ITO, WD-1(3), KOLKATA, Kolkata V. Spiritual Hierarchy Publication Trust, Kolkata

ITA 606/KOL/2016

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 6470 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-05-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 05-04-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ARVIND AGARWAL
• Assessee Lawyers: S DASGUPTA
• Keywords: Business income; Charitable institution
• Section: 12A; 12AA

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: KOL KATA ( ) . . , !' . # . $% , & !' ) [BEFORE SHRI P.M. JAGTAP, AM & SHRI A. T. VARKEY, JM] I.T.A. NO. 606/KOL/2016 ASSESSMENT YEAR: 2010 - 11 ITO(E), WD-1(3), KOLKATA VS. SPIRITUAL HIERARCHY PUBLICATION TRUST (PAN: AAITS 2972 D) APPELLANT RESPONDENT DATE OF HEARING 08.02.2018 DATE OF PRONOUNCEMENT 01.05.2018 FOR THE APPELLANT SHRI S. DASGUPTA, ADDL. CIT(DR) FOR THE RESPONDENT SHRI ARVIND AGARWAL, ADVOCATE ORDER PER SHRI A.T.VARKEY, JM THIS IS AN APPEAL PREFERRED BY THE REVENUE AGAINST THE ORDER OF THE LD. CIT(A)-25, KOLKATA DATED 21.01.2016 FOR ASSESSMENT YEAR 2010-11. THE MAIN GRIEVANCE OF THE REVENUE IS AGAINST THE ACTION OF T HE LD. CIT(A) IN ALLOWING EXEMPTIONS TO THE INCOME OF ASSESSEE TRUST U/S 11(4 ) AND 11(4A) OF THE ACT. 2. BRIEF FACTS OF THIS CASE ARE THAT THE ASSESSEE T RUST IS REGISTERED U/S 12A OF THE ACT AND HAS APPROVAL U/S 80G. THE AO DURING THE ASSESSMENT FOR ASSESSMENT YEAR 2010-11 WAS OF THE OPINION THAT SINCE THE ASSE SSEE IS ENGAGED IN THE ACTIVITY OF PRINTING AND PUBLISHING AND SELLING/DISTRIBUTING VARIOUS BOOKS, MAGAZINES, E- BOOKS, CDS, DVDS, PHOTOGRAPHS, AUDIO-VIDEO TAPES AN D OTHER PRINTED MATERIALS IS 2 ITA NO.606/KOL/2016 SPIRITUAL HIERARCHY PUBLICATION TRUST A.YR.2010-11 2 ENGAGED PURELY COMMERCIAL VENTURES WITH PROFIT MOTI VE AND THEREFORE ACCORDING TO HIM WAS NOT ELIGIBLE FOR THE BENEFIT OF EXEMPTIO N U/S 11 OF THE ACT AND ASSESSED INCOME AT RS. 3,08, 41,503/-. AGGRIEVED TH E ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A) WHO WAS PLEASED TO ALLOW THE ASSESSEES APPEAL. AGGRIEVED THE REVENUE IS BEFORE US. 3. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ECORDS. WE NOTE THAT AO WHILE PASSING THE IMPUGNED ASSESSMENT ORDER HAD SIM ULTANEOUSLY TOOK UP THE MATTER WITH THE LD. DDIT(EXEMP) TO CANCEL THE 12A R EGISTRATION GRANTED TO THE ASSESSEE. THE LD. DDIT(E) VIDE A REASONED ORDER DAT ED 10.06.2013 WAS PLEASED TO DROP THE SAID PROCEEDINGS AND THEREBY STILL THE ASS ESSEE TRUST IS ENJOYING 12A REGISTRATION. IT WAS BROUGHT TO OUR NOTICE THAT FOR THE SUBSEQUENT YEARS I.E. ASSESSMENT YEAR 2011-12, THE AO HAS ACCEPTED THAT T HE ASSESSEE TRUST IS ELIGIBLE FOR EXEMPTION OF ITS INCOME U/S 11 OF THE ACT. WE A LSO NOTE THAT THE ASSESSEE TRUST WAS ESTABLISHED BY DEED OF TRUST ON 08.04.2009 AND THE TRUST WAS REGISTERED U/E 12AA OF THE ACT W.E.F. 24.06.2009 AND APPROVAL U/S 80G(5)(VI) WAS GRANTED ON 14.05.2009. WE NOTE THAT THE MAIN OBJECT OF THE TRU ST IS TO EDUCATE AND PROPAGATE AMONG THE GENERAL PUBLIC AND ART AND SCIENCE OF YOG A AND MEDITATION THROUGH PUBLICATION, PRINTING /DISTRIBUTION OF SPIRITUAL JO URNALS, PERIODICALS, PAMPHLETS, MAGAZINES, NEWS PAPERS, PRINTED BOOKS, E-BOOKS, CDS , DVDS, EITHER FREE OF COST OR AT CONCESSIONAL PRICE. THE AO WAS OF THE OPINION THAT THE ASSESSEE WAS CARRYING OUT A COMMERCIAL ACTIVITY UNDER THE GARB O F EDUCATION AND THEREFORE HE DENIED EXEMPTION OF INCOME U/S 11 AND TREATED EXCES S INCOME OVER EXPENDITURE AS THE BUSINESS INCOME OF THE TRUST AND SIMULTANEOU SLY TOOK UP THE MATTER WITH THE DDIT(E) FOR CANCELLATION OF THE REGISTRATION GRANTE D U/S 12AA OF THE ACT. WE 3 ITA NO.606/KOL/2016 SPIRITUAL HIERARCHY PUBLICATION TRUST A.YR.2010-11 3 NOTE THAT THE DDIT(E) HAS DROPPED THE PROCEEDINGS A FTER HEARING THE ASSESSEE TRUST BY A REASONED ORDER DATED 10.06.2013. AS PER THE PROVISO TO SECTION 2(15) THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBL IC UTILITY SHALL NOT BE A CHARITABLE PURPOSE; IF IT INVOLVES THE CARRYING OF ANY ACTIVITY IN THE NATURE OF TRADE, COMMERCE, BUSINESS OR ANY ACTIVITY OF RENDER ING IN HIS SERVICE BEING RELEVANT TO TRADING, COMMERCIAL AND BUSINESS FOR CE SS OF FEE OR ANY OTHER CONSIDERATION. WE NOTE THAT THE ASSESSEE TRUST HAS NOT BEEN FORMED WITH AN OBJECTIVE FOR ADVANCEMENT OF ANY OTHER OBJECT OF GE NERAL PUBLIC UTILITY. THEREFORE, PROVISO TO SECTION 2(15) DOES NOT COME INTO PLAY. T HE MAIN OBJECT OF THE ASSESSEE AS NOTED EARLIER IS TO EDUCATE AND PROPAGATE THE AR T AND SCIENCE OF YOGA AND MEDITATION. THE TERM EDUCATION ENJOYS VIDE CONNOT ATIONS COVERING ALL KINDS OF TRAINING CARRIED ON IN A SYSTEMATIC MANNER, LEADING TO PERSONALITY DEVELOPMENT OF AN INDIVIDUAL. THERE IS NOTHING IN THE ACT WHICH GI VES A RESTRICTED MEANING. THEREFORE, SINCE THE MAIN OBJECT OF THE ASSESSEE TR UST IS TO PROPAGATE AND EDUCATE THE GENERAL PUBLIC, THE ART AND SCIENCE OF YOGA AND MEDITATION THROUGH PUBLICATION BY PRINTING AS WELL AS DIGITAL AND OTHER FORMS STAT ED ABOVE CANNOT BE BROUGHT UNDER THE PROVISO TO SECTION 2(15) OF THE ACT. THE AO ERRED IN MISDIRECTING HIMSELF BY TAKING A VIEW THAT THE ASSESSEE IS ENGAG ED IN THE COMMERCIAL ACTIVITY ONLY WITH A PROFIT MOTIVE. WE NOTE THAT THE DDIT(E) HAS GIVEN A REASONED ORDER AS TO WHY HE HAS DROPPED THE PROCEEDINGS FOR CANCEL LATION OF SEC. 12A REGISTRATION TAKEN UP BY THE AO. WE NOTE THAT THE A SSESSEE HAS DISTRIBUTED FREE OF COST BOOKS AMOUNTING TO RS. 12,12,470/- AND THE COS T OF BOOKS GIVEN FREE TO SHRI RAM KRISHNA MISSION AMOUNTED TO RS. 14,72,848/-. TH US, BOOKS WORTH RS. 28.88 LACS WERE DISTRIBUTED FREE OF COST FOR ACHIEVING OF OBJECT FOR EACH THE ASSESSEE TRUST WAS FORMED AND AO WRONGLY ASSUMED THAT THE AS SESSEE DID NOT CARRY OUT ANY CHARITABLE ACTIVITY. WE ALSO NOTE THAT FOR AY 2011- 12, THE AO HIMSELF HAS 4 ITA NO.606/KOL/2016 SPIRITUAL HIERARCHY PUBLICATION TRUST A.YR.2010-11 4 ACCEPTED THAT ASSESSEE TRUST IS ELIGIBLE FOR EXEMPT ION U/S. 11 OF THE ACT. IN THE AFORESAID FACTS AND CIRCUMSTANCES OF THE CASE, WE A RE INCLINED TO AFFIRM THE IMPUGNED ORDER OF LD. CIT(A) AND THEREFORE, WE DISM ISS THE REVENUE APPEAL. 4. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 01.05.201 8 SD/- SD/- (P.M JAGTAP) (ABY. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 1 ST MAY, 2018 SB, SR. PS COPY OF THE ORDER FORWARDED TO: 1. APPELLANT ITO(E), WD-13, KOLKATA, 6 TH FLOOR, 10B, MIDDLETON ROW, KOLKATA-700071. 2 RESPONDENT SPIRITUAL HIERARCHY PUBLICATION TRUS T, 2/3, JUDGES COURT ROAD, KOLKATA-700027. 3. THE CIT(A) KOLKATA. 4. 5. CIT KOLKATA DR, ITAT, KOLKATA. / TRUE COPY, BY ORDER, SR. PVT. SECRETARY