DDIT (E), New Delhi V. Petroleum Federation of India, New Delhi

ITA 612/DEL/2010

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 74167 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 11 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 17-10-2013
• Assessment Year: 2005-2006
• Appeal Filed On: 09-02-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VEENA JOSHI
• Keywords: Charitable institution; Opportunity of being heard; Additional evidence; Valuation report; Non compliance; Onus to prove
• Section: 143(3); 12A; 12AA; 144; 11

Judgement Text

ITA NOS.612 & 5684/DEL/2010 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : F : NEW DELHI BEFORE SHRI A.D. JAIN, JUDICIAL MEMBER AND SHRI T.S. KAPOOR, ACCOUNTANT MEMBER ITA NOS.612 & 5684/DEL/2010 ASSESSMENT YEARS : 2005-06 & 2007-08 ADIT (E), INV. CIR.II, ROOM NO.306, 3 RD FLOOR, AAYAKAR BHAWAN, LAXMI NAGAR DISTT. CENTRE, NEW DELHI. VS. PETROLEUM FEDERATION OF INDIA, INDIAN OIL BHAWAN, 1 ST FLOOR, AUROBINDO MARG, YOUSUF SARAI, NEW DELHI. PAN : AAATP4882B ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY : SHRI KANCHUN KAUSHAL DEPARTMENT BY : SMT. VEENA JOSHI, CIT DR ORDER PER A.D. JAIN, JUDICIAL MEMBER: THESE ARE DEPARTMENTS APPEALS FOR ASSESSMENT YEARS 2005-06 AND 2007-08 AGAINST THE ORDERS DATED 25.11.2009 AND 09.09 .2010 RESPECTIVELY, PASSED BY THE CIT (A)-XXI, NEW DELHI. ITA NO.612/DEL/2010 2. THE FOLLOWING GROUNDS OF APPEAL ARE TAKEN:- 1. ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT (A) HAS ERRED IN IGNORING THE FACT THAT THE ORDER U/S 144 [B EST JUDGMENT ASSESSMENT] WAS CORRECTLY PASSED BY THE ASSESSING OFF ICER KEEPING IN ITA NOS.612 & 5684/DEL/2010 2 VIEW OF THE TIME CONSTRAINS AND NON-SUBMISSION OF COMP LETE INFORMATION BY THE ASSESSEE. FURTHER, THE LD. CIT (A) HAS ERRED IN ADMITTING THE ADDITIONAL EVIDENCE UNDER RULE 46A BECAU SE THE ASSESSEE DID NOT FILE THE SAME BEFORE THE A.O. EVEN THO UGH ADEQUATE OPPORTUNITY WAS DULY GRANTED BY THE A.O. 2. ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE, THE L D. CIT (A) HAS ERRED IN HOLDING THAT THE ACTIVITIES OF THE ASSESS EE ARE CHARITABLE IN NATURE AND THAT THE ASSESSEE IS ELIGIBLE TO THE CLAIM OF EXEMPTION U/S 11 OF THE IT ACT, 1961 IGNORING THE FACT THAT THE DECISION IN CITA VS. EMPLOYEES DEATH & SUPERANNUATION RELIEF FUND 234 ITR 308 WAS SQUARELY APPLICABLE IN THIS CASE BECAUSE THE FACTS OF THIS CASE ARE IDENTICAL TO THE CASE CIT VS. EMPLOYEES DEATH & SUPERAN NUATION RELIEF FUND 234 ITR 308 AND OTHER CASES CITED BY THE ASSESSI NG OFFICER IN HIS ORDER. CONSEQUENTLY, THE LD. CIT (A) HAS GROSSLY ERRE D IN DELETING THE ADDITION MADE AT RS.12,81,70,700/- WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE WAS NOT ENTITLED TO BENEFITS OF SECTION 11 O F THE ACT BECAUSE THERE WERE NUMEROUS VIOLATIONS OF THE PROVISIO NS OF SECTION 13 OF THE IT ACT, 1961. 3. APROPOS GROUND NO.1, THE GRIEVANCE OF THE DEPARTM ENT IS THAT THE LD. CIT (A) HAS ERRED IN NOT TAKING INTO CONSIDERATION T HE FACT THAT THE ASSESSMENT ORDER WAS CORRECTLY PASSED BY THE ASSESSING OFFICER U/S 144 OF THE IT ACT, IN VIEW OF THE TIME CONSTRAINTS AND NON-SU BMISSION OF COMPLETE INFORMATION BY THE ASSESSEE; AND THAT THE LD. CIT (A) H AS ERRED IN ADMITTING ADDITIONAL EVIDENCE WHICH WAS NOT FILED BEFORE THE A SSESSING OFFICER, EVEN THOUGH ADEQUATE OPPORTUNITY WAS AFFORDED BY THE ASSESSI NG OFFICER TO THE ASSESSEE. 4. THE LD. COUNSEL FOR THE ASSESSEE, ON THE OTHER HAND, HAS REFUTED THE ABOVE OBJECTION ON BEHALF OF THE DEPARTMENT, CONTEN DING THAT THE LD. CIT (A) HAS DULY TAKEN INTO CONSIDERATION THE FACT THAT PROPE R AND SUFFICIENT OPPORTUNITY WAS NOT PROVIDED BY THE ASSESSING OFFICER TO THE ASSESSEE FOR COMPLIANCE OF ORDER SHEET NOTING DATED 24.12.2007; T HAT THE ASSESSING OFFICER HAD ERRED IN PASSING THE EX PARTE ASSESSMENT ORDE R; AND THAT THE ADDITIONAL EVIDENCE WAS CORRECTLY ADMITTED BY THE LD . CIT (A) IN THE ABSENCE OF PROPER AND ADEQUATE OPPORTUNITY HAVING BEEN PROV IDED TO THE ASSESSEE IN THE ASSESSMENT PROCEEDINGS. ITA NOS.612 & 5684/DEL/2010 3 5. IN THIS REGARD, AS AVAILABLE FROM THE IMPUGNED ORD ER, DURING THE ASSESSMENT PROCEEDINGS, VIDE ORDER SHEET ENTRY DATED 24.1 2.2007, THE ASSESSING OFFICER SPECIFICALLY ASKED THE ASSESSEE TO JUSTIFY INCURRENCE OF CERTAIN EXPENSES AND ALSO TO SHOW AS TO HOW THE ACTIVITI ES CARRIED ON BY THE ASSESSEE WERE CHARITABLE IN NATURE AND FOR THE BENEFIT OF THE GENERAL PUBLIC. THE ASSESSEE WAS ASKED TO SUBMIT SUCH JUSTIFICATION BY 26.1 2.2007. 