TCI Institute of Logistic, Gurgaon V. CIT(E), Chandigarh

ITA 5402/DEL/2015

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 3926 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-01-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Assessment Year: misc
• Appeal Filed On: 03-09-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIJAY VERMA
• Keywords: Charitable institution; Competent authority
• Section: 80G; 12AA; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH D : NEW DELHI) BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.5401/DEL./2015 ITA NO.5402/DEL./2015 TCI INSTITUTE OF LOGISTIC, VS. CIT (E), 69, INSTITUTIONAL AREA, CHANDIGARH. SECTOR 32, GURGAON. (PAN : AAECT9627P) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI P.C. YADAV, ADVOCATE REVENUE BY : SHRI VIJAY VERMA, CIT DR DATE OF HEARING : 07.12.2017 DATE OF ORDER : 19.01.2018 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 APPEALS, THE SAME ARE BEING D ISPOSED OF BY WAY OF CONSOLIDATED ORDER TO AVOID REPETITION OF DI SCUSSION. 2. THE APPELLANT, TCI INSTITUTE OF LOGISTIC (HEREIN AFTER REFERRED TO AS THE ASSESSEE COMPANY) BY FILING THE PRESENT APPEALS SOUGHT TO SET ASIDE THE IMPUGNED ORDERS DATED 29.05.2015 P ASSED BY THE ITA NOS.5401 & 5402/DEL/2015 2 COMMISSIONER OF INCOME-TAX (EXEMPTIONS), CHANDIGARH ON THE GROUNDS INTER ALIA THAT :- ITA NO.5401/DEL/2015 1. THAT THE LD. CIT (E) HAS ERRED IN REJECTING THE APPLICATION OF THE APPELLANT TO REGISTER THE TRUST U/S 12AA OF THE INCOME TAX ACT. 2. THAT THE LD. CIT (E) HAS ERRED IN REJECTING THE APPLICATION OF THE APPELLANT TO REGISTER THE TRUST U/S 12AA OF THE INCOME TAX ACT, DESPITE THE FACT THAT OBJECTS ARE C HARITABLE, WITHIN THE DEFINITION OF SUB-SECTION 15 OF SECTION 2 OF THE INCOME TAX ACT, 1961. 3. THAT THE LD. CIT (E) HAS ERRED IN OBSERVING THA T THE ACTIVITIES OF THE APPELLANT ARE MERELY FOR PROMOTIO N OF TRANSPORTATION BUSINESS AND REJECTING THE APPLICATI ON OF THE APPELLANT TO REGISTER THE TRUST U/S 12AA OF THE INC OME TAX ACT ON THIS GROUND. ITA NO.5402/DEL/2015 1. THAT THE LD. CIT (E) HAS ERRED IN REJECTING THE APPLICATION OF THE APPELLANT TO REGISTER THE TRUST U/S 80G OF THE INCOME TAX ACT. 2. THAT THE LD. CIT (E) HAS ERRED IN REJECTING THE APPLICATION OF THE APPELLANT TO REGISTER THE TRUST U/S 80G OF THE INCOME TAX ACT, DESPITE THE FACT THAT OBJECTS ARE C HARITABLE, WITHIN THE DEFINITION OF SUB-SECTION 15 OF SECTION 2 OF THE INCOME TAX ACT, 1961. 3. THAT THE LD. CIT (E) HAS ERRED IN OBSERVING THA T THE ACTIVITIES OF THE APPELLANT ARE MERELY FOR PROMOTIO N OF TRANSPORTATION BUSINESS AND REJECTING THE APPLICATI ON OF THE APPELLANT TO REGISTER THE TRUST U/S 80G OF THE INCO ME TAX ACT ON THIS GROUND. 3. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICATION OF THE CONTROVERSY AT HAND ARE : THE APPLICATIONS MOVED BY THE ASSESSEE COMPANY IN FORM NO.10A AND 10G FOR REGISTRATION UND ER SECTION 12AA OF THE INCOME-TAX ACT, 1961 (FOR SHORT THE AC T) AND APPROVAL U/S 80G OF THE ACT RESPECTIVELY HAVE BEEN REJECTED BY THE ITA NOS.5401 & 5402/DEL/2015 3 LD. CIT ON THE GROUND THAT THE ACTIVITIES OF THE AS SESSEE COMPANY DOES NOT FALL WITHIN THE AMBIT OF SECTION 2(15) OF THE ACT BEING MERELY INTO THE PROMOTION OF TRANSPORT BUSINESS. 4. FEELING AGGRIEVED, THE ASSESSEE COMPANY HAS COME UP BEFORE THE TRIBUNAL BY CHALLENGING THE IMPUGNED ORD ER PASSED BY LD. CIT BY WAY OF FILING THE PRESENT APPEALS . 5. 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. 6. IT IS NOT IN DISPUTE THAT THE ASSESSEE COMPANY H AS GOT AFFILIATION FROM NATIONAL SKILL DEVELOPMENT CORPORA TION (NSDC), A PUBLIC PRIVATE PARTNERSHIP IN INDIA UNDER THE MIN ISTRY OF SKILL DEVELOPMENT AND ENTREPRENEURSHIP AS ON 30.03.2015, AS ITS VOCATIONAL TRAINING PARTNER. 7. IT IS ALSO NOT IN DISPUTE THAT THE ASSESSEE COMP ANY IS REGISTERED U/S 25 OF THE COMPANIES ACT HAVING BEEN BARRED FROM DISTRIBUTION OF PROFIT AMONGST ITS MEMBERS BY WAY O F DIVIDENDS WITH FOLLOWING AIMS AND OBJECTS : 1. TO INITIATE, CARRYOUT, EXECUTE, IMPLEMENT, AID AND ASSIST ACTIVITIES TOWARDS DEVELOPING KNOWLEDGE, SKILL EXPE RTISE, COMPETENCIES AND CAPABILITIES FOR LOGISTICS SECTOR AND IN MEETING THE ENTIRE VALUE CHAIN'S REQUIREMENTS OF-APPROPRIAT ELY TRAINED MANPOWER IN QUANTITY AND QUALITY ON A SUSTAINED AND EVOLVING BASIS. ITA NOS.5401 & 5402/DEL/2015 4 2. TO ESTABLISH / RUN SCHOOLS, COLLEGES, INSTITUTES , TRAINING CENTERS, AND SUCH OTHER AGENCIES AS MAY BE REQUIRED TO PROMOTE COMPETENCY BUILDING IN LOGISTICS SECTOR. 3. TO DESIGN, DEVELOP & IMPLEMENT SKILL COMPETENCY DEVELOPMENT PLAN FOR THE LOGISTICS SECTOR AND MAINT AIN SKILL INVENTORY. 4. TO COLLABORATE WITH OTHER ORGANIZATIONS, INSTITU TES, SCHOOLS, COLLEGES, UNIVERSITIES, AND CENTERS TO ENC OURAGE / PROMOTE COMPETENCY DEVELOPMENT & EMPLOYABILITY IN L OGISTICS SECTOR IN INDIA AND ABROAD. 5. TO DETERMINE SKILLS / COMPETENCY STANDARDS AND QUALIFICATIONS IN CONSONANCE WITH THE SECTOR NORMS. 6. TO ESTABLISH A WELL- STRUCTURED LOGISTICS AND SU PPLY CHAIN SECTOR SPECIFIC LABOUR MARKET INFORMATION SYSTEM (' LMIS') TO ASSIST PLANNING AND DELIVERY OF TRAINING. 7. TO FACILITATE IN STANDARDIZING THE AFFILIATION AND ACCREDITATION PROCESS FOR THE SECTOR. 8. TO COORDINATE PARTICIPATION OF SOCIAL PARTNERS, EMPLOYERS IN THE PRIVATE SECTOR, TRAINING PROVIDERS, PROFESSI ONAL SOCIETIES AND NGOS/CIVIL SOCIETY GROUPS IN THE PROCESS OF SKI LL DEVELOPMENT FOR THE SECTOR. 9. TO IDENTIFY THE SKILL DEVELOPMENT NEEDS OF THE S ECTOR, REVIEW INTERNATIONAL TRENDS IN SECTOR SKILL DEVELOP MENT AND IDENTIFY SECTOR SKILL GAPS AND TECHNOLOGY. 10. TO DO AND UNDERTAKE THE TASK OF EDUCATIONAL, V OCATIONAL AND PROFESSIONAL SKILL UPGRADE FOR THE SECTOR. 11. TO FACILITATE IN SETTING UP A ROBUST AND STRIN GENT CERTIFICATION AND ACCREDITATION PROCESS FOR THE SEC TOR TO ENSURE CONSISTENCY AND ACCEPTABILITY OF STANDARDS. 12. TO PROMOTE RESEARCH AND DEVELOPMENT, DEVELOPMEN T & DEPLOYMENT OF TECHNOLOGICAL SOLUTIONS, IMPROVING EF FICIENCIES AND INNOVATION IN LOGISTICS AND SUPPLY CHAIN INDUST RY SECTOR. 13. TO COLLABORATE WITH NATIONAL AND INTERNATIONAL PARTNERS SUITABLY FOR FURTHERANCE OF ITS OBJECTIVES. 14. TO PROVIDE CONSULTANCY TO OTHER EDUCATIONAL INS TITUTES, UNIVERSITIES, TRAINING CENTERS, & SUCH OTHER ORGANI ZATION WHICH ARE INTO / WILLING TO DEVELOP COMPETENCIES FOR LOGI STICS SECTOR. ITA NOS.5401 & 5402/DEL/2015 5 15. NO OBJECTS OF THE COMPANY SHALL .CARRIED OUT WI THOUT OBTAINING PRIOR PERMISSION OF COMPETENT AUTHORITY, WHENEVER REQUIRE OR PRESCRIBED. 16. NONE OF THE OBJECTS OF THE COMPANY SHALL BE CA RRIED OUT ON A COMMERCIAL BASIS. 8. LD. CIT DECLINED THE REGISTRATION U/S 12AA AND A PPROVAL U/S 80G TO THE ASSESSEE COMPANY ON THE SOLE GROUND THAT , THE ACTIVITIES OF THE ASSESSEE COMPANY DOES NOT FALL WI THIN THE AMBIT OF SECTION 2(15) OF THE ACT I.E. CHARITABLE PURPOSE AS THE ACTIVITIES OF THE ASSESSEE COMPANY ARE MERELY IN RELATION TO PROM OTION OF TRANSPORTATION BUSINESS. 9. MAJOR AIMS AND OBJECTS OF THE ASSESSEE COMPANY I S TO DESIGN, DEVELOPMENT AND IMPLEMENT SKILL/COMPETENCY DEVELOPM ENT PLAN FOR LOGISTIC SECTOR BY ESTABLISHING SCHOOLS, COLLEG ES, INSTITUTES, TRAINING CENTERS AND SUCH OTHER AGENCIES TO PROMOTE COMPETENCY BUILDING IN LOGISTICS SECTORS. WHEN WE EXAMINE THE AFORESAID AIMS AND OBJECTS OF THE ASSESSEE COMPANY PURSUED BY THE ASSESSEE COMPANY, IT LEADS TO THE CONCLUSION THAT IT WILL CE RTAINLY LEAD TO CREATING OF JOB OPPORTUNITIES IN THE LOGISTIC, WARE HOUSE AND COURIER SECTORS TO THE UNEMPLOYED YOUTH OF OUR COUNTRY. MO REOVER, WHEN WE EXAMINE THE AIMS AND OBJECTS OF THE ASSESSEE COM PANY IN THE LIGHT OF THE FACT THAT IT IS A COMPANY REGISTERED U /S 25 OF THE COMPANIES ACT, IT AGAIN LEADS TO THE CONCLUSION THA T THE ASSESSEE ITA NOS.5401 & 5402/DEL/2015 6 COMPANY IS ESTABLISHED TO BRIDGE THE SKILL GAPS IN THE LOGISTIC INDUSTRY IN COLLABORATION WITH NSDC. 10. NO DOUBT, THE MERE REGISTRATION OF A COMPANY U/ S 25 OF THE COMPANIES ACT, AS CONTENDED BY LD. DR, IS NOT ENOUG H FOR REGISTRATION U/S 12AA AND 80G OF THE ACT BUT THE FA CTUM OF THE REGISTRATION OF THE ASSESSEE COMPANY U/S 25 OF THE COMPANIES ACT HAS TO BE SEEN IN THE LIGHT OF THE AIMS AND OBJECTS OF THE ASSESSEE COMPANY WHICH ARE CERTAINLY LEAD TO CREATING JOB OP PORTUNITIES BY PROVIDING SKILL EXPERTISE AND BY PROMOTING KNOWLEDG E IN THE LOGISTIC SECTOR. 11. LD. DR FOR THE REVENUE FURTHER CONTENDED THAT S INCE ASSESSEE COMPANY HAS BEEN FORMED FOR CONDUCTING COU RSES FOR TCI EMPLOYEES AND TRAINEE AFTER GETTING TRAINING ARE TO SERVE THE TCI, THE ASSESSEE COMPANY CANNOT BE SAID TO BE FORMED FO R RENDERING SERVICES TO THE PUBLIC AT LARGE. HOWEVER, WE ARE O F THE CONSIDERED VIEW THAT WHEN SKILL TRAINING IS GIVEN BY THE ASSES SEE COMPANY IN LOGISTICS TO THE TRAINEE THOUGH FROM TCI BUT WITHOU T ANY BINDING AGREEMENT THAT THEY WERE TO SERVE TCI FOR A SPECIFI ED PERIOD, THE ARGUMENT RAISED BY THE LD. DR IS NOT SUSTAINABLE. TRAINING IMPARTED TO THE TRAINEE WHICH WOULD CREATE JOB OPPO RTUNITIES FOR THE TRAINEE WITH LIBERTY TO SERVE ANYWHERE WOULD CERTAI NLY AMOUNT TO RENDERING SERVICES TO THE PUBLIC AT LARGE. ITA NOS.5401 & 5402/DEL/2015 7 12. WHEN WE EXAMINE THE ANNUAL OPERATIONAL REPORT O F THE ASSESSEE COMPANY FOR FY 2014-15, AVAILABLE AT PAGES 14 TO 17 OF THE PAPER BOOK, AND ATTENDANCE ROLL OF THE TRAINEE WITH CLASS ROOM PHOTOGRAPHS, AVAILABLE AT PAGES 18 TO 29 OF THE PAP ER BOOK, IT IS PROVED THAT THE ASSESSEE COMPANY HAS BEEN ESTABLISH ED TO CARRY OUT THE SKILL MISSION IN COLLABORATION WITH NSDC AS PER CURRICULUM LAY DOWN BY THE NSDC. ANNUAL OPERATION REPORT FOR FY 2 014-15, AVAILABLE AT PAGES 14 TO 17, ALSO SHOWS THAT THE AS SESSEE COMPANY IS PROVIDING CURRICULUM OF 18 DAYS EACH FOR TRANSPO RTATION AND SUPPLY CHAIN SOLUTIONS; CERTIFICATE IN WAREHOUSE MA NAGEMENT; CERTIFICATE IN TRANSPORT SYSTEM & MANAGEMENT; CERTI FICATE IN WARE HOUSE MANAGEMENT; CERTIFICATE IN TRANSPORT SYS TEM & MANAGEMENT; CERTIFICATE IN COURIER MANAGEMENT AND C ERTIFICATE IN COURIER MANAGEMENT ETC.. THE ASSESSEE COMPANY ALSO PLACED ON RECORD CERTIFICATE OF PARTNERSHIP DATED 30.03.2015 ISSUED BY NSDC CERTIFYING THAT THE ASSESSEE COMPANY IS AN APPROVED PARTNER OF NSDC FOR AYS 2014-15 & 2015016. 13. HONBLE DELHI HIGH COURT IN CASE CITED AS INSTITUTE OF CHARTERED ACCOUNTANT VS. DIT EXEMPTION 347 ITR 99 (DEL.), AFTER DISCUSSING THE DECISION RENDERED BY THE HONB LE GUJARAT HIGH COURT IN GUJARAT STATE CO-OPERATIVE UNION VS. CIT (1992) 1 95 ITR 279 (GUJ.) , HELD THAT THE WORD EDUCATION DOES NOT CONFINE TO ITA NOS.5401 & 5402/DEL/2015 8 SCHOLASTIC INSTRUCTIONS BUT OTHER FORMS OF EDUCATIO N ARE ALSO INCLUDED IN THE WORD EDUCATION WHICH MEANS INSTRUCT ING OR EDUCATING. 14. THE LD. DR FOR THE REVENUE VIDE SYNOPSIS FILED IN THIS CASE BROUGHT TO OUR NOTICE CIRCULAR NO.11/2008 DATED 19. 12.2008 EXPLAINING THE AMENDMENT IN SECTION 2(15) OF THE AC T W.E.F. 01.04.2009 AS UNDER :- SECTION 2(15) OF THE INCOME TAX ACT, 1961 DEFINES CHARITABLE PURPOSE TO INCLUDING THE FOLLOWING :- (I) RELIEF OF THE POOR (II) EDUCATION (III) MEDICAL RELIEF, AND (IV) THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY 15. WHEN WE EXAMINE THE AIMS AND OBJECTS OF THE ASS ESSEE COMPANY IN THE LIGHT OF THE AFORESAID DEFINITION OF CHARITABLE PURPOSE IMPARTING SKILL EDUCATION IN LOGISTICS, WAR EHOUSING MANAGEMENT AND COURIER MANAGEMENT, IT WOULD CERTAIN LY LEAD TO FULFILLING THE OBJECT OF GENERAL PUBLIC UTILITY. F URTHERMORE, BY IMPARTING SKILL DEVELOPMENT IN LOGISTICS INDUSTRY, WAREHOUSE AND COURIER MANAGEMENT, TO BE DEPLOYED IN THE LOGISTICS INDUSTRY, WOULD CERTAINLY SERVE THE OBJECT OF GENERAL PUBLIC UTILITY AS DRIVING VEHICLES BY THE UNTRAINED DRIVERS ON THE ROADS ARE ALSO LEADING TO NUMEROUS ROAD ACCIDENTS IN OUR COUNTRY. ITA NOS.5401 & 5402/DEL/2015 9 16. IN VIEW OF WHAT HAS BEEN DISCUSSED ABOVE, WE AR E OF THE CONSIDERED VIEW THAT ASSESSEE COMPANY REGISTERED U/ S 25 OF THE COMPANIES ACT IS CARRYING OUT ITS ACTIVITIES WITH S PECIFIC AIMS AND OBJECTS OF IMPARTING TRAINING IN LOGISTICS, WAREHOU SING MANAGEMENT AND COURIER MANAGEMENT FOR THE BENEFIT OF THE PUBLI C AT LARGE BEING A PUBLIC PRIVATE PARTNERSHIP HAVING AFFILIATION OF NSDC UNDER THE MINISTRY OF SKILL DEVELOPMENT AND ENTREPRENEURSHIP AS ITS VOCATIONAL TRAINING PARTNER AND AS SUCH, IS ENTITLE D TO BE REGISTERED U/S 12AA AND CONSEQUENT APPROVAL U/S 80G OF THE ACT . SO, THE IMPUGNED ORDERS PASSED BY THE CIT (EXEMPTION), CHAN DIGARH ARE NOT SUSTAINABLE IN THE EYES OF LAW, HENCE THE LD. C IT IS DIRECTED TO GRANT REGISTRATION U/S 12AA TO THE ASSESSEE COMPANY FORTHWITH, WITH APPROVAL U/S 80G OF THE ACT. CONSEQUENTLY, BO TH THE APPEALS FILED BY THE ASSESSEE COMPANY ARE ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THIS 19 TH DAY OF JANUARY, 2018. SD/- SD/- (R.K. PANDA) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 19 TH DAY OF JANUARY, 2018 TS ITA NOS.5401 & 5402/DEL/2015 10 COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(E), CHANDIGARH. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.