Video Photographers Association of Gujarat, Ahmedabad V. The Dy.DIT (Exemp.), Ahmedabad

ITA 470/AHD/2015

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 5981 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 9 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2010-2011
• Appeal Filed On: 04-03-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T SANKAR
• Keywords: Charitable institution
• Section: 143(3); 195; 12

Judgement Text

ITA NO.470/AHD/2015 ASSESSMENT YEAR: 2010-11 PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL, AHMEDABAD SMC BENCH, AHMEDABAD [CORAM: PRAMOD KUMAR AM] ITA NO.470/AHD/2015 ASSESSMENT YEAR: 2010-11 VIDEO PHOTOGRAPHERS ASSOCIATION OF GUJARAT ............ APPLICANT PUNYABHAI SHOPPING CENTRE DARPAN CROSS ROAD, NARANPURA AHMEDABAD 380 013 [PAN: AAAAV3774D] VS. DEPUTY COMMISSIONER OF INCOME-TAX, EXEMPTIONS, AHMEDABAD ....................... RESPONDENT APPEARANCES BY SUNIL TALATI FOR THE APPELLANT T SANKAR FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : 04.10.2018 DATE OF PRONOUNCING THE ORDER : 02.01.2019 O R D E R 1. BY WAY OF THIS APPEAL, THE ASSESSEE APPELLANT HA S CHALLENGED CORRECTNESS OF THE ORDER DATED 3 RD SEPTEMBER 2014 PASSED BY THE CIT(A) IN THE MATTER OF ASSESSMENT UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961, FOR THE ASSESSM ENT YEAR 2010-11. 2. GRIEVANCE OF THE ASSESSEE, IN SUBSTANCE, IS THAT THE LEARNED CIT(A) ERRED IN HOLDING THAT THE PROVISO TO SECTION 2(15) WILL COME INTO PLAY ON THE FACTS OF THIS CASE, AND, CONSEQUENTLY, THE ASSESSEE APPELLANT IS TO BE DECLINED THE STATUS OF BEING ENGAGED IN A CHARITABLE ACTIVITY. 3. THE ASSESSEE APPELLANT IS A CHARITABLE TRUST REG ISTERED UNDER SECTION 12 A OF THE INCOME TAX ACT. THE MAIN OBJECTS FOR WHICH THE ASSESSEE WA S FORMED INCLUDE, INTER ALIA, TO IMPROVE THE ART OF PHOTOGRAPHY AND VIDEOGRAPHY, AND, FOR THAT P URPOSE, TO PROCURE AND IN TURN GIVE GUIDANCE, DIRECTIONS AND INFORMATION TO THE MEMBERS OF THE AS SOCIATION. DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTIC ED THAT IN THE RELEVANT PREVIOUS YEAR, THE ASSESSEE HAS ORGANIZED AN EXHIBITION, CHARGED FEES FOR STALLS IN THE EXHIBITION AND THESE STALLS WERE NOT ONLY GIVEN TO THE MEMBERS BUT ALSO TO THE COMMERCIAL ORGANIZATIONS. THE ASSESSING OFFICER WAS OF THE VIEW THAT THIS ACTIVITY OF HOLDI NG EXHIBITION CANNOT BE TREATED AS A CHARITABLE ACTIVITY UNDER SECTION 2(15). IT WAS HELD THAT SINC E HOLDING AN EXHIBITION IS IN THE NATURE OF ITA NO.470/AHD/2015 ASSESSMENT YEAR: 2010-11 PAGE 2 OF 4 COMMERCIAL ACTIVITY AND AS PROVISO TO SECTION 2(15) IS, ACCORDINGLY, INVOKED AND THE ASSESSEE IS TO BE DENIED THE BENEFIT OF SECTION 11. AGGRIEVED, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A). IT WAS POINTED OUT THAT THE ASSESSEE HA D ORGANIZED VARIOUS PHOTOGRAPHY WORKSHOPS BY EMINENT PHOTOGRAPHERS AND EDUCATIONALISTS SHRI G IRISH MISTRY AND JALJIT AJNANI, AND THAT THESE WORKSHOPS AND EXHIBITIONS WERE EDUCATIONAL IN NATUR E. LEARNED CIT(A) REJECTED THIS PLEA BY RELYING UPON HONBLE SUPREME COURTS JUDGMENT IN TH E CASE OF SOLE TRUSTEE VS LOK SIKSHAN TRUST (101 ITR 234). LEARNED CIT(A) HELD THAT HOL DING OF EXHIBITION CANNOT BE HELD TO BE EDUCATION. THE ACTION OF THE ASSESSING OFFICER WAS UPHELD AND THE PLEA REGARDING THE ACTIVITY OF THE TRUST BEING AN EDUCATIONAL ACTIVITY WAS ALSO RE JECTED. THE ASSESSEE IS NOT SATISFIED AND IS IN FURTHER APPEAL BEFORE THE TRIBUNAL. 4. I HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF THE APPLICABLE LE GAL POSITION. 5. I FIND THAT IT IS IMMATERIAL AS TO WHETHER THE A CTIVITY OF HOLDING AN EXHIBITION PER SE IS AN EDUCATION ACTIVITY OR NOT, BECAUSE, AS LONG AS THE ASSESSEE IS PURSUING THE EDUCATIONAL ACTIVITIES BY HOLDING WORKSHOPS AND CLASSES- AS THE ASSESSEE I S CLEARLY ON THE FACTS OF THIS CASE, EVEN WHEN HIS PURSUING THE EDUCATIONAL OBJECTS INVOLVE A N ACTIVITY IN THE NATURE OF COMMERCIAL ACTIVITY, THE PROVISO TO SECTION 2 (15) CANNOT BE I NVOKED. SECTION 2(15), AS IT STOOD PRIOR TO THE INSERTION OF PROVISO THERETO WITH EFFECT FROM 1ST A PRIL 2009, WAS A RELATIVELY SIMPLE SECTION WHICH STATED THAT CHARITABLE PURPOSE INCLUDES RELIEF OF THE POOR, EDU CATION, MEDICAL RELIEF, AND THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBL IC UTILITY BUT THE PROVISO TO THIS SUB SECTION, INSERTED WITH EFFECT FROM 1ST APRIL 2009, STATES THAT PROVIDED THAT THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY SHALL NOT BE A CHARITABLE PURPOSE, IF IT INVOLVES THE CARRYING ON OF ANY ACTIVITY IN THE NATURE OF TR ADE, COMMERCE OR BUSINESS, OR ANY ACTIVITY OF RENDERING ANY SERVICE IN RELATION TO AN Y TRADE, COMMERCE OR BUSINESS, FOR A CESS OR FEE OR ANY OTHER CONSIDERATION, IRRESPECTIV E OF THE NATURE OF USE OR APPLICATION, OR RETENTION, OF THE INCOME FROM SUCH ACTIVITY . IN PLAIN WORDS, ALL THAT THIS LEGISLATIVE AMENDMENT PROVIDED FOR WAS THAT IN A SITUATION IN W HICH, IN THE COURSE OF ADVANCEMENT OF ANY OTHER OBJECT OF PUBLIC UTILITY, THE ACTIVITIES OF A N INSTITUTION INVOLVED CARRYING ON OF ANY ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINESS OR OF A NY ACTIVITY OF RENDERING ANY SERVICE IN RELATIONSHIP TO ANY TRADE, COMMERCE OR BUSINESS FOR A CESS, FEE OR ANY OTHER CONSIDERATION, THEN IRRESPECTIVE OF WHAT SUCH AN INSTITUTION DOES TO TH E INCOME, HOW THAT INCOME IS APPLIED OR HOW THAT INCOME IS RETAINED, THE INSTITUTION, TO THAT E XTENT, WILL CEASE TO BE CARRYING ON CHARITABLE ACTIVITIES. ALL THIS IS, HOWEVER, RELEVANT ONLY FOR THE RESIDUARY CLAUSE OF DEFINITION, I.E. ANY OTHE R OBJECT OF GENERAL PUBLIC UTILITY. IN A CASE IN WHI CH AN ASSESSEE IS INVOLVED IN EDUCATIONAL ACTIVITY, THE PROVISO TO SECTION 2(15) DOES NOT COM E INTO PLAY. AS TO WHAT COULD BE TERMED AS AN ITA NO.470/AHD/2015 ASSESSMENT YEAR: 2010-11 PAGE 3 OF 4 EDUCATIONAL ACTIVITY, WE FIND GUIDANCE FROM OUR JUR ISDICTIONAL HIGH COURT IN THE CASE OF GUJARAT STATE CO-OPERATIVE UNION V. CIT (1992) 195 ITR 279 (GUJ) WHEREIN IT IS, INTER ALIA, HELD THAT THE CHANGING TIME AND THE EVER WIDENING HORIZONS OF KNOWLEDGE MAY BRING IN CHANGES IN THE METHODOLOGY OF TEACHING AND A SHIFT FOR THE BET TER IN THE INSTITUTIONAL SETUP. ADVANCEMENT OF KNOWLEDGE BRING WITHIN ITS FOLD SUIT ABLE METHODS OF ITS DISSEMINATION AND THOUGH THE PRIMARY METHOD OF SITTING IN A CLASS -ROOM MAY REMAIN IDEAL FOR MOST OF THE INITIAL EDUCATION, IT MAY BECOME NECESSARY TO H AVE A DIFFERENT OUTLOOK FOR FURTHER EDUCATION. IT IS NOT NECESSARY TO NAIL DOWN THE CON CEPT OF EDUCATION TO A PARTICULAR FORMULA OR TO FLOW IT ONLY THROUGH A DEFINED CHANNE L. ITS PROGRESS LIES IN ACCEPTANCE OF NEW IDEAS AND DEVELOPMENT OF APPROPRIATE MEANS TO R EACH THEM TO THE RECIPIENTS . SIMILARLY, IN THE CASE OF DIRECTOR OF INCOME TAX (EXEMPTIONS) V. AHMEDABAD MA NAGEMENT ASSOCIATION 366 ITR 85(GUJ), HONBLE JURISDICTIONAL HIGH COURT HAVE REFERRED TO THE SUPREME COURT DECISION IN THE CASE OF SOLE TRUSTEE LOK SHIK SHAN TRUST (SUPRA) AND HAVE HELD THAT EDUCATION UNDER SECTION 2(15) DOES NOT HAVE A RES TRICTED MEANING WHEREBY ONLY NORMAL SCHOOLING I.E. SCHOLASTIC EDUCATION IS COVERED. I T HAS BEEN HELD THAT SECTION 2(15) COVERS EDUCATION WHICH IS PROVIDED IN NON-SCHOLASTIC MANNE R ALSO. ON A SIMILAR NOTE, HONBLE DELHI HIGH COURT IN THE CASE OF DELHI MUSIC SOCIETY VS DGIT 357 ITR 265(DELHI) HAS HELD THAT TEACHING AND PROMOTING ALL FORMS OF MUSIC AND DANCE , WESTERN, INDIAN, AND ANY OTHER ACCORDING TO THE OBJECTS OF THE TRUST IS ALSO IMPARTING OF ED UCATION. IN THE LIGHT OF THESE DISCUSSIONS, AND BEARING IN MIND ENTIRETY OF THE FACTS OF THIS CASE, I AM OF THE CONSIDERED VIEW THAT TEACHING THE ART OF PHOTOGRAPHY, WHICH IS MAIN AND PREDOMINANT O BJECT OF THE ASSESSEE, IS ALSO AN EDUCATIONAL ACTIVITY. THEREFORE, THE PROVISO TO SEC TION 2(15) IS NOT RELEVANT IN THE PRESENT CONTEXT AND EVEN IF THE ASSESSEE IS FOUND TO BE HOLDING EXH IBITION, WHICH MAY BE OF COMMERCIAL NATURE BUT SUBSERVIENT TO THE MAIN OBJECT WHICH ARE EDUCAT IONAL; CANNOT BE REASON ENOUGH TO DECLINE THE BENEFIT OF SECTION 11. 6. IN VIEW OF THE ABOVE DISCUSSIONS, AND BEARING IN MIND PECULIAR FACTS OF THIS CASE, I AM OF THE VIEW THAT THE AUTHORITIES BELOW WERE IN ERROR I N INVOKING PROVISO TO SECTION 2(15) ON THE FACTS OF THIS CASE. I, THEREFORE, SEE NO REASONS TO DEAL WITH ALL OTHER PERIPHERAL LEGAL ISSUES RAISED BY THE ASSESSEE AND UPHOLD THE PLEA OF THE ASSESSEE FO R THE SHORT REASONS SET OUT ABOVE. 7. IN THE RESULT, THE APPEAL IS ALLOWED. PRONOUNCED IN THE OPEN COURT TODAY ON THE 2 ND DAY OF JANUARY, 2019. SD/- PRAMOD KUMAR (ACCOUNTANT MEMBER) DATED: AHMEDABAD, THE 2 ND DAY OF JANUARY, 2019. ITA NO.470/AHD/2015 ASSESSMENT YEAR: 2010-11 PAGE 4 OF 4 COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) CIT (4) CIT(A) (5) DR (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD