The DCIT (Exemption), Circle-1, Ahmedabad V. Give Foundation, Ahmedabad

ITA 471/AHD/2018

AI Insights

The case involves multiple appeals by the Give Foundation against the orders of the Commissioner of Income Tax (Appeals) concerning the denial of tax exemptions under Sections 11 and 12, and the taxation of corpus donations. The primary contention revolves around whether the Foundation's activities qualify as charitable under Section 2(15) of the Income Tax Act, despite the Foundation acting as a facilitator between donors and charitable organizations. The Tribunal considered various judicial precedents and the Supreme Court's decision in the Ahmedabad Urban Development Authority case, which influenced the interpretation of charitable activities under the Act. The matter was restored to the Assessing Officer for a detailed examination of the Foundation's activities in light of these precedents.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 125358 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 7 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-10-2023
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 25-09-2023
• Assessment Year: 2014-2015
• Appeal Filed On: 26-02-2018
• Other Referred Cases: Agarwal Shiksha Samiti Trust vs. State, Winsome Foundation vs. State, Sarladevi Sarabhai Trust No. 2 vs. State, All Saints School vs. State, Ahmedabad Urban Development Authority vs. State, Sabarmati Ashram Gaushala Trust vs. State
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Gift; Depreciation; Charitable institution
• Section: 54; 12AA; 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, AHMEDABAD BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER & SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER I. T .A . N o s . 9 65 & 96 6 / A h d/2 0 1 7 ( A s s e s s m en t Y e ar s : 2 01 0- 11 & 2 0 1 1- 1 2) G i ve Fo u n da ti on , J - 7 04 , I n dr a pr as th a To w e r s , D r i ve - i n - R o ad , T ha lte j , A h m e d a ba d - 3 8 0 05 4 V s. J oi nt D ir ec t or o f I n c o m e Ta x ( Ex e mp t io n) /D ep ut y D ir ec to r of I n c o m e T a x ( E xe mp tio n) , A h m e da ba d - 3 8 0 01 4 [ P A N N o . AA B C G2 32 2 D ] (Appellant) .. (Respondent) I .T .A . N o . 3 2 0/ A h d /2 0 1 7 ( A ss es s me n t Y e a r : 20 1 2 - 1 3) G i ve Fo u n da ti on , J - 7 04 , I n dr ap r as th a To w e r s , D r i ve - i n - R o ad , T h a lte j , A h m e da ba d - 3 8 0 05 4 V s. D e p ut y D i r e c t or of I nc o m e Ta x ( Ex e mp t io n) , C ir cl e - 1 , A h m e da ba d - 3 8 0 01 4 [ P A N N o . AA B C G2 32 2 D ] (Appellant) .. (Respondent) I .T .A . N o . 2 4 2/ A h d /2 0 1 7 ( A ss es s me n t Y e a r : 20 1 2 - 1 3) A s s is ta n t C o mm i ss i on e r of I nc o m e Ta x ( E xe m p ti on ) , C ir cl e - 1, A h m e da ba d V s. G i ve Fo u n da ti on , 3 r d F lo or , 5 3 & 5 4 , We st K h e t wa d i, M u n c i pl e, S K h e t wa d i La ne , Kh etw ad i, Mu mb ai - 4 00 00 4 [ P A N N o . AA B C G2 32 2 D ] (Appellant) .. (Respondent) I .T .A . N o . 4 3 5/ A h d /2 0 1 9 ( A ss es s me n t Y e a r : 20 1 3 - 1 4) G i ve Fo u n da ti on , J - 7 04 , I n dr ap r as th a To w e r s , D r i ve - i n - R o ad , T h a lte j , A h m e da ba d - 3 8 0 05 4 V s. D e p ut y C o m m i ss io ne r o f I nc o m e Ta x ( E xe m p ti on ) , C ir cl e - 1 , A h m e da ba d - 3 8 0 00 9 [ P A N N o . AA B C G2 32 2 D ] (Appellant) .. (Respondent) ITA Nos. 965&966/Ahd/2017, 320/Ahd/2017, 242/Ahd/2017,435/Ahd/2019, 1032/Ahd/2018 471/Ahd/2018 & 967/Ahd/2019 Give Foundation vs. Joint Director of Income Tax (Exemption) Asst. Years –2010-11 to 2015-16 - 2 - I .T .A . N o . 10 32 /A h d /2 01 8 ( A ss es s me n t Y e a r : 20 1 4 - 1 5) G i ve Fo u n da ti on , J - 7 04 , I n dr ap r as th a To w e r s , D r i ve - i n - R o ad , T h a lte j , A h m e da ba d-3 8 0 05 4 V s. D e p ut y D i r e c t or of I nc o m e Ta x ( Ex e mp t io n) , C ir cl e - 1 , A h m e da ba d [ P A N N o . AA B C G2 32 2 D ] (Appellant) .. (Respondent) I .T .A . N o . 4 7 1/ A h d /2 0 1 8 ( A ss es s me n t Y e a r : 20 1 4 - 1 5) D e p ut y C o m m i ss io ne r o f I nc o m e Ta x ( Ex e mp t io n) , C ir cl e - 1, A h m e da ba d - 3 8 0 00 9 V s. G i ve Fo u n da ti on , J - 7 04 , I n dr ap r as th To w e r s , N r . D r i v e - i n- C in e m a , Su vi dh a N ag ar C H S Ltd ., Tha lt ej , A h m e da b a d- 3 80 0 5 4 [P A N N o .AA B C G2 32 2 D] (Appellant) .. (Respondent) I .T .A . N o . 9 6 7/ A h d /2 0 1 9 ( A ss es s me n t Y e a r : 20 1 5 - 1 6) G i ve Fo u n da ti on , J - 7 04 , I n dr ap r as th a To w e r s , D r i ve - i n - R o ad , T h a lte j , A h m e da ba d - 3 8 0 05 4 V s. D e p ut y C o m m is s io ne r o f I nc o m e Ta x ( E xe m p ti on ) , C ir cl e - 1 , A h m e da ba d - 3 8 0 00 9 [P A N N o .AA B C G2 32 2 D] (Appellant) .. (Respondent) Appellant by : Shri S. N. Soparkar, Sr. Advocate & Shri Parin Shah, A.R. Respondent by: Shri Ashok Kumar Suthar, Sr. D.R. & Shri Kamlesh Makwana, CIT D.R. D a t e of H ea r i ng 26.09.2023 D a t e of P r o no u n ce me nt 06.10.2023 ITA Nos. 965&966/Ahd/2017, 320/Ahd/2017, 242/Ahd/2017,435/Ahd/2019, 1032/Ahd/2018 471/Ahd/2018 & 967/Ahd/2019 Give Foundation vs. Joint Director of Income Tax (Exemption) Asst. Years –2010-11 to 2015-16 - 3 - O R D E R PER BENCH: These bunch of appeals have been filed by the Assessee and the Revenue against the orders passed by the Ld. Commissioner of Income Tax (Appeals)-7 & 9 (in short “Ld. CIT(A)”), Ahmedabad vide orders dated 17.03.2016, 11.11.2016, 12.12.2018, 22.12.2017 & 20.03.2019 passed for the Assessment Years 2010-11 to 2015-16. Since common issues are under consideration before us, all appeals are taken up together for disposal. 2. Primarily, for all the years under consideration, three issues are involved, for which the Assessee and Department are in appeal, which can be summed up as below: 3. Issue 1: Denying exemption to the assessee under Sections 11 and 12 by invoking Section 13(8) read with the Proviso to Section 2(15) of the Act. This issue arises in all Assessment Years in the assessee’s appeals before us (applicable to all Assessment Year for consideration before us where the assessee is in appeal). 4. Issue 2: Whether the CIT(A) was right in allowing depreciation to the Assessee and, if so under what provision was the depreciation to be allowed (relevant to certain Assessment Year 2014-15 where Department is in appeal on this issue) ITA Nos. 965&966/Ahd/2017, 320/Ahd/2017, 242/Ahd/2017,435/Ahd/2019, 1032/Ahd/2018 471/Ahd/2018 & 967/Ahd/2019 Give Foundation vs. Joint Director of Income Tax (Exemption) Asst. Years –2010-11 to 2015-16 - 4 - 5. Issue 3: Whether the CIT(A) was right in his conclusions with respect to Ld. Assessing Officer’s action of bringing the corpus donation to tax (relevant to Assessment Years 2012-13, 2014-15 and 2015-16, where Revenue is in appeal before us and Assessment Year 2013-14, where the assessee is in appeal before us). 6. Since the appeals filed by the Assessee and Department for all the Assessment Years under consideration before us revolve around the aforesaid issues, we are not separately reproducing the grounds of appeal for the respective years filed by the Assessee and the Department for the sake of brevity. 7. We shall first discuss Issue Number 1 in which the assessee is in appeal before us on the action of the Ld. Assessing Officer in holding that the activities of the assessee are not eligible for exemption under Sections 11 and 12 of the Act. 8. The brief facts of the case are that the Assessee is a company licensed under Section 8 of the Companies Act, 2013 and registered under Section 12AA of the Income-tax Act, 1961. It receives donations from various donors under various heads such as payroll giving (where employees make donations by means of deductions out of their salaries), internet donations (where donors make donations through the assessee's website), donations for specific projects, and other donations not falling in any of these categories. The Assessee passes on these donations to ITA Nos. 965&966/Ahd/2017, 320/Ahd/2017, 242/Ahd/2017,435/Ahd/2019, 1032/Ahd/2018 471/Ahd/2018 & 967/Ahd/2019 Give Foundation vs. Joint Director of Income Tax (Exemption) Asst. Years –2010-11 to 2015-16 - 5 - charitable organisations, all registered under Section 12AA of the Act. These charitable organisations, often operate within a local area and unable to otherwise raise funds for their charitable work, seek to benefit are from the reach of the assessee, and gain access to funds that they could not have otherwise accessed. These organisations normally get listed on the assessee’s website so as to raise funds through the assessee. The assessee is therefore engaged in indirect charity. However, some part of the donations received by the assessee are retained by it to meet its administrative expenditure and to enable it to carry on its operations, which have been termed by the assessee as “retained earnings”. For all the Assessment Years under consideration, the income and expenditure account of the assessee thus reflected only the aforesaid retained donations (on the credit side) and the administrative expenses incurred (on the debit side). The donations received by the Assessee which were to be passed on to other organisations were routed through the balance sheet. However, for tax purposes, these donations were treated as income and were subjected to the requirements of application / accumulation under Section 11 of the Act. 9. During the course of assessment proceedings, the Ld. Assessing Officer for the various years under consideration, was of the view that the assessee is not engaged in charitable activities. The primary observations of the Ld. Assessing Officer can be summed up as under: ITA Nos. 965&966/Ahd/2017, 320/Ahd/2017, 242/Ahd/2017,435/Ahd/2019, 1032/Ahd/2018 471/Ahd/2018 & 967/Ahd/2019 Give Foundation vs. Joint Director of Income Tax (Exemption) Asst. Years –2010-11 to 2015-16 - 6 - (i) The Assessee carries on the activity of receiving donations from various donors and passing on the donations as specified by the donor to various organisations. However, as the actual charitable work is not carried on by the Assessee but by the other organisations and therefore, the case of the assessee would fall under the residuary category and therefore would be hit by Section 13(8) of the Act. Alternatively the assessee is not carrying on any activity that can be classified in any of those categories except providing financial support. (ii) The Assessee only acts as a facilitator for arranging funds for various charitable organisations who carry out the actual charitable activities, and the assessee only monitors the utilisation of these funds (iii) With respect to payroll giving, the payers have deducted tax at source for AYs 2010-11 and 2011-12, treating the same as fees for professional services. With respect to listing donations, the listing of the NGO on the Assessee's website is connected to these donations. Both these kinds of donations are thus fees for professional services i.e. what the assessee does is provide professional services for a fee / consideration. The assessee’s explanation that these retained earnings kept by the assessee to defray the costs of verification and documentation relatable to ITA Nos. 965&966/Ahd/2017, 320/Ahd/2017, 242/Ahd/2017,435/Ahd/2019, 1032/Ahd/2018 471/Ahd/2018 & 967/Ahd/2019 Give Foundation vs. Joint Director of Income Tax (Exemption) Asst. Years –2010-11 to 2015-16 - 7 - listing was not acceptable on the ground that the aforesaid amount were fee for services. (iv) So far as corporate (payroll) donations are concerned, the payers themselves considered this a payment as a professional fees for advice. For AYs 2010-11 and 2011-12, tax was deducted at source out of these receipts. (v) The activities of the Assessee are in the nature of trade, commerce or business within the meaning of the provisos to Section 2(15) of the Act and therefore hit by Section 13(8) of the Act. (vi) The assessee is not carrying out any activity in the fields of education, medical, relief of poor except disbursing the funds to organisations carrying out such activities. The assessee’s activities fall within the residuary limb of Section 2(15) "the advancement of any other object of general public utility." 10. In appeal, Ld. CIT(Appeals) dismissed the appeal of the assessee on this issue. The CIT(A) held that the Assessee is a facilitator for arranging funds for charitable organisations, and that the assessee receives fees from the donors as well as the donees. For all Assessment Years, the CIT(A) relied on Tribunal's order for A.Y. 2009-10 in the assessee’s own case. For A.Ys. 2010-11 and 2011-12, the CIT(A) held ITA Nos. 965&966/Ahd/2017, 320/Ahd/2017, 242/Ahd/2017,435/Ahd/2019, 1032/Ahd/2018 471/Ahd/2018 & 967/Ahd/2019 Give Foundation vs. Joint Director of Income Tax (Exemption) Asst. Years –2010-11 to 2015-16 - 8 - that (a) that the Assessee's activities are not in the nature of charitable activities at all; (b) that there is no change in the activities from A.Y. 2009-10; (c) that the Assessee basically renders professional services by way of giving advice for identifying charitable organisations for donors; and (d) that the assessee has not brought on record any evidence to show any change in the nature of activities. 11. The assessee is in appeal before us against the aforesaid order passed by Ld. CIT(Appeals) holding that the assessee is not engaged in charitable activities. Before us, the Counsel for the assessee submitted that the activity of the assessee is that it acts as a bridge between the donor and the donee i.e. the activity of the assessee is that on receipt of donation, the assessee identifies suitable recipients, who are not the direct beneficiaries of such donation but are usually other trusts who are engaged in conducting charitable activities. The role of the assessee is to identify such genuine organizations / trusts which are engaged in carrying out charitable activities in the form of giving relief to the poor etc. The assessee keeps complete check on the activities carried out by such organizations / trusts to ensure that the money which has been received from donors by the assessee has been utilized for giving relief to the poor i.e. carrying out charitable activities. For this purpose, the assessee keeps a detailed account / takes a detailed report from the donee / recipient organisations to oversee whether the funds have been correctly utilised as per the specifications of the donor. For the above activities, the ITA Nos. 965&966/Ahd/2017, 320/Ahd/2017, 242/Ahd/2017,435/Ahd/2019, 1032/Ahd/2018 471/Ahd/2018 & 967/Ahd/2019 Give Foundation vs. Joint Director of Income Tax (Exemption) Asst. Years –2010-11 to 2015-16 - 9 - assessee retains a portion (ranging from 6% to 7%) of the said donations to meet the administrative expenses for carrying out the aforesaid activities of identifying the recipient organizations / trusts, for carrying out check on the activities carried out by such trusts / organisations, to give a report to the donors of the utilization of their donations for the purpose of their records etc. Before us, the Counsel for the assessee placed reliance on various judicial precedents which on similar set of facts have a held that the assessee can be said to be engaged in carrying out charitable activities within the meaning of Section 2(15) of the Act. The Counsel for the assessee submitted that the Revenue Authorities have not appreciated that in view of the various judicial precedents on identical set of facts, the assessee is clearly carrying out charitable activities and falls within the main limb of Section 2(15) of the Act i.e. relief of the poor, medical relief etc. The second contention put forth by the Counsel for the assessee is that the position regarding charitable activities has undergone a substantial change after the decision of the Hon’ble Supreme Court in the case of Ahmedabad Urban Development Authority (AUDA) 143 taxmann.com 278 (SC). The contention of the Counsel for the assessee is that even if it were to be held that the assessee is engaged in advancement of “any other object of general public utility”, still in view of the decision of AUDA supra, since the assessee is primarily engaged in carried out charitable activities, while retaining a small portion of such donations towards expenditure is only incidental to such charitable activities, the assessee is carrying out charitable activities ITA Nos. 965&966/Ahd/2017, 320/Ahd/2017, 242/Ahd/2017,435/Ahd/2019, 1032/Ahd/2018 471/Ahd/2018 & 967/Ahd/2019 Give Foundation vs. Joint Director of Income Tax (Exemption) Asst. Years –2010-11 to 2015-16 - 10 - within the meaning of Section 2(15) of the Act. Accordingly, the Counsel for the assessee submitted that the matter may be set aside to the file of Assessing Officer for de novo consideration keeping in view the fact that firstly, various judicial precedents have held that if the assessee acts as a bridge between the donor and the recipients, still, the assessee can be said to have been carrying on charitable activities within the meaning of Section 2(15) of the Act and secondly, in view of the decision of AUDA decision, the assessee is clearly carrying out charitable activities and therefore, the matter may be considered afresh by the concerned Assessing Officer, in light of the above arguments. Further, it was submitted that in the decision by ITAT in assessee’s own case for Assessment Year 2009-10, the ITAT did not get an opportunity to adjudicate on the above lines and accordingly, the matter needs to be considered afresh in light of the aforesaid arguments put forth. 12. In response, the Ld. DR submitted that the case of the assessee is directly covered by the decision of ITAT the assessee’s own case for Assessment Year 2009-10. The appeal against the said order is pending before the High Court of Gujarat for adjudication. It was submitted that there is no change in facts as compared to Assessment Year 2009-10 and the facts of the years before us for our consideration and therefore, the decision of ITAT for Assessment Year 2009-10 would apply to these years as well. Accordingly, it was submitted that Ld. CIT(Appeals) has ITA Nos. 965&966/Ahd/2017, 320/Ahd/2017, 242/Ahd/2017,435/Ahd/2019, 1032/Ahd/2018 471/Ahd/2018 & 967/Ahd/2019 Give Foundation vs. Joint Director of Income Tax (Exemption) Asst. Years –2010-11 to 2015-16 - 11 - not erred in facts and in law in dismissing the appeal of the assessee on this issue. 13. We have heard the rival contentions and perused the material on record. We observe that in the case of Agarwal Shiksha Samiti Trust 36 Taxman 165 (Rajasthan), the High Court held that assessee-trust which was collecting donations with sole purpose of disbursing same for educational institutions run by a Shiksha Samiti, was an educational institution within meaning of Section 10(22) and was, therefore, entitled to exemption qua its income. The above case was approved by the Hon'ble Supreme Court in the case of Aditanar Educational Institution 90 Taxman 528 (SC). In the case of Winsome Foundation 89 taxmann.com 131 (Chandigarh - Trib.), the ITAT held that it is permissible under law for charitable trusts to donate for charitable or religious purpose and apply its income for said purpose but benefit of application cannot be claimed if it is found that funds are being diverted for non-charitable purposes. In the case of Sarladevi Sarabhai Trust No. 2, 40 Taxmann388 (Guj), the High Court held that when a donor- trust which is itself a charitable and religious trust donates its income to another trust, provisions of Section 11(1)(a) can be said to have been met out by such donor-trust and the donor-trust can be said to have applied its income for religious and charitable purposes, notwithstanding the fact that donation is subjected to any conditions that donee-trust will treat the donation as to its corpus and can only utilise the accrued income from the ITA Nos. 965&966/Ahd/2017, 320/Ahd/2017, 242/Ahd/2017,435/Ahd/2019, 1032/Ahd/2018 471/Ahd/2018 & 967/Ahd/2019 Give Foundation vs. Joint Director of Income Tax (Exemption) Asst. Years –2010-11 to 2015-16 - 12 - donated corpus for religious and charitable purposes, and that the question whether gifted income is to be utilised by donee-trust fully for its religious and charitable purposes or whether donee-trust has to keep intact the corpus of the donation and has to utilise only the income therefrom for its religious and charitable purposes would not make the slightest difference, so far as entitlement of the donor-trust for exemption under Section 11(1) goes. In the case of All Saints School 105 taxmann.com 149 (Delhi - Trib.), the Delhi ITAT held that exemption was available to donor charitable trust in respect of payment of sum to another charitable trust for utilisation towards charitable purpose of donee trust, such payment could be considered as proper application of income even if not spent in year of receipt itself. Therefore, from the above judicial precedents, it is clear that the fact that the assessee had further given the donation to other trusts for the purpose of carrying out charitable work itself would not disentitle the assessee from denial of exemption. Before us, we observe that it is not the case of the Department that the trusts / organisations to whom the assessee had given the donations for carrying out charitable activities had not in fact carried out any charitable activities in the first instance. Secondly, it would be useful to reproduce the relevant extracts of the decision rendered by Hon’ble Supreme Court in the case of the Ahmedabad Urban Development Authority 143 taxmann.com 278 (SC), while interpreting the impact of earning of incidental income, while carrying out charitable activities by the assessee trust: ITA Nos. 965&966/Ahd/2017, 320/Ahd/2017, 242/Ahd/2017,435/Ahd/2019, 1032/Ahd/2018 471/Ahd/2018 & 967/Ahd/2019 Give Foundation vs. Joint Director of Income Tax (Exemption) Asst. Years –2010-11 to 2015-16 - 13 - “A.3 Generally, the charging of any amount towards consideration for such an activity (advancing general public utility), which is on cost-basis or nominally above cost, cannot be considered to be "trade, commerce, or business" or any services in relation thereto. It is only when the charges are markedly or significantly above the cost incurred by the assessee in question, that they would fall within the mischief of "cess, or fee, or any other consideration" towards "trade, commerce or business". In this regard, the Court has clarified through illustrations what kind of services or goods provided on cost or nominal basis would normally be excluded from the mischief of trade, commerce, or business, in the body of the judgment.” ..... “166. What then is the interpretation of the expression "incidental" profits, from "business" being "incidental to the attainment of the objectives" of the GPU charity (which occurs in Section 11(4A))? As stated earlier, the interpretation of that expression in Thanthi Trust (supra) was in the context of a per se charity, i.e., where the trust's object was education. However, the restrictive or negative terms enjoining GPU charities from carrying on profitable activity had been deleted in 1983 (w.e.f. 1-4-1984). In Surat Art Silk (supra), the court had articulated the determinative test for defining whether a Trust was a GPU charity if its predominant object was to carry out a charitable purpose and that if that was the case, the fact that it earned profit would not per se deprive it of tax exemption. This decision was interpreted in the context of Section 11(4A) by this court in Thanthi Trust, to hold that business can be incidental to attainment of the trust's objects.” ..... “170. Classically, the idea of charity was tied up with eleemosynary51. However, "charitable purpose" - and charity as defined in the Act have a wider meaning where it is the object of the institution which is in focus. Thus, the idea of providing services or goods at no consideration, cost or nominal consideration is not confined to the provision of services or goods without charging anything or charging a token or nominal amount. This is spelt out in Indian Chamber of Commerce (supra) where this Court held that certain GPUs can render services to the public with the condition that they would not charge "more than is actually needed for the rendering of the services, - may be it may not be an exact equivalent, such mathematical precision being impossible in the case of variables, - may be a little surplus is left over at the end of the year - the broad inhibition against making profit is a good guarantee that the carrying on of the activity is not for profit”. ITA Nos. 965&966/Ahd/2017, 320/Ahd/2017, 242/Ahd/2017,435/Ahd/2019, 1032/Ahd/2018 471/Ahd/2018 & 967/Ahd/2019 Give Foundation vs. Joint Director of Income Tax (Exemption) Asst. Years –2010-11 to 2015-16 - 14 - 14. Accordingly, it is observed that the Hon’ble Supreme Court has held that while carrying out charitable activities, the assessee trust may also collect nominal cost / consideration with the objective to effectuate the carrying out of the charitable activities. However, this is subject to the condition that such charge is only confined to the extent the same is required for the purpose of carrying out charitable activities and should not take the colour of professional fees / business income. We observe that while rendering the decision, the ITAT in the assessee’s own case for Assessment Year 2009-10 did not have the benefit of considering the impact of the aforesaid decision in the case of Ahmedabad Urban Development Authority (supra) on the activities carried out by the assessee Trust, having been rendered at a later date. It would be useful to reproduce the relevant extracts of the ITAT the ruling the assessee’s own case for Assessment Year 2009-10 for ready reference: “25. Thus, at best it can be said that in earlier year the activities of the assessee was treated as activity towards advancement of general public utility. However, we find that there was an amendment in proviso to Section 2(15) of the Act we.f. 1-4-2009 whereby two provisos were inserted in Section 2(15) which define charitable purpose as under:- "Provided that the advancement of any other object of general public utility shall not be a charitable purpose, if it involves carrying on of any activity in the nature of trade, commerce or business, or any activity of 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: [ Provided further that the first proviso shall not apply if the aggregate value of the receipts from the activities referred to therein is [twenty five lakh rupees] or less in the previous year;] ITA Nos. 965&966/Ahd/2017, 320/Ahd/2017, 242/Ahd/2017,435/Ahd/2019, 1032/Ahd/2018 471/Ahd/2018 & 967/Ahd/2019 Give Foundation vs. Joint Director of Income Tax (Exemption) Asst. Years –2010-11 to 2015-16 - 15 - 26. Therefore, in view of the above amendment in law the activities which were regarded as advancement of general public utility in earlier years cannot be regarded as activities for charitable purposes if the activities are hit by first proviso and is not covered by exemption provided in second proviso. In the instant case we find that the receipt of the assessee from advisory fee charged for rendering services exceeds the limit provided in Section 2(15) of the Act. Therefore, the activity of the assessee cannot be regarded as of charitable purpose. of advancement of general public utility during the Assessment Year 2009-10. Therefore the above decision is not applicable on facts of the case. 27. The second decision relied upon by the assessee is of Hon'ble Guiarat High Court in the case of Sabarmati Ashram Gaushala Trust (supra). In this case. Hon'ble High Court has held as under:- "that the main obiectives of the Trust were to breed cattle and endeavour to improve the quality of the cows and oxen in view of the need of all India is prominently and agricultural country. All these were objects of general public utility and would squarely fall under Sec. 2(15) of the Act Profit making was neither the aim nor object of the trust. It was not the principal activity. Merely because while carrying out the activities for the purpose of achieving the object of the Trust, certain incidental surpluses were generated, would not render the activity innature of trade, commerce or business, the assessee was entitled to exemption u/s. 11." 28. We find that the facts of the instant case are distinguishable from the facts of the case before the Hon'ble High Court. In that case the assessee was engaged in the activities of breeding cattle in an endeavour to improve the quality of cows and oxen and as an incidental activity to that it sold milk and received surplus. The Hon'ble High Court held that breeding cattle was activity of public utility and merely because some incidental surplus arose to the charitable trust it cannot be held that the assessee trust was carrying out any activity in the nature of trade. In contradiction to the facts of that case in the instant case we find that the entire expenses incurred by the assessee company was for rendering advisory services for which it also received charges from the persons to whom advisory were given. The main activity of the assessee was of rendering services and for that activity it received charges which exceeded the limit specified in second proviso to Section 2(15) of the Act. Therefore, it cannot be held that the receipt generated was incidental to the attainment of the main object of the trust. Rather the receipt ITA Nos. 965&966/Ahd/2017, 320/Ahd/2017, 242/Ahd/2017,435/Ahd/2019, 1032/Ahd/2018 471/Ahd/2018 & 967/Ahd/2019 Give Foundation vs. Joint Director of Income Tax (Exemption) Asst. Years –2010-11 to 2015-16 - 16 - was generated in respect of main and only activity carried out by the assessee. Therefore this decision does not help the case of the assessee.” 15. Accordingly, on perusal of the decision rendered by ITAT the assessee’s own case for Assessment Year 2009-10, it is observed that the relevant time, though this issue was discussed by the ITAT in its decision, however, the Tribunal did not have the benefit of the decision rendered by the Hon’ble Supreme Court in the case of AUDA supra. 16. Accordingly, in interest of justice, the matter is being restored to the file of the Assessing Officer to analyse the impact of the observations made by the Hon’ble Supreme Court in the decision of AUDA supra, more specifically on the observations made by the Hon’ble Supreme Court with regards to incidental earning of income, in the light of the assessee’s set of facts. The Assessing Officer after considering of the facts of the assessee’s case may then decide whether, looking into the assessee’s facts, the assessee is engaged primarily in rendering of services for consideration (retained earnings) or whether looking into the totality of facts of the assessee’s case, it could be inferred that such retained earnings are only kept by the assessee to the extent of facilitating the above activities. Further, the Assessing Officer may also analyse the impact of decisions which have held that the assessee acts as a bridge between the donor and the recipient, even then, looking into the particular facts of assessee’s case, it may be inferred that the assessee is carrying out charitable activities within the meaning of Section 2(15) of the Act. Accordingly, looking into the totality of facts of the assessee’s ITA Nos. 965&966/Ahd/2017, 320/Ahd/2017, 242/Ahd/2017,435/Ahd/2019, 1032/Ahd/2018 471/Ahd/2018 & 967/Ahd/2019 Give Foundation vs. Joint Director of Income Tax (Exemption) Asst. Years –2010-11 to 2015-16 - 17 - case, the Assessing Officer may also analyse whether the aforesaid decisions have a bearing on the assessee’s set of facts. In the result, the primary matter involved in all the Assessment Years under consideration before us is restored to the file of the Assessing Officer for carrying out the analysis as directed above. 17. In the result, Issue No. 1 raised by the assessee for various Assessment Years is allowed for statistical purposes. 18. Issue Nos. 2 and 3 are concerned on whether the concurrent claims for depreciation and capital expenditure as application of income to charitable purposes would be permissible and whether the corpus donations are to be brought to tax. 19. With respect to Issue No. 3, the Counsel for the assessee submitted that in view of the assessee’s submission on Issue No. 1 above, corpus donations would be exempt under Section 11(1)(d) of the Act. However, since the primary issue i.e. Issue No. 1 involved for all the Assessment Years under consideration has been restored to the file of Assessing Officer for de novo consideration as per directions given above, in the interest of justice, the other issues i.e. Issues 2 and 3 are also restored to the file of the Assessing Officer for de novo consideration. 20. In the result, the appeal of the Department is allowed for Assessment Year 2014-15 for statistical purposes in respect of Issue No. ITA Nos. 965&966/Ahd/2017, 320/Ahd/2017, 242/Ahd/2017,435/Ahd/2019, 1032/Ahd/2018 471/Ahd/2018 & 967/Ahd/2019 Give Foundation vs. Joint Director of Income Tax (Exemption) Asst. Years –2010-11 to 2015-16 - 18 - 2 referred to above. For Assessment Years 2012-13, 2014-15 and 2015- 16, the appeal of the Department is allowed for statistical purposes for Issue No. 3 referred to above and appeal of the assessee is allowed for statistical purposes for Issue No. 3 referred to above for Assessment Year 2013-14. 21. In the combined result, both the appeals of the Assessee and the Department are allowed for statistical purposes. This Order pronounced in Open Court on 06/10/2023 Sd/- Sd/- (WASEEM AHMED) (SIDDHARTHA NAUTIYAL ) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 06/10/2023 TANMAY, Sr. PS TRUE COPY आदेश क त ल प अ े षत/Copy of the Order forwarded to : 1. अपीलाथ / The Appellant 2. यथ / The Respondent. 3. संबं धत आयकर आय ु त / Concerned CIT 4. आयकर आय ु त(अपील) / The CIT(A)- 5. वभागीय त न ध, आयकर अपील!य अ धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड' फाईल / Guard file. आदेशान ु सार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील य अ धकरण, अहमदाबाद / ITAT, Ahmedabad 1. Date of dictation 03.10.2023(Dictation given by the Hon’ble Member on his dragon software on 01.10.2023) 2. Date on which the typed draft is placed before the Dictating Member 03.10.2023 3. Other Member..................... 4. Date on which the approved draft comes to the Sr.P.S./P.S 04.10.2023 5. Date on which the fair order is placed before the Dictating Member for pronouncement .10.2023 6. Date on which the fair order comes back to the Sr.P.S./P.S 06.10.2023 7. Date on which the file goes to the Bench Clerk 06.10.2023 8. Date on which the file goes to the Head Clerk.......................................... 9. The date on which the file goes to the Assistant Registrar for signature on the order.......................... 10. Date of Despatch of the Order..........................................