Indian Leather Technologists Association, Kolkata V. ITO (Exemption) - 1, Kolkata , Kolkata

ITA 37/KOL/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 2793 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 5 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-06-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 03-04-2019
• Assessment Year: 2009-2010
• Appeal Filed On: 05-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ROBIN CHOUDHURY CIT SR DR RE
• Assessee Lawyers: PIJUSH DEY
• Keywords: Business income; Charitable institution; Set aside
• Section: 143(3); 234B; 12A; 28; 11

Judgement Text

I.T.A. NOS. 37 & 38/KOL/2018 (ASSESSMEN T YEARS: 2009-10 & 2010-11) INDIAN LEATHER TECHNOLOGISTS ASSOCIA TION 1 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA A(SMC) BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, VICE-PRESIDENT (KZ) I.T.A. NOS. 37 & 38/KOL/2018 ASSESSMENT YEARS: 2009-2010 & 2010-2011 INDIAN LEATHER TECHNOLOGISTS ASSOCIATION,......... .........................APPELLANT 44, SANJOY BHAVAN, 3 RD FLOOR, SANTI PALLY, KASBA, KOLKATA-700 107 [PAN: AAATI 3153 L] -VS.- INCOME TAX OFFICER(EXEMPTION)-1, KOLKATA....... ...............RESPONDENT 10B, MIDDLETON ROW, 5 TH FLOOR, KOLKATA-700 071 APPEARANCES BY: SHRI PIJUSH DEY, FCA, FOR THE APPELLANT SHRI ROBIN CHOUDHURY, ADDL. CIT, SR. D.R., FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : APRIL 03, 2019 DATE OF PRONOUNCING THE ORDER : JUNE 07, 2019 O R D E R PER SHRI P.M. JAGTAP, VICE-PRESIDENT (KOLKATA ZONE) :- THESE TWO APPEALS FILED BY THE ASSESSEE ARE DIRECT ED AGAINST TWO SEPARATE ORDERS OF LD. COMMISSIONER OF INCOME TAX ( APPEALS)-25, KOLKATA BOTH DATED 23.08.2017, WHEREBY HE CONFIRMED THE DIS ALLOWANCE MADE BY THE ASSESSING OFFICER ON ACCOUNT OF ASSESSEES CLAI M FOR EXEMPTION UNDER SECTION 11 OF THE INCOME TAX ACT, 1961 FOR A.YS. 20 09-10 AND 2010-11. 2. THE ASSESSEE IN THE PRESENT CASE IS AN INSTITUTI ON, WHICH IS REGISTERED UNDER SECTION 25 OF THE COMPANIES ACT, 1 956. IT IS ALSO REGISTERED UNDER SECTION 12A OF THE INCOME TAX ACT, 1961 UNDER SIXTH LIMB OF THE DEFINITION OF CHARITABLE PURPOSES AS GIVEN IN SECTION 2(15) OF I.T.A. NOS. 37 & 38/KOL/2018 (ASSESSMEN T YEARS: 2009-10 & 2010-11) INDIAN LEATHER TECHNOLOGISTS ASSOCIA TION 2 THE ACT. IN THE RETURN OF INCOME FILED FOR A.Y. 200 9-10 ON 16.03.2010, INCOME FROM OTHER SOURCES AMOUNTING TO RS.4,99,500/ - WAS DECLARED BY THE ASSESSEE AS ITS TOTAL INCOME WHILE THE INCOME E ARNED FROM SALE OF PUBLICATIONS AS WELL AS ORGANIZING EXHIBITIONS IN T HE FORM OF STALL RENT, ENTRY TICKETS CHARGES ETC. AMOUNTING TO RS.10,99,31 4/- WAS CLAIMED TO BE EXEMPT UNDER SECTION 11 OF THE ACT ON THE GROUND TH AT THE SAME WAS GENERATED FROM THE ACTIVITY OF ADVANCEMENT OF ANY O THER OBJECT OF GENERAL PUBLIC UTILITY. DURING THE COURSE OF ASSE SSMENT PROCEEDINGS, THE CLAIM OF THE ASSESSEE FOR EXEMPTION UNDER SECTION 1 1 WAS EXAMINED BY THE ASSESSING OFFICER. ON SUCH EXAMINATION, HE NOTE D THAT SECTION 2(15) WAS AMENDED W.E.F. A.Y. 2009-10, WHEREBY IT WAS PRO VIDED THAT THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC U TILITY SHALL NOT BE A CHARITABLE PURPOSE, IF IT INVOLVES THE CARRYING ON OF ANY ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINESS, OR ANY ACTIV ITY 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. HE ALSO REFERRED TO SECTION 28(III) OF THE ACT, WHICH SPECIFICALLY PROVIDED THA T PROFITS AND GAINS OF BUSINESS OR PROFESSION INCLUDE INCOME DERIVED BY A TRADE, PROFESSIONAL OR SIMILAR ASSOCIATION FROM SPECIFIC SERVICES PROVIDED FOR ITS MEMBERS. HE NOTED THAT THE PRINCIPAL ACTIVITY INVOLVED IN ORGAN IZING EXHIBITIONS BY THE ASSESSEE WAS RUNNING OF THE STALLS AND THE ASSESSEE HAD NOT ONLY CHARGED FROM THE OCCUPIER OF THE STALLS BUT HAD ALSO COLLEC TED ENTRY FEES FROM THE GENERAL PUBLIC TO VISIT THE STALLS. HE HELD THAT TH E SAID ACTIVITY THUS WAS AN ADVENTURE IN THE NATURE OF TRADE, WHICH WAS CARRIED ON FOR PROFIT-MOTIVE. ACCORDINGLY RELYING ON THE AMENDMENT MADE IN SECTIO N 2(15) AS WELL AS THE PROVISIONS OF SECTION 28(III), HE HELD THAT THE ASSESSEE WAS NOT ENTITLED FOR EXEMPTION UNDER SECTION 11 AND THE INC OME OF THE ASSESSEE WAS LIABLE TO BE COMPUTED IN THE NORMAL COMMERCIAL MANNER. ACCORDINGLY AN ADDITION OF RS.10,99,314/- WAS MADE BY HIM TO TH E TOTAL INCOME OF THE ASSESSEE UNDER THE HEAD INCOME FROM BUSINESS OR PR OFESSION IN THE ASSESSMENT COMPLETED FOR A.Y. 2009-10 UNDER SECTION 143(3) VIDE AN I.T.A. NOS. 37 & 38/KOL/2018 (ASSESSMEN T YEARS: 2009-10 & 2010-11) INDIAN LEATHER TECHNOLOGISTS ASSOCIA TION 3 ORDER DATED 14.12.2011. ON THE SIMILAR BASIS, THE A SSESSMENT FOR A.Y. 2010-11 WAS ALSO MADE BY THE ASSESSING OFFICER VIDE AN ORDER DATED 30.03.2013 PASSED UNDER SECTION 143(3) DENYING THE CLAIM OF THE ASSESSEE FOR EXEMPTION UNDER SECTION 11 AND DETERMINING THE TOTAL INCOME OF THE ASSESSEE AT RS.21,76,580/- AS AGAINST THE TOTAL INC OME OF RS.11,871/- DECLARED BY THE ASSESSEE IN THE RETURN OF INCOME. 3. AGAINST THE ORDERS PASSED BY THE ASSESSING OFFIC ER UNDER SECTION 143(3) FOR BOTH THE YEARS UNDER CONSIDERATION, I.E. A.Y. 2009-10 AND 2010-11, APPEALS WERE PREFERRED BY THE ASSESSEE BEF ORE THE LD. CIT(APPEALS). DURING THE COURSE OF APPELLATE PROCEE DINGS BEFORE THE LD. CIT(APPEALS), A DETAILED SUBMISSION WAS MADE BY THE ASSESSEE CHALLENGING THE ACTION OF THE ASSESSING OFFICER IN DISALLOWING ITS CLAIM FOR EXEMPTION UNDER SECTION 11 ON VARIOUS GROUNDS. THE LD. CIT(APPEALS), HOWEVER, DID NOT FIND MERIT IN THE SAID SUBMISSIONS AND PROCEEDED TO CONFIRM THE DISALLOWANCE MADE BY THE ASSESSING OFFI CER BY DENYING THE EXEMPTION CLAIMED BY THE ASSESESE UNDER SECTION 11 OF THE ACT FOR BOTH THE YEARS UNDER CONSIDERATION FOR THE FOLLOWING COM MON REASONS GIVEN IN HIS IMPUGNED ORDERS:- I HAVE PERUSED THE SUBMISSION AND FACTS OF THE CAS E MENTIONED IN THE ASSESSMENT ORDER. ON PERUSAL OF FA CTS AND CIRCUMSTANCES, IT SHOWS THAT THE UNDERLYING IDEA BE HIND SECTION 28(III) WAS THAT THE INCOME IS DERIVED FROM THE BUSINESS AND THAT IN THE COURSE OF SUCH BUSINESS SP ECIFIC SERVICES MUST BE RENDERED FOR ITS MEMBERS. SECTION 28(III) HAS INTRODUCED TO CUT AT THE MUTUALITY PRINCIPLE BEING RELIED ON IN SUPPORT OF A CLAIM FOR EXEMPTION. BUT ON PERUSAL OF ASSESSMENT ORDER, IT SHOWS THAT THE INSTITUTION ORG ANISED LEATHER EXPORT PROMOTION AND HAD MADE ARRANGEMENT F OR STALL ON PAYMENT OF SOME RENT AND CHARGED MINIMUM ENTRY T ICKET FEES FROM THE GENERAL PUBLIC WHO CAME TO VISIT THE STALLS. THE SERVICES, IN THIS CASE, ARE LIMITED TO THE PERSONS WHO ARE ENGAGED IN LEATHER BUSINESS. THOUGH THE APPELLANT C LAIMED THAT IT WAS FOR GENERAL PUBLIC UTILITY, GENERAL PUB LIC HAS NOTHING TO DO WITH THE LEATHER EXPORT BUSINESS ONLY THE CONCERNED PERSONS WHO ENGAGED IN LEATHER TRADE ARE PARTICIPANTS IN THE BUSINESS. IT IS CLEAR THAT IT W AS FOR TAKING CARE OF THOSE PERSONS ONLY WHO ARE ENGAGED IN LEATH ER EXPORT BUSINESS. THE APPELLANT HAS NOT ESTABLISHED THAT IT WAS' FOR THE PURPOSE OF GENERAL PUBLIC UTILITY AND FOR PUBLI C AT LARGE. I.T.A. NOS. 37 & 38/KOL/2018 (ASSESSMEN T YEARS: 2009-10 & 2010-11) INDIAN LEATHER TECHNOLOGISTS ASSOCIA TION 4 THE STALLS ARE ALLOTTED AND FEE CHARGES FROM THOSE PERSONS WHO ARE ENGAGED IN LEATHER BUSINESS AND ACTIVITY IS DON E FOR PROMOTION OF LEATHER BUSINESS ONLY. THE APPELLANT H AS NOT BEEN ABLE TO ESTABLISH AS TO HOW IT CAN BE DISTINGU ISHED FROM INSTALLATION OF STALL AND FAIR ACTIVITIES ARE NOT F OR PROMOTION OF PARTICULAR TRADE AND THE PARTICIPANTS ARE NOT ON LY FROM LEATHER BUSINESS. THE PARTICIPANTS PAID FEE FOR EVE RY FACILITY WHICH SHOWS THAT IT WAS RUNNING ON COMMERCIAL LINE . 