25.12.2007 WAS A HOLIDAY. STILL, ON 26.12.2007, THE ASSESSEE SUBMITTED CLARIFICATION IN RESPECT OF CERTAIN EXPENSES AND PAYME NTS MADE TO SOME MEMBERS OF THE ASSESSEE AOP. ON 26.12.2007, THE ASSESSEE ATT ENDED BEFORE THE ASSESSING OFFICER ALONG WITH THE BOOKS OF ACCOUNT AN D SUPPORTING DOCUMENTS AND REQUESTED FOR A SHORT ADJOURNMENT, SO AS T O ENABLE IT TO SUBMIT EXPLANATIONS/INFORMATION REGARDING THE REMAINI NG INQUIRIES. THIS REQUEST OF THE ASSESSEE WAS REJECTED BY THE ASSESSING OFFICE R. ON 28.12.2007, THE ASSESSEE VERBALLY REQUESTED THE ASSESSING OFFICER TO PERMIT A WRITTEN REPLY BEING FILED ON 31.12.2007, 29.12.20 07 AND 30.12.2007 BEING SATURDAY AND SUNDAY, RESPECTIVELY. THIS REQUEST WAS ALS O REJECTED BY THE ASSESSING OFFICER AND ON 31.12.2007, THE ASSESSING OFFICER REFUSED TO ACCEPT THE LETTER WITH WHICH THE ASSESSEE APPROACHED THE ASSESSING OFFICER. THE SAID LETTER WAS FAXED ALONG WITH ALL ANNEXURES BY THE ASSESSEE TO THE OFFICE OF THE DIRECTOR OF INCOME-TAX (EXEMPTION). A COPY T HEREOF WAS ALSO SENT THROUGH COURIER ON THE SAME DATE. THE SITUATION WAS AL SO EXPLAINED TO THE DIRECTOR OF INCOME-TAX (EXEMPTION) ON THE SAME DAY. STILL, THE ASSESSMENT ORDER WAS PASSED U/S 144 OF THE ACT. 6. IT WAS IN THE ABOVE CIRCUMSTANCES, THAT THE ASSESSEE F ILED AN APPLICATION UNDER RULE 46A OF THE IT RULES BEFORE TH E CIT (A), SUBMITTING THE AFORESAID LETTER DATED 31.12.2007 ALONG WITH ALL ANN EXURES, ADDRESSED TO THE ASSESSING OFFICER. THE LD. CIT (A) SENT THE APPLICATION ALONG WITH THE ADDITIONAL EVIDENCE TO THE ASSESSING OFFICER FOR COMMEN TS. THE ASSESSING OFFICER SUBMITTED REMAND REPORT DATED 11.02.2009. TH E ASSESSEE SUBMITTED ITS REJOINDERS DATED 21.04.2009 AND 18.06.2009. ITA NOS.612 & 5684/DEL/2010 4 7. THE LD. CIT (A), IT IS SEEN, ADMITTED THE ADDITIO NAL EVIDENCE FILED BY THE ASSESSEE, FINDING THAT PROPER OPPORTUNITY OF HEARING WA S NOT GIVEN TO THE ASSESSEE BY THE ASSESSING OFFICER. THE RELEVANT PORTION OF THE LD. CIT (A)S ORDER IN THIS REGARD IS AS FOLLOWS:- 3.4 I HAVE CONSIDERED THE FACTS OF THE CASE AND MATERI AL PLACED ON RECORD. IT IS EVIDENT FROM THE CHRONOLOGY OF EVENTS AS AFOREMENTIONED THAT PROPER OPPORTUNITY OF BEING HEARD WAS NOT GIVEN TO TH E APPELLANT AND ACCORDINGLY THE CASE OF THE APPELLANT FALLS WITHIN THE PURVIEW OF RULE 46A (1) OF THE INCOME TAX RULES. A PERUSAL OF TH E REPLY DATED DECEMBER 31, 2007 AND THE EVIDENCES ENCLOSED THEREWITH SHOW THAT ALL THESE DOCUMENTS AND EVIDENCES WERE NECESSARY FOR THE LD. A.O. TO ADJUDICATE THE ISSUES ON WHICH ADDITIONS TO THE INCOME O F THE APPELLANT WAS MADE. HENCE, TO DECIDE THE PRESENT APPEAL THE ADDITI ONAL EVIDENCES ADDUCED BY THE APPELLANT NEEDS TO BE ADMITTED ON ACCOUNT OF THE REASONS THAT THE ASSESSEE COULD NOT PRODUCE THESE DOCUMENTS BEFORE THE LD. A.O. FOR THE ONLY REASON THAT THE QUERIES WERE RAISED BY THE LD. A.O. VIDE ORDER SHEET DATED DECEMBER 24, 2007 AND SUFFICIENT TIME AND OPPORTUNITY WAS NOT PROVIDED TO IT TO COMPLY WITH THE SAME, WHILE THE ASSESSMENT ORDER WAS PASSED ON DECEMBER 27, 2007. AN OPPORTUNITY WAS GIVEN TO THE LD. A.O. TO COMMENT ON THE DO CUMENTS AS WELL AS ON THE MERITS OF THE ADDITION MADE IN THE ASSESS MENT ORDER. AS REQUIRED, IN ACCORDANCE WITH THE RULE 46A OF THE INCOM E TAX RULES WAS MADE, A REMAND REPORT WAS RECEIVED WHICH REITERATED THE POINTS MADE IN THE ASSESSMENT ORDER. THE SAME HAS ALSO BEEN CONSI DERED. IN VIEW OF THE PRESENT FACTS, AND THE PRINCIPLE OF NATU RAL JUSTICE WHICH REQUIRES NOBODY SHOULD BE CONDEMNED UNHEARD, IN MY OPINION, THE DOCUMENTS PRODUCED BY THE ASSESSEE VIDE LETTER DATED DECEMBER 31, 2007, BEING RELEVANT AND MATERIAL TO THE ISSUES UN DER CONSIDERATION ARE ADMITTED. 8. THE DEPARTMENT HAS NOT BEEN ABLE TO REBUT THE ABO VE FACTUAL POSITION BEFORE US. SINCE EVIDENTLY THE ASSESSEE WAS NOT AFFORDED ADEQUATE OPPORTUNITY OF HEARING BY THE ASSESSING OFFICER, THE LD . CIT (A) WAS WELL JUSTIFIED IN ADMITTING THE ADDITIONAL EVIDENCE FILED BEFORE HIM. GROUND NO.1 IS, ACCORDINGLY, REJECTED. 