ITO (E), New Delhi V. M/s. The Poorva Sanskritik Kendra, New Delhi

ITA 3566/DEL/2015

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 0743 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 3 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-09-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: I
• Assessment Year: 2011-2012
• Appeal Filed On: 03-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Benefit of exemption
• Section: 12; 11

Judgement Text

1 ITA NO. 3566/DEL/2015 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: G NEW DELHI BEFORE SHRI R. K. PANDA, ACCOUNTANT MEM BER AND MS SUCHITRA KAMBLE, JUDI CIAL MEMBER ITA NO. 3566/DEL/2015 ( A.Y 2011-12) ITO (E) WARD-2(3) NEW DELHI (APPELLANT) VS THE POORVA SANSKRITIK KENDRA DISTRICT CENTRE, PLOT NO. 14, LAXMI NAGAR NEW DELHI AABTT1434C (RESPONDENT) APPELLANT BY SH. ANOOP SINGH, SR. DR RESPONDENT BY SH. SATYAJIT GOEL, CA ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORD ER DATED 26/3/2015 PASSED BY CIT(A)-40, NEW DELHI FOR ASSESSMENT YEAR 2011-12. 2. THE GROUNDS OF APPEAL ARE AS UNDER:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD.CIT (A) HAS ERRED IN IGNORING THE FACTS THAT THE PROPERTY HELD BY THE ASSESSEE WAS UTILIZED PURELY FOR COMMERCIAL ACT IVITIES. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD.CIT (A) HAS ERRED IN IGNORING THE FACTS THAT THE ASSESSEES ACTIVITY FALLS UNDER THE CATEGORY OF ADVANCEMENT OF ANY OTH ER OBJECT OF GENERAL PUBLIC UTILITY AND COMMERCIAL IN NATURE. HENCE, THE FIRST PROVISO TO SECTION 2(15) IS CLEARLY APPLICABLE TO I T. DATE OF HEARING 11.09.2018 DATE OF PRONOUNCEMENT 12.09.2018 2 ITA NO. 3566/DEL/2015 3. THE ASSESSEE IS ESTABLISHED BY THE GOVERNMENT OF DELHI AND IS REGISTERED UNDER THE SOCIETIES REGISTRATION ACT, 1860 DATED 01/11/2004 AND IS ALSO REGISTERED U/S 12AA(1) OF THE I.T ACT, 1961 DATED 2 7/04/2007 AS A CHARITABLE SOCIETY. THE MAIN OBJECT OF THE ASSESSEE IS TO PROM OTE INDIAN ART AND CULTURE ETC. AND TO RUN A CULTURAL CENTRE IN LAXMI NAGAR, D ELHI. THE ASSESSEE IS HAVING A REVENUE SHARING AGREEMENT WITH G&S SAROVAR PARK H OSPITALITY LTD. FOR PROVIDING THE FACILITIES OF RESTAURANT AND CLUB ETC . TO THE MEMBERS OF THE SOCIETY AND THE ASSESSEE IS TO GET THE SHARE OF 14% REVENUE FROM THE ABOVE COMPANY. THE CASE FOR A.Y 2009-10 WAS TAKEN UP FOR SCRUTINY AND THE ASSESSING OFFICER HAD INVOKED THE PROVISO TO SECTION 2(15) AND HAD DE NIED THE EXEMPTION U/S 11(1) TO THE ASSESSEE BUT THE SAME WAS ALLOWED BY T HE CIT(A) AND THE DEPARTMENTAL APPEAL HAS ALSO BEEN DISMISSED BY THE TRIBUNAL VIDE THE ORDER DATED 04/08/2014 IN ITA NO. 3506/DEL/2013. EARLIER THE DIT (EXEMPTION) HAD CANCELLED THE REGISTRATION U/S 12AA(3) FOR THE A.Y. 2006-07 TO 2008-09 BUT THE SAME WAS RESTORED BY THE TRIBUNAL VIDE THE ORDER D ATED 30/11/2011 IN ITA NO. 1786/DEL/2011. THE ASSESSING OFFICER FOLLOWING THE ORDER FOR EARLIER YEARS AGAIN DENIED THE EXEMPTION U/S 11(1) BY INVOKING TH E PROVISO TO SECTION 2(15) VIDE THE ORDER OF THE ASSESSING OFFICER. 4. BEING AGGRIEVED BY THE ORDER OF THE ASSESSING OF FICER, THE ASSESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT(A) PARTLY ALLOWE D THE APPEAL OF THE ASSESSEE. 5. THE LD. DR SUBMITTED THAT THE CIT(A) IGNORED T HE FACT THAT THE PROPERTY HELD BY THE ASSESSEE WAS UTILIZED PURELY FOR COMMER CIAL ACTIVITIES AND THE SAID ACTIVITY DOES NOT FALL UNDER THE CATEGORY OF ADVANC EMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY AND THUS COMMERCIAL IN NATUR E. THEREFORE, THE FIRST PROVISO TO SECTION 2(15) IS CLEARLY APPLICABLE TO T HE ASSESSEES CASE AND THE ASSESSING OFFICER RIGHTLY DENIED THE EXEMPTION U/S 11(1) OF THE INCOME TAX ACT, 1961. 6. THE LD. AR SUBMITTED THAT THE CIT(A) RIGHTLY ALL OWED THE EXEMPTION U/S 11(1) BY FOLLOWING THE EARLIER YEAR DECISION IN THE ASSESSEES OWN CASE FOR 3 ITA NO. 3566/DEL/2015 ASSESSMENT YEAR 2009-10 (ITA NO. 3506/DEL/2013 ORDE R DATED 4/8/2014). THE LD. AR SUBMITTED THAT THE HONBLE DELHI HIGH CO URT IN CASE OF INDIA TRADE PROMOTION ORGANIZATION VS. DGIT (E) 53 TAXMAN.COM 4 04 (DELHI) UPHELD THE CONSTITUTIONAL VALIDITY OF THE PROVISO TO SECTION 2 (15) AND FURTHER HELD THAT MERELY RECEIPT OF FEE OR CHARGE CANNOT BE SAID THAT THE ASSESSEE IS INVOLVED IN ANY TRADE, COMMERCE OR BUSINESS. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED ALL T HE RELEVANT MATERIAL AVAILABLE ON RECORD. THE FACTS ARE IDENTICAL TO T HE FACTS OF THE CASE DECIDED BY THE TRIBUNAL FOR ASSESSMENT YEAR 2009-10 IN ASSESSE ES OWN CASE. THE TRIBUNAL HELD AS UNDER:- 6. THERE IS NO DISPUTE THAT PROVISO TO SCCTION-2(15 ) OF THE ACT INSERTED FROM THE ASSESSMENT YEAR 2009-10 IS APPLICABLE IN T HE YEAR UNDER CONSIDERATION AND THE SAME CAN BE INVOKED ONLY IF T HE ASSESSEE IS INVOLVED IN CARRYING ON ANY ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINESS, OR ANY ACTIVITY OF RUNNING ANY SERVICES IN RELATION TO ANY TRADE, COMMERCE OR BUSINESSES FOR A CESS OR FEE FOR ANY OTHER CONSIDER ATION, IRRESPECTIVE OF THE NATURE OF USE OR APPLICATION OR UTILIZATION OF THE INCOEM FROM SUCH ACTIVITY. SINCE ALL THESE SIMILAR CTIVITIES HAVE ALREADY BEEN EXAMINED AND CONSIDERED BY THE ITAT IN ITA NO. NO.L786/DEL/2011 IN THE CASE OF ASSESSEE ITSELF AND AFTER DISCUSSING IT IN DETAIL, THE ITAT HAS COME TO THE CONCLUSION THAT THESE ACTIVITIES OF THE ASSESSEE SO CIETY DO NOT INVOLVE THE CARRYING OF ANY ACTIVITY IN THE NATURE OF TRADE, CO MMERCE OR BUSINESS OR ANY ACTIVITY OF RUNNING ANY SERVICE IN RELATION TO ANY TRADE, COMMERCE OR BUSINESS. WE ARE THUS OF THE VIEW THAT THE PROVISO INSERTED IN SEC. 2(15) OF THE ACT. W.E.F. 01.04.2009 IS NOT ATTRACTED IN THE CASE OF THE ASSESSEE. WE, THEREFORE, HOLD THAT THE LEARNED CIT(APPEALS) FOLLO WING THE SAID ORDER OF THE ITAT HAS RIGHTLY DECIDED THAT THE ASSESSING OFF ICES WAS NOT JUSTIFIED IN DENYING THE BENEFIT OF EXEMPTION UNDER SECTIONS 11 AND 12 OF THE ACT AVAILABLE TO THE ASSESSEE BY APPLYING THE PROVISO T O SECTION 2(15) OF THE 4 ITA NO. 3566/DEL/2015 ACT. THE FIRST APPELLATE ORDER BEING COMPREHENSIVE AND REASONED ONE THUS DOES NOT NEED ANY INTERFERENCE. THE SAME IS UPHELD AND THE GROUNDS ARE ACCORDINGLY REJECTED. SINCE, THE CIT(A) WHILE GRANTING RELIEF TO ASSESSEE HAS FOLLOWED THE DECISION OF THE TRIBUNAL AS WELL AS THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN CASE OF INDIA TRADE PROMOTION ORGANIZATION (SUPRA), THEREFORE, IN ABSENCE OF ANY CONTRARY MATERIAL BROUGHT TO OUR NOTICE, WE FIN D NO INFIRMITY IN ORDER OF THE CIT(A). HENCE, APPEAL OF THE REVENUE IS DISMISSED. 8. IN RESULT, THE APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 12 TH SEPTEMBER, 2018. SD/- SD/- (R. K. PANDA) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEM BER DATED: 12/09/2018 *R.N COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI 5 ITA NO. 3566/DEL/2015 DATE OF DICTATION 11.09.2018 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 11.09.2018 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 12 .09.2018 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT 12 .09.2018 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 12 .09.2018 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