The Dy,DIT.,(Exemp)., Ahmedabad V. Ahmedabad Management Association , Ahmedabad

ITA 309/AHD/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 6223 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 2 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-04-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 06-04-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 31-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJESH MEENA
• Keywords: Charitable institution
• Section: 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH (BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER) ITA. NO: 309/AHD/2014 (ASSESSMENT YEAR: 2010-11) DEPUTY DIRECTOR OF INCOME-TAX (EXEMPTION), AHMEDABAD V/S AHMEDABAD MANAGEMENT ASSOCIATION ATIRA CAMPUS, DR, VIKRAM SARABHAI MARG, AHMEDABAD-380 015 (APPELLANT) (RESPONDENT) PAN: AAATA 5881D APPELLANT BY : SHRI RAJESH MEENA, SR. D. R. RESPONDENT BY : SHRI JIGAR PATEL, A.R. ( )/ ORDER DATE OF HEARING : 06 -04-201 7 DATE OF PRONOUNCEMENT : 12 -04-2017 PER N.K. BILLAIYA, ACCOUNTANT MEMBER: 1. THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD. CIT(A)- XXI, AHMEDABAD DATED 28.11.2013 PERTAINING TO A.Y. 2010-11. ITA NO. 309/ AHD/2014 . A.Y. 2010-11 2 2. THE SUM AND SUBSTANCE OF THE GRIEVANCE OF THE REVEN UE IS THAT THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN HOLDING THAT THE ACTIV ITIES OF THE ASSESSEE ARE IN THE FIELD OF EDUCATION AND THAT THE ASSESSEE WAS EL IGIBLE FOR EXEMPTION U/S. 11(1) OF THE ACT. 3. AT THE VERY OUTSET, THE LD. COUNSEL FOR THE ASSESSE E STATED THAT THE ISSUE HAS BEEN DECIDED BY THE HONBLE JURISDICTIONAL HIGH COU RT IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE BY ORDER DATED 13. 06.2014 IN TAX APPEAL NO. 707 OF 2013. 4. THE LD. D.R. COULD NOT BRING ANY DISTINGUISHING DEC ISION IN FAVOUR OF THE REVENUE. 5. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE ORD ERS OF THE AUTHORITIES BELOW. WE FIND THAT THE ISSUE HAS BEEN DECIDED BY T HE HONBLE JURISDICTIONAL HIGH COURT OF GUJARAT IN FAVOUR OF T HE ASSESSEE AND AGAINST THE REVENUE IN ASSESSEES OWN CASE IN TAX APPEAL NO .707 OF 2013. THE RELEVANT FINDINGS OF THE HONBLE HIGH COURT READS A S UNDER:- 5.7 NOW IN VIEW OF THE AFORESAID FINDING THAT THE ACTIVITIES OF THE ASSESSEE IS IN THE FIELD OF EDUCATION, WHETHER THE ASSESSEE IS ENTITLED 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 SECT ION 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 SECTI ON 2(15) OF THE ACT IS ITA NO. 309/ AHD/2014 . A.Y. 2010-11 3 CONCERNED, AS SUCH THE SAME HAS BEEN EXPLAINED VIDE CIRCULAR NO. 11/2008 DATED 19/12/2008- IT IS CLARIFIED THAT WHERE INDUST RIES OR TRADE ASSOCIATION CLAIM BOTH TO BE CHARITABLE INSTITUTIONS AS WELL AS MUTUAL ORGANIZATIONS AND THEIR ACTIVITIES ARE RESTRICTED TO CONTRIBUTIONS FR OM AND PARTICIPATION OF ONLY THEIR MEMBERS, THESE WOULD NOT FALL UNDER THE PURVI EW OF THE PROVISO TO SECTION 2(15) OF THE ACT OWING TO THE PRINCIPLES OF MUTUALITY. FROM THE CIRCULAR NO. 11/2008 DATED 19/12/2008 IT APPEARS TH AT THE THE NEWLY INSERTED PROVISO TO SECTION 2(15) OF THE ACT WILL APPLY TO E NTITIES WHOSE PURPOSE IS ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY I.E. FOURTH LIMB OF DEFINITION OF 'CHARITABLE PURPOSE 1 CONTAINED IN SECTION 2(15) OF THE ACT AND HENCE SUCH ENTITIES WILL NOT BE ELIGIBLE FOR EXEMPT ION UNDER SECTION 11 OR UNDER SECTION 10(23C) OF THE ACT IF THEY CARRY ON C OMMERCIAL ACTIVITIES. THUS, ON FAIR READING OF SECTION 2(15) OF THE ACT T HE NEWLY INSERTED PROVISION SECTION 2(15) OF THE ACT WILL NOT APPLY IN RESPECT OF THE FIRST THREE LIMBS OF SECTION 2(15) OF THE ACT I.E. RELIEF TO THE POOR; E DUCATION OR MEDICAL RELIEF. THUS, WHERE THE PURPOSE OF A TRUST OR INSTITUTION I S RELIEF OF THE POOR; EDUCATION OR MEDICAL RELIEF, IT WILL CONSTITUTE 'CHARITABLE P URPOSE' EVEN IF IT INCIDENTALLY INVOLVES THE CARRYING ON OF THE COMMERCIAL ACTIVITI ES. THUS, ON FAIR READING OF SECTION 2(15) OF THE ACT READ WITH CIRCULAR NO.11/2008 DATED 19/12/2008 IT APPEARS THAT IF THE CASE OF THE ASSESSEE DOES NOT F ALL WITHIN THE FIRST THREE LIMBS OF SECTION 2(15) OF THE ACT I.E. RELIEF TO TH E POOR; EDUCATION OR MEDICAL RELIEF AND IF IT FALLS IN THE FOURTH LIMB I.E. ADVA NCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY AND IT IS FOUND THAT SUCH AC TIVITY OF ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY INVOLVES CAR RYING ON OF (A) ANY ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINESS; OR (B) A NY 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, THE SAM E SHALL NOT BE CONSIDERED ITA NO. 309/ AHD/2014 . A.Y. 2010-11 4 FOR 'CHARITABLE PURPOSE' AND SHALL NOT BE ENTITLED T O EXEMPTION UNDER SECTION 11 OF THE ACT. 5.8 IN THE PRESENT CASE, AS OBSERVED HEREINABOVE AND 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 ACT AND, THEREFORE, WOULD BE ENTITLED TO EXEMPTION UNDER SECTION 11 OF THE ACT. 6. IN VIEW OF THE ABOVE, WE ARE IN COMPLETE AGRE EMENT 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. 7. UNDER THE CIRCUMSTANCES, THE QUESTION RAISED IN THE PRESENT TAX APPEAL IS ANSWERED AGAINST THE REVENUE AND IN FAVOUR OF THE A SSESSEE. CONSEQUENTLY, THE PRESENT TAX APPEAL DESERVES TO BE DISMISSED AND IS ACCORDINGLY DISMISSED. HOWEVER, IN THE FACTS AND CIRCUMSTANCES OF THE CASE , THERE SHALL BE NO ORDER AS TO COSTS. 6. RESPECTFULLY, FOLLOWING THE JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT (SUPRA), WE DECLINE TO INTERFERE WITH THE FIN DINGS OF THE FIRST APPELLATE AUTHORITY. ITA NO. 309/ AHD/2014 . A.Y. 2010-11 5 7. APPEAL FILED BY THE REVENUE IS ACCORDINGLY DISMISSE D. ORDER PRONOUNCED IN OPEN COURT ON 12 - 04- 20 17 SD/- SD/- (MAHAVIR PRASAD) (N. K. BILLAIYA) JUDICIAL MEMBER TRUE COPY ACCOUNTANT MEMBER AHMEDABAD: DATED 12/04/2017 RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHME DABAD