4. AGGRIEVED BY THE ORDERS OF THE LD. CIT(APPEALS), THE ASSESSEE HAS PREFERRED THESE APPEALS BEFORE THE TRIBUNAL ON THE FOLLOWING GROUNDS AS REVISED:- 1. THAT, ON FACTS AS WELL AS ON LAW, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 25, KOL HAS ERRED IN CONFIRMING THE DENIAL OF EXEMPTION UNDER SECTION 11 CLAIMED BY THE APPELLANT IN THE RETURN OF INCOME DE SPITE SUCH EXEMPTION WAS BEING ALLOWED TO THE APPELLANT CONSISTENTLY. 2 THAT. ON FACTS AS WELL AS ON LAW, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 25, KOL HAS ERRED IN CONFIRMING THE APPLICATION OF 1 ST PROVISO TO SE CTION 2(15) INSPITE OF THE FACT THAT NONE OF THE ACTIVITI ES CARRIED ON BY THE APPELLANT IS IN THE NATURE OF TRADE, COMM ERCE OR BUSINESS. 3. THAT, ON FACTS AS WELL AS ON LAW, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 25, KOL HAS ERRED IN CONFIRMING THE INCOME EARNED BY WAY OF HOLDING/ ORGANIZING THE EVENT CALLED LEXPOS DURING THE PREVI OUS YEAR AND TREATING THE SAID EVENT IN THE NATURE OF T RADE, COMMERCE OR BUSINESS. 4. THAT, ON FACTS AS WELL AS ON LAW, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 25, KOL HAS ERRED IN CONFIRMING THE HOLDING OF DIFFERENT ACTIVITIES O F LEXPOS I.E. STALL HIRING, COLLECTION OF ENTRY TICKET FEES ETC ARE ADVENTURE IN THE NATURE OF TRADE WITH PROFIT MOTIVE . 5. THAT, ON FACTS AS WELL AS ON LAW, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 25. KOL HAS ERRED IN CONFIRMING THE INVOCATION OF THE PROVISION OF SE CTION 28(III) BY CHARACTERIZING THE INCOME OF THE APPELLA NT AS INCOME FROM SPECIFIC SERVICES PERFORMED TO ITS MEMB ERS BY THE APPELLANT. 6. THAT, ON FACTS AS WELL AS ON LAW, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 25, KOL HAS ERRED IN NOT DELETING THE LEVY OF INTEREST UNDER SECTION 234B AMOUNTING TO RS.85,140/- WHICH IS CONSEQUENTIAL IN NATURE. I.T.A. NOS. 37 & 38/KOL/2018 (ASSESSMEN T YEARS: 2009-10 & 2010-11) INDIAN LEATHER TECHNOLOGISTS ASSOCIA TION 5 5. I HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. ALTHOUGH THE LD. D.R. HAS STRONGLY SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW DENYI NG THE CLAIM OF THE ASSESSEE FOR EXEMPTION UNDER SECTION 11 OF THE ACT AND POINTED OUT SPECIFICALLY THE REASONS GIVEN BY THE ASSESSING OFF ICER AS WELL AS BY THE LD. CIT(APPEALS) IN THEIR RESPECTIVE ORDERS FOR DEN YING SUCH CLAIM, IT IS OBSERVED THAT THERE ARE VARIOUS JUDICIAL PRONOUNCEM ENTS THAT ARE CITED BY THE LD. COUNSEL FOR THE ASSESSEE, WHICH FULLY SUPPO RT THE ASSESSEES CASE OF THE ISSUE UNDER CONSIDERATION. IT IS PERTINENT TO N OTE THAT REGISTRATION UNDER SECTION 12A WAS GRANTED TO THE ASSESSEE BY TH E INCOME TAX DEPARTMENT AFTER CONSIDERING ITS OBJECTS WHICH, INT ER ALIA, INCLUDED TO ASSIST AND ENCOURAGE THE APPLICATION OF SCIENCE AND SCIENTIFIC METHODS TO THE MANUFACTURE AND UTILIZATION OF LEATHER AND ALLI ED PRODUCTS BY THE PUBLICATION OF JOURNAL AND OTHER LITERATURE OR BY T HE HOLDING OF MEETING FROM TIME TO TIME, OR OTHERWISE TO ORGANIZE EXHIBIT IONS, SYMPOSIUM ETC. FOR DEFUSING AMONG THE TECHNOLOGISTS KNOWLEDGE AND INFORMATION RELATING TO LEATHER AND ALLIED INDUSTRIES TO CREATE PUBLIC I NTEREST IN LEATHER SCIENCE BY ORGANIZING POPULAR SCIENTIFIC TALKS AND BY DEFUS ING BASIC AND APPLIED SCIENTIFIC KNOWLEDGE AND IN PURSUANCE OF THESE OBJE CTS, WHICH WERE CONSIDERED AS CHARITABLE WHILE GRANTING REGISTRATIO N UNDER SECTION 12A TO THE ASSESSEE, EXHIBITIONS WERE ORGANIZED BY THE ASS ESSEE KNOWN AS LEXPO DURING THE YEAR UNDER CONSIDERATION AND INC OME FROM STALLS RENT AND ENTRY TICKET CHARGES WAS GENERATED. THERE WAS A LSO INCOME GENERATED BY THE ASSESSEE FROM SALE OF PUBLICATION. IN THE RE TURN OF INCOME FILED FOR THE YEAR UNDER CONSIDERATION, EXEMPTION UNDER SECTI ON 11 WAS CLAIMED BY THE ASSESSEE FOR THE SAID INCOME BUT THE SAID EXEMP TION WAS DENIED BY THE ASSESSING OFFICER IN THE ASSESSMENT COMPLETED U NDER SECTION 143(3) BY RELYING ON THE PROVISO TO SECTION 2(15) AS AMEND ED W.E.F. A.Y. 2009-10 AS WELL AS THE PROVISIONS OF SECTION 28(III) OF THE ACT. IT IS OBSERVED THAT IN THE CASE OF INDIAN CHAMBER OF COMMERCE VS.- ITO INVOLVING SIMILAR FACTS THE CLAIM OF THE ASSESSEE FOR EXEMPTION UNDER SECTION 11 WAS DENIED I.T.A. NOS. 37 & 38/KOL/2018 (ASSESSMEN T YEARS: 2009-10 & 2010-11) INDIAN LEATHER TECHNOLOGISTS ASSOCIA TION 6 BY THE ASSESSING OFFICER AS WELL AS BY THE LD. CIT( APPEALS) AND THE TRIBUNAL VIDE ITS ORDER DATED 02.12.2014 PASSED IN ITA NO. 1491/KOL/2012 ALLOWED THE SAID CLAIM, INTER ALIA, F OR THE FOLLOWING REASONS GIVEN IN PARAGRAPH NO. 37 & 38 OF ITS ORDER :- 37. NOW COMING TO APPLICATION OF SECTION 28 (III) OF THE ACT. WE FIND THAT SECTION 28 (III) OF THE ACT PROVI DES THAT THE INCOME DERIVED BY A TRADE, PROFESSIONAL OR SIMILAR ASSOCIATION FROM SPECIFIC SERVICES PERFORMED FOR IT S MEMBERS WILL BE BROUGHT TO CHARGE UNDER THE HEAD 'PROFITS A ND GAINS OF BUSINESS OR PROFESSION'. THE UNDERLYING IDEA BEH IND S. 28(III) IS THAT THERE MUST BE A BUSINESS FROM WHICH INCOME IS DERIVED AND THAT IN THE COURSE OF SUCH BUSINESS SPE CIFIC SERVICES MUST BE RENDERED FOR ITS MEMBERS. THE CONC EPT BEHIND S.28(III) IS TO CUT AT THE MUTUALITY PRINCIP LE BEING RELIED ON IN SUPPORT OF A CLAIM FOR EXEMPTION, WHEN THE ASSESSEE WAS ACTUALLY DERIVING INCOME OR MAKING PRO FITS AS A RESULT OF RENDERING SPECIFIC SERVICES FOR ITS MEMBE RS IN A COMMERCIAL WAY. THE REASON FOR THE INTRODUCTION OF SECTION 28(III) OF ACT, TO IGNORE THE PRINCIPLE OF MUTUALIT Y AND REACH THE SURPLUS ARISING TO THE MUTUAL ASSOCIATION AND T HIS IS CLEAR FROM THE FACT THAT THESE PROVISIONS ARE CONFI RMED TO SERVICES PERFORMED BY THE ASSOCIATION 'FOR ITS MEMB ERS'. SUCH INCOME WOULD EITHER BE CHARGED AS BUSINESS INC OME OR UNDER THE RESIDUAL HEAD, DEPENDING UPON THE QUESTIO N WHETHER THE ACTIVITIES OF THE ASSOCIATION WITH THE NON- MEMBERS AMOUNT TO A BUSINESS OR OTHERWISE. SECTION 28(III) CONSTITUTES CERTAIN INCOME OF THE ASSOCIATION TO BE BUSINESS INCOME WITHOUT AFFECTING THE SCOPE OF THE EXEMPTION UNDER SECTION 11. SECTION 2(15) WHICH INCORPORATES THE DE FINITION OF 'CHARITABLE PURPOSES' SIMPLY SHOWS THAT SEVERAL MUTUAL ASSOCIATIONS MAY ALSO FALL WITHIN THE DEFINITION. T HE RECEIPTS DERIVED BY A CHAMBER OF COMMERCE AND INDUSTRY FOR PERFORMING SPECIFIC SERVICES TO ITS MEMBERS, THOUGH TREATED AS BUSINESS INCOME UNDER SECTION 28(III) WOULD STIL L BE ENTITLED TO THE EXEMPTION UNDER SECTION 11 R.W.S. 2 (15) OF THE ACT, PROVIDED THERE IS NO PROFIT MOTIVE, THUS ASSES SEE BEING A CHARITABLE INSTITUTION CARRYING ON THE OBJECT OF PR OMOTION AND DEVELOPMENT OF TRADE AND COMMERCE AND WHICH IS NOT INVOLVED IN THE CARRYING ON OF ANY ACTIVITY IN THE NATURE OF BUSINESS, THE SAID SECTION 28(III) OF THE ACT DOES NOT APPLY. 38. IN VIEW OF THE ABOVE DISCUSSION, WE ARE OF THE CONSIDERED VIEW THAT IN THE GIVEN FACTS AND DETAILE D READING OF THE VARIOUS JUDICIAL DECISIONS THROUGH THE YEARS , INTERPRETING THE DEFINITION OF 'CHARITABLE PURPOSE' AS LAID OUT IN SECTION 2(15) OF THE ACT AND ALSO THE DEFINI TION OF 'BUSINESS' IN RELATION TO THE SAID SECTION AMPLY RE VELS THAT THE THEORY OF DOMINANT PURPOSE HAS ALWAYS, ALL THRO UGH THE YEARS, BEEN UPHELD TO BE THE DETERMINING FACTOR LAY ING DOWN WHETHER THE INSTITUTION IS CHARITABLE IN NATUR E OR NOT. I.T.A. NOS. 37 & 38/KOL/2018 (ASSESSMEN T YEARS: 2009-10 & 2010-11) INDIAN LEATHER TECHNOLOGISTS ASSOCIA TION 7 WHERE THE MAIN OBJECT OF THE INSTITUTION WAS 'CHARI TABLE' IN NATURE, THEN THE ACTIVITIES CARRIED OUT TOWARDS THE ACHIEVEMENT OF THE SAID, BEING INCIDENTAL OR ANCILL ARY TO THE MAIN OBJECT, EVEN IF RESULTING IN PROFIT AND EVEN IF CARRIED OUT WITH NON MEMBERS, WERE ALL HELD TO BE CHARITAB LE IN NATURE. HONBLE APEX COURT IN EARLIEST CASE OF ANDH RA CHAMBER OF COMMERCE (SUPRA) HAD CLEARLY LAID OUT TH E PRINCIPLE THAT IF THE PRIMARY PURPOSE OF AN INSTITU TION WAS ADVANCEMENT OF OBJECTS OF GENERAL PUBLIC UTILITY, I T WOULD REMAIN CHARITABLE EVEN IF AN INCIDENTAL OR ANCILLAR Y ACTIVITY OR PURPOSE, FOR ACHIEVING THE MAIN PURPOSE, WAS PRO FITABLE IN NATURE. IN OUR VIEW THE BASIC PRINCIPLE UNDERLYI NG THE DEFINITION OF 'CHARITABLE PURPOSE' REMAINED UNALTER ED EVEN ON AMENDMENT IN THE SECTION 2(15) OF THE ACT W.E.F. 01/04/2009, THOUGH THE RESTRICTIVE FIRST PROVISO WA S INSERTED THEREIN. ACCORDINGLY, IN THE GIVEN FACTS O F THE CASE AS DISCUSSED ABOVE IN DETAIL, THE ASSESSEE ASSOCIAT ION'S PRIMARY PURPOSE WAS ADVANCEMENT OF OBJECTS OF GENER AL PUBLIC UTILITY AND IT WOULD REMAIN CHARITABLE EVEN IF AN INCIDENTAL OR ANCILLARY ACTIVITY OR PURPOSE, FOR AC HIEVING THE MAIN PURPOSE WAS PROFITABLE IN NATURE. HENCE, A SSESSEE IS NOT HIT BY NEWLY INSERTED PROVISO TO SECTION 2(1 5) OF THE ACT. THIS ISSUE OF ASSESSEES APPEAL IS ALLOWED. 6. IT IS ALSO OBSERVED THAT A SIMILAR ISSUE WAS INV OLVED IN THE CASE OF CREDAI BENGAL VS- CIT (EXEMPTION) AND VIDE ITS ORD ER DATED SEPTEMBER 30, 2016 PASSED IN ITA NO. 381/KOL/2016, IT WAS HEL D BY THE TRIBUNAL THAT WHERE ASSESSEES OBJECT OF PROMOTION OF CONSTR UCTION INDUSTRY IN INDIA HAD BEEN ACCEPTED BY THE REVENUE FOR GRANTING REGISTRATION UNDER SECTION 12AA, MERELY BECAUSE THE ASSESSEE HELD FAIR S IN INDIA AND ABROAD WHICH GENERATED SURPLUS FUND TO THE ASSESSEE, IT BE ING INCIDENTAL TO MAIN OBJECT OF THE ASSESSEE COULD NOT BE SAID TO BE COMM ERCIAL ACTIVITY OF THE ASSESSEE AND THERE WAS NO VIOLATION OF THE PROVIS IONS OF SECTION 2(15). 7. IN MY OPINION, THE RATIO OF THE DECISION OF THE TRIBUNAL RENDERED IN THE CASE OF INDIAN CHAMBER OF COMMERCE (SUPRA) AS W ELL AS IN THE CASE OF CREDAI BENGAL (SUPRA) IS SQUARELY APPLICABLE IN THE PRESENT CASE AND RESPECTFULLY FOLLOWING THE SAME, I SET ASIDE THE IM PUGNED ORDERS OF THE LD. CIT(APPEALS) ON THE ISSUE UNDER CONSIDERATION AND D IRECT THE ASSESSING I.T.A. NOS. 37 & 38/KOL/2018 (ASSESSMEN T YEARS: 2009-10 & 2010-11) INDIAN LEATHER TECHNOLOGISTS ASSOCIA TION 8 OFFICER TO GRANT EXEMPTION UNDER SECTION 11 TO THE ASSESSEE FOR BOTH THE YEARS UNDER CONSIDERATION AS CLAIMED. 8. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON JUNE 07, 2019 . SD/- (P.M. JAGTAP) VICE-PRESIDENT (KZ ) KOLKATA, THE 7 TH DAY OF JUNE, 2019 COPIES TO : (1) INDIAN LEATHER TECHNOLOGISTS ASSOCIATION, 44, SANJOY BHAVAN, 3 RD FLOOR, SANTI PALLY, KASBA, KOLKATA-700 107 (2) INCOME TAX OFFICER(EXEMPTION)-1, KOLKATA. 10B, MIDDLETON ROW, 5 TH FLOOR, KOLKATA-700 071 (3) COMMISSIONER OF INCOME TAX (APPEALS)-25, KOLKA TA, (4) COMMISSIONER OF INCOME TAX- , (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.