DCIT (E), New Delhi V. M/s National Association of Software and Services Companies (NASSCOM), New Delhi

ITA 3237/DEL/2016

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 9271 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 7 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-01-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2010-2011
• Appeal Filed On: 02-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: H N MEENA
• Section: 143(3); 13; 12; 11

Judgement Text

ITA NO.- 3237/DEL/2016. NATIONAL ASSOCIATION OF SOFTWARE AND SERVICES COMPA NIES PAGE 1 OF 23 IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH: C: NEW DELHI) BEFORE SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER AND SHRI ANADEE NATH MISSHRA, ACCOUNTANT MEMBER ITA NO:- 3237/DEL/2016 ( ASSESSMENT YEAR: 2010-11) DY. COMMISSIONER OF INCOME - TAX (E), CIRCLE-2(1), NEW DELHI. VS. M/S NATIONAL ASSOCIATION OF SOFTWARE AND SERVICE COMPANIES (NASSCOM), INTERNATIONAL YOUTH CENTRE, 2 ND FLOOR, PT. UMA SHANKAR DIXIT MARG, CHANKYAPURI, NEW DELHI-110066. PAN NO: AAATN2595F APPELLANT RESPONDENT REVENUE BY : SHRI H.N. MEENA, SR. DR ASSESSEE BY : SHRI DEEPESH JAIN, CA ORDER PER ANADEE NATH MISSHRA, AM [A] THIS APPEAL HAS BEEN FILED BY REVENUE AGAINST THE IMPUGNED APPELLATE ORDER DATED 14.03.2016 PASSED BY LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-36, NEW DELHI, [IN SHORT, LD.CIT(A)] PERTAINING TO ASSESS MENT YEAR 2010-11, ON THE FOLLOWING GROUNDS: 1. ON THE FACTS AND CIRCUMSTANCES OF AND IN LAW, LD. CIT(A) HAS ERRED IN LAW IN ALLOWING THE APPEAL OF THE ASSESSEE IGNORING THE FACT THAT THE ACTIVITIES OF THE ASSESSEE IS IN THE NATURE OF TRADE, COMMERCE OR BUSINESS OR ANY ACTIVITY ITA NO.- 3237/DEL/2016. NATIONAL ASSOCIATION OF SOFTWARE AND SERVICES COMPA NIES PAGE 2 OF 23 OF RENDERING ANY SERVICE IN RELATION TO ANY TRADE, COMMERCE OR BUSINESS FOR CESS OR FEE OR ANY OTHER CONSIDERATION, IRRESPECTIV E OF THE NATURE OF USE OR APPLICATION, OR RETENTION OF THE INCOME FROM SUCH A CTIVITIES. THE ASSESSEE FALLS IN THE LAST CATEGORY OF GENERAL PUBLIC UTILIT Y AS PER THE DEFINITION OF SEC. 2(15) OF I.T. ACT 1961 AND NOT ENTITLED TO CARRY ON ANY BUSINESS OR COMMERCIAL ACTIVITY. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, LD. CIT(A) HAS ERRED IN LAW IN ALLOWING THE APPEAL OF THE ASSESSEE IGNORING THE FACT THAT ASSESSEE CHARGES SUBSCRIPTION FEE ON THE BASIS OF T URNOVER FROM THE MEMBERS AND VOTING RIGHT IS AS PER SUBSCRIPTION OF FEES. SO, THE VOTING RIGHT TO MEMBERS IS ACTUALLY BASED ON THE TURNOVER, WHICH IS VIOLATING OF THE PRINCIPLE OF MUTUALITY. 3. THE APPELLANT CRAVES LEAVE TO ADD, TO ALTER OR A MEND ANY GROUND OF APPEAL RAISED ABOVE AT THE TIME OF HEARING. [B] ASSESSMENT ORDER DATED 18.03.2013 WAS PASSED BY TH E ASSESSING OFFICER (AO, FOR SHORT) UNDER SECTION 143(3) OF THE INCOME TAX A CT, 1961 (I.T. ACT, FOR SHORT) WHEREIN THE TOTAL INCOME WAS ASSESSED AT RS. 12,14, 81,569/- AGAINST RETURNED INCOME AT NIL. THE ADDITION OF RETURNED INCOME OF ASSESSEE W AS MADE BY THE AO BASED ON HIS CONCLUSION THAT EXEMPTION UNDER SECTION 11 & 12 OF I.T. ACT WAS TO BE DENIED TO THE ASSESSEE AND THAT THE ASSESSEE SOCIETY WAS TO BE AS SESSED AS NORMAL AOP (ASSOCIATION OF PERSON). THE RELEVANT PORTION OF THE ASSESSMENT ORDER DATED 18.03.2013 IS REPRODUCED AS UNDER: ITA NO.