE ASSESSEE THAT THE NEWLY INSERTED PROVISO TO SECTION 2(15) OF THE ACT ONLY COMES IN TO PLAY WHEN THE TRUST IS ENGAGED IN 'THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY' COVERED BY THE FOURTH LIMB OF SECTI ON 2(15). SINCE THE ASSESSEE WAS COVERED NOT BY THE FOURTH LIMB OF SECTION 2(15) OF THE ACT, IT WAS NOT HIT BY THE NEWLY INSERTED PROVISO TO SECTION 2(15) OF THE ACT. HON'B LE ITAT, BANGALORE HAS, IN THE CASE OF VIVEKANAND GENERAL HOSPITAL VS CIT [2014] 49 TAX MANN.COM 392 (BANGALORE- TRIB.), HELD THAT '15. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE A RE IN AGREEMENT WITH THE ARGUMENTS PUT FORTH ON BEHALF OF THE ASSESSEE. AS R IGHTLY CONTENDED BY LEARNED COUNSEL FOR THE ASSESSEE, THE DEFINITION OF 'CHARIT ABLE PURPOSE' HAS SEVERAL LIMBS, VIZ., (I) RELIEF OF THE POOR, (II) EDUCATION , (III) MEDICAL RELIEF, (IV) PRESERVATION OF ENVIRONMENT (INCLUDING WATERSHED, F OREST AND WILDLIFE), (V) PRESERVATION OF MONUMENTS OR PLACES OR OBJECTS OF A RTISTIC OR HISTORIC INTEREST, AND (VI) ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY. PROVISO TO SECTION 2(15) OF THE ACT IS APPLICABLE ONLY IN RESP ECT OF A CHARITABLE INSTITUTION WHICH HAS THE OBJECT OF 'ANY OTHER OBJECT OF GENERA L PUBLIC UTILITY'. 5.9 HON'BLE GUJARAT HIGH COURT HAS, IN THE CASE OF DIT (E) VS AHMEDABAD MANAGEMENT ASSOCIATION [2014] 47 TAXMANN.COM 162 (G UJARAT), HAS HELD THAT NEWLY INSERTED PROVISO TO SECTION 2(15) WILL APPLY TO ENT ITIES WHOSE PURPOSE IS ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY BUT W ILL NOT APPLY TO ENTITIES ENGAGED IN ACTIVITIES IN NATURE OF RELIEF TO POOR, EDUCATION O R MEDICAL RELIEF. '5.3 SECTION 11 OF THE ACT PROVIDES THAT SUBJECT TO THE PROVISIONS OF SECTION 60 TO 63 THE INCOME DERIVED FROM PROPERTY HELD UNDER T RUST WHOLLY FOR CHARITABLE OR RELIGIOUS PURPOSES TO THE EXTENT TO WHICH SUCH I NCOME IS APPLIED TO SUCH PURPOSES IN INDIA, AND, WHERE ANY SUCH INCOME IS AC CUMULATED OR SET APART FOR APPLICATION TO SUCH PURPOSES IN INDIA SHALL NOT BE INCLUDED IN THE TOTAL INCOME OF THE PREVIOUS YEAR OF THE PERSON IN RECEIPT OF TH E SAID INCOME. ''CHARITABLE PURPOSE' IS DEFINED UNDER SECTION 2(15 ) OF THE ACT, WHICH READS AS UNDER; 'CHARITABLE PURPOSE' INCLUDES RELIEF OF THE POOR, E DUCATION, MEDICAL RELIEF [PRESERVATION OF ENVIRONMENT (INCLUDING WATERSHEDS, FORESTS AND WILDLIFE) AND ITA NOS.: 772 AND 2656/AHD/17, 3565/AHD/16, 426, 265 7 AND 2658/AHD/17 ASSESSMENT YEARS: 2009-10, 10-11, 11-12, 12-13, 13- 14 AND 14-15 PAGE 8 OF 15 PRESERVATION OF MONUMENTS OR PLACES OR OBJECTS OF A RTISTIC OR HISTORIC INTEREST] AND THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY.' HOWEVER, SUBSEQUENTLY AND WITH EFFECT FROM ASSESSME NT YEAR 2008-09 PROVISO TO SECTION 2(15) OF THE ACT HAS BEEN ADDED AND SECT ION 2(15) HAS BEEN AMENDED BY THE FINANCE ACT, 2008 BY ADDING THE PROV ISO WHICH STATES THAT THE 'ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY' SHALL NOT BE A CHARITABLE PURPOSE IF IT INVOLVES THE CARRYING ON O F-(A) ANY ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINESS; OR (B) ANY A CTIVITY OF RENDERING ANY SERVICE IN RELATION TO ANY TRADE, COMMERCE OR BUSIN ESS FOR CESS OR FEE OR ANY OTHER CONSIDERATION, IRRESPECTIVE OF THE NATURE OF USE OR APPLICATION, OR RETENTION OF THE INCOME FROM SUCH ACTIVITY. THE REV ENUE HAS DENIED THE EXEMPTION CLAIMED BY THE ASSESSEE UNDER SECTION 11 OF THE ACT MAINLY RELYING UPON THE AMENDED SECTION 2(15) OF THE ACT BY SUBMIT TING THAT THE CASE OF THE ASSESSEE WOULD FALL UNDER THE FOURTH LIMB OF THE DE FINITION OF 'CHARITABLE PURPOSE I.E. 'ADVANCEMENT OF ANY OTHER OBJECT OF GE NERAL PUBLIC UTILITY' AND, THEREFORE, THE ASSESSEE SHALL NOT BE ENTITLED TO EX EMPTION FROM TAX UNDER SECTION 11 OF THE ACT. THEREFORE, THE FIRST QUESTION, WHICH IS POSED FOR C ONSIDERATION OF THIS COURT IS, WHETHER PROVISO TO SECTION 2(15) OF THE ACT WOULD B E APPLICABLE IN CASE WHERE IT IS FOUND THAT THE ACTIVITY OF THE ASSESSEE IS AN EDUCATIONAL ACTIVITY AND WHETHER THE ACTIVITIES OF THE ASSESSEE CAN BE SAID TO BE EDUCATIONAL ACTIVITIES OR NOT? 5.4 NOW WHILE CONSIDERING WHETHER THE ACTIVITIES OF THE ASSESSEE CAN BE SAID TO BE EDUCATIONAL ACTIVITIES OR NOT THE DECISION OF TH IS COURT AS WELL AS HON'BLE THE SUPREME COURT IS REQUIRED TO BE REFERRED TO AND CONSIDERED. IN THE CASE OF GUJARAT STATE CO-OPERATIVE UNION (SUPRA) IT IS HELD BY THE DIVISION BENCH OF THIS COURT THAT MERE EXISTENCE OF PROFIT WILL NOT D ISQUALIFY INSTITUTION FOR EXEMPTION UNDER SECTION 10(22) OF THE ACT, IF SOLE PURPOSE OF ITS EXISTENCE IS NOT PROFIT MAKING BUT IS EDUCATIONAL ACTIVITIES. IN THE SAID DECISION THE DIVISION BENCH ALSO CONSIDERED THE DECISION OF HON' BLE THE SUPREME COURT IN THE CASE OF SOLE TRUSTEE, LOK SHIKSHANA TRUST (SUPR A), WHICH HAS BEEN RELIED UPON BY THE ASSESSING OFFICER AS WELL AS THE LEARNE D COUNSEL APPEARING ON BEHALF OF THE REVENUE, IN THE SAID DECISION THE DIV ISION BENCH OF THIS COURT HAS OBSERVED AS UNDER; 'IT APPEARS TO US THAT THE DECISION OF THE TRIBUNAL WHICH SEEKS TO REST IT ON THE OBSERVATIONS MADE BY THE SUPREME COURT IN LOKA SHIK SHANA TRUST'S (SUPRA) FOR HOLDING THAT, THE ASSESSEE IS NOT ENTITLED TO E XEMPTION UNDER SECTION 10(22) OF THE ACT IS BASED ON A COMPLETE MISREADING OF THE OBSERVATIONS OF THE SUPREME COURT. IN LOKA SHIKSHANA TRUST'S (SUPRA) TH E SUPREME COURT, WHILE DEALING WITH THE PROVISIONS OF SECTION 11 ROAD WITH SECTION 2(15) OF THE ACT, WHICH DEFINES 'CHARITABLE PURPOSE' OBSERVED AS UNDE R; 'THE SENSE IN WHICH THE WORD 'EDUCATION' HAS BEEN U SED IN SECTION 2(15) OF THE ACT IN THE SYSTEMATIC INSTRUCTION, SCHOOLING OR TRA INING GIVEN TO THE YOUNG IS PREPARATION FOR THE WORK OF LIFE. IT ALSO CONNOTES THE WHOLE COURSE OF SCHOLASTIC ITA NOS.: 772 AND 2656/AHD/17, 3565/AHD/16, 426, 265 7 AND 2658/AHD/17 ASSESSMENT YEARS: 2009-10, 10-11, 11-12, 12-13, 13- 14 AND 14-15 PAGE 9 OF 15 INSTRUCTION WHICH A PERSON HAS RECEIVED. THE WORD ' EDUCATION' HAS NOT BEEN USED IN THAT WIDE AND EXTENDED SENSE, ACCORDING TO WHICH EVERY ACQUISITION OF FURTHER KNOWLEDGE CONSTITUTES EDUCATION. ACCORDING TO THIS WIDE AND EXTENDED SENSE, TRAVELLING IS EDUCATION, BECAUSE AS A RESULT OF TRAVELLING YOU ACQUIRE FRESH KNOWLEDGE....BUT THIS NOT THE SENSE IN WHICH THE WORD 'EDUCATION' IS USED IN CLAUSE (15) OF SECTION 2. WHAT 'EDUCATION' CONNO TES IN THAT CLAUSE IS THE PROCESS OF TRAINING AND DEVELOPING THE KNOWLEDGE, S KILL, MIND AND CHARACTER OF STUDENTS BY NORMAL SCHOOLING? THE SUPREME COURT, IN THE ABOVE OBSERVATIONS BY REF ERRING TO THE SYSTEMATIC INSTRUCTION, SCHOOLING OR TRAINING GIVEN TO THE YOU NG HAS ONLY CITED AN INSTANCE IN ORDER TO INDICATE AS TO WHAT THE WORD 'EDUCATION ' APPEARING IN SECTION 2(15) OF THE ACT WHICH DEFINES 'CHARITABLE PURPOSES ' IS INTENDED TO MEAN. WE ARE CERTAIN THAT THESE OBSERVATIONS WERE NOT INTEND ED TO KEEP OUT OF THE MEANING OF THE WORD 'EDUCATION', PERSONS OTHER THAN 'YOUNG. THE EXPRESSION 'SCHOOLING' ALSO MEANS 'THAT SCHOOLS, INSTRUCTS OR EDUCATES' (THE OXFORD ENGLISH DICTIONARY VOL. IX, PAGE 217). THE SUPREME COURT HAS OBSERVED THAT THE WORD 'EDUCATION' ALSO CONNOTES THE WHOLE COURSE OF SCHOLASTIC INSTRUCTION WHICH A PERSON HAS RECEIVED. THIS CLEARLY INDICATES THAT THE OBSERVATIONS OF THE SUPREME COURT WERE NOT INTENDED TO GIVE A NARRO W OR PEDANTIC SENSE TO THE WORD 'EDUCATION'. BY GIVING FURTHER ILLUSTRATIONS O F A TRAVELER GAINING KNOWLEDGE, VICTIMS OF SWINDLERS AND THIEVES BECOMIN G WISER, THE VISITORS TO NIGHT CLUBS ADDING TO THEIR KNOWLEDGE THE HIDDEN MY STERIES OF LIFE, THE SUPREME COURT HAS INDICATED THAT THE WORD 'EDUCATIO N' IS NOT USED IN A LOOSE SENSE SO AS TO INCLUDE ACQUISITION OF EVEN SUCH KNO WLEDGE. THE OBSERVATIONS OF THE SUPREME COURT ONLY INDICATE THE PROPER CONFINES OF THE WORD 'EDUCATION' IN THE CONTEXT OF THE PROVISIONS OF SECTION 2(15) O F THE ACT. IT WILL NOT BE PROPER TO CONSTRUE THESE OBSERVATIONS IN A MANNER IN WHICH THEY ARE CONSTRUED BY THE TRIBUNAL WHEN IT INFESTS FROM THESE OBSERVATIONS, I N PARAGRAPH 17 OF ITS JUDGMENT, THAT THE WORD 'EDUCATION' IS LIMITED TO S CHOOLS, COLLEGES AND SIMILAR INSTITUTIONS AND DOES NOT EXTEND TO ANY OTHER MEDIA FOR SUCH ACQUISITION OF KNOWLEDGE. THE OBSERVATIONS OF THE SUPREME COURT DO NOT CONFINE THE WORD 'EDUCATION' ONLY TO SCHOLASTIC INSTRUCTIONS BUT OTH ER FORMS OF EDUCATION ALSO ARE INCLUDED IN THE WORD 'EDUCATION'. AS NOTICED AB OVE, THE WORD 'SCHOOLING' ALSO MEANS INSTRUCTING OR EDUCATING. IT, THEREFORE, CANNOT BE SAID THAT THE WORD 'EDUCATION' HAS BEEN GIVEN AN UNDULY RESTRICTED MEA NING BY THE SUPREME COURT IN THE SAID DECISION. THOUGH, IN THE CONTEXT OF THE PROVISION OF SECTION 10(22), THE CONCEPT OF EDUCATION NEED NOT BE GIVEN ANY WIDE OR EXTENDED MEANING, IT SURELY WOULD ENCOMPASS SYSTEMATIC DISSE MINATION OF KNOWLEDGE AND TRAINING IN SPECIALIZED SUBJECTS AS IS DONE BY THE ASSESSES. THE CHANGING TIMES AND THE EVER WIDENING HORIZONS OF KNOWLEDGE M AY BRING IN CHANGES IN THE METHODOLOGY OF TEACHING AND A SHIFT OF THE BETT ER IN THE INSTITUTIONAL SETUP. ADVANCEMENT OF KNOWLEDGE BRINGS WITHIN ITS FOLD SUI TABLE METHODS OF ITS DISSEMINATION AND THOUGH THE PRIMARY METHOD OF SITT ING IN A CLASSROOM MAY REMAIN IDEAL FOR MOST OF THE INITIAL EDUCATION, IT MAY BECOME NECESSARY TO HAVE A DIFFERENT OUTLOOK FOR FURTHER EDUCATION, FT IS NO T NECESSARY TO NAIL DOWN THE CONCEPT OF EDUCATION TO A PARTICULAR FORMULA OR TO FLOW IT ONLY THROUGH A DEFINED CHANNEL. ITS PROGRESS LIES IN THE ACCEPTANC E OF NEW IDEAS AND DEVELOPMENT OF APPROPRIATE MEANS TO REACH THEM TO R ECIPIENTS.' ITA NOS.: 772 AND 2656/AHD/17, 3565/AHD/16, 426, 265 7 AND 2658/AHD/17 ASSESSMENT YEARS: 2009-10, 10-11, 11-12, 12-13, 13- 14 AND 14-15 PAGE 10 OF 15 5.5 NOW SO FAR AS RELIANCE PLACED UPON THE DECISION OF THE DIVISION BENCH OF THIS COURT IN THE CASE OF SAURASHTRA EDUCATION FOUN DATION (SUPRA) BY THE LEARNED ADVOCATE APPEARING ON BEHALF OF THE REVENUE IS CONCERNED, IT IS REQUIRED TO BE NOTED THAT AS SUCH THE TRIBUNAL HAS CONSIDERED THE SAME IN DETAIL AND HAS RIGHTLY HELD AND OBSERVED THAT AS SU CH THE SAID DECISION WOULD ASSIST THE ASSESSEE RATHER THAN THE REVENUE. IT IS ALSO REQUIRED TO BE NOTED THAT AS SUCH IN THE SAID DECISION THE DIVISION BENCH HAS NOT TAKEN ANY CONTRARY DECISION THAT OF THE DECISION OF GUJARAT STATE CO-O PERATIVE UNION (SUPRA). IT IS TO BE NOTED THAT, ON FACTS, IT WAS HELD THAT THE AS SESSEE CANNOT BE SAID TO BE AN EDUCATIONAL INSTITUTION AND, THEREFORE, THE ASSESSE E WOULD NOT BE ENTITLED TO EXEMPTION AS CONTEMPLATED UNDER SECTION 10(22) OF T HE ACT 5.6 NOW APPLYING THE RATIO OF THE DECISION OF THE D IVISION BENCH OF THIS COURT IN THE CASE OF GUJARAT STATE CO-OPERATIVE UNION (SU PRA) REPRODUCED HEREINABOVE AND THE ACTIVITIES OF THE ASSESSEE SUCH AS CONTINUING EDUCATION DIPLOMA AND CERTIFICATE PROGRAMME; MANAGEMENT DEVEL OPMENT PROGRAMME; PUBLIC TALKS AND SEMINARS AND WORKSHOPS AND CONFERE NCES ETC., WE ARE IN COMPLETE AGREEMENT WITH THE VIEW TAKEN BY THE TRIBU NAL THAT THE ACTIVITIES OF THE ASSESSEE IS EDUCATIONAL ACTIVITIES AND/OR IS IN THE FIELD OF EDUCATION. 5.7 NOW IN VIEW OF THE AFORESAID FINDING THAT THE A CTIVITIES OF THE ASSESSEE IS IN THE FIELD OF EDUCATION, WHETHER THE ASSESSEE IS ENT ITLED TO EXEMPTION UNDER SECTION 11 OF THE ACT OR NOT AND WHETHER IN THE FAC TS AND CIRCUMSTANCES OF THE CASE THE ASSESSEE CAN BE DENIED EXEMPTION UNDER SEC TION 11 OF THE ACT RELYING UPON AND/OR CONSIDERING THE PROVISO TO SECTION 2(15 ) OF THE ACT IS CONCERNED SO FAR AS THE AMENDMENT IN SECTION 2(15) OF THE ACT AMENDED VIDE FINANCE ACT, 2008 AND INSERTION OF PROVISO TO SECTION 2(15) OF THE ACT IS CONCERNED, AS SUCH THE SAME HAS BEEN EXPLAINED VIDE CIRCULAR NO. 11/2008 DATED 19/12/2008. IT IS CLARIFIED THAT WHERE INDUSTRIES O R TRADE ASSOCIATION CLAIM BOTH TO BE CHARITABLE INSTITUTIONS AS WELL AS MUTUA L ORGANIZATIONS AND THEIR ACTIVITIES ARE RESTRICTED TO CONTRIBUTIONS FROM AND PARTICIPATION OF ONLY THEIR MEMBERS, THESE WOULD NOT FALL UNDER THE PURVIEW OF THE PROVISO TO SECTION 2(15) OF THE ACT OWING TO THE PRINCIPLES OF MUTUALI TY. FROM THE CIRCULAR NO.11/2008 DATED 19/12/2008 IT APPEARS THAT THE NEW LY INSERTED PROVISO TO SECTION 2(15) OF THE ACT WILL APPLY TO ENTITIES WHO SE PURPOSE IS ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY I.E. FOU RTH LIMB OF DEFINITION OF 'CHARITABLE PURPOSE' CONTAINED IN SECTION 2(15) OF THE ACT AND HENCE SUCH ENTITIES WILL NOT BE ELIGIBLE FOR EXEMPTION UNDER S ECTION 11 OR UNDER SECTION 10(23C) OF THE ACT IF THEY CARRY ON COMMERCIAL ACTI VITIES. THUS, ON FAIR READING OF SECTION 2(15) OF THE ACT THE NEWLY INSER TED PROVISION SECTION 2(15) OF THE ACT WILL NOT APPLY IN RESPECT OF THE FIRST T HREE LIMBS OF SECTION 2(15) OF THE ACT I.E. RELIEF TO THE POOR; EDUCATION OR MEDIC AL RELIEF. THUS, WHERE THE PURPOSE OF A TRUST OR INSTITUTION IS RELIEF OF THE POOR; EDUCATION OR MEDICAL RELIEF, IT WILL CONSTITUTE 'CHARITABLE PURPOSE' EVE N IF IT INCIDENTALLY INVOLVES THE CARRYING ON OF THE COMMERCIAL ACTIVITIES. THUS, ON FAIR READING OF SECTION 2(15) OF THE ACT READ WITH CIRCULAR NO.11/2008 DATE D 19/12/2008 IT APPEARS THAT IF THE CASE OF THE ASSESSEE DOES NOT FALL WITH IN THE FIRST THREE LIMBS OF SECTION 2(15) OF THE ACT I.E. RELIEF TO THE POOR; E DUCATION OR MEDICAL RELIEF AND ITA NOS.: 772 AND 2656/AHD/17, 3565/AHD/16, 426, 265 7 AND 2658/AHD/17 ASSESSMENT YEARS: 2009-10, 10-11, 11-12, 12-13, 13- 14 AND 14-15 PAGE 11 OF 15 IF IT FALLS IN THE FOURTH LIMB I.E. ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY AND IT IS FOUND THAT SUCH ACTIVITY O F ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY INVOLVES CARRYING ON OF (A) ANY ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINESS; OR (B) ANY A CTIVITY OF RENDERING ANY SERVICE IN RELATION TO ANY TRADE, COMMERCE OR BUSIN ESS; FOR A CESS OR FEE OR ANY OTHER CONSIDERATION, IRRESPECTIVE OF THE NATURE OF USE OR APPLICATION, OR RETENTION OF THE INCOME FROM SUCH ACTIVITY, THE SAM E SHALL NOT BE CONSIDERED FOR 'CHARITABLE PURPOSE' AND SHALL NOT BE ENTITLED TO EXEMPTION UNDER SECTION 11 OF THE ACT. 5.8 IN THE PRESENT CASE, AS OBSERVED HEREINABOVE AN D RIGHTLY HELD BY THE TRIBUNAL, THE ACTIVITIES OF THE ASSESSEE WOULD FALL WITHIN THE DEFINITION OF 'CHARITABLE PURPOSE' AS PER SECTION 2(15) OF THE AC T AND, THEREFORE, WOULD BE ENTITLED TO EXEMPTION UNDER SECTION 11 OF THE ACT. 6. IN VIEW OF THE ABOVE, WE ARE IN COMPLETE AGREEME NT WITH THE VIEW TAKEN BY THE TRIBUNAL THAT THE ACTIVITIES OF THE ASSESSEE IS RELATED TO EDUCATION AND, THEREFORE, IS ENTITLED TO EXEMPTION UNDER SECTION 1 1 OF THE ACT AT THIS STAGE, IT IS REQUIRED TO BE NOTED THAT RIGHT FROM THE ASSESSM ENT YEAR 1995-96 TILL 2008- 09 THE ACTIVITIES OF THE ASSESSEE HAS BEEN CONSIDER ED BY THE REVENUE AS EDUCATIONAL ACTIVITIES. CONSIDERING VARIOUS ACTIVIT IES OF THE ASSESSEE AS NARRATED BY THE ASSESSING OFFICER IN PARAGRAPH NOS. 4 AND 5 OF THE ASSESSMENT ORDER AND CONSIDERING THE DECISION OF THE DIVISION BENCH OF THIS COURT IN THE CASE OF GUJARAT STATE CO-OPERATIVE UNION (SUPRA) WE CONFIRM THE VIEW TAKEN BY THE TRIBUNAL THAT THE ACTIVITIES OF THE ASSESSEE -AHMEDABAD MANAGEMENT ASSOCIATION IS RELATED TO EDUCATION AND, THEREFORE, IS ENTITLED TO EXEMPTION UNDER SECTION 11 OF THE ACT AS CLAIMED.' 5.10 THE CORE ACTIVITY OF THE ASSESSES IS UNDISPU TEDLY CHARITABLE. THE ASSESSING OFFICER HAS NEVER RAISED ANY DOUBT ABOUT THE ACTIVI TIES CARRIED OUT BY THE ASSESSEE. ONE OF THE MAJOR AIMS OF THE ASSESSEE IS TO RAISE R ESOURCES TO MEET ITS OBJECTS RELATING TO EDUCATION, MEDICAL RELIEF AND RELIEF TO THE POOR . THERE IS A CLOSE AND PROXIMATE CONNECTION BETWEEN THE ORGANIZATION OF GARBA EVENT AND THE UTILIZATION OF THE SURPLUS GENERATED, TO MEET THE AIMS AND OBJECTS OF THE ASSE SSEE, WHICH, INCIDENTALLY FALL WITHIN THE FIRST THREE LIMBS OF SECTION 2(15) OF THE ACT A ND ARE OUT OF THE MISCHIEF OF THE NEWLY INSERTED FIRST PROVISO TO SECTION 2(15) OF THE ACT. THE ACTIVITY OF ORGANIZING THE ANNUAL GARBA EVENT WAS WITH A PRIOR AND ULTIMATE MOTIVE OF PROVIDING EDUCATION, MEDICAL RELIEF AND RELIEF TO THE POOR, SUCH ACTIVITY, EVEN IF IT GENERATES SURPLUS, CANNOT BE TERMED AS TRADE, COMMERCE OR BUSINESS, IN VIEW OF T HE DECISION OF HON'BLE ITAT, DELHI IN SOCIETY OF INDIAN AUTOMOBILE MANUFACTURERS VS IT O (E) [2016] 71 TAXMANN.COM 138 (DELHI - TRIB.), WHERE IT WAS HELD THAT WHERE A CTIVITIES OF ASSESSEE-SOCIETY IN ORGANISING SEMINARS/CONFERENCES AND AUTO EXPO WERE PERFORMED WITH PRIOR OBJECT OF PROMOTION OF GROWTH OF AUTOMOBILE INDUSTRY IN INDIA WHICH IS AN OBJECT OF GENERAL PUBLIC UTILITY, SUCH ACTIVITIES WOULD NOT COME WITH IN AMBIT OF PROVISO TO SECTION 2(15) EVEN IF SOME INCOME WAS GENERATED FROM SUCH ACTIVIT IES. 5.11 IN VIEW OF THE ABOVE DISCUSSION, IT IS HELD T HAT THE OBJECTS OF THE ASSESSEE ARE COVERED BY THE FIRST THREE LIMBS OF THE DEFINITION OF 'CHARITABLE PURPOSE' U/S 2(15), VIZ. RELIEF TO POOR, EDUCATION AND MEDICAL RELIEF AND A LARGE PART OF ITS ACTIVITIES ALSO RELATE ITA NOS.: 772 AND 2656/AHD/17, 3565/AHD/16, 426, 265 7 AND 2658/AHD/17 ASSESSMENT YEARS: 2009-10, 10-11, 11-12, 12-13, 13- 14 AND 14-15 PAGE 12 OF 15 TO FULFILLING THESE OBJECTIVES AND ARE NOT HIT BY T HE FIRST PROVISO TO SECTION 2(15) OF THE ACT. KEEPING IN VIEW DECISIONS OF HON'BLE JURISDICT IONAL HIGH COURT IN AHMEDABAD MANAGEMENT ASSOCIATION (SUPRA) AND SABARMATI ASHRAM GAUSHALA TRUST (SUPRA), IT IS HELD THAT THE ASSESSEE CANNOT BE DENIED EXEMPTION U /S 11 OF THE ACT ON THE GROUND THAT IT IS ENGAGED IN ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY AND THAT IT IS HIT BY FIRST PROVISO TO SECTION 2(15) OF THE ACT. THE ASSESSING OFFICER IS DIRECTED TO ALLOW THE CLAIMED EXEMPTION U/S 11 TO THE ASSESSEE. THE ASSE SSEE SUCCEEDS ON THESE GROUNDS OF APPEAL. 9. AGGRIEVED BY THE RELIEF SO GRANTED BY THE CIT(A) , THE ASSESSING OFFICER IS IN APPEAL BEFORE US. 10. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED TH E MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF THE AP PLICABLE LEGAL POSITION. 11. LET US BEGIN BY TAKING A LOOK AT THE PROVISIONS OF SECTION 2(15) AS IT STOOD AT THE RELEVANT POINT OF TIME, WHICH, FOR READY REFERENCE, IS REPRODUCED BELOW: SECTION 2(15) CHARITABLE PURPOSE INCLUDES RELIEF OF THE POOR, E DUCATION, MEDICAL RELIEF, PRESERVATION OF ENVIRONMENT, INCLUDING WATERSHEDS, FORESTS AND WILDLIFE, AND PRESERVATION OF MONUMENTS OR PLACES OR OBJECTS OF A RTISTIC OR HISTORIC INTEREST, AND THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY: PROVIDED THAT THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERA L PUBLIC UTILITY SHALL NOT BE A CHARITABLE PURPOSE, IF IT INVOLVES THE CARRYIN G ON OF ANY ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINESS, OR ANY ACTIVITY OF REN DERING ANY SERVICE IN RELATION TO ANY TRADE, COMMERCE OR BUSINESS, FOR A CESS OR FEE OR ANY OTHER CONSIDERATION, IRRESPECTIVE OF THE NATURE OF USE OR APPLICATION, O R RETENTION, OF THE INCOME FROM SUCH ACTIVITY: PROVIDED FURTHER THAT THE FIRST PROVISO SHALL NOT APPLY IF THE AGGREGATE VALUE OF THE RECEIPTS FROM THE ACTIVITIES REFERRED TO THEREIN IS TEN LAKH RUPEES OR LESS IN THE PREVIOUS YEAR; 12. AS A PLAIN LOOK AT THE ABOVE STATUTORY PROVISIO N WOULD SHOW THE DISABILITY ON ACCOUNT OF FIRST PROVISO TO SECTION 2(15) COMES INTO PLAY O NLY IN A CASE IN WHICH THE OBJECTS OF AN INSTITUTION ARE OBJECTS OF GENERAL PUBLIC UTILITY. IN CONTRAST, HOWEVER, IN THE PRESENT CASE, THE OBJECTS OF THE INSTITUTION ARE IN THE AREA OF RELIE F TO POOR, EDUCATION AND MEDICAL RELIEF, AND THAT IS THE AREA IN WHICH THE CORE ACTIVITIES ARE P ERFORMED. THE OBJECTS OF THE ASSESSEE SOCIETY, FOR READY REFERENCE, ARE REPRODUCED BELOW: ITA NOS.: 772 AND 2656/AHD/17, 3565/AHD/16, 426, 265 7 AND 2658/AHD/17 ASSESSMENT YEARS: 2009-10, 10-11, 11-12, 12-13, 13- 14 AND 14-15 PAGE 13 OF 15 THE OBJECTIVES OF APPELLANT AS PER CONSTITUTION AR E LISTED BELOW: - TO MOBILIZE RESOURCES FROM LOCAL COMMUNITIES AN D THE PEOPLE HAVING AFFILIATION AND CONCERN FOR INDIA AND GUJARAT IN PARTICULAR RES IDING IN INDIA OR ABROAD; AND TO APPLY THEM FOR STRENGTHENING THE SERVICES IN EDUCAT ION, HEALTH, HUMAN CARE AND OTHER SOCIAL SECTORS EXISTING IN BARODA AND STATE OF GUJA RAT - TO ASSESSEE ON A CONTINUING BASIS THE NEED FOR HUMAN SERVICE PROGRAMS; TO SEEK SOLUTIONS TO HUMAN PROBLEMS; TO ASSIST IN THE DEVEL OPMENT OF NEW OR THE EXPANSION OR MODIFICATION OF EXISTING HUMAN SERVICE PROGRAMS AND TO FOSTER COOPERATION AMONG LOCAL, STATE AND NATIONAL AGENCIES FOR PROVIDING SE RVICE TO COMMUNITY - TO MOBILIZE RESOURCES FOR SPECIFIC NEED BASED P ROJECT AND APPLY THEM FOR STRENGTHENING SERVICES IN ONE OR MORE SECTORS EXIST ING IN BARODA AND/OR ANYWHERE INDIA - TO OBTAIN AS FAR AS POSSIBLE THE FINANCIAL RESO URCES, BOTH GOVERNMENTAL AND VOLUNTARY, NEEDED TO MEET THE HUMAN SERVICE NEEDS O F THE COMMUNITY AND TO REDUCE THE DUPLICATION OF EFFORTS TO THE EXTENT FEASIBLE A ND PRACTICAL FOR RESOURCE MOBILIZATION - TO DEPLOY UNITED WAY FINANCIAL AND MANAGEMENT S UPPORT SO AS TO MAXIMIZE THE RESOURCES AVAILABLE TO AGENCIES FOR SERVICES AIMED AT THE MOST URGENT CURRENT NEEDS OF THE COMMUNITY - TO FACILITATE STARTING OF UNITED WAY ORGANIZATI ONS IN VARIOUS CITIES, TOWNS AND VILLAGES IN INDIA WITH LOCAL SUPPORT AND WITH THE O BJECTIVE OF PROMOTING, STRENGTHENING AND COORDINATING THE VOLUNTARY EFFORTS OF CITIZENS BY PROVIDING ASSISTANCE TO THEM. 13. IN PURSUANCE OF THESE OBJECTS, EVEN IF THE ASSE SSEE PERFORMS SOME ACTIVITIES, WHICH CAN BE ALLEGED TO BE ON COMMERCIAL LINES, ARE PERFORMED , THE CHARITABLE NATURE OF THE OBJECTS WILL NOT BE VITIATED AS PROVISO TO SECTION 2(15) COMES I NTO PLAY ONLY IN RESPECT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY AND IS NOT COVERE D BY THE SPECIFIC OBJECTS POINTED OUT EARLIER- INCLUDING RELIEF TO POOR, EDUCATION AND MEDICAL REL IEF. NOTHING, THEREFORE, REALLY TURNS ON THE GARBA EVENT BEING ORGANIZED ON THE BASIS OF, WHAT C AN BE TERMED AS, COMMERCIAL PRINCIPLES. THAT ASPECT OF THE MATTER IS NOT RELEVANT IN THE PR ESENT CASE. AS WE HAVE NOTED EARLIER, ONE OF THE MAJOR OBJECT OF THE ASSESSEE SOCIETY IS MOBILI ZING RESOURCES FROM THE LOCAL COMMUNITIES AND THE PEOPLE HAVING AFFILIATION AND CONCERN FOR I NDIA IN GENERAL, AND GUJARAT IN PARTICULAR, RESIDING IN INDIA OR ABROAD AND TO APPLY THEM FOR S TRENGTHENING THE SERVICES IN EDUCATION, HEALTH AND HUMAN CARE AND OTHER SOCIAL SECTORS EXIS TING IN BARODA AND STATE OF GUJARAT, AND THERE IS ALSO NO DISPUTE THAT CONSIDERABLE WORK IN THIS AREA HAS BEEN CARRIED OUT IN THIS AREA AS EVIDENT FROM THE MATERIAL PRODUCED BEFORE THE ASSES SING OFFICER, COPIES OF WHICH HAVE BEEN FILED BEFORE US AS WELL. THE GENUINENESS OF THIS OB JECT, AND FURTHERANCE OF THIS OBJECT, CANNOT EVEN BE DOUBTED. WE ARE SATISFIED THAT THE ACTIVIT IES CARRIED OUT BY THE ASSESSEE ARE IN THE ITA NOS.: 772 AND 2656/AHD/17, 3565/AHD/16, 426, 265 7 AND 2658/AHD/17 ASSESSMENT YEARS: 2009-10, 10-11, 11-12, 12-13, 13- 14 AND 14-15 PAGE 14 OF 15 NATURE OF EDUCATION, MEDICAL RELIEF AND HELP TO POO R WHICH ARE SPECIFICALLY COVERED BY SECTION 2(15) AND NOT BY ITS RESIDUARY SEGMENT. THE PROVISO TO SECTION 2(15) THUS INDEED HAS NO APPLICATION IN THE MATTER. AS FOR THE DENIAL OF DE DUCTION IN RESPECT OF EXPENSES LIKE ASSISTANCE TO VOLUNTARY AGENCIES, MANAGEMENT ASSIST ANCE AND TRAINING, PUBLIC EDUCATION PROGRAMME, RESEARCH AND PUBLICATIONS AND EXPENSES F OR COMMUNITY SERVICE, THAT IS ONLY CONSEQUENTIAL IN NATURE INASMUCH AS THE DEDUCTIONS WERE DECLINED IN COMPUTATION OF BUSINESS INCOME FROM GARBA EVENT BUT THEN ONCE THE PROVISO T O SECTION 2(15) IS HELD TO BE INAPPLICABLE ON THE FACTS OF THIS CASE, THESE EXPENSES ARE TO BE TREATED AS APPLICATION OF INCOME. LEARNED REPRESENTATIVES DO NOT DISPUTE THIS POSITION. 14. IN VIEW OF THESE DISCUSSIONS, AS ALSO BEARING I N MIND ENTIRETY OF THE CASE, WE ARE IN CONSIDERED AGREEMENT WITH THE WELL REASONED CONCLUS IONS ARRIVED AT BY THE LEARNED CIT(A) AND WE, THEREFORE, DECLINE TO INTERFERE IN THE MATT ER. 15. IN THE RESULT, ITA NO. 3565/AHD/16 IS DISMISSED . ITA NOS.: 772 AND 2656/AHD/17, 426, 2657 AND 2658/A HD/17 ASSESSMENT YEARS: 2009-10, 10-11, 12-13, 13-14 AND 14-15 16. LEARNED REPRESENTATIVES FAIRLY AGREE THAT WHATE VER WE DECIDE IN THE ABOVE APPEAL WILL ALSO APPLY MUTATIS MUTANDIS IN THE ALL THE REMAINING FIVE APPEALS AS WELL, EVE N THOUGH THERE IS A SLIGHT VARIATION IN WORDINGS OF THE GROUNDS OF AP PEAL, BECAUSE, IN SUBSTANCE, THE GRIEVANCES REMAIN THE SAME, AND THE CIT(A) HAS ONLY FOLLOWED H IS ORDER IMPUGNED IN THE ABOVE APPEAL. IN VIEW OF THIS ADMITTED POSITION, THESE REMAINING FIVE APPEALS MUST ALSO FAIL. 17. IN THE RESULT, ALL THE SIX APPEALS ARE DISMISSE D. PRONOUNCED IN THE OPEN COURT TODAY ON THE 25 TH DAY OF JUNE, 2019. SD/- SD/- JUSTICE P P BHATT PRAMOD KUMAR (PRESIDENT) (VI CE-PRESIDENT) AHMEDABAD, DATED THE 25 TH DAY OF JUNE, 2019 ITA NOS.: 772 AND 2656/AHD/17, 3565/AHD/16, 426, 265 7 AND 2658/AHD/17 ASSESSMENT YEARS: 2009-10, 10-11, 11-12, 12-13, 13- 14 AND 14-15 PAGE 15 OF 15 COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) CIT (4) CIT(A) (5) DR (6) GUARD FILE BY ORDER TRUE COPY ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD