THE INDUS ENTREPRENEURS, MUMBAI V. DDIT (E) 1(2), MUMBAI

ITA 3437/MUM/2016

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 6727 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 8 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-01-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2010-2011
• Appeal Filed On: 17-05-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: CHAITANYA ANJARIA
• Assessee Lawyers: ABHISHEK TILAK; ARIJIT CH AURAVA
• Keywords: Charitable institution; Competent authority
• Section: 142(1); 195; 2; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE SHRI SHAMIM YAHYA, AM AND SHRI RAVISH SOOD, JM ITA NO S . 3437 & 3438 /MUM/ 2016 (ASSESSMENT YEAR S : 2010 - 11 & 2011 - 12 ) THE INDUS ENTREPRENEURS ONE INDIABULLS CENTRE, 6 TH FLOOR, TOWER 2A, SENAPATI BAPAT MARG, LOWER PAREL, MUMBAI - 400 013 VS. DY. CIT (EXEMPTIONS) - 1(2) PIRAMAL CHAMBERS, LALBAUG, PAREL, MUMBAI - 400 012 PAN/GIR NO. AAATT 4547 P ( APPELLANT ) : ( RESPONDENT ) APPELLANT BY : SHRI ARIJIT CH AURAVA & SHRI ABHISHEK TILAK RESPONDENT BY : SHRI CHAITANYA ANJARIA DATE OF HEARING : 30.10.2018 DATE OF PRONOUNCEMENT : 22.01 .2019 O R D E R PER SHAMIM YAHYA, A. M.: THESE ARE APPEAL S BY THE ASSESSEE AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 1, MUMBAI (LD.CIT(A) FOR SHORT) DATED 17.02.2016 AND PERTAINS TO THE ASSESSMENT YEAR S (A.Y.) 2010 - 11 & 2011 - 12 RESPECTIVELY. 2. SINCE THE ISSUES ARE COMMON AND CONNECTED AND THE APPEALS WERE HEARD TOGETHER, THESE HAVE BEEN CONSOLIDATED AND DISPOSED OF BY THIS COMMON ORDER. 3. THE COMMO N GROUNDS OF APPEAL READ AS UNDER: DENIAL OF EXEMPTION UNDER SECTION 11 OF THE INCOME - TAX ACT, 1961 1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW. CIT (A) - L ERRED IN UPHOLDING / CONFIRMING THE ACTION OF A O THAT THE ACTIVITIES CONDUCTED BY THE APPELLANT DO E S NOT FALL \ \ IIHIN THE MEANING OF EDUCATION AS INCLUDED IN THE DEFINITION OF CHARITABLE PURPOSE UNDER SECTION 2(15) 2 ITA NOS. 3437 & 3438/MUM/2016 2) W IT HOUT PREJUDICE TO THE ABOVE, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW. CIT(A) - 1 ERRED IN UPHOLDING / CONFIRMING THE ACTION OF AC) THAT THE APPELLANT IS HIT BY THE PROVISO TO SECTION 2(15) ON THE GROUNDS THAT THE ACTIVITIES OF THE APPELLANT ARC COMMERCIAL IN NATURE NON - APPLICABILITY OF PRINCIPLE OF MUTUALITY 3) WITHOUT PREJUDICE TO (HE ABOVE, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE EASE AND IN LAW. CIT(A) - 1 ERRED IN UPHOLDING / CONFIRMING THE ACTION OF AO THAT THE CONDITIONS FOR APPLICABILITY OF THE PRINCIPLE OF MUTUALITY CONCEPT AR E NOT SATISFIED BY THE APPELLANT EACH OF THE ABOVE GROUNDS OF APPEAL ARE INDEPENDENT AND WITHOUT PREJUDICE TO EACH OTHER. 4. THE ASSESSEE HAS ALSO FILED COMM ON ADDITIONAL GROUND WHICH READ AS UNDER: 4. WITHOUT PREJUDICE TO FACT THAT THE ACTIVITY OF THE APPELLANT FALLS UNDER THE AMBIT OF EDUCATION UNDER SECTION 2(15) OF ACT, THE AO AND CIT(A) ERRED IN NOT APPRECIATING THAT SUCH ACTIVITIES OF THE APPELLANT ARE ALSO COVERED UNDER 'ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY AS INCLUDED IN THE DEFINITION OF CHARIT ABLE PURPOSE UNDER SECTION 2(15) OF THE ACT BUT DOES NOT FALL WITHIN THE AMBIT OF 'CARRYING ON OF ANY ACTIVITY IN THE NATURE OF TRADE COMMERCE OR BUSINESS / SERVICES IN AID THERETO' AS CONTAINED IN THE FIRST PROVISO TO SECTION 2(15) OF THE ACT. 5. SINCE T HE FACTS ARE IDENTICAL, THE LD. CIT(A) HAS FOLLOWED HIS ORDER OF A.Y. 2010 - 11 AND A.Y. 2011 - 12 BUT WE ARE REFERRING TO FACTS AND FIGURES FROM A.Y. 2010 - 11. 6. BRIEF FACTS OF THE CASE ARE AS UNDER: DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO NOTED THAT THE ASSESSEE TRUST HAS SHOWN AN INCOME OF RS. 4.53 COURSE FROM THE ACTIVITY OF ORGANIZING SEMINARS WHICH DOES NOT FALL WITHIN THE MEANING OF 'EDUCATION' AS CONTEMPLATED IN SECTION 2(15) OF THE INCOME TAX ACT 1961. ACCORDINGLY, A SHOW CAUSE NOTICE U/S . 142(1) OF THE I. T. ACT, DATED 21.01.2013 WAS I SSUED TO THE ASSESSEE . IN RESPONSE TO THE ABOVE SHOW CAUSE, ASSESSEE FILED ITS SUBMISSIONS VIDE LETTER DATED 13.02.2013. AFTER CONSIDERING SUBMISSION OF THE ASSESSEE , THE A.O. MENTIONED THE DETAILS OF VARIOU S PROGRAMMES/ COURSES/EVENTS RUN BY THE TRUST DURING THE YEAR. 7. THE AO FURTHER EXAMINED THE WEBSITE OF THE TRUST 'HTTPS://MUM BAI.TIE.ORG/PAGE/CHAPTER - OUR - NETWORK' AND THE STATEMENT. THE AO ON PERUSAL OF THE DETAILS 3 ITA NOS. 3437 & 3438/MUM/2016 OF PROGRAMS / EVENTS FURNISHED BY THE AS SESSEE DURING THE ASSESSMENT PROCEEDINGS AND THE DETAILS PUBLISHED ON THE WEBSITE OBSERVED AS UNDER: A. THAT THE ASSESSEE TRUST IS A PART OF A LARGER FOREIGN NETWORK B. THAT THE ASSESSEE IS ESSENTIALLY A NETWORKING ORGANIZATION FOR ENTREPRENEURS AND THE ACTIVITIES ARE PURELY TOWARDS THIS CAUSE. C. THAT IT IS NOT DENIED THAT THE TRUST IS ONLY CONDUCTING SEMINARS AND SHORT TERM COURSES ONLY. NONE OF THE EVENTS / PROGRAMS / COURSES ARE IN THE NATURE OF ROUTINE EDUCATIONAL ACTIVITY. D. THAT THE EVENTS / SEMINARS BEING CONDUCTED BY THE TRUST ARE OPEN TO NON - ME M BERS AND ARE CHARGEABLE. THE AMOUNTS BEING CHARGED ARE FAIRLY HIGH. IN VIEW OF THE ABOVE , THE AO CONCLUDED THAT THE INCOME OF RS. 4,53,50,303/ - SHOWN BY THE TRUST FROM THE ACTIVITY OF ORGANIZING SEMINARS ON ANGEL INVESTMENT, VENTURE CAPITAL & PRIVATE EQUITY ETC IS A COMMERCIAL, NON - CHARITABLE ACTIVITY. THEREFORE THE ACTIVITY OF THE TRUST IN ORGANIZING SEMINARS ON ANGEL INVESTMENT, VENTURE CAPITAL & PRIVATE EQUITY DOES NOT FALL WITHIN THE MEANING OF 'EDUCATION' AS CONTEMPLATED IN SECTION 2(15) OF THE IT. ACT. RELIANCE WAS PLACED ON SOLE TRUSTEE, LOKA SHIKSHONA TRUST V. COMMISSIONER OF INCOME TAX, MYSORE . 101 ITR 234 WHEREIN THE APEX COURT HAS HELD THAT WORD 'EDUCATION' HAS B EEN USED IN SECTION 2(15) IN THE SENSE OF DEVELOPING THE K NOWLEDGE, SKILL, MIND AND CHARACTER OF STUDENTS BY NORMAL SCHOOLING. FURTHER HON'BLE PATNA HIGH COURT, IN THE CASE OF BIHAR INSTITUTE OF MINING & MINING SURVEYING VS CIT 208 ITR 608, 615(PAT) HAS HE LD THAT COACHING /TRAINING OF STUDENTS TO APPEAR AT SOME SPECIFIED EXAMINATIONS UPON TAKING SPECIFIED SUM WOULD NOT BRING THE ASSESSEE UNDER PROVISIONS OF SECTION 2(15). 8. IN VIEW OF ABOVE THE ASSESSING OFFICER HELD THAT THE ACTIVITIES OF THE ASSESSEE BEING OUT SIDE THE SCOPE OF CHARITABLE ACTIVITIES, AS DEFINED UNDER SECTION 2(15) AND BEING COMMERCIAL AND NON - CHARITABLE IN NATURE, THE CLAIM OF EXEMPTION U/S 11 IS REJECTED. 4 ITA NOS. 3437 & 3438/MUM/2016 9. UPON THE ASSESSEES APPEAL, THE LD. CIT(A) CONSIDERED THE ASSESSEES SUBMISSION. BUT HE WAS NOT CONVINCED. HE UPHELD THE A.O.S ACTION AND HELD AS UNDER: I. THE APPELLANT SUBMITTED THAT ITS ACTIVITIES ARE 'EDUCATION' IN NATURE AND HENCE ITS CASE IS NOT COVERED BY PROVISO TO SECTION 2(15). IN THIS REGARD, IT IS MENTIONED THAT THE APPELLANT IS ORGANIZING ANNUAL FUNCTIONS WHEREIN CERTAIN WORKSHOPS ARE CARRIED OUT. FOR ALL SUCH WORKSHOP / SEMINAR / MEETING CONDUCTED BY THE APPELLANT, THERE IS A CHARGE W HETHER IT IS A MEMBER OR NON - MEMBER. DURING THE YEAR, OUT OF TOTAL FEES OF RS. 45.01 LAKHS, APPELLANT HAS RECEIVED RS. 24.45 L AKHS FROM MEMBERS AND RS. 20.38 LAKHS FROM NON - MEMBERS. ITHOUT ANY EXCEPTION, A CHARGE HAS BEEN LEVIED ON NON - MEMBERS. FURTHER, THE APPEILANT IS NOT AUTHORIZED TO ISSUE ANY CERTIFICATE / DEGREE. THE APPELLANT IS NOT HAVING ANY REGULAR FACULTY WHICH IS EVIDENT FROM THE FACT THAT NO EXPENDITURE ON ACCOUNT OF SALARY ETC. HAS BEEN DEBITED TO ITS INCOME AND EXPENDITURE ACCOUNT. THERE ARE NO CLASS ROOMS AS SUCH FOR IMPARTING EDUCATION ON REGULAR BASIS. HENCE, NO STUDENT AND TEACHER RELATION EXISTS BETWEEN THE SPEAKERS AND THE PERSONS ATTENDING THE SEMINARS / CONFERENCES. IN THE CASE OF SOLE TRUSTE E LOK SHIKSHAN TRUST 101 ITR 234 HON'BLE SUPREME COURT HAS CLEARLY OBSERVED THAT 'THE SENSE IN WHICH WORD EDUCATION HAS BEEN USED IN SECTION 2(15) IS THE SYSTEMATIC INSTRUCTION, SCHOOLING OR TRAINING GIVEN TO THE YOUNG IN PREPARATION FO R THE WORK OF LIFE. IT ALSO CONNOTES THE WHOLE COURSE OF SCHOLASTIC INSTRUCTION WHICH A PERSON HAS RECEIVED. THE WORD EDUCATION HAS NOT BEEN USED IN THAT WIDE AND EXTENSIVE SENSE ACCORDING TO WHICH EVERY ACQUISITION OF FURTHER KNOWLEDGE CONSTITUTES EDUCATION . WHAT EDUCATION CONNOTES IN THAT CLAUSE IS THE PROCESS OF TRAINING AND DEVELOPING THE KNOWLEDGE , SKILL , MIND AND CHARACTER OF STUDENTS BY NORMAL SCHOOLING'. FROM THESE OBSERVATIONS OF THE HON'BLE APEX COURT IT IS NOTED THAT THE CONDITIONS PRESCRIBED FOR ANY ENTITY TO FALL UNDER THE TERM 'EDUCATION' HAVE NOT BEEN FULFILLED BY THE APPELLANT AS PER THE FACTS GIVEN ABOVE. I I . FURTHER, FORMAL EDUCATION PRE - SUPPOSES APPROVAL BY EDUCATION BODIES OF CENTRAL / STATE GOVT. IT IS APPARENT FROM THE SU BMISSION MADE THAT NONE OF THE COURSES OFFERED ARE RECOGNIZED AS SUCH BY ANY COMPETENT AUTHORITY. IT IS FACT THAT THE ASSESSEE INSTITUTE HAS NOT GOT ANY RECOGNITION BY ANY OTHER COMPETENT AUTHORITY AT CENTRAL OR STATE LEVEL WHICH RECOGNIZES / APPROVES THE EDUCATIONAL COURSES. IN THE CASE OF BIHAR INSTITUTE OF MINING AND MINES SURVEYING 208 ITR 608 IT WAS HELD THAT THE INSTITUTION WHICH ARE NOT AUTHORIZED, CANNOT BE SAID TO HAVE ANY ELEMENT OF NORMAL SCHOOLING. SPECIAL REFERENCE IS MADE TO THE THIRD LAST PAR A OF THE SAID ORDER WHERE THE HON'BLE COURT TOOK COGNIZANCE OF THE FACT THAT THE INSTITUTE WAS NOT RECOGNIZED. THUS, SINCE THE APPELLANT IS NOT IMPARTING EDUCATION DURING THE YEAR, PROVISO TO SECTION 2(15) IS SQUARELY APPLICABLE. III. THE APPELLANT WITHOUT PREJUDICE SUBMITTED THAT ALTHOUGH ITS ACTIVITIES ARE IN THE NATURE OF 'ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY', YET THEY ARE N O T IN THE NATURE OF BUSINESS, TRADE OR PROFESSION OR SERVICES IN RELATION TO BUSINESS, TRADE OR PROFESSION. TH E APPELLANT CLAIMED THAT ITS ACTIVITIES ARE NOT LIMITED FOR MEMBERS BUT ALSO TO GENERAL PUBLIC. IN THIS REGARD IT IS MENTIONED THAT AS PER CLAUSE 5.5 OF THE MEMORANDUM OF ASSOCIATION, THE 'CHARTER MEMBERSHIP' IS RESTRICTED TO PERSONS WHO ARE SUCCESSFUL VET ERAN ENTREPRENEURS, CORPORATE EXECUTIVES, AND SENIOR PROFESSIONALS ONLY WHICH IS BY INVITATION ONLY. THUS, THIS MEMBERSHIP IS NOT OPEN FOR GENERAL PUBLIC. SIMILARLY, 'HONORARY MEMBERSHIP' IS RESTRICTED TO THE MEMBERS WHO ARE PROMINENT INDIVIDUALS OF STANDI NG AND REPUTE FOR WHICH APPROVAL OF GOVERNING COUNCIL IS REQUIRED. AGAIN FOR 'ASSOCIATE MEMBERS' AND 'CORPORATE MEMBERS' APPROVAL OF GOVERNING COUNCIL IS REQUIRED. 5 ITA NOS. 3437 & 3438/MUM/2016 THUS THE MEMBERSHIP IS RESTRICTED AND HENCE THE CLAIM OF THE APPELLANT THAT IT IS OPEN TO GE NERAL PUBLIC IS FACTUALLY NOT CORRECT. IV . APPELLANT SUBMITTED THAT IT DOES NOT RENDER ANY SERVICES FOR FEE IN CONNECTION WITH BUSINESS, TRADE OR COMMERCE. IN THIS REGARD IT IS MENTIONED THAT DURING THE YEAR UNDER CONSIDERATION, THE APPELLANT HAS RECEIVED MEETING INCOME OF RS. 45.01 LAKH S AND SPONSORSHIP INCOME OF RS. 3.58 CRORES. THE APPELLANT HAS CONDUCTED SEMINARS ETC, FOR WHICH A CHARGE HAS BEEN LEVIED. THE SPONSORS LIKE AKRUTI CITY LTD, ADANI ENTERPRISES, KPMG, ESSAR OIL LTD. AND ESSAR STEEL LTD. HAVE PAID RS.25 LAKHS EACH, TATA SONS RS.20 LAKHS, ICICI BANK LTD. RS .26.87 LAKS FOR SPONSORING ITS ANNUAL FUNCTION AND IN TURN, THE APPELLANT HAS PROVIDED THEM SERVICES OF BRANDING ON ALL SPONSOR PANELS, SOCIAL MEDIA, WEBSITE & EMAILER BRANDING, VENUE VIDEO ADS [IN WORKSHOP CLASSROOM], IN AUDITORIUM / CLASSROOM BRANDING, S TANDEE OUTSIDE AUDITORIUM / WORKSHOP CLASSROOM, CONTACT DETAILS OF WORKSHOP ATTENDEES AND 30/50/100 PASSES FOR TIE SUMMIT DEPENDING UPON TH EIR CONTRIBUTION FORM THESE FACTS IT IS VERY CLEAR THAT THE APPELLANT IS RENDERING SERV ICES FOR A F EE WHICH IS IN THE NATURE OF TRADE, COMMERCE OR BUSINESS. IN THE CA SE OF ACIT VS THE TRIBUNE TRUST, ITAT (CHANDIGARH) IN ITA NO. L273/CHD/2012 IT WAS HELD THAT DERIVING INCOME FROM ADVERTISEMENT ETC. IS NOT CHARITABLE PURPOSE / ACTIVITY. FURTHER IT IS NOTED THAT AGAINST THESE RECEIPTS, AN EXPENDITURE OF RS. 3 CRORES HAS BEEN MADE WHICH INCLUDES EVENT MANAGEMENT EXPENSES, SUMMIT EXPENSES, EXPENDITURE ON FOOD AND BEVERAGES, VIDEOGRAPHY ETC. THE NATURE OF THESE EXPENSES FURTHER STRENGTHS THE FACT THAT THE APPELLANT IS ENGAGED IN T HE BUSINESS OF RENDERING SERVICES FOR A FEE WHICH IS LIKE ANY OTHER BUSINESS/COMMERCIAL ACTIVITY CARRIED OUT BY ANY BUSINESS/ ENTITY IN THE MARKET. ON THIS ACCOUNT ALSO, PROVISO TO SECTION 2(15) IS APPLICABLE. V. THE APPELLANT CONTENDED THAT IT IS A NON - PROFIT ENTITY AND IT RECEIVES FUNDS TO MEET ITS OPERATIVE COST WITHOUT MOTIVE TO EARN PROFIT. IN THIS REGARD IT IS MENTIONED THAT DURING THE YEAR APPELLANT HAS GENERATED A SURPLUS OF RS.1.22 CRORES AND HENCE CONTENTION OF THE APPELLANT IS NOT CORRECT. EVEN IN SUBSEQUENT YEAR SURPLUS OF RS. 42.29 LAKHS IS SHOWN IN THE INCOME & EXPENDITURE ACCOUNT, HERE IT WOULD BE RELEVANT TO MENTION THAT IF A CHARITABLE ORGANIZATION CARRYING OUT OBJECTS OF 'ADVANCEMENT OF GENERAL PUBLIC UTILITY' IS INVOLVED IN CARRYING ON A NY ACTIVITY IN THE NATURE OF TRADE, COMMERCE, BUSINESS OR IS CHARGING FEES FOR SERVICES IN RELATION TO ANY TRADE, COMMERCE, BUSINESS, IS EXCLUDED FROM BEING 'CHARITABLE.' THE PROFIT MOTIVE BEHIND SUCH BUSINESS, COMMERCE OR TRADE ACTIVITY IS NOT REQUIRED TO BE SEPARATELY EXAMINED AND PROVED FOR APPLICABILITY OF PROVISO TO SECTION 2(15). THE SPECIFIC AMENDMENT BY WAY OF PROVISO TO SECTION 2(15) W.E.F. A.Y. 2009 - 10 DOES NOT PROVIDE FOR CARRYING OUT BUSINESS TRADE OR COMMERCE PER SE FOR APP LICABILITY OF PROVISO, RATHER THE STIPULATION IN THE PROVISO IS I N RELATION TO' WHICH IS TO BE INTERPRETED AND APPLIED IN THAT CONTEXT IN A WIDER TERM AND NOT TO BE CONFINED TO CARRYING OUT TRADE, BUSINESS AND PROFESSION. IT WAS HE LD IN THE CASE OF SUBHRAM TRUST VS. DIT (E) (2009) 317 ITR (AT)(BANG.) THAT 'THE TERM IN RELATION TO SHOULD BE BROADLY INTERPRETED I.E. TO SAY IF ANY ACTIVITY WHICH DIRECTLY OR INDIRECTLY FACILITATES THE RENDERING OF ANY SERVICE IN RELATION TO ANY TRADE, COMMERCE OR BUSINESS, IS CARRIED ON BY TRUST, THEN IT WILL BE COVERED UNDER PROV ISO TO SECTION 2(15)'. THE PROVISO TO SECTION 2(15) IS ATTRACTED EVEN IN A CASE WHERE THE ASSESSEE IS NOT CARRYING OUT BUSINESS, TRADE, COMMERCE BY IT SELF. THE CHARGING OF FEES AND CONSIDERATION I N RELATION TO' SERVICES FOR ANY TRADE, BUSINESS AND COMMERCE OR 'INVOLVEMENT' IN TRADE, COMMERCE AND BUSINESS IS SUFFICIENT TO ATTRACT THE PROVISO TO SECTION 2(15). VI. IN VIEW OF THE FACTS AND LEG AL POSITION AS DISCUSSED ABOVE, I AGREE WITH THE ASSESSING OFFICER THAT THE APPELLANT IS HIT BY THE PROVISO TO SECTION 2(15) AND HENCE NOT ELIGIBLE FOR EXEMPTION U/S. 11 OF THE I. T. ACT. GROUNDS OF APPEAL NO. 1 TO 5 ARE, THEREFORE, DISMISSED. 6 ITA NOS. 3437 & 3438/MUM/2016 VII. THE AP PELLANT ALSO ARGUED THAT ITS CASE IS COVERED BY THE PRINCIPLES OF MUTUALITY. IN THIS REGARD IT IS MENTIONED THAT FOR EXEMPTION UNDER THE PRINCIPLES OF MUTUALITY, THERE MUST BE A COMPLETE IDENTITY BETWEEN THE CONTRIBUTORS, PARTICIPATORS AND ALSO THE ACTION OF THE PARTICIPATORS AND CONTRIBUTORS MUST BE IN FURTHERANCE OF THE MANDATE OF ASSOCIATION AND THERE MUST BE NO SCOPE OF PROFITEERING BY THE CONTRIBUTORS FROM THE FUND. IN CASE OF THE APPELLANT THE CONTRIBUTORS AND BENEFICIARIES ARE DIFFERENT SINCE THE ASS ESSEE HAS RECEIVED SPONSORSHIP INCOME FROM ITS SPONSORS WHICH IS FROM THIRD PARTIES, FURTHER, THE APPELLANT IS RENDERING SERVICES TO THE NON - MEMBERS FROM WHICH IT IS MAKING PROFIT AND ALSO WHICH IS NOT MANDATE OF THE ASSOCIATION. THUS THE APPELLANT DOES NO T FULFILL THE CONDITIONS OF BEING A MUTUAL ORGANIZATION. HENCE THIS CONTENTION OF THE APPELLANT IS NOT ACCEPTABLE. 10. AGAINST THE ABOVE ORDER, THE ASSESSEE IS IN APPEAL BEFORE US. 11. THE LD. COUNSEL OF THE ASSESSEE HAS SUMMARIZED HIS SUBMISSIONS AS UNDER: OBJ ECTIVES OF THE APPELLANT SOCIETY 1.8 TH E APPELLANT IS ESTABLISHED AS A CHARITABLE ORGANIZATION WITH THE FOLLOWING MAIN OBJECTS AS S:ATED IN ITS MEMORANDUM OF ASSOCIATION - A. TO ENCOURAGE, SUPPORT AND NURTURE ENTREPRENEURSHIP BY, INTER ALIA, PROVIDING EDUCATIONAL, NETWORKING AND MENTORING ASSISTANCE TO EXISTING AND POTENTIAL ENTREPRENEURS AND PROFESSIONALS; B . TO BUILD BUSINESS AND NETWORK BRIDGES BETWEEN ENTERPRISES, ENTREPRE NEURS, PROFESSIONALS AND INDIVIDUALS; C. TO ORGANIZE EDUCATIONAL WORKSHOPS, BUSINESS SEMINARS, CONFERENCES AND EXHIBITIONS TO BRING TOGETHER MEMBERS, VENTURE CAPITALISTS, ANGEL INVESTORS AND OTHERS FOSTERING A BETTER APPRECIATION OF EA CH OTHER'S' NEEDS AND DELIVERING THE HIGHEST QUALITY SERVICES TO MEMBERS D. TO EDIT, PRINT AND PUBLISH JOURNALS, BOOKS, PAMPHLETS AND OTHER RELEVANT MATERIAL RELEVANT TO BOOST THE ENTREPRENEURSHIP (TO RECEIVE VOLUNTARY CONTRIBUTIONS IS NOT PART OF THE OBJECTIVE OF THE APPELLANT). 1.9 TH E APPELLANT IS A MEMBER OF THE GLOBAL TIE NETWORK'. THE INDUS ENTREPRENEURS IS BASED GL OBALLY IN THE UNITED STATES OF AMERICA AND IS ESTABLISHED AS A REGISTERED NOT FOR PROFIT ORGANISATION. THE COPY OF TAX RESIDENCY CERTIFICATE UNDER US LAWS IS AT PAPERBOOK 2, PAGE 36. THE MAIN OBJECT OF THE TIE NETWORK IS TO PROMOTE THE EDUCATION, ENCOURAGE MENT AND D EVELOPMENT OF ENTREPRENEURS AROUND THE GLOBE. HOWEVER, THE APPELLANT AND TIE USA ARE DOES NOT HAVE ANY KIND OF TRANSACTIONS AMONGST THEM AND BOTH OF THEM FUNCTION INDEPENDENTLY. GROUND 1: GENERAL IN NATURE GROUND 2: IT IS SUBMITTED THAT THE ACTIV ITIES OF THE APPELLANT IS IN THE NATURE OF EDUCATION 1.10 THE APPELLANT CARRIES OUT ITS OBJECTS THROUGH VARIOUS WORKSHOPS. THESE EDUCATIONAL WORKSHOPS ARE CONDUCTED IN A SYSTEMATIC AND STRUCTURED MANNER COVERING VARIOUS TOPICS OF INTEREST AND IMPORTANCE. T HE DETAILS OF THE VARIOUS WORKSHOPS UNDERTAKEN ARE GIVEN IN THE TABLE BELOW 7 ITA NOS. 3437 & 3438/MUM/2016 SR. NO. NAME OF ACTIVITY BRIEF DESCRIPTION OF ACTIVITY 1 CLEANTECH SIG FOCUSED INTERACTIONS WITH LEADERS AND EXPERTS IMPARTING KNOWLEDGE IN CLEAN ENERGY AND ENVIRONMENT TOPICS COVERED: TRIP TO SUZLON WINDFARMS ENERGIZING ENTREPRENEURSHIP IN THE CLEANTECH SPACE CLEAN MENTORING WORKSHOP 2 THE MEDIA AND ENTERTAINMENT NETWORK BY TIE MUMBAI (MENT) INITIATIVE TOWARDS ENABLING AND EMPOWERING ENTREPRENEURS IN THE MEDIA & ENTERTAINMENT INDUSTRY ACROSS MUMBAI & PUNE. TOPICS COVERED: LAUNCH OF SOCIAL ENTREPRENEURSHIP 3 MENTORING CLINIC MENTORING IS A KEY VALUE PROPOSITION OF TIE AND IS A ONE - ON - ONE INTERACTION BETWEEN A SENIOR ENTREPRENEUR OR PROFESSIONAL AND AN ENTREPRENEUR WHO NEEDS GUIDANCE AND ADVISE FROM SOMEONE WHO HAS AN EDUCATED VIEW ON THE SUBJECT OR WHO HAS MORE EXPERIENCE IN THE SITUATION UNDER DISCUSSION. 4 MY STORY MY STORY SESSIONS ARE INTERACTIVE CLOSE DOOR DISCUSSIONS THAT INVOLVE A CANDID CONVERS ATION WITH A SENIOR ENTREPRENEUR OFTEN FACILITATED BY A MODERATOR. 5 TIE INSTITUTE KNOWLEDGE SERIES (TIKS) (TIKS) IS A MONTHLY EDUCATIONAL FORMAT THAT DISCUSSES ON CLASSROOM LEARNING. TOPICS COVERED: MANAGING YOUR FINANCIAL ISSUES CAMBRIDGE: DO ENTREPRENEURS INVEST ENOUGH IN THEMSELVES? TIE INSTITUTE PRTO A WORKSHOP ON STRATEGY & TEAM BUILDING MARKET RESEARCH METHODOLOGIES IMPACT OF BUDGET 2010 6 TIE SUMMIT THE MADE IN INDIA SEARCH 7 TIE OVER COFFEE (TOC) TIE OVER COFFEE IS ONE OF THE MOST POPULAR FORMATS AT TIE MUMBAI. IT IS A BI MONTHLY FORMAT WHERE IN A CHARTER MEMBER HOSTS 25 - 40 TIE MEMBERS FOR AN EARLY MORNING BREAKFAST SESSION, WHICH IS USUALLY AN INFORMAL AND INTERACTIVE HUDDLE SESSION AROUND A TOPIC OF THE CHARTER MEMBER'S INTER EST OVER COFFEE AND BREAKFAST. 8 TIE STREE SHAKTI (TSS) TSS A MOVEMENT THAT AIMS TO CONNECT AND ENABLE ENTERPRISING WOMEN FROM DIFFERENT SOCIO - ECONOMIC STRATA THROUGH A SERIES OF ON - GROUND FOCUS ACTIVITIES THAT ARE DRIVEN BY TIE'S CORE PHILOSOPHY OF MENTO RING, EDUCATION, INSPIRATION AND NETWORKING. TOPICS COVERED: THE WHY, HOW & WHEN OF NETWORKING 6 MUST HAVES FOR RUNNING SUCCESSFUL VENTURES TATA TIE STREE SHAKTI WORKSHOP AND AWARDS 8 ITA NOS. 3437 & 3438/MUM/2016 THE DETAILS OF THESE WORKSHOPS ARE ALSO BEEN GIVEN AT PAPERBOOK 1, PAGES 94 - 95 FOR AY 2010 - 11 AND PAGES 99 - 104 FOR AY 2011 - 12 AS WELL AS HANDOUT DURING THE COURSE OF HEARING. DURING THE SUBJECT ASSESSMENT YEARS, MORE THAN 60% OF THE WORKSHOPS WERE ON NON - CHARGEABLE BASIS. 1 .11 THE APPELLANT UNDERTAKES THE W ORKSHOPS BY ENGAGING EXTERNAL TEACHERS, RENOWNED EXPERTS IN THE FIELD OF ENTREPRENEURSHIP AND OTHER MEMBERS OF THE APPELLANT. THE APPELLANT CONDUCTS THESE WORKSHOPS THROUGH THE YEAR ON A MONTHLY/ BI - MONTHLY BASIS TO REGULARLY IMPART ENTREPRENEURIAL EDUCATI ON AND FOSTER THE GROWTH AND DEVELOPMENT OF BEST PRACTICES AND TECHNIQUES FOR THE ENTREPRENEURS. 1.1 2 AS PER THE OXFORD DICTIONARY, THE MEANING OF THE WORD 'WORKSHOP' IS ' A MEETING AT WHICH A GROUP OF PEOPLE ENGAGE IN INTENSIVE DISCUSSION AND ACTIVITY ON A PARTICULAR SUBJECT OR PROJEC T. AS PER BLACK'S LAW DICTIONARY, SEMINAR IS ' A FORMAL PRESENTATION BY EXPERTS WHERE THE ATTENDEES ARE ENCOURAGED TO ASK QUESTIONS AND DISCUSS THE MATTER TO HAND ', WHEREAS A WORKSHOP IS ' A TRAINING CLASS GIVEN TO SOLVE TASK S RELATED TO WORK TO GAIN HANDS - ON EXPERIENCE ', THUS THE APPELLANT IS UNDERTAKING EDUCATION AND TRAINING OF INDIVIDUALS/START - UPS WHICH FALLS WITHIN THE MEANING OF THE WORD 'EDUCATION' UNDER SECTION 2(15) OF THE ACT. IT IS SIMILAR TO THE REFRESHER COURSES CONDUCTED BY PROFESSIONAL BODIES WITH THE OBJECTIVE TO UPDATE KNOWLEDGE AND SKILLS BY IMPARTING EDUCATION IN A NON - FORMAL MANNER. 3 THE WORD EDUCATION HAS TO BE INTERPRETED MORE WIDELY TO INCLUDE NON - FORMAL EDUCATION AND CANNOT HAVE RESTRICTED INTERPRETA TION AS PLACED UNDER SECTION 10(23C) OF THE ACT. 1.14 THE LEARNED A O HAS RELIED ON THE DECISION OF THE APEX COURT IN THE CASE OF SOLE TRUSTEE, LOKA SHIKSHANA TRUST V S. CIT[1975] 101 ITR 234. THE LEARNED AO HAS NOT APPRECIATED THAT THE APEX COURT HAD DELIVERED ITS JUDGMENT BASED ON THE SPECIFIC FACTS OF THE CASE WHILE PROVIDING AN INTERPRETATION OF THE TERM 'EDUCATION' USED IN SECTION 2(15) OF THE ACT. THE OBSERVATIONS OF THE APEX COURT IN LOK SHIKSHANA TRUST AND THE DEFINITION OF EDUCATION MUST BE SEE N IN LIGHT OF THE SPECIFIC FACTS OF THE CASE. THE CASE OF THE APPELLANT IS COMPLETELY DISTINGUISHABLE FROM THE FACTS IN THE CASE RELIED UPON BY THE LEARNED AO. THE HON'BLE APEX COURT IN THE JUDGMENT DELIVERED IN THE CASE OF SOLE TRUSTEE, LOKA SHIKSHANA TRU ST HAS EXPLAINED THE METHODOLOGY OF IMPARTING EDUCATION THROUGH USE OF THE TERM SCHOLASTIC INSTRUCTION. 1. 15 SCHOLASTIC INSTRUCTION HAS BEEN INTERPRETED AS 'SCHOLASTIC INSTRUCTION CONSISTED OF SEVERAL ELEMENTS. THE FIRST WAS THE LECTIO: A TEACHER WOULD R EAD AN AUTHORITATIVE TEXT FOLLOWED BY A COMMENTARY, BUT NO QUESTIONS WERE PERMITTED. THIS WAS FOLLOWED BY THE MEDITATIO (MEDIATION OR REFLECTION) IN WHICH STUDENTS REFLECTED ON AND APPROPRIATED THE TEXT. FINALLY, IN THE QUAESTIO STUDENTS COULD ASK QUESTION S (QUAESTIONES) THAT MIGHT HAVE OCCURRED TO THEM DURING MEDITATIO. EVENTUALLY THE DISCUSSION OF QUAESTIONES BECAME A METHOD OF INQUIRY APART FROM THE LECTIO AND INDEPENDENT OF AUTHORITATIVE TEXTS. IN CONTROVERSIAL CASES, DISPUTATIONES WERE ARRANGED IN ORDE R TO RESOLVE DIFFICULT QUAESTIONES' 1. 16 FURTHER TO SUPPORT THE APPELLANT'S CONTENTION, VARIOUS OTHER COURTS HAVE HELD THAT EDUCATION CANNOT BE SEEN WITH A NARROW LENS - A. THE DECISION OF THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF INDO - AMERICAN SO CIETY VS. ADIT(E) [2005] 96 ITD 61, WHEREIN IT WAS HELD THAT THERE IS NO INDISPENSIBTE REQUISITE THAT EDUCATION SHOULD ONLY BE IMPARTED TO POOR CLASS AND NOT TO THE ELITE, AND THEREFORE HOLDING OF EDUCATIONAL PROGRAMMES AND COURSES BY CHARGING FEES TO COVE R THE COSTS AMOUNTED TO EDUCATION, WHICH WAS A CHARITABLE PURPOSE. 9 ITA NOS. 3437 & 3438/MUM/2016 B. THE GUJARAT HIGH COURT IN THE CASE OF GUJARAT STATE CO - OPERATIVE UNION VS CIT[1992] 195 ITR 279 HELD THAT 'THE SUPREME COURT, IN THE ABOVE OBSERVATIONS (SOLE TRUSTEE, LOKA SHIKSHANA TRUS T, SUPRA), BY REFERRING TO THE SYSTEMATIC INSTRUCTION, SCHOOLING OR TRAINING GIVE N TO THE YOUNG 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 INT ENDED TO MEAN. WE ARE CERTAIN THAT THESE OBSERVATIONS WERE NOT INTENDED 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 DICTIONA RY, 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 GI VE A NARROW OR PEDANTIC SENSE TO THE WORD 'EDUCATION '. BY GIVING FURTHER ILLUSTRATIONS OF A TRAVELLER GAINING KNOWLEDGE, VICTIMS OF SWINDLERS AND THIEVES BECOMING WISER, THE VISITORS TO NIGHT CLUBS ADDING TO THEIR KNOWLEDGE THE HIDDEN MYSTERIES OF LIFE, TH E SUPREME COURT HAS INDICATED THAT THE WORD ' EDUCATION IS NOT USED IN A LOOSE SENSE SO AS TO INCLUDE ACQUISITION OR EVEN SUCH KNOWLEDGE . THE OBSERVATIONS OF THE SUPREME COURT ONLY INDICATE THE PROPER CONFINES OF THE WORD 'EDUCATION' IN THE CONTEXT OF THE P ROVISIONS OF SECTION 2(15) OF THE ACT. IT WILL NOT BE PROPER TO CONSTRUE THESE OBSERVATIONS IN A MANNER IN WHICH THEY ARE CONSTRUED BY THE TRIBUNALS/HEN IT INFERS FROM THESE OBSERVATION IN PARA 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 OTHER FORMS OF EDUCATION ALSO ARE INCLUDED IN THE WORD 'EDUCATION'. AS NOTICED ABOVE, THE WORD 'SCHOOLING' ALSO MEANS INSTRUCTING OR EDUCATING. IT, THEREFORE, CANNOT BE SAID THAT THE WORD 'EDUCATION' HAS BEEN GIVEN AN UNDULY RESTRICTED MEANING 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 DISSEMINATION OF KNOWLEDGE AND TRAINING IN SPECIALISED SUBJECTS AS IS DONE BY THE APP ELLANT. THE CHANGING TIMES AND THE EVER WIDENING HORIZONS OF K NOWLEDGE MAY BRING IN CHANGES IN THE METHODOLOGY OF TEACHIN G AND A SHIFT FOR THE FETTER IN T HE INSTITUTIONAL SETUP. ADVANCEMENT OF KNOWLEDGE BRINGS WITHIN ITS FOLD SUITABLE METHODS OF ITS DISSEMINATION AND THOUGH THE PRIMARY METHOD OF SITTING IN A CLASSROOM MAY REMAIN IDEAL FOR MOST OF THE INITIAL EDUCATION, IT MAY BECOME NECESSARY TO HAVE A DIFFERENT OUTLOOK FOR FURTHER EDUCATION. IT IS NOT NECESSARY TO NAIL DOWN THE CONCEPT OF EDUCATION T O A PARTICULAR FORMULA OR TO FLOW IT ONLY THROUGH A DEFINED CHANNEL. ITS PROGRESS LIES IN THE ACCEPTANCE OF NEW IDEAS AND DEVELOPMENT OF APPROPRIATE MEANS TO REACH THEM TO THE RECIPIENTS. C. THE DECISION OF THE HIGH COURT OF GUJARAT IN THE CASE OF DIT VS. AHMEDABAD MANAGEMENT ASSOCIATION [2014] 47 TAXMANN.COM 162 , WHEREIN THE COURT HELD THAT 'APPLYING THE RATIO OF THE DECISION OF THE DIVISION BENCH OF THIS COURT IN THE CASE OF GUJARAT STATE CO - OPERATIVE UNION (SUPRA) REPRODUCED HEREINABOVE AND THE ACTIVITIE S OF THE ASSESSES SUCH AS CONTINUING EDUCATION DIPLOMA AND CERTIFICATE PROGRAMME; MANAGEMENT DEVELOPMENT PROGRAMME; PUBLIC TALKS AND SEMINARS AND WORKSHOPS AND CONFERENCES ETC., WE ARE IN COMPLETE AGREEMENT WITH THE VIEW TAKEN BY THE TRIBUNAL THAT THE ACTI VITIES OF THE ASSESSEE IS EDUCATIONAL ACTIVITIES AND/OR IS IN THE FIELD OF THE EDUCATION.' 10 ITA NOS. 3437 & 3438/MUM/2016 1.17 THE APPELLANT DOES NOT CHARGE FEES FROM MEMBERS/NON - MEMBERS IN CASE OF CERTAIN WORKSHOPS / SEMINARS UNDERTAKEN. IN ABOUT 40% OF THE CASES, THE FEES CHARGED BY THE APPELLANT RANGES FROM INR 300 TO INR 1500 PER WORKSHOP WHICH IS TO RECOVER THE COSTS AND CANNOT BE SAID TO BE EXCESSIVE. 1.18 ACCORDINGLY, IT IS SUBMITTED THAT ITS ACTIVITIES ARE EDUCATIONAL IN NATURE FALLING UNDER THE MEANING OF 'EDUCATION' UNDER SECT ION 2(15) OF THE ACT. RELIANCE IS PLACED ON ALL THE CASES SUBMITTED DURING THE COURSE OF HEARING, WHICH HAVE UPHELD THAT CONDUCTING OF WORKSHOPS FALL WITHIN THE AMBIT OF THE TERM EDUCATION. GROUND 3: WITHOUT PREJUDICE TO THE ABOVE, THE ACTIVITIES UNDERTAK EN BY THE APPELLANT ARE IN THE NATURE OF 'ADVANCEMENT OF OTHER OBJECT OF GENERAL PUBLIC UTILITY', NOT IN THE NATURE OF BUSINESS, TRADE OR PROFESSION OR SERVICES IN RELATION TO BUSINESS, TRADE OR PROFESSION 1. 19 WITHOUT PREJUDICE TO THE CONTENTION THAT THE ACTIVITIES OF THE APPELLANT ARE PURELY EDUCATIONAL, AS PER THE OBJECTS IN THE MEMORANDUM OF ASSOCIATION OF THE APPELLANT, INCULCATING ENTREPRENEURIAL SKILLS AND ADVANCEMENT OF SUCH SKILLS FOR YOUNG STUDENTS AND ASPIRANT ENTREPRENEURS IS FOR THE ADVANCEMENT OF GENERAL BENEFIT OF THE PUBLIC. 1. 20 THE APPELLANT SUBMITS THAT THOUGH IT IS A MEMBERSHIP - BASED ORGANIZATION, ITS ACTIVITIES ARE OPEN TO NON - MEMBERS AS WELL. THIS IS EVIDENT FROM THE NUMBER OF PARTICIPANTS WHO ARE NOT MEMBERS OF THE APPELLANT. FURTHER, THERE IS NO MINIMUM REQUIREMENT FOR OBTAINING MEMBERSHIP OF THE APPELLANT AND IS THUS, OPEN TO THE GENERAL PUBLIC. 1.21 SINCE THE APPELLANT IS ESTABLISHED AS A NOT - FOR - PROFIT ENTITY, IT RECEIVES FUNDS TO CONDUCT ITS ROUTINE ACTIVITIES AND TO MEET ITS OP ERATING COSTS FROM THE FOLLOWING SOURCES - A. MEMBERSHIP FEES - USED TO MEET OPERATING COSTS INCURRED FOR FACILITIES PROVIDED TO MEMBERS - RECEIPTS FROM WORKSHOPS CONDUCTED ('MEETING INCOME') - USED TO COVER COSTS INCURRED ON ORGANIZING WORKS HOPS C CONTRIBUTIONS - APPELLANT RECEIVES CONTRIBUTIONS FOR ITS ANNUAL EVENT, WHICH IS UTILIZED TO MEET THE BALANCE OPERATING COSTS INCURRED ON ORGANIZING WORKSHOPS FOR ENTREPRENEURS 1.22 ON ACCOUNT OF THE ANNUAL EVENT CALLED 'SUMMIT', THE APPELLANT WAS ABLE TO GENERATE HIGHER SPONSORSHIP IN THE NATURE OF CONTRIBUTIONS WHICH ARE COVERED UNDER SECTION 12(1) OF THE ACT. SU CH CONTRIBUTIONS ARE DEEMED TO BE INCOME DERIVED FROM PROPERTY HELD UNDER TRUST AND HAVE B EEN ACCEPTED BY THE LOWER AUTHORITIES. THE CONT RIBUTION IS TOWARDS THE AIMS AND OBJECTS OF THE APPELLANT . THERE IS NO QUID - PRO - QUO IN THE NATURE OF BUSINESS ACTIVITY BETWEEN THE CONTRIBUTORS AND THE APPELLANT. DETAILS OF THE VARIOUS CATEGORIES OF CONTRIBUTIONS AND THE ASSOCIATED BENEFITS ARE ENCLOSED AS ANNEXURE - 1. THE COPY OF ACKNOWLEDGEMENT RECEIPTS OF CONTRIBUTIONS ARE ENCLOSED AS ANNEXURE - 2. 1.23 THE DOMINANT OBJECT OF THE APPELLANT IS TO PROVIDE TANGIBLE BENEFIT TO THE SOCIETY AT LARGE AND MAKE THEM SELF - RELIANT BY EDUCATING THEM. THE A PPELLANT DOES NOT CARRY ON ANY BUSINESS ACTIVITY. 1.24 IN TH E CASE OF INSTITUTE OF CHARTERED ACCOUNTANTS OF INDI A V. DIRECTOR GENERAL OF INCOME T AX (EXEMPTIONS) [2012] 347 ITR 99, THE HON'BLE DELHI HIGH COURT DISCUSSED THE DEFINITIONS TRADE, COMMERCE AND B USINESS REPRODUCED BELOW 11 ITA NOS. 3437 & 3438/MUM/2016 TRADE , AS PER THE WEBSTER'S NEW TWENTIETH CENTURY DICTIONARY (2ND EDITION), MEANS, AMONGST OTHERS, 'A MEANS OF EARNING ONE'S LIVING, OCCUPATION OR WORK. IN BLACK'S LAW DICTIONARY, 'TRADE' MEANS A BUSINESS WHICH A PERSON HAS LEA RNT OR HE CARRIES ON FOR PROCURING SUBSISTENCE OR PROFIT; OCCUPATION OR EMPLOYMENT, ETC. THE MEANING OF 'COMMERCE' AS GIVEN BY THE CONCISE OXFORD DICTIONARY IS 'EXCHANGE OF MERCHANDISE, SPECIALLY ON LARGE SCALE'. IN ORDINARY PARLANCE, TRADE, AND COMMERCE CARRY WITH THEM THE IDEA OF PURCHASE AND SALE WITH A VIEW TO MAKE PROFIT. IF A PERSON BUYS GOODS WITH A VIEW TO SELL THEM FOR PROFIT, IT IS AN ORDINARY CASE OF TRADE. IF THE TRANSACTIONS ARE ON A LARGE SCALE IT IS CALLED COMMERCE. NOBODY CAN DEFINE THE VOL UME, WHICH WOULD CONVERT A TRADE INTO COMMERCE. FOR THE PURPOSE OF THE FIRST PROVISO TO SECTION 2(15), TRADE IS SUFFICIENT, THEREFORE, THIS ASPECT IS NOT REQUIRED TO BE EXAMINED IN DETAIL. THE WORD 'BUSINESS' IS THE BROADEST TERM AND IT ENCOMPASSES TRADE, COMMERCE AND OTHER ACTIVITIES. SECTION 2(13) OF THE INCOME - TAX ACT DEFINES THE TERM 'BUSINESS' AS UNDER : '2. DEFINITIONS. ... (13) 'BUSINESS' INCLUDES ANY TRADE, COMMERCE OR MANUFACTURE OR ANY ADVENTURE OR CONCERN IN THE NATURE OF TRADE, COMMERCE OR MA NUFACTURE.' THE WORD 'BUSINESS' IS A WORD OF LARGE AND INDEFINITE IMPORT. SECTION 2(13) DEFINES BUSINESS TO INCLUDE ANY TRADE, COMMERCE OR MANUFACTURE OR ANY ADVENTURE OR CONCERN IN THE NATURE OF TRADE, COMMERCE OR MANUFACTURE. THE INTENTION OF THE LEGISL ATURE IS TO MAKE THE DEFINITION EXTENSIVE AS THE TERM 'INCLUSIVE' HAS BEEN USED. THE LEGISLATURE HAS DELIBERATELY DEPARTED FROM GIVING A DEFINITE IMPORT TO THE TERM 'BUSINESS' BUT MADE REFERENCE TO SEVERAL OTHER GENERAL TERMS LIKE 'TRADE', 'COMMERCE', 'MAN UFACTURE' AND 'ADVENTURE OR CONCERN IN THE NATURE OF TRADE, COMMERCE AND MANUFACTURE'. ACCORDING TO SAMPATH LYENGAFS LAW OF INCOME TAX (9TH EDITION), A BUSINESS ACTIVITY HAS FOUR ESSENTIAL CHARACTERISTICS. FIRSTLY, A BUSINESS MUST BE A CONTINUOUS AND SYST EMATIC EXERCISE OF ACTIVITY. BUSINESS IS DEFINED AS AN ACTIVE OCCUPATION CONTINUOUSLY CARRIED ON. BUSINESS VOCATION CONNOTES SOME REAL, SUBSTANTIVE AND SYSTEMATIC COURSE OF ACTIVITY OR CONDUCT WITH A SET PURPOSE. THE SECOND ESSENTIAL CHARACTERISTIC IS PROF IT MOTIVE OR CAPABLE OF PRODUCING PROFIT. TO REGARD AN ACTIVITY AS BUSINESS, THERE MUST BE A COURSE OF DEALINGS CONTINUED, OR CONTEMPLATED TO BE CONTINUED, NORMALLY WITH AN OBJECT OF MAKING PROFIT AND NOT FOR SPORT OR PLEASURE (BHARAT DEVELOPMENT P. LTD. V . C'IT [1982] 133ITR 470 (DELHI)). THE THIRD ESSENTIAL CHARACTERISTIC IS THAT A BUSINESS TRANSACTION MUST BE BETWEEN TWO PERSONS. BUSINESS IS NOT A UNILATERAL ACT. IT IS BROUGHT ABOUT BY A TRANSACTION BETWEEN TWO OR MORE PERSONS. AND, LASTLY, THE BUSINESS ACTIVITY USUALLY INVOLVES A TWIN ACTIVITY. THERE IS USUALLY AN ELEMENT OF RECIPROCITY INVOLVED IN A BUSINESS TRANSACTION.' 25 THE DELHI HIGH COURT IN THE CASE OF GS1 INDIA VS DGIT(E) [2013] 38 TAXMANN.COM 364 HELD THAT LEGAL TERMS 'TRADE, COMMERCE, OR BUSINESS' IN SECTION 2(15), MEANS AN ACTIVITY UNDERTAKEN WITH A VIEW TO MAKE OR EARN PROFIT. PROFIT MO TI V E IS DETERMINATIVE AND A CRITICAL FACTOR TO DISCERN WHETHER AN ACTIVITY IS BUSINESS, TRADE OR COMMERCE. 26 THERE ARE VARIOUS JUDICIAL PRECEDENTS WHI CH HELD THAT IF THE DOMINANT OBJECT BEING CHARITY THEN ANY INCIDENTAL ACTIVITY WOULD NOT FALL WITHIN THE DEFINITION OF BUSINESS A. BHARAT DIAMOND BOURSE [(2003) 126 TAXMAN 365 (SC) B. SHREE NASHIK PANCHVATI PANJARPOLE [(2017) 81 TAXMANN.COM 375 (BOMBAY) ] C. WOMEN'S INDIA TRUST[(2015) 60 TAXMANN.COM 55 (BOMBAY)] D. SABARMATI ASHRAM GAUSHALA TRUST [(2014) 362 ITR 539 (GUJ)] 12 ITA NOS. 3437 & 3438/MUM/2016 E. THE FERTILIZERS ASSOCIATION OF INDIA [(ITA NO, 964 & 966/2017; DATED 13/11/2017 (DELHI HC)] F. BUILDERS ASSOCIATION OF INDIA [ (2017) 82 TAXMANN.COM 239 (MUMBAI)] G. INDIA INTERNATIONAL CENTRE[(2015) 57 TAXMANN.COM 265 (DEL - TRIB)] H. INDIAN CHAMBER OF COMMERCE [(2014) 52 TAXMANN.COM 52 (KOL)] 1.27 ALSO, FURTHER AS PER THE FINANCIAL WORKING (BIFURCATED BETWEEN REGULAR AND ANNU AL ACTIVITIES) SUBMITTED BEFORE YOUR HONOR AND ALSO ATTACHED AS ANNEXURE - 3, WE WOULD LIKE TO HIGHLIGHT THAT THE APPELLANT HAS GENERATED MERE SURPLUS ONLY DUE TO THE CONTRIBUTION RECEIVED DURING THE ANNUAL EVENT, OTHERWISE THE APPELLANT IS RUNNING IN LOSSES WHILE CARRYING OUT ITS REGULAR ACTIVITIES. 1. 28 FURTHER, IN THE CASE OF HOSHIAPUR IMPROVEMENT TRUST [(2015) 61 TAXMANN.COM 162 (AMRITSAR)] IT WAS HELD THAT WHEN BUSINESS ACTIVITIES ARE CARRIED OUT BY ASSESSEE TRUST IN COURSE OF ACTUAL CARRYI NG OUT OF SUCH ADVANCEMENT OF ANY OTHER GENERAL PUBLIC UTILITY', BENEFIT OF SECTION 11, READ WITH SECTION 2(15), CANNOT BE DECLINED. 1.29 THE APPELLANT SUBMITS THAT NONE OF ITS ACTIVITIES ARE CARRIED OUT WITH AN OBJECT OR MOTIVE TO EARN A PROFIT OR SURPLUS. THE EARNING OF REVENUE IS ONLY INCIDENTAL TO THE PREDOMINANT OBJECT OF PROVIDING EDUCATION AND SKILL DEVELOPMENT TO THE ENTREPREN EURS IN INDIA, WHICH, WITHOUT PREJUDICE, WILL BE CONSIDERED TO BE ADVANCEMENT OF ANY OBJECT OF GENERAL PUBLIC UTILITY. THE APPELLANT DOES NOT UNDERTAKE ANY ACTIVITY WITH THE AIM TO GENERATE A PROFIT. 1.30 FURTHER, IT IS SUBMITTED THAT OBTAINING DONATIONS B Y WAY OF ADVERTISEMENTS ARE PURELY VOLUNTARY IN NATURE AND THEREFORE, THERE IS NO ELEMENT OF QUID PRO QUO. RELIANCE IS PLACED ON THE DECISION OF BOMBAY HIGH COURT IN TRUSTEES OF VISHA NIMA CHARITY TRUST [(1982) 10 TAXMAN 10 (BOMBAY) 1.31 THE PROVISO HAS TO BE READ DOWN TO COVER A CASE WHERE THE ACTIVITIES ARE BEING CARRIED ON FOR COMMERCIAL GAINS AND THE PRE - DOMINANT OBJECT IS TO MAKE PROFIT. THE SAME DOES NOT COVER A CASE OF GENUINE CHARITABLE ORGANIZATION WHICH EARNS SURPLUS FROM ACTIVITIES INCIDENTAL TO CARRYING ON ITS OBJECTS. RELIANCE IS PLACED ON THE DECISION OF DELHI HIGH COURT IN INDIA TRADE PROMOTION ORGANIZATION [(WP (C) NO. 1872/2013 (DELHI) THEREFORE, ON THE BA SIS OF THE FACTS PRESENTED AND JUDICIAL INTERPRETATIONS OF THE DEFINITION OF THE TERM CHARITY UNDER SECTION 2(15) OF THE ACT, THE ASSESSEE SUBMITS THAT ITS ACTIVITIES ARE ALSO COVERED WITHIN THE MEANING OF ADVANCEMENT OF GENERAL PUBLIC UTILITY' UNDER SECTION 2(15) OF THE ACT AND DOES NOT FALL WITHIN THE MISCHIEF OF THE PROVISO. HENCE, EVEN UNDER THE FOURTH LIMB OF 'CHARITY' AS DEFINED UNDER SECTION 2(15) OF THE ACT, THE ACTIVITIES ARE DULY COVERED AND THE APPELLANT IS ENTITLED TO DEDUCTION UNDER SECTION 11 OF THE ACT. WE REQUEST YOU TO CONSIDER THE ABOVE SUBMISSION AND ALL THE RELEVANT DEC ISIONS FILED DURING THE COURSE OF HEARING. 1 2. PER CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE (LD. DR FOR SHORT) RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. HE REFERRED TO THE PROGRAM DETAILS AND THE ACTIVITIES OF THE FEES CHARGED FROM MEMBERS AND NON MEMBERS DETAILED IN THE ASSESSMENT ORDER. THE LD. DR SUBMITTED THAT THE DETAIL OF THE PROGRAM MAKES IT ABUNDANTLY CLEAR THAT THE ASSESSEE IS 13 ITA NOS. 3437 & 3438/MUM/2016 NOT PROVIDING ANY EDUCATIONAL SERVICES. IT IS NOT INDULGING IN ANY SYSTEMATIC EDUCATI ONAL ACTIVITY. RATHER, IT IS ESSENTIALLY A NETWORKING ORGANIZATION OF ENTREPRENEURS. THE FEES BEING CHARGED FROM NON MEMBERS ARE FAIRLY HIGH. THE LD. DR FURTHER SUBMITTED THAT RELIANCE ON THE HONBLE APEX COURT DECISION IN THE CASE OF SOLE TRUSTEE, LOKA SH IKSHONA TRUST (SUPRA) AND THE HON'BLE PATNA HIGH COURT IN THE CASE OF BIHAR INSTITUTE OF MINING & MINING SURVEYING (SUPRA) ARE SQUARELY APPLICABLE. THE LD. DR SUBMITTED THAT ALL THE POINTS RAISED BY THE LD. COUNSEL OF THE ASSESSEE HAS BEEN VERY CLEARLY AND COGENTLY ADDRESSED BY THE LD. CIT(A). HENCE, THE LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT THE ORDER OF THE LD. CIT(A) NEEDS TO BE SUSTAINED. 13. BEFORE PROCEEDING FURTHER WE MAY GAINFULLY REFER TO THE PROVISION OF SECTION 2(15) WHICH READS AS UNDER: DEFINITIONS. 2. IN THIS ACT, UNLESS THE CONTEXT OTHERWISE REQUIRES, ( 15 ) 68 'CHARITABLE PURPOSE' 69 INCLUDES RELIEF OF THE POOR, 69 EDUCATION, 70 [YOGA,] MEDICAL RELIEF, 71 [PRESERVATION OF ENVIRONMENT 69 (INCLUDING WATERSHEDS, FORESTS AND WILDLIFE) AND PRESERVATION OF MONUMENTS OR PLACES OR OBJECTS OF ARTISTIC OR HISTORIC INTEREST,] AND THE ADVANCEMENT OF ANY OTHER 69 OBJECT OF GENERAL PUBLIC UTILITY: PROVIDED THAT THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY 69 SHALL NOT BE A CHA RITABLE PURPOSE, IF IT INVOLVES THE CARRYING ON OF ANY ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINESS 73 , OR ANY ACTIVITY OF RENDERING ANY SERVICE IN RELATION TO ANY TRADE, COMMERCE OR BUSINESS 73 , 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, UNLESS ( I ) SUCH ACTIVITY IS UNDERTAKEN IN THE COURSE OF ACTUAL CARRYING OUT OF SUCH ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY 73 ; AND ( II ) THE AGGREGATE RECEIPTS FROM SUCH ACTIVITY OR ACTIVITIES DURING THE PREVIOUS YEAR, DO NOT EXCEED TWENTY PER CENT OF THE TOTAL RECEIPTS, OF THE TRUST OR INSTITUTION UNDERTAKING SUCH ACTIVITY OR ACTIVITIES, OF THAT PREVIOUS YEAR;]] IN THE PRESENT CASE, THE PLEA OF THE ASSESSEE IS THAT IT DESERVES EXEMPTION INASMUCH AS IT IS ENGAGED IN CHARITABLE PURPOSE BEING EDUCATION. 14 ITA NOS. 3437 & 3438/MUM/2016 14. UPON CAREFUL CONSIDERATION, WE FIND THAT IN THIS REGARD WE MAY GAINFULLY REFER TO THE PROGRAM DETAILS BROUGHT OUT BY THE A.O. IN PG NOS. 6 TO 16 OF THE ASSESSMENT ORDER. THE DETAIL OF THE PROGRAMS REFERRED IN THE ASSESSMENT ORDER SHOW THAT THE MAJORITY OF THE SO CALLED PROGRAM S ARE SAID TO BE INFORMAL AND INTERACTIVE HUDDLE SESSION OVER MORNING BREAKFAST. SOME OF SU CH HUDDLE S ARE OVER EVENING SNACKS AND TEA. A GOOD NUMBER OF THEM INVOLVED ONLY FOR INTERACTION WITH SENIOR ENTREPRENEUR S . THEN THERE ARE EVENTS FOR IDEA VALIDAT ING FOR BUDDING AND EARLY STAGE ENTREPRENEURS AND INTERACTIVE SESSIONS WITH SENIOR ENTREPRENEURS. THEN THERE ARE PROGRAMS FOR PRESENTING HOLISTIC VIEW FOR FUNDING OPTIONS FOR ENTREPRENEURS. THE SAID DETAIL S MAKE IT ABUNDANTLY CLEAR THAT THE ASSESSEE IS NOT ENGAG ED INTO EDUCATION ACTIVITY LEAVE ALONE SYSTEMATIC IMPARTING OF EDUCATION. IT HAS RIGHTLY BEEN CALLED ESSENTIALLY A NETWORKING ORGANIZATION OF ENTREPRENEURS. THE ACTIVITIES ARE PURELY TOWARDS THIS. GOO D AMOUNT OF FEES IS ALSO BEING CHARGED TO NON MEMBERS. HUGE SPONSORSHIP MONEY IS COLLECTED FROM CORPORATE BODIES IN L IEU OF ADVERTISEMENT AND OTHER SERVICE S PRO VID ED TO THEM. AS RIGHTLY NOTED BY THE LD. CIT(A), THE ASSESSEE IS NOT IMPARTING ANY SYSTEMATIC EDUCATIONAL ACTIVITY. IT IS NOT AUTHORIZED TO ISSUE ANY CERTIFICATE/DEGREE. IT IS NOT HAVING ANY REGULAR FACULTY. NO STUDENT AND TEACHER RELATIONSHIP EXISTS BETWEEN THE SPEAKERS AND THE PERSONS ATTENDING THE SEMINARS. THE RATIO OF DECISION OF HONBLE APEX COURT I N THE CASE OF SOLE TRUSTEE LOK SHIKSHAN TRUST (SUPRA) REFERRED BY THE LD. C IT(A) AND THE A.O. ARE FULLY APPLICABLE. THE SAID HUDDLE WORKSHOP, COURSE, ETC. OFFERED BY THE ASSESSEE HAVE NO RECOGNITION OF ANY COMPETENT AUTHORITY. IN THIS REGARD, THE AU THORITIES BELOW HAVE RIGHTLY QUOTED THE DECISION OF THE HONBLE PATNA HIGH COURT IN THE CASE OF BIHAR INSTITUTE OF MINING & MINING SURVEYING (SUPRA) . 15 ITA NOS. 3437 & 3438/MUM/2016 1 5 . AS REGARDS THE ASSESSEES WITHOUT PREJUDICE/ALTERNATIVE SUBMISSION THAT ALTHOUGH THE ACTIVITIES ARE IN THE NATURE OF 'ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY', YET THEY ARE NOT IN THE NATURE OF BUSINESS, TRADE OR PROFESSION. THE ASSESSEE S CLAIM IS THAT ITS ACTIVITIES ARE NOT LIMITED FOR MEMBERS BUT ALSO TO GENERAL PUBLIC. IN THIS REGARD, THE LD. CIT(A) HAS REFERRED TO CLAUSE 5.5 OF THE MEMORANDUM OF ASSOCIATION, THE 'CHARTER MEMBERSHIP' IS RESTRICTED TO PERSONS WHO ARE SUCCESSFUL VETERAN ENTREPRENEURS, CORPORATE EXECUTIVES, AND SENIOR PROFESSIONALS WHICH IS BY INVITATION ONLY. HENCE, THE MEMBERSHIP IS NOT OPEN FOR GENERAL PUBLIC. FURTHERMORE, AS NOTED BY THE LD. CIT(A) THE 'HONORARY MEMBERSHIP' IS RESTRICTED TO THE MEMBERS WHO ARE PROMINEN T INDIVIDUALS OF STANDING AND REPUTE FOR WHICH APPROVAL OF GOVERNING COUNCIL IS REQUIRED. AGAIN FOR 'ASSOCIATE MEMBERS' AND 'CORPORATE MEMBERS' APPROVAL OF GOVERNING COUNCIL IS REQUIRED. HENCE, THE ASSESSEES CLAIM THAT THE MEMBERSHIP IS OPEN TO GENERAL PU BLIC IS NOT AT ALL FACTUALLY CORRECT AS THE MEMBERSHIP IS RESTRICTED. 1 6 . FURTHERMORE, THE ASSESSEES PLEA THAT IT DOES NOT RENDERED ANY SERVICE FOR FEE IN CONNECTION WITH BUSINESS, TRADE OR COMMERCE, ETC. IS NOT IN ACCORDANCE WITH THE AMOUNT BEING RECEIVED BY THE ASSESSEE AND THE NATURE THEREOF. THE ASSESSEE HAS RECEIVED MEETING INCOME OF RS.45.01 LAKHS AND SPONSORSHIP INCOME OF RS.3.58 CRORES. THE ASSESSEE HAS CONDUCTED SEMINARS ETC, FOR WH ICH A CHARGE HAS BEEN LEVIED. THE VARIOUS SPONSORS BEING CORPORATE HOUSES PAID DIFFERENT AMOUNT RANGING FROM RS.20 LACS TO RS.25 LACS FOR SPONSORING ITS ANNUAL FUNCTION AND IN TURN, THE ASSESSEE HAS PROVIDED THEM SERVICES OF BRANDING ON ALL SPONSOR PANELS, SOCIAL MEDIA, WEBSITE & EMAILER BRANDING, VENUE VIDEO ADS [IN WORKSHOP CLASSROOM], IN AUDITORIUM , ETC. THE ASSESSEE ALSO PROVIDES THEM 30/50/100 PASSES FOR TIE SUMMIT DEPENDING UPON THEIR CONTRIBUTION . THESE FACTS CLEAR LY 16 ITA NOS. 3437 & 3438/MUM/2016 INDICATE THAT THE ASSESSEE IS REN DERING SERVICES FOR A FEE WHICH IS IN THE NATURE OF TRADE , COMMERCE OR BUSINESS. THE NATURE OF THIS EXPENDITURE INCURRED BY THE ASSESSEE WHICH INCLUDES EVENT MANAGEMENT EXPENSES, SUMMIT EXPENSES, EXPENDITURE ON FOOD AND BEVERAGES, VIDEOGRAPHY ETC TO THE TU NE OF RS.3 CRORES ALSO SUPPORT THE CASE THAT THE ASSESSEE IS IN THE BUSINESS OF RENDERING SERVICES FOR A FEE WHICH IS LIKE ANY OTHER BUSINESS/COMMERCIAL ACTIVITY CARRIED OUT BY ANY BUSINESS/ ENTITY IN THE MARKET. HENCE, ON THIS ACCOUNT ALSO, PROVISO TO SEC TION 2(15) IS APPLICABLE. THE ASSESSEES CONTENTION THAT IT IS A NON - PROFIT ENTITY AND IT RECEIVES FUNDS TO MEET ITS OPERATIVE COST WITHOUT ANY MOTIVE TO EARN PROFIT IS CLEARLY IN CONTRADICTION TO THE SURPLUS OF RS.1.22 CRORES GENERATED BY THE ASSESSEE IN THIS YEAR. H ERE IT WOULD BE RELEVANT TO NOTE THAT IF A CHARITABLE ORGANIZATION CARRYING OUT OBJECTS OF 'ADVANCEMENT OF GENERAL PUBLIC UTILITY' IS INVOLVED IN CARRYING ON ANY ACTIVITY IN THE NATURE OF TRADE, COMMERCE, BUSINESS OR IS CHARGING FEES FOR SERVIC ES IN RELATION TO ANY TRADE, COMMERCE, BUSINESS, IT IS EXCLUDED FROM BEING 'CHARITABLE.' THE ASSESSEES PLEA THAT IT IS COVERED BY MUTUALITY HAS ALSO BEEN RIGHTLY SET ASIDE BY THE LD. CIT(A). THERE IS ABSENCE OF COMPLETE IDENTITY BETWEEN CONTRIBUTORS AND P ARTICIPA N TS. THE CONTRIBUTORS AND BENEFICIARY ARE DIFFERENT. FURTHERMORE, THE ASSESSEE IS RENDERING SERVICES TO NON MEMBERS FOR GETTING PROFIT. HENCE, THE LD. CIT(A) HAS RIGHTLY HELD THAT THE ASSESSEE DOES NOT FULFILL THE CONDITION OF MUTUAL ORGANIZATION. 1 7 . WE FURTHER NOTE THAT THE LD. COUNSEL OF THE ASSESSEE HAS TRIED TO DISTINGUISH THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF SOLE TRUSTEE, LOKA SHIKSHONA TRUST (SUPRA). BUT IN OUR CONSIDERED OPINION , THE DISTINCTION BROUGHT OUT BY THE LD. COUNSEL OF THE ASSESSEE IS NOT SUSTAINABLE. THE NATURE OF THE ACTIVITY OF THE SAID SEMINARS AND WORKSHOP WERE NOT AT ALL ACCEPTED AS EDUCATIONAL ACTIVITY. THE DECISIONS REFERRED BY THE 17 ITA NOS. 3437 & 3438/MUM/2016 LD. COUNSEL OF THE ASSESSEE DO NOT SUPPORT THE CASE OF THE ASSESSEE , AS THEY WERE RENDERED IN THE FACTS OF THE INDIVIDUAL CASES. IT IS SETTLED LAW THAT BEFORE ONE SUBMITS TO THE RULE OF PRECEDENCE, THE FACT OF THE CASE HAS TO BE TAKEN INTO ACCOUNT. THE ASSESSEE HAS CONTENDED THAT NONE O F ITS ACTIVITIES ARE CARRIED OUT WITH AN OBJECT OR ANY MOTIVE TO EARN PROFIT OR SURPLUS. TH AT TH E EARNING OF REVENUE IS ONLY INCIDENTAL TO THE PREDOMINANT OBJECT OF PROVIDING EDUCATION AND SKILL DEVELOPMENT TO THE ENTREPRENEURS. HOWEVER, WE FIND THAT THIS SUBMISSION IS QUITE IN CONTRADICTION TO THE FACT THAT THE ASSESSEE IS CHARGING HUGE AMOUNTS FOR SPONSORSHIP FEE FROM CORPORATE AGAINST WHICH IT PROVIDES VARIOUS TYPES OF ADVERTISEMENT SERVICES AND FREE PASSES ARE ALSO PROVIDED. THESE FACTS CLEARLY ALSO NEG ATE THE ASSESSEES SUBMISSION THAT DONATIONS OBTAINED BY WAY OF ADVERTISEMENTS ARE PURELY VOLUNTARY IN NATURE AND THEREFORE, THERE IS NO ELEMENT OF QUID PRO QUO. MAKING SLABS FOR SPONSORSHIP FEE AND SPECIFYING THE TYPES OF SERVICE AGAINST IT ARE CERTAINLY FOR COMMERCIAL GAINS WITH PREDOMINANT OBJECTIVE TO MAKE PROFIT. HENCE, IN OUR CONSIDERED OPINION, THERE IS NO INFIRMITY IN THE ORDERS OF THE AUTHORITIES BELOW. ACCORDINGLY, WE UPHOLD THE SAME. 17. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 2 2 . 0 1 . 2 0 1 9 S D / - S D / - ( RAVISH SOOD ) (SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED : 2 2 . 0 1 . 2 0 1 9 ROSHANI , SR. PS 18 ITA NOS. 3437 & 3438/MUM/2016 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT - CONCERNED 5. DR, ITAT, MUMBAI 6. GUARD FILE BY ORDER, (DY./ASSTT. REGISTRAR) ITAT, MUMBAI