- 3237/DEL/2016. NATIONAL ASSOCIATION OF SOFTWARE AND SERVICES COMPA NIES PAGE 3 OF 23 ITA NO.- 3237/DEL/2016. NATIONAL ASSOCIATION OF SOFTWARE AND SERVICES COMPA NIES PAGE 4 OF 23 ITA NO.- 3237/DEL/2016. NATIONAL ASSOCIATION OF SOFTWARE AND SERVICES COMPA NIES PAGE 5 OF 23 ITA NO.- 3237/DEL/2016. NATIONAL ASSOCIATION OF SOFTWARE AND SERVICES COMPA NIES PAGE 6 OF 23 ITA NO.- 3237/DEL/2016. NATIONAL ASSOCIATION OF SOFTWARE AND SERVICES COMPA NIES PAGE 7 OF 23 ITA NO.- 3237/DEL/2016. NATIONAL ASSOCIATION OF SOFTWARE AND SERVICES COMPA NIES PAGE 8 OF 23 ITA NO.- 3237/DEL/2016. NATIONAL ASSOCIATION OF SOFTWARE AND SERVICES COMPA NIES PAGE 9 OF 23 ITA NO.- 3237/DEL/2016. NATIONAL ASSOCIATION OF SOFTWARE AND SERVICES COMPA NIES PAGE 10 OF 23 [C] AGGRIEVED, THE ASSESSEE FILED APPEAL BEFORE THE LD . CIT(A). VIDE IMPUGNED APPELLATE ORDER DATED 14.03.2016, THE LD. CIT(A), F OLLOWING THE ORDER OF THE LD. CIT(A) FOR THE ASSESSMENT YEAR (A.Y. 2009-10) ALLOWED THE ASSESSEES APPEAL HOLDING THAT: THE MEMBERSHIP FEES RECEIVED BY THE ASSESSEE FROM I TS OWN MEMBERS COMES WITHIN THE MEANING OF PRINCIPLE OF MUTUALITY AND AS SUCH THE N ET INCOME OF THE ASSESSEE FROM ITS OWN MEMBER IS EXEMPT FROM TAX . THE RELEVANT PORTION OF THE ORDER OF LD. CIT(A) IS REPRODUCED AS UNDER: ITA NO.- 3237/DEL/2016. NATIONAL ASSOCIATION OF SOFTWARE AND SERVICES COMPA NIES PAGE 11 OF 23 ITA NO.- 3237/DEL/2016. NATIONAL ASSOCIATION OF SOFTWARE AND SERVICES COMPA NIES PAGE 12 OF 23 ITA NO.- 3237/DEL/2016. NATIONAL ASSOCIATION OF SOFTWARE AND SERVICES COMPA NIES PAGE 13 OF 23 [C.1] THE PRESENT APPEAL HAS BEEN FILED BY REVENUE AGAIN ST THE IMPUGNED APPELLATE ORDER DATED 14.03.2016 OF THE LD. CIT(A). AT THE T IME OF HEARING BEFORE US, THE LD. AR OF THE ASSESSEE SUBMITTED AT THE OUTSET THAT THE IS SUE IN DISPUTE IN THE PRESENT APPEAL IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE, BY THE ORDERS OF THE CO-ORDINATE BENCH OF ITAT, DELHI IN ASSESSEES OWN CASE; VIDE ORDER DATE D 20.09.2019 IN ITA NO. 6521/DEL/2013 FOR ASSESSMENT YEAR 2009-10 AND ORDER DATED 05.11.2019 IN ITA NO. 5738/DEL/2016 FOR ASSESSMENT YEAR 2012-13. THE LEA NED DEPARTMENTAL REPRESENTATIVE (LD. DR, FOR SHORT) AGREED THAT THE ISSUE IN DISP UTE IN THE PRESENT APPEAL IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE, VIDE THE AFORESA ID ORDERS DATED 20.09.2019 AND 05.11.2019 OF CO-ORDINATE BENCH OF ITAT, DELHI. NE ITHER SIDE HAS BROUGHT ANY DISTINGUISHING FACTS AND CIRCUMSTANCES TO OUR ATTEN TION TO PERSUADE US TO TAKE A VIEW ITA NO.- 3237/DEL/2016. NATIONAL ASSOCIATION OF SOFTWARE AND SERVICES COMPA NIES PAGE 14 OF 23 DIFFERENT FROM VIEW ALREADY TAKEN BY THE CO-ORDINAT E BENCH OF ITAT, DELHI BY AFORESAID ORDER DATED 20.09.2019 AND 05.11.2019; AND BOTH SID ES WERE IN AGREEMENT AT THE TIME OF HEARING BEFORE US, THAT FACTS AND CIRCUMSTANCES FOR THIS YEAR (A.Y. 2010-11) AND IDENTICAL TO FACTS AND CIRCUMSTANCES OF ASSESSMENT YEAR 2009-10 AND ASSESSMENT YEAR 2012-13 TO WHICH AFORESAID ORDERS DATED 20.09.2019 AND 05.11.2019 OF CO-ORDINATE BENCH OF ITAT, DELHI CORRESPOND. [D] WE HAVE HEARD BOTH SIDES. WE HAVE PERUSED THE MAT ERIALS AVAILABLE ON RECORD. WE FIND THAT THE LD. CIT(A) HAS FOLLOWED THE DECISI ON OF HER PREDECESSOR IN ASSESSMENT YEAR 2009-10. FOR ASSESSMENT YEAR 2009-10, CO-ORDI NATE BENCH OF ITAT, DELHI HAS ALREADY TAKEN A VIEW IN AFORESAID ORDER DATED 20.09 .2019 IN ITA NO. 6521/DEL/2013 IN FAVOUR OF THE ASSESSEE. THE RELEVANT PORTION OF TH E AFORESAID ORDER DATED 20.09.2019 OF CO-ORDINATE BENCH OF ITAT, DELHI FOR ASSESSMENT YEA R 2009-10 IN ITA NO. 6521/DEL/2013 IS REPRODUCED AS UNDER: ITA NO.- 3237/DEL/2016. NATIONAL ASSOCIATION OF SOFTWARE AND SERVICES COMPA NIES PAGE 15 OF 23 ITA NO.- 3237/DEL/2016. NATIONAL ASSOCIATION OF SOFTWARE AND SERVICES COMPA NIES PAGE 16 OF 23 ITA NO.- 3237/DEL/2016. NATIONAL ASSOCIATION OF SOFTWARE AND SERVICES COMPA NIES PAGE 17 OF 23 ITA NO.- 3237/DEL/2016. NATIONAL ASSOCIATION OF SOFTWARE AND SERVICES COMPA NIES PAGE 18 OF 23 ITA NO.- 3237/DEL/2016. NATIONAL ASSOCIATION OF SOFTWARE AND SERVICES COMPA NIES PAGE 19 OF 23 [D.1] FOR ASSESSMENT YEAR 2012-13 ALSO, CO-ORDINATE BENC H OF ITAT, DELHI HAS ONCE AGAIN DECIDED THE ISSUE IN DISPUTE IN FAVOUR OF THE ASSESSEE, BY FOLLOWING THE AFORESAID ORDER DATED 20.09.2019 OF CO-ORDINATE BENCH OF ITAT , DELHI FOR ASSESSMENT YEAR 2009- 10. THE RELEVANT PORTION OF THE ORDER DATED 5.11.20 19 OF CO-ORDINATE BENCH OF ITAT, DELHI FOR ASSESSMENT YEAR 2012-13 IN ITA NO. 5738/D EL/2016 IS REPRODUCED AS UNDER: ITA NO.- 3237/DEL/2016. NATIONAL ASSOCIATION OF SOFTWARE AND SERVICES COMPA NIES PAGE 20 OF 23 ITA NO.- 3237/DEL/2016. NATIONAL ASSOCIATION OF SOFTWARE AND SERVICES COMPA NIES PAGE 21 OF 23 [D.2] IT IS NOT IN DISPUTE THAT THE FACTS AND CIRCUMSTAN CES FOR THIS YEAR ARE IDENTICAL TO FACTS AND CIRCUMSTANCES FOR ASSESSMENT YEARS 2009-1 0 TO 2012-13 FOR WHICH VIDE AFORESAID ORDERS DATED 20.09.2019 AND 05.11.2019, C O-ORDINATE BENCH OF ITAT, DELHI HAS ALREADY DECIDED THE ISSUE IN FAVOUR OF THE ASSE SSEE. RESPECTFULLY FOLLOWING THE AFORESAID ORDERS DATED 20.09.2019 AND 05.11.2019 OF CO-ORDINATE BENCH OF ITAT, DELHI IN ASSESSEES OWN CASE, FOR ASSESSMENT YEARS 2009- 10 AND 2012-13; WE ALSO DECIDE THE ISSUE IN DISPUTE BEFORE US IN FAVOUR OF THE ASSESSE E. ACCORDINGLY, WE DECLINE TO INTERFERE ITA NO.- 3237/DEL/2016. NATIONAL ASSOCIATION OF SOFTWARE AND SERVICES COMPA NIES PAGE 22 OF 23 WITH THE AFORESAID IMPUGNED APPELLATE ORDER DATED 1 4.03.2016 OF LD. CIT(A). RESULTANTLY, THIS APPEAL FILED BY REVENUE IS DISMIS SED. [E] IN THE RESULT, APPEAL OF REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 09 /01/20. SD/- SD/- (SUDHANSHU SRIVASTAVA) (ANADEE NA TH MISSHRA) JUDICIAL MEMBER ACCOUNT ANT MEMBER DATED: 09/01/20. POOJA/- COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI ITA NO.- 3237/DEL/2016. NATIONAL ASSOCIATION OF SOFTWARE AND SERVICES COMPA NIES PAGE 23 OF 23 DATE OF DICTATION DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER