DCIT (E), New Delhi V. M/s National Accreditation Board, New Delhi

ITA 5262/DEL/2016

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 5165 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 7 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-05-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2013-2014
• Appeal Filed On: 06-10-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation; Charitable institution; Rule of consistency; Set aside
• Section: 143(3); 12A; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH E : NEW DELHI) BEFORE HONBLE VICE PRESIDENT, SHRI G.D. AGRAWAL AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.5262/DEL./2016 (ASSESSMENT YEAR : 2013-14) DCIT (E), CIRCLE 2 (1), VS. M/S. NATIONAL ACCREDITA TION BOARD, NEW DELHI. 4 TH FLOOR, NBCC PLACE, EAST TOWER, BHISHAM PITAMAH MARG, PRAGATI VIHAR, NEW DELHI 110 003. (PAN :AAAAN8753G) CO NO.5/DEL/2017 (IN ITA NO.5262/DEL./2016) (ASSESSMENT YEAR : 2013-14) M/S. NATIONAL ACCREDITATION BOARD, VS. DCIT (E), CI RCLE 2 (1), 4 TH FLOOR, NBCC PLACE, EAST TOWER, NEW DELHI. BHISHAM PITAMAH MARG, PRAGATI VIHAR, NEW DELHI 110 003. (PAN :AAAAN8753G) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI RUCHESH SINHA, ADVOCATE REVENUE BY : SMT. RINKU SINGH, ADDL. CIT DR DATE OF HEARING : 14.05.2019 DATE OF ORDER : 27.05.2019 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : SINCE COMMON QUESTIONS OF FACTS AND LAW HAVE BEEN R AISED IN BOTH THE AFORESAID APPEAL AND CROSS OBJECTION, T HE SAME ARE BEING DISPOSED OFF BY WAY OF CONSOLIDATED ORDER TO AVOID REPETITION OF DISCUSSION. ITA NO.5262/DEL/2016 2 2. APPELLANT, DCIT (E), CIRCLE 2(1), NEW DELHI (HE REINAFTER REFERRED TO AS THE REVENUE) BY FILING THE PRESENT APPEAL SOUGHT TO SET ASIDE THE IMPUGNED ORDER DATED 13.07.2016 PASSE D BY THE COMMISSIONER OF INCOME-TAX (APPEALS)-40, NEW DELHI QUA THE ASSESSMENT YEAR 2013-14 ON THE GROUNDS INTER ALIA T HAT :- ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, LD. CIT (A) HAS ERRED IN LAW IN HOLDING THAT THE ACTIVITIES OF THE ASSESSEE ARE CHARITABLE IN NATURE AND THAT ASSESSEE IS ELIGI BLE FOR HT EXEMPTION U/S 11 OF THE I.T. ACT BY IGNORING THE FA CT ACTIVITIES OF THE ASSESSEE IS TO FACILITATE ACCREDITATION AND CON TINUING SUPERVISION THROUGH INSPECTION AND CHARGING INSPECT ION AND ACCREDITATION FEES FROM VARIOUS ORGANIZATIONS. THE ASSESSEES ACTIVITIES FALLS UNDER LAST LIMB OF SECTION 2(15) O F THE ACT AND HIT BY THE PROVISO TO SECTION 2(15) OF THE ACT. 3. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICAT ION OF THE CONTROVERSY AT HAND ARE : ASSESSEE SOCIETY, REGISTE RED UNDER THE SOCIETIES REGISTRATION ACT, A STATUTORY BODY OF GOV ERNMENT OF INDIA, IS ALSO REGISTERED UNDER SECTION 12A OF THE INCOME-TAX ACT, 1961 (FOR SHORT THE ACT) WITH MAIN OBJECTIVES AS UNDER :- A) ASSESS THE GRADE COLLEGES AND/OR INSTITUTIONS OF TECHNICAL AND PROFESSIONAL EDUCATION THE COURSES AND PROGRAMS OFF ERED BY THEM, THEIR VARIOUS UNITS, FACULTY, DEPARTMENT ETC. ; B) STIMULATE THE ACADEMIC ENVIRONMENT AND QUALITY O F TEACHING AND RESEARCH IN THE INSTITUTIONS; C) CONTRIBUTION TO THE SPHERE OF KNOWLEDGE IN ITS D ISCIPLINE. 4. AO CALLED UPON THE ASSESSEE TO EXPLAIN AS TO WHY ITS RECEIPT FROM FEES SUBSCRIPTION SHOULD NOT BE HIT BY PROVISO OF SECTION 2(15) OF THE ACT AND DENIED THE EXEMPTION UNDER SECTION 1 1 OF THE ACT TO ITA NO.5262/DEL/2016 3 THE ASSESSEE AND THEREBY COMPUTED THE INCOME OF THE ASSESSEE AS UNDER :- INCOME AS PER INCOME AND EXPENDITURE ACCOUNT 23,12, 00,349 EXPENSES AS PER INCOME & EXPENDITURE ACCOUNT ESTABLISHMENT EXPENSES 1,30,45,438 OTHER ADMINISTRATIVE EXPENSES 90,03,469 EXPENSES ON GRANTS, SUBSIDIES ETC. - TRAVEL EXPENSES 11,29,19,091 OTHER EXPENSES - DEPRECIATION 1,25,43,440 INCOME TAX FOR THE FINANCIAL YEAR 2011-12 30,06,853 15,05,18,291 NET TAXABLE INCOME 8,06,82,058 5. ASSESSEE CARRIED THE MATTER BY WAY OF AN APPEAL BEFORE THE LD. CIT (A) WHO HAS DELETED THE ADDITIONS BY ALLOWI NG THE APPEAL. FEELING AGGRIEVED, THE REVENUE HAS COME UP BEFORE T HE TRIBUNAL BY WAY OF FILING THE PRESENT APPEAL. 6. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS R ELIED UPON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. 7. TO PROCEED FURTHER, WE WOULD EXTRACT THE PROVISI ONS CONTAINED UNDER SECTION 2(15) OF THE ACT FOR READY PERUSAL AS UNDER:- 2(15) 'CHARITABLE PURPOSE' INCLUDES RELIEF OF THE POOR, EDUCATION, YOGA, MEDICAL RELIEF, PRESERVATION OF EN VIRONMENT (INCLUDING WATERSHEDS, FORESTS AND WILDLIFE) AND PR ESERVATION OF MONUMENTS OR PLACES OR OBJECTS OF ARTISTIC OR HISTO RIC INTEREST, AND THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY: ITA NO.5262/DEL/2016 4 PROVIDED THAT THE ADVANCEMENT OF ANY OTHER OBJECT O F GENERAL PUBLIC UTILITY SHALL NOT BE A CHARITABLE PURPOSE, I F IT INVOLVES THE CARRYING ON OF ANY ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINESS, OR ANY ACTIVITY OF RENDERING ANY SERVICE IN RELATION TO ANY TRADE, COMMERCE OR BUSINESS, 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 A CTUAL CARRYING OUT OF SUCH ADVANCEMENT OF ANY OTHER OBJECT OF GENE RAL PUBLIC UTILITY; 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 S UCH ACTIVITY OR ACTIVITIES, OF THAT PREVIOUS YEAR. 8. WHEN WE EXAMINE THE MAIN OBJECTIVES OF ASSESSEE SOCIETY FOR ASSESSMENT AND ACCREDITATION CARRIED OUT BY THE ASSESSEE SOCIETY, THE SAME ARE TO ASSESS AND GRADE COLLEGES AND/OR INSTITUTIONS OF TECHNICAL AND PROFESSIONAL EDUCATIO N, THE COURSES AND PROGRAMS OFFERED BY THEM, THEIR VARIOUS UNITS, FACU LTY, DEPARTMENT ETC.; TO STIMULATE THE ACADEMIC ENVIRONMENT AND QUA LITY OF TEACHING AND RESEARCH IN THE INSTITUTIONS; TO MAKE CONTRIBUT ION TO THE SPHERE OF KNOWLEDGE IN ITS DISCIPLINE; TO MOTIVATE COLLEGE S AND/OR INSTITUTIONS OF TECHNICAL AND PROFESSIONAL EDUCATIO N FOR RESEARCH, AND ADOPT TEACHING PRACTICES THAT GROOM THEIR STUDE NTS FOR THE INNOVATION AND DEVELOPMENT OF LEADERSHIP QUALITIES; TO ENCOURAGE INNOVATIONS, SELF EVALUATION AND ACCOUNTABILITY IN HIGHER EDUCATION; TO PROMOTE NECESSARY CHANGES, INNOVATIONS AND REFOR MS ALL ASPECTS ITA NO.5262/DEL/2016 5 OF THE WORKING OF THE COLLEGES/ INSTITUTIONS OF TE CHNICAL AND PROFESSIONAL EDUCATION FOR THE ABOVE PURPOSE; AND T O HELP INSTITUTIONS REALIZE THEIR ACADEMIC OBJECTIVES; IT LEADS TO THE CONCLUSION THAT THE ASSESSEE SOCIETY IS INTO CHARIT ABLE ACTIVITIES, THE OBJECTIVES BEING INCIDENTAL TO THE EDUCATION. 9. NOW, THE QUESTION ARISES FOR DETERMINATION IN TH IS CASE IS :- AS TO WHETHER RECEIPTS OF THE ASSESSEE FROM FEES/ SUBSCRIPTION ARE HIT BY PROVISO TO SECTION 2(15) OF THE ACT? 10. WHEN THE ASSESSEE SOCIETY IS RECEIVING RECEIPT OF FEES/ SUBSCRIPTION AS PER NORMS LAID DOWN BY GOVERNMENT O F INDIA, PROFIT MOTIVE IS NOT VISIBLE RATHER ALL THE ACTIVITIES ARE CENTERED AROUND DISCIPLINING, PROMOTING, IMPROVING AND CONTRIBUTING TO SIMILAR ACADEMIC ENVIRONMENT AND QUALITY OF TEACHING AND TO ENHANCE THE KNOWLEDGE AND DISCIPLINE OF THE EDUCATIONAL INSTITU TIONS WHICH ARE INCIDENTAL TO THE EDUCATION AND CANNOT BE KEPT UNDE R THE OBJECTS OF GENERAL PUBLIC UTILITY. 11. WHEN WE FURTHER EXAMINE THE ACTIVITIES BEING CA RRIED OUT BY THE ASSESSEE SOCIETY IN THE LIGHT OF THE FACT THAT IN THE IMMEDIATELY PRECEDING YEAR I.E. AY 2012-13, ASSESSEE HAS BEEN D ULY GRANTED EXEMPTION UNDER SECTION 11 OF THE ACT BY FRAMING AS SESSMENT UNDER SECTION 143(3) OF THE ACT. UNDISPUTEDLY, THE RE IS NO CHANGE IN THE AIMS AND OBJECTIVES OF THE ASSESSEE SOCIETY WHICH ARE BEING ITA NO.5262/DEL/2016 6 CARRIED OUT IN ACCORDANCE WITH THE MEMORANDUM OF AS SOCIATION AND CERTIFICATE OF REGISTRATION UNDER SOCIETIES REG ISTRATION ACT DATED 07.01.2010. THERE IS NOT AN IOTA OF MATERIAL BROUGHT ON RECORD BY AO IF THE FACTS OF THE YEAR UNDER ASSESSM ENT ARE DISTINGUISHABLE FROM AY 2012-13. 12. IN THESE CIRCUMSTANCES, RULE OF CONSISTENCY AS LAID DOWN BY HONBLE SUPREME COURT IN RADHASOAMI SATSANG VS. CIT 193 ITR 321 (SC) IS APPLICABLE IN THIS CASE. SO, THE AO WITHOUT PR OVING ON RECORD THAT THE ACTIVITIES OF THE ASSESSEE SOCIETY ARE IN THE NATURE OF TRADE, COMMERCE OR BUSINESS PROCEEDED TO DENY THE B ENEFIT OF SECTION 11 OF THE ACT WHICH IS NOT SUSTAINABLE IN T HE EYES OF LAW. RATHER ASSESSEE IS CARRYING OUT ITS ACTIVITIES OF A CCREDITATION AS PER ALL INDIA COUNCIL FOR TECHNICAL EDUCATION (AICTE) A CT, 1987 AND THERE IS NO ELEMENT OF PROFIT AND AS SUCH FIRST PRO VISO TO SECTION 2(15) OF THE ACT IS NOT APPLICABLE. 13. IN VIEW OF WHAT HAS BEEN DISCUSSED ABOVE, WE AR E OF THE CONSIDERED VIEW THAT LD. CIT (A) HAS RIGHTLY ALLOWE D THE EXEMPTION UNDER SECTION 11 OF THE ACT TO THE ASSESSEE BY ALLO WING THE APPEAL. SO, FINDING NO ILLEGALITY OR PERVERSITY IN THE IMPU GNED ORDER PASSED BY THE LD. CIT(A), THE APPEAL FILED BY THE REVENUE IS HEREBY DISMISSED. ITA NO.5262/DEL/2016 7 14. CROSS OBJECTION FILED BY THE ASSESSEE IS MERELY TO SUPPORT THE ORDER OF THE LD. CIT (A) AND IN VIEW OF THE FACT TH AT APPEAL BEARING ITA NO.5262/DEL/2016 FILED BY THE REVENUE IN WHICH THE PRESENT CROSS OBJECTION WAS FILED BY THE ASSESSEE HAS SINCE BEEN DISMISSED VIDE THIS COMPOSITE ORDER, THE PRESENT CROSS OBJECT ION IS HEREBY DISMISSED HAVING BEEN BECOME INFRUCTUOUS. ORDER PRONOUNCED IN OPEN COURT ON THIS 27 TH DAY OF MAY, 2019. SD/- SD/- (G.D. AGRAWAL) (KULDIP SINGH) VICE PRESIDENT JUDICIAL MEMBE R DATED THE 27 TH DAY OF MAY, 2019 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-40, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.