9. COMING TO GROUND NO.2, THE GRIEVANCE OF THE DEPA RTMENT IS THAT THE LD. CIT (A) HAS ERRED IN HOLDING THE ACTIVITIES OF TH E ASSESSEE TO BE CHARITABLE ITA NOS.612 & 5684/DEL/2010 5 IN NATURE AND THAT THE ASSESSEE IS ELIGIBLE TO THE CLAIM OF EXEMPTION U/S 11 OF THE ACT; AND THAT THE LD. CIT (A) HAS ERRED IN DELET ING THE ADDITION OF ` 12,81,70,700/- CORRECTLY MADE BY THE ASSESSING OFFICER, FAILING TO APPRECIATE THAT THE ASSESSEE WAS NOT ENTITLED TO THE BENEFIT OF SEC TION 11 OF THE ACT IN VIEW OF THE NUMEROUS VIOLATIONS OF THE PROVISIONS OF SE CTION 13 THEREOF. 10. EXEMPTION U/S 11 OF THE ACT WAS DENIED TO THE ASSESSE E BY THE ASSESSING OFFICER, HOLDING THAT THE ASSESSEE SOCIETY WAS NOT INVOLVED IN ANY CHARITABLE ACTIVITY AND THAT THE BENEFIT OF ITS ACTI VITIES WENT TO ITS MEMBERS, RATHER THAN TO THE GENERAL PUBLIC. THE ASSESSING OFFIC ER OBSERVED THAT THE ASSESSEE SOCIETY GAVE ITS SERVICES IN THE SHAPE OF RESULT OF RESEARCH MADE BY IT IN PRODUCTS OF OIL, PETROLEUM, ETC., THAT THEREFO RE, NO CHARITY WAS BEING DONE AND THE PUBLIC AT LARGE WAS NOT BENEFITTED THER EBY, RATHER IT WAS A BENEFIT TO THE MEMBERS OF THE SOCIETY ITSELF AND THAT CERTAIN MEMBERS OF THE ASSESSEE SOCIETY WERE PAID AMOUNTS IN RESPECT OF THE RESEAR CH AND FOR HOLDING OF MEETINGS AND CONFERENCES AND THE EXPENSES SO INCURRED WERE NOT JUSTIFIED. 11. THE LD. CIT (A), IN THE IMPUGNED ORDER, OBSERVED , INTER ALIA, THAT THE ASSESSEE SOCIETY WAS A SOCIETY REGISTERED UNDER THE SOCIETI ES REGISTRATION ACT, WHICH ALSO STOOD REGISTERED UNDER SECTION 12AA O F THE IT ACT VIDE ORDER DATED 30.06.2003, W.E.F. 07.08.2002; THAT IN EARLIE R YEARS, THE ASSESSEES CLAIM OF EXEMPTION U/S 11 HAD CONSISTENTLY BEEN ALLOWE D; THAT THE STUDIES PREPARED BY THE ASSESSEE SOCIETY CONTAINED RESEARCH ON D IFFERENT ASPECTS OF PETROLEUM PRODUCTS, PRICING, ETC., AND THEIR EFFECT ON THE ECONOMY OF INDIANS LIVING BELOW THE POVERTY LINE AND BENEFITS TO THE OI L AND GAS SECTOR; THAT THUS, THE OBJECTS OF, AS WELL AS THE ACTIVITIES CARRIED ON BY THE ASSESSEE SOCIETY WERE FOR THE BENEFIT OF THE SOCIETY AT LARGE AND PAR TICULARLY FOR THE OIL AND GAS INDUSTRY AND SO, THEY WERE IN THE NATIONAL INTEREST OF POLICY MAKING ON THE ENERGY SECTOR; THAT THESE ACTIVITIES WERE NOT CARRIED OUT FOR EARNING OF PROFIT, OR FOR CONFERRING BENEFIT TO ANY MEMBER OF THE ASSESSE E SOCIETY, BUT WERE IN THE NATURE OF ADVANCEMENT OF AN OBJECT OF GENERAL P UBLIC UTILITY; THAT IN ITA NOS.612 & 5684/DEL/2010 6 TERMS OF ITS OBJECTS, THE ASSESSEE SOCIETY PROMOTES THE INTE REST OF THE PETROLEUM INDUSTRY IN LINE WITH PUBLIC/NATIONAL POL ICIES AND IT ALSO HELPS IN RESOLUTION OF ISSUES AND FACILITATES EVOLUTION OF HYDRO CARBON RELATED POLICIES, AND REGULATIONS AND THEIR IMPLEMENTATION; THAT THERE FORE, THE ACTIVITIES OF THE ASSESSEE, IN RELATION TO SEMINARS AND STUDIES CONDUCTED DUR ING THE YEAR, PROMOTED THE OBJECTS FOR WHICH THE ASSESSEE SOCIETY WAS C REATED; AND THAT SO, THE ASSESSEE, BEING AN ORGANIZATION INVOLVED IN CHA RITABLE PURPOSES, WAS ENTITLED FOR EXEMPTION U/S 11 READ WITH SECTION 2 (1 5) OF THE ACT. 12. APROPOS THE PAYMENTS MADE BY THE ASSESSEE TO ITS MEMB ERS, THE LD. CIT (A) OBSERVED THAT THE AMOUNT OF ` 36,42,000/- PA ID TO M/S PRICEWATER HOUSE COOPERS FOR CONDUCTING STUDY ON OIL AND GAS INDUST RY ON THE ISSUES OF FUELLING INDIAS GROWTH AND VAT ON PETROLEUM PROD UCTS, THAT OF ` 2,32,310/- TO WORLD LPG ASSOCIATION AS MEMBERSHIP FEE A ND THOSE TO IOC AND BPCL FOR RENT AND CONFERENCE CHARGES PAID FOR CONDU CTING SEMINARS, ETC., WERE REASONABLE. IT WAS ALSO OBSERVED THAT THESE PAYMENT S WERE MADE FOR SERVICES/RENT, WHICH WERE AT ARMS LENGTH, DUE TO WHIC H, THE DENIAL OF EXEMPTION ON SUCH PAYMENTS WAS INCORRECT. THE LD. CIT (A) FURTHER HELD THAT THE PROVISIONS OF SECTION 13(1)(C) OF THE ACT DID NOT GET ATTRACTED AND SUCH PROVISIONS HAD NOT BEEN APPLIED BY THE ASSESSING OFFICER IN DENYING THE EXEMPTION CLAIMED BY THE ASSESSEE IN THE ASSESSMENT ORDER, THOUGH IN THE REMAND REPORT, THE ASSESSING OFFICER HAD ASSERTED THAT SUC H PROVISIONS WERE APPLICABLE. 13. HAVING HEARD THE PARTIES IN THE LIGHT OF THE MAT ERIAL AVAILABLE ON RECORD, IT IS SEEN THAT THE ASSESSEE SOCIETY IS A SOCIETY RE GISTERED UNDER THE SOCIETIES REGISTRATION ACT. IT IS ALSO REGISTERED U/S 12A OF THE IT ACT, W.E.F. 07.08.2002. THE EXEMPTION CLAIMED U/S 11 OF THE ACT OVER THE YEARS BY THE ASSESSEE HAS BEEN CONSISTENTLY ALLOWED BY THE DEPARTMENT. TO BUTTRESS THIS POSITION, BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE HAS PLACED ON RECORD COPIES OF ASSESSMENT ORDERS PASSED U/S 143(3) OF THE ACT FOR ASSESSMENT YEARS 2003-04, 2004-05, 2010-11 AND 2011-12, SHOWING THAT NOT ONLY IN THE ITA NOS.612 & 5684/DEL/2010 7 EARLIER YEARS, BUT IN THE SUBSEQUENT YEARS TOO, THE AC TIVITIES OF THE ASSESSEE SOCIETY HAVE BEEN HELD TO BE CHARITABLE BY THE ASSESSIN G OFFICER HIMSELF. THE ASSESSEE SOCIETY WAS FORMED AFTER THE DISMANTLING OF THE A DMINISTERED PRICE MECHANISM IN THE PETROLEUM SECTOR AND THE CLOSING DOWN OF THE OIL CO- ORDINATION COMMITTEE. THE ASSESSEE SOCIETY WAS CREATED FO R CO-ORDINATION IN THE HYDROCARBON SECTOR, AT THE INITIATION OF THE GOV ERNMENT OF INDIA, WITH THE OBJECT OF PROMOTING THE INTEREST OF THE PETROLEUM IN DUSTRY IN LINE WITH THE PUBLIC/NATIONAL POLICIES, THROUGH A SELF REGULATORY E NVIRONMENT, KEEPING IN VIEW CONSUMER INTEREST. IT IS ALSO THE OBJECT OF THE ASSE SSEE SOCIETY TO WORK FOR GLOBAL COMPETITIVENESS OF THE PETROLEUM INDUSTRY A ND TO PROMOTE MEASURES OF ENERGY CONSERVATION, HEALTH AND SAFETY AND ENVIRONMENT AMONG THE MEMBERS AND CONSUMERS. DURING THE YEAR UNDER CONSID ERATION, THE ASSESSEE SOCIETY CARRIED OUT A NUMBER OF ACTIVITIES OF PU BLIC IMPORTANCE AND UTILITY IN THE AREA OF USE OF OIL, PETROLEUM AND NAT URAL GASES, AS UNDER:- I) IT HAS ORGANIZED ITS FIRST OVERSEAS DELEGATION TO GLOBAL PEAK OIL GATHERING AT KOBLENZ, GERMANY IN OCTOBER 2004 WHERE THE ASSESSEE HAD MADE A PRESENTATION ON ENERGY SITUATION & POLICY OF INDIA. II) IT HAS ALSO ORGANIZED SEMINARS, CONFERENCES, WORKSHOPS, TR AINING PROGRAMMES AND LECTURES AND BROUGHT OUT PUBLICATIONS. IT HAS PROMOTED ENERGY CONSERVATION, HEALTH, SAFETY AND ENVI RONMENT AND HELPS TO OPTIMIZE RESOURCE UTILIZATION OF MEMBERS. III) BESIDES THE ABOVE, THE ASSESSEE HAS GIVEN INDUSTRY RECOMMENDATIONS TO MINISTRY OF PETROLEUM AND NATURAL GAS (MOP & NG) ON THE CONSTITUTION OF PETROLEUM AND NATURAL GAS TECHNICAL AUTHORITY, RENDERED SUGGESTIONS/COMMENTS TO MOP & NG ON THE DRAFT POLICY FOR DEVELOPMENT OF NATURAL GAS PIPELINE NETWORKS, LAUNCHED A SERIES OF LEARNING AND EDUCATION WORKSHOPS B EGINNING WITH ONE ON INDIAN & GLOBAL EMERGING PRACTICES IN EX PLORATION AND PRODUCTION (E & P) ACCOUNTING. ITA NOS.612 & 5684/DEL/2010 8 IV) IT HAS UNDERTAKEN A STUDY ON LPG SUBSIDY ADMINISTRATIO N AND MARKETING FOR PRESENTATION TO GOVERNMENT IN ASSOCIATI ON WITH INDIAN INSTITUTE OF MANAGEMENT, AHMEDABAD. V) THE ASSESSEE HAS GOT PUBLISHED SUSTAINABLE IMPERATIVE FOCUSING ON ECONOMIC, ENVIRONMENTAL AND SOCIAL DEVELOPMENT GO ALS OF CORPORATE IN THE FORM OF TRIPLE BOTTOM LINE REPORTS. VI) IT HAS ALSO SUBMITTED TO MOP & NG AND MINISTRY OF FINAN CE (MOF) A REPORT ON THE KEROSENE DISTRIBUTION AND RELATED SUBSIDY ADMINISTRATION AND THE GENERATION AND ASSESSMENT OF OPTI ONS FOR IMPROVEMENT OF THE SYSTEM. VII) IT HAS SUBMITTED REPORTS TO THE GOVERNMENT ON POLICY FOR NATURAL GAS PIPELINES AND CITY GAS DISTRIBUTION AND REGULATOR Y ISSUES ON NATIONAL GAS ARISING OUT OF PETROLEUM & NATURAL GAS R EGULATORY BOARD ACT, 2006. 14. THE ASSESSEE SOCIETY PREPARED A REPORT ON MEASURES TO CURB ADULTERATION AT RETAIL OUTLETS. IT HELD SEMINARS AND MEETINGS IN CONNECTION WITH PROTECTION OF THE ENVIRONMENT, WHICH HELPS THE GENERAL PUBLIC. IT ALSO GOT TWO STUDIES PREPARED FOR THE ADVANCEMENT OF OIL A ND GAS INDUSTRY WITH MUCH EMPHASIS ON THE GENERAL PUBLIC AS CONSUMER. THESE TWO STUDIES WERE FUELLING INDIAS GROWTH AND VAT ON PETROLEUM PROD UCTS. THESE STUDIES CONTAINED RESEARCH ON DIFFERENT ASPECTS OF PETROLEUM PRODUCTS, PRICING, ETC. AND THEIR EFFECT ON THE ECONOMY. THESE REPORTS WERE C IRCULATED TO THE INDUSTRY, THE GOVERNMENT AND THE PLANNING COMMISSION, ETC., IN ORDER TO ENABLE THE DESIRED QUANTITY OF PETROLEUM FUEL TO BE PLANNED TO BE MADE AVAILABLE BY THE INDUSTRY TO THE PUBLIC, IN ORDER TO ACHIEVE THE TARGET OF ECONOMIC GROWTH. THE STUDIES CONTAINED RESEARCH ON THE IMPACT ON THE ECONOMY OF INDIANS LIVING BELOW THE POVERTY LINE AN D BENEFITS TO THE OIL AND GAS SECTOR. THE EXECUTIVE SUMMARY OF THESE PUBLICATIONS IS AVAILABLE ON THE WEBSITE OF THE ASSESSEE SOCIETY FREE OF COST TO THE PUBLI C. ITA NOS.612 & 5684/DEL/2010 9 15. THUS, EVIDENTLY, THE OBJECTS OF THE ASSESSEE SOCIETY, AS WELL AS ITS ACTIVITIES BENEFIT NOT ONLY THE OIL AND GAS INDUSTRY, BUT THE SOCIETY AT LARGE. THEY ARE IN THE NATIONAL INTEREST OF POLICY MAKING O N THE ENERGY SECTOR. THE PAPERS PREPARED BY THE ASSESSEE SOCIETY WERE USED BY THE G OVERNMENT AND THE POLICY MAKERS TO FORMULATE THE POLICIES FOR FUTUR E NEEDS OF OIL AND GAS IN THE INDIAN ECONOMY FOR SUSTAINABLE GROWTH WHICH WOULD HELP THE PUBLIC AND THE DEVELOPMENT OF THE NATION. THEREFORE, THE ACTIV ITIES CARRIED ON BY THE ASSESSEE WERE IN THE NATURE OF ADVANCEMENT OF THE OBJEC T OF GENERAL PUBLIC UTILITY AND WERE NOT EITHER FOR EARNING PROFIT, OR FOR CONVERTING BENEFIT TO ANY PARTICULAR MEMBER OF THE ASSESSEE SOCIETY. THE ASSESSEE SOCIE TY ADVANCES AN OBJECT OF GENERAL PUBLIC UTILITY IN THE PETROLEU M SECTOR BY ACTING AS AN INTERFACE BETWEEN THE GOVERNMENT, THE INDUSTRY AND T HE CONSUMERS AND BY BRINGING THEM TOGETHER TO FRAME POLICIES AND TO IMPA RT LEARNING FOR ADVANCEMENT IN THE SECTOR TO BRING FISCAL REFORM. IN THIS REGARD, THE LD. CIT (A) HAS CORRECTLY APPLIED THE DECISION IN CIT VS. GUJ ARAT MARITIME BOARD, 295 ITR 561 (SC). IN THAT CASE, IT WAS HELD THAT IT CANNO T BE SAID THAT A PURPOSE WOULD CEASE TO BE CHARITABLE EVEN IF PUBLIC WELFARE IS INTENDED TO BE SERVED; THAT IF THE PRIMARY PURPOSE AND THE PREDOMINANT OBJE CT ARE TO PROMOTE THE WELFARE OF THE GENERAL PUBLIC, THE PURPOSE WOULD BE A CHARITABLE PURPOSE; AND THAT WHEN AN OBJECT IS TO PROMOTE OR PROTECT THE INTEREST OF A PARTICULAR TRADE OR INDUSTRY, THAT OBJECT BECOMES AN OBJECT OF P UBLIC UTILITY. 16. APROPOS THE PAYMENT MADE BY THE ASSESSEE TO ITS MEMBE RS, THE POSITION IS THAT THE ASSESSEE MADE PAYMENT OF ` 36,42,000 /- TO M/S PRICEWATER HOUSE COOPERS FOR CONDUCTING STUDY ON OIL A ND GAS INDUSTRY ON THE ISSUES OF FUELLING INDIAS GROWTH AND VAT ON PET ROLEUM PRODUCTS. THE ASSESSING OFFICER WAS OF THE VIEW THAT THE PAYMENT MADE HAD BENEFITTED PRICEWATER HOUSE COOPERS (PWC). THE ASSESSING OFFICER OBSE RVED THAT THE ASSESSEE HAD NOT FURNISHED ANY EVIDENCE TO JUSTIFY THE P AYMENT, SINCE NO QUOTATION HAD BEEN RECEIVED FROM ANY OTHER CONSULTAN T FOR THE SAME STUDY AND SO, NO COMPARATIVE DETAILS HAD BEEN FURNISHED TO J USTIFY THE PAYMENT. ITA NOS.612 & 5684/DEL/2010 10 THE ASSESSEE, ON THE OTHER HAND, BEFORE THE LD. CIT (A) , SUBMITTED VARIOUS DOCUMENTS AND EVIDENCE TO JUSTIFY THE GENUINENESS OF TH E EXPENDITURE INCURRED AND TO SHOW THAT THE RESULT OF THE STUDY HAD NOT BENEFITTED ONLY THE OIL AND GAS SECTOR, BUT HAD ALSO ASSISTED THE GOVERNMENT IN FORMULATION OF REGULATIONS AND POLICIES AND HAD BENEFITTED THE SOCIE TY AT LARGE. IT WAS SUBMITTED THAT PWC HAD BEEN ENGAGED BY THE ASSESSEE AFTE R ENTERING INTO A PROPER ENGAGEMENT LETTER SIGNED BY BOTH THE PARTIES A ND AFTER APPROVAL OF THE FEES BY THE ASSESSEE. IN THIS REGARD, COPIES OF ENGAGE MENT LETTER, NOTE OF APPROVAL OF ENGAGEMENT BY THE ASSESSEE AND MEMO OF FEE S ALONG WITH COMMUNICATION BETWEEN THE PARTIES WERE FURNISHED BEFO RE THE LD. CIT (A), SHOWING THAT PWC WAS HAVING THE SPECIALIZED EXPERTISE FOR THE REQUIRED WORK AND IT WAS ONLY AFTER AGREEMENT BETWEEN THE PARTIES A ND THE APPROVAL OF THE FEES BY THE ASSESSEE, THAT THE SERVICES WERE PROVIDED AND PAYMENT WAS MADE. IT WAS CONTENDED THAT AS SUCH, THE SERVICES RENDER ED BY PWC WERE SPECIALIZED SERVICES AND NOT MERELY REGULAR ACCOUNTING SERVICES. THE LD. CIT (A) HELD THE PAYMENT MADE BY THE ASSESSEE TO PWC TO BE REASONABLE ON CONSIDERING THE ABOVE VOLUMINOUS DOCUMENTARY EVIDENC E FILED BY THE ASSESSEE. IT WAS CORRECTLY OBSERVED THAT THE WORK DONE BY PWC FOR CONDUCTING THE STUDIES IN RELATION TO FUELLING INDIA S GROWTH AND VAT ON LPG WERE LARGE ASSIGNMENTS INVOLVING TIME AND PROFESS IONAL EXPERTISE. IT WAS ALSO CORRECTLY OBSERVED THAT THE ASSESSING OFFICER HAD NOT BROUGHT ON RECORD ANYTHING TO SHOW THAT THE PAYMENT WAS UNREASONA BLE OR IN EXCESS. THESE FINDINGS OF THE LD. CIT (A) HAVE NOT BEEN SHOWN TO BE ERRONEOUS. IT WOULD BE APT TO REPRODUCE HERE THE RELEVANT FINDING S OF THE LD. CIT (A) IN THIS REGARD:- 6.8 I HAVE CONSIDERED THE SUBMISSIONS FILED BY THE A PPELLANT ALONG WITH THE ADDITIONAL EVIDENCES ADDUCED IN RELATION TO TH E ABOVE PAYMENTS. I HAVE ALSO GONE THROUGH THE REMAND REPORT SE NT BY THE A.O. AND THE REJOINDER THEREOF FILED BY THE APPELLANT. IN MY CONSIDERED VIEW THE PAYMENTS MADE TO THE PWC ARE REASONABLE ON THE FACT THAT THE WORK DONE BY THE PWC FOR CONDUCTING THE STUDIES IN RELATION TO FUELLING INDIA GROWTH AND VAT ON LPG WERE LARGE ASS IGNMENTS INVOLVING TIME AND PROFESSIONAL EXPERTISE. THE A.O. H AS ALSO NOT BEEN ITA NOS.612 & 5684/DEL/2010 11 ABLE TO DISCHARGE HIS ONUS TO BRING ON RECORD THAT THE P AYMENTS MADE TO THE MEMBERS ARE UNREASONABLE OR IN EXCESS. FURTHER, THE A.O. HAS ALSO FAILED TO DISCHARGE HIS ONUS TO PROVE THAT THE ACTI VITIES DONE BY THE SOCIETY ARE NOT FOR PUBLIC UTILITY. THE STUDIES PUBL ISHED ARE NOW AVAILABLE IN PUBLIC DOMAIN AND IS NOT ONLY EDUCATIVE BUT ALSO A USEFUL PUBLICATION FOR POLICYMAKERS AS WELL AS INDUSTRY. FU RTHER, IT IS AVAILABLE TO BE USED FOR THE ACADEMIC RESEARCH IN THE FIELD OF TH E OIL AND GAS INDUSTRY. THE REASONABLENESS OF THE PAYMENTS IS ALSO J USTIFIED INVIEW OF THE EXPLANATION OF THE APPELLANT THAT THE ABOVE PAYMENTS HA VE BEN MADE AFTER THE PROPER SCRUTINY OF PROPOSAL AND NEED OF SUCH STUDY APPROVED BY THE BOARD IN ACCORDANCE WITH BUDGET SANCTIO N IN THIS REGARD. IT IS ALSO IMPORTANT TO NOTE DURING THE COURSE OF APPELLATE PROCEEDINGS, MY PREDECESSOR HAD RAISED A SPECIFIC Q UERY ON THE REASONABLENESS OF THE PAYMENTS WHERE THE APPELLANT HAD DEMONSTRATED AND FURNISHED A DETAILED NOTE GIVING THE B ACKGROUND OF THE METHODOLOGY USED BY PWC FOR CONDUCTING THESE STUDIES AND ALSO JUSTIFIED THE CHARGEABILITY RATE PER HOUR CHARGED FROM THE APPELLANT WERE FAR BELOW THE RATES PRESCRIBED BY THE ICAI IN REL ATION TO CONSULTANCY/MANAGEMENT SERVICES. 17. THE ASSESSEE HAD ALSO MADE PAYMENT OF ` 2,32,310/- T O WORLD LPG ASSOCIATION, AS MEMBERSHIP FEE. TOO, THE ASSESSEE HAD RECEI VED AN AMOUNT OF ` 9,410/- FROM WORLD LPG ASSOCIATION AS MEMBERSHIP F EE. THE ASSESSING OFFICER DID NOT RECORD ANY CLEAR-CUT FINDING ON THI S ASPECT. HAVING HAD NO OPPORTUNITY TO FILE EVIDENCE BEFORE THE ASSESSING OFFIC ER IN THIS CONCERN, THE ASSESSEE FILED THE SAME AS ADDITIONAL EVIDENCE BEFORE THE LD. CIT (A). IN THE REMAND REPORT, THE ASSESSING OFFICER CONTENDED THAT THE RECEIPT OF THE ASSESSEE CAME WITHIN THE PURVIEW OF THE FOREIGN CONTRIB UTION REGULATION ACT, WHICH HAD NOT BEEN VERIFIED. THE LD. CIT (A) O BSERVED AS FOLLOWS:- 6.9 IN RESPECT OF THE PAYMENT MADE TO WORLD LPG ASSOCI ATION, SINCE IT IS MERELY A SUBSCRIPTION FEE PAID BY THE APPELLANT O N THE BASIS OF INVOICE RAISED BY THE ASSOCIATION IN REGULAR COURSE OF ITS OPERATIONS, THEREFORE, IT CANNOT BE SAID THAT SAME IS NOT REASONABLE. FURTHER, THE APPELLANT HAS JUSTIFIED THE NEED OF IT BECOMING THE MEMB ER VIDE ITS SUBMISSIONS STATED ABOVE AND HAS ALSO FILED NECESSAR Y EVIDENCE OF THE PAYMENTS. FURTHER, THE CONTENTION OF THE A.O. REGARDING THE NON COMPLIANCE OF THE PROVISIONS OF FCRA IS NOT APPLICABL E, AS A SUM OF RS.9,410/- RECEIVED BY THE APPELLANT FROM WORLD LPG D OES NOT COME UNDER THE PURVIEW OF FCRA. 18. HERE AGAIN, BEFORE US, THE DEPARTMENT HAS NOT BEE N ABLE TO REFUTE THE FINDINGS RECORDED BY THE LD. CIT (A). AS PER THE REC ORD, WORLD LPG ASSOCIATION IS A WORLD RENOWNED BODY. ALMOST ALL COMPANIES IN THE OIL AND GAS SECTOR ARE ITA NOS.612 & 5684/DEL/2010 12 ITS MEMBERS. THE ASSESSEE HAD FILED MINUTES OF THE MEETING HELD ON 04.07.2003, IN WHICH, THIS MEMBERSHIP WAS APPROVED. A COPY OF THE INVOICE WAS ALSO FILED. THE ASSESSEE SOCIETY BECAME A MEMBER OF TH E WORLD LPG ASSOCIATION TO ACHIEVE ITS OBJECT OF PROVIDING AN UPDA TE ON THE EVENTS AND DEVELOPMENT IN THE FIELD OF OIL AND GAS APPLICABLE TO GOVERNMENT REGULATORS AND ITS MEMBERS AND TO CONDUCT STUDIES OF PUBLIC UTILI TY. THE WORLD LPG GAS ASSOCIATION ALSO BECAME A MEMBER OF THE ASSESSEE SOCIETY AN D AS A RESULT OF SUCH MEMBERSHIP, IT RECEIVES INFORMATION, DATA, PUBLIC ATIONS, ETC., DISSEMINATED IN THE NATURE OF EDUCATION AND UTILIZED BY IT FOR DRAWING UP STRATEGIES FOR GOVERNMENT AND STATUTORY BODIES FOR ENHA NCING DISTRIBUTION AND MARKETING OF LPG AND AUTO LPG AS A UTILITY TO TH E GENERAL PUBLIC. AS SUCH, THE MEMBERSHIP WAS REQUIRED FOR ATTAINING THE OBJECT S OF THE ASSESSEE SOCIETY. SO FAR AS REGARDS THE PAYMENT RECEIVED BY THE ASSESSEE DURING WORLD LPG ASSOCIATION, THIS AMOUNT WAS TOWARDS MEMBERSH IP FEE AND DID NOT QUALITY TO BE A FOREIGN CONTRIBUTION. 19. A SEMINAR ON E&P ACCOUNTING WAS CONDUCTED JOINTLY BY THE ASSESSEE AND PWC ON 05.11.2004 AT BPCL TRAINING CENTRE, MUMB AI. THIS SEMINAR WAS DEVOTED TO ENHANCING EDUCATION ON THE SUBJECT OF E&P ACCOUNTING IN INDIA, A MATTER OF PUBLIC INTEREST. THE COST WAS SHARED BY THE A SSESSEE AND PWC. THE ASSESSEE MADE PAYMENT OF ` 2,86,328/- TO PWC. ANOTHER A MOUNT OF ` 89,850/- WAS PAID BY THE ASSESSEE TO BPCL TOWARDS THE COST OF FACILITIES, UTILITIES, LUNCH, TEA AND SNACKS. THE ASSESSING OFFICER OB SERVED THAT THERE WAS NO JUSTIFICATION FOR THE PAYMENT SO MADE. THE CIT (A) HELD: 6.10 SIMILARLY, WITH REGARD TO THE PAYMENTS MADE TO IO C AND BPCL FOR RENT AND CONFERENCE CHARGES PAID FOR CONDUCTING THE SE MINARS, ETC., ARE ALSO FOUND TO BE REASONABLE AS BOTH IOC AND BPCL ARE PUBLIC SECTOR UNDERTAKINGS IN WHICH GOVERNMENT OF INDIA IS A MAJOR BENEFICIARY AND, THEREFORE, AN ALLEGATION THAT THERE IS UNDUE BENEFIT GIVE N TO SUCH MEMBERS IS UNCALLED FOR. FURTHER, A COMPARATIVE RENT D ETAILS WERE FILED BY THE APPELLANT WHICH ARE MUCH HIGHER AS COMPARED TO WHAT THE APPELLANT HAS PAID TO THESE MEMBERS, AND, THEREFORE THE CONTENTION OF THE A.O. ALSO FAILS ON THIS GROUND. ITA NOS.612 & 5684/DEL/2010 13 20. AGAIN, THE DEPARTMENT HAS NOT BEEN ABLE TO SHOW A S TO HOW THE CIT (A) HAS ERRED IN HOLDING THE PAYMENT TO BE REASONABLE. AS AGAINST THE OBSERVATION OF THE ASSESSING OFFICER THAT THE SEMINAR WAS CONDUCTED BY THE BPCL, A CHARTERED ACCOUNTANT FIRM, BPCL IS NOT A CHA RTERED ACCOUNTANT FIRM, BUT IT IS BHARAT PETROLEUM CORPORATION LTD., A LEADI NG OIL AND GAS COMPANY IN INDIA. THE SEMINAR IN QUESTION, ON THE OTHER HAND, WA S CONDUCTED ALONG WITH PWC. THE ASSESSING OFFICER ASSERTED THAT THE RESULT OF THE SEMINAR HAD NOT BENEFITTED THE PUBLIC AT LARGE. IN THIS REGARD, IT R EMAINS IRREFUTED THAT THE SEMINAR WAS ATTENDED NOT ONLY BY THE ASSESSEE SOCIETY, BU T BY NON-MEMBERS INCLUDING PROFESSIONALS, AS WELL AS REPRESENTATIVES OF OTH ER COMPANIES. THE BENEFIT OF SUCH SEMINAR WAS THAT PROFESSIONALS WITH THE O BJECTIVE OF DISSEMINATING EDUCATION FOR ACCOUNTING FOR THE OIL AN D GAS INDUSTRY RECEIVED EDUCATION. THIS WAS CRUCIAL IN THE DETERMINATION OF T HE PRICING OF OIL PRODUCTS. 21. THEN, THE ASSESSEE SOCIETY HAD PAID RENT OF ` 50,05 ,974/- TO INDIAN OIL CORPORATION FOR THE PREMISES HIRED BY THE ASSESSEE FOR OF FICE PURPOSE. THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAD NOT FURNIS HED ANY EVIDENCE TO JUSTIFY THIS PAYMENT, SINCE IOC WAS ALSO A MEMBER OF THE ASSESSEE SOCIETY. THE LD. CIT (A) OBSERVED AS ABOVE. 22. HERE, THE VALUATION OF THE RENT WAS DONE BY A GO VERNMENT APPROVED VALUER. THIS VALUATION WAS BASED ON THE PREVAILING MAR KET RENT. THE ASSESSEE HAD FILED BEFORE THE LD. CIT (A) THE SUPPORTING DOCU MENTS ALONG WITH LEASE AGREEMENT AND VALUATION REPORT. A COPY OF THE REPOR T OF THE REGISTERED VALUER WAS ALSO FURNISHED. THIS REPORT PROVIDED THAT THE EFFEC TIVE PER SQUARE FEET RATE OF RENT PAID BY THE ASSESSEE SOCIETY FOR OFFICE SPA CE AT YUSUF SARAI FOR 6908 SQ. FT., WAS ` 42 PER SQ. FT. PER MONTH. THE REGI STERED VALUER ALSO MENTIONED THAT THE RENT PAID BY ABN AMRO BANK FOR A SIMILAR OFFICE SPACE IN HAUZ KHAS WAS ` 50 PER SQ. FT. PER MONTH. THE COMPARI SON SHOWS THAT THE PAYMENT WAS REASONABLE. THE ASSESSEE HAD ALSO FURNISHED A COPY OF LEASE AGREEMENT SHOWING RENT IN THE AREA OF SIRI FORT INSTI TUTIONAL AREA. THERE, THE RENT CHARGED WAS OF ` 120 PER SQ. FT. PER MONTH. MORE OVER, IOC IS A PUBLIC ITA NOS.612 & 5684/DEL/2010 14 SECTOR UNDERTAKING, WHEREIN THE GOVERNMENT OF INDIA HAS SUBSTANTIAL EQUITY AND IT HAS NOT BEEN SHOWN THAT THE RENT PAID BY THE A SSESSEE TO IOC WAS EXCESSIVE. 23. ANOTHER AMOUNT OF ` 21,000/- WAS PAID BY THE ASSESSE E TO IOC FOR CONDUCTING GUEST LECTURES. THIS WAS QUESTIONED BY THE ASS ESSING OFFICER AND FOUND TO BE REASONABLE BY THE LD. CIT (A). 24. HERE AGAIN, THE ASSESSEE HAD DULY FURNISHED SUPPORTI NG DOCUMENTS BEFORE THE LD. CIT (A), SHOWING THAT THE PAYMENT WAS LESS THAN THE CHARGES OF OTHER CONFERENCE HALLS LIKE UNDER THE HABITAT CEN TRE AND SCOPE COMPLEX. A COPY OF CHARGE LIST OF SCOPE COMPLEX WAS FILED. THE RE, CHARGES FOR SEMINAR HALL OF THE SCOPE TOWER VARIED FROM ` 4,000/- TO ` 25,000/-. THE PAYMENT MADE BY THE ASSESSEE TO IOC WAS, AS SUCH, EVIDENTLY, LESS. 25. THEN, AS CORRECTLY OBSERVED BY THE LD. CIT (A), T HE ASSESSING OFFICER HAD ERRED IN OBSERVING THAT THE PAYMENTS WERE BENEFIT TING THE MEMBERS OF THE ASSESSEE SOCIETY. UNDISPUTEDLY, THE PAYMENTS WERE MADE FOR SERVICES/RENT, WHICH WERE AT ARMS LENGTH. 26. THE CONTENTION OF THE ASSESSING OFFICER IN THE REMA ND REPORT THAT THE PROVISIONS OF SECTION 13 (1)(C) OF THE ACT GET ATTRAC TED, WAS ALSO RIGHTLY REJECTED BY THE LD. CIT (A), IN VIEW OF THE FACT TH AT THE PAYMENTS MADE BY THE ASSESSEE SOCIETY TO ITS MEMBERS HAVE NOT BEEN SHOWN TO BE UNREASONABLE. RATHER, THESE PAYMENTS HAVE BEEN FOUND T O BE IN ACCORDANCE WITH THE SERVICES RENDERED. 27. IN THE GROUND TAKEN BY THE DEPARTMENT (GROUND N O.2), IT HAS BEEN STATED THAT THE LD. CIT (A) HAS FAILED TO APPLY THE DECISION IN CITA VS. EMPLOYEES DEATH AND SUPERANNUATION RELIEF FUND, 234 ITR 308 (KAR), THOUGH THIS DECISION IS SQUARELY APPLICABLE. BEFORE US, HOWEVER, THE APPLICABILITY OF THIS DECISION TO THE FACTS OF THE PRE SENT CASE DOES NOT STAND MADE OUT. IN THAT CASE, IT WAS HELD THAT WHERE A TRUST IS ESTABLISHED FOR THE ITA NOS.612 & 5684/DEL/2010 15 BENEFIT OF THE EMPLOYEES OF A PUBLIC SECTOR COMPANY, IT IS NOT ENTITLED FOR CHARITABLE PURPOSES WITHIN THE MEANING OF SECTION 2 ( 15) OF THE INCOME-TAX ACT AND IT IS NOT ENTITLED TO EXEMPTION U/S 11 THEREO F. THIS DECISION, IN VIEW OF THE PRECEDING DISCUSSION, DOES NOT AID THE CASE OF THE D EPARTMENT AT ALL, SINCE THEREIN, THE BENEFIT WAS LIMITED TO THE EMPLOYE ES OF THE COMPANY, WHICH IS UNDISPUTEDLY NOT THE CASE HEREIN, THE OBJECTS OF THE ASSESSEE BEING FOR THE PUBLIC BENEFIT AND, THEREFORE, AN OBJECT OF GENERAL PUBLIC UTILITY. 28. FOR THE AFOREGOING DISCUSSION, WE DO NOT FIND ANY ERROR WHATSOEVER IN THE ORDER OF THE LD. CIT (A) WITH REGARD TO GROUND NO.2 AND THE SAME IS HEREBY REJECTED. ITA NO.5684/DEL/2010 29. THE FOLLOWING GROUNDS OF APPEAL HAVE BEEN RAISED: - 1. ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT (A) HAS ERRED IN ACCEPTING THE ASSESSEES CLAIM OF EXEMPTI ON 11 OF THE IT ACT AS THE SOCIETY IS RENDERING SERVICES IN THE SHAPE OF RESULT OF RESEARCH, SEMINAR OR OTHERWISE THROUGH THE ACTIVITIES I N REGARD OF THE OBJECTS IN THE FIELD, WHILE PETROLEUM AND HYDRO CARBON BENEFITS OF WHICH GOES TO THE MEMBERS OF THE SOCIETY WHOLLY OR A GR OUP OF PARTICULAR CORPORATE GROUP AND NOT FOR THE BENEFIT OF G ENERAL PUBLIC AT LARGE. ITS OBJECTS/ACTIVITIES DO NOT COME WITHIN THE AMBI T OF SECTION 2 (15) OF THE ACT. 2. ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE, THE L D. CIT (A) HAS ERRED IN TREATING THAT THE ASSESSEE HAS NOT VIOLATED TH E PROVISIONS OF SECTION 13 (1) (C), PARTICULARLY WHEN THE ASSESSEE HAS PAID RENT OF RS.48,94,277/- TO M/S INDIAN CORPORATION PVT. LTD. A CO RPORATE MEMBER, PERSON SPECIFIED U/S 13 (3)OF THE IT ACT AND RS.1,04, 65,465/- PAID TO M/S PRICE WATER HOUSE COOPER PVT. LTD. MEMBER OF THE S OCIETY, PERSON SPECIFIED U/S 13 (3) OF THE IT ACT. 30. THE SUBJECT MATTER OF BOTH THE GROUNDS IN THIS AP PEAL, IT IS SEEN, IS, MUTATIS MUTANDIS, EXACTLY SIMILAR TO THE SUBJECT MATTER OF GROUND NO.2 RAISED IN ITA NO.612/DEL/2010. THE OBSERVATIONS MADE BY US WH ILE DEALING WITH GROUND NO.2 IN THAT APPEAL ARE, AS SUCH, EQUALLY APP LICABLE HERETO ALSO AND ITA NOS.612 & 5684/DEL/2010 16 IN ACCORDANCE THEREWITH, THE FINDINGS OF THE LD. CIT (A) ON BOTH THESE ISSUES IN THIS APPEAL ARE ALSO CONFIRMED. 31. IN THE RESULT, BOTH THE APPEALS FILED BY THE DEPA RTMENT ARE DISMISSED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 31.01.201 4. SD/- SD/- [ T.S. KAPOOR ] [A.D. JAIN] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED, 31 ST JANUARY, 2014. DK COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT AR, ITAT, NEW DELHI.