ACIT(E), CIRCLE- 2(1), NEW DELHI V. NATIONAL ACCREDITION BOARD FOR TESTING AND CALIBRATION, NEW DELHI

ITA 6288/DEL/2017

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 5268 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 11 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-09-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2013-2014
• Appeal Filed On: 10-10-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income; Charitable institution; Question of law; Set aside
• Section: 12A; 153; 12; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH E : NEW DELHI) BEFORE SHRI KULDIP SINGH, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER (THROUGH VIDEO CONFERENCE) ITA NO.6288/DEL./2017 (ASSESSMENT YEAR : 2013-14) ITA NO.6289/DEL./2017 (ASSESSMENT YEAR : 2014-15) ACIT (E), CIRCLE 2 (1), VS. NATIONAL ACCREDITATION BOARD FOR TESTING NEW DELHI. AND CALIBRATION, 3 RD FLOOR, NISCAIR, 14, SATSANG VIHAR MARG, NEW MEHRAULI ROAD, NEW DELHI 110 067. (PAN : AAATN3528Q) (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE REVENUE BY : MS. PARAMITA M. BISWAS, CIT DR DATE OF HEARING : 20.09.2021 DATE OF ORDER : 24.09.2021 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 OFF BY WAY OF CONSOLIDATED ORDER TO AVOID REPETITION OF DI SCUSSION. ITA NO.6288/DEL./2017 ITA NO.6289/DEL./2017 2 2. APPELLANT, ACIT (E), CIRCLE 2 (1), NEW DELHI (HE REINAFTER REFERRED TO AS THE REVENUE) BY FILING THE PRESENT APPEALS SOUGHT TO SET ASIDE THE IMPUGNED ORDERS BOTH DATED 04.07.2017 PASSED BY THE COMMISSIONER OF INCOME - TAX (APPEALS)-40, DELHI QU A THE ASSESSMENT YEARS 2013-14 & 2014-15 ON THE IDENTICAL GROUNDS INTER ALIA THAT :- 1. ON THE BASIS OF FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) HAS ERRED IN IGNORING THE FACT THAT THE ASSESSEE IS NOT ELIGIBLE FOR EXEMPTION U/S 11 OF TH E I.T. ACT, 1961. 2. ON THE BASIS OF FACTS AND CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD. CIT (A) HAS ERRED IN IGNORING THE FACT THAT THE ASSESSEE IS RENDERING SERVICES TO THE LABORATORIES AND BY MONITORING SUCH LABS CARRYING OUT ACTIVITIES IN A C OMMERCIAL MANNER WITH A VIEW TO EARN PROFIT AND CHARGING FEE FROM THEM WHICH IS LIABLE TO BE TAXED UNDER THE HEAD PROFIT & GAINS OF BUSINESS AND PROFESSION AND AS SUCH, ITS ACTIVITIE S ARE NOT IN CHARITABLE NATURE. 3. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICAT ION OF THE CONTROVERSY AT HAND ARE : ASSESSEE BEING A SOCIETY REGISTERED UNDER SOCIETIES REGISTRATION ACT IS ALSO GRANTED REGISTRA TION UNDER SECTION 12A OF THE INCOME-TAX ACT, 1961 (FOR SHORT THE ACT ). THE MAIN AIMS AND OBJECTS OF THE ASSESSEE SOCIETY ARE TO PRO MOTE, COORDINATES, GUIDE, IMPLEMENT AND MAINTAIN ACCREDIT ATION SYSTEM FOR LABORATORIES SUITABLE IN THE COUNTRY IN ACCORDA NCE WITH THE RELEVANT NATIONAL AND INTERNATIONAL STANDARDS AND G UIDES; TO ENCOURAGE PROFICIENCY TESTS INTER-LABORATORY COMPAR ISONS IN ORDER TO ENSURE ACCURACY, RELIABILITY AND REPRODUCIBILITY OF TEST RESULTS, TO ITA NO.6288/DEL./2017 ITA NO.6289/DEL./2017 3 ENSURE THAT THE ACCREDITED LABORATORIES ADHERE TO A LL THE CONDITIONS OF ACCREDITATION BY PERIODIC SURVEILLANCE, ETC. 4. ASSESSING OFFICER (AO) DURING SCRUTINY PROCEEDIN GS NOTICED THAT THE ASSESSEE SOCIETY FALLS UNDER THE 6 TH LIMB OF CHARITABLE ACTIVITIES I.E. ADVANCEMENT OF ANY OTHER OBJECTS OF GENERAL PUBLIC UTILITY AND PROCEEDED TO HOLD THAT AS PER AMENDED P ROVISIONS, CONTAINED U/S 2(15) OF THE ACT, THE ACTIVITIES OF T HE ASSESSEE SOCIETY DO NOT FALL UNDER THE CHARITABLE PURPOSE AND THEREBY DENIED THE EXEMPTION U/S 11 & 12 OF THE ACT BY ASSESSING THE T OTAL INCOME AT RS.6,67,97,692/- & RS.7,48,30,568/- FOR AYS 2013-14 & 2014-15 RESPECTIVELY. 5. ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT ( A) BY WAY OF FILING APPEALS WHO HAS PARTLY ALLOWED THE SAME. FE ELING AGGRIEVED, THE REVENUE HAS COME UP BEFORE THE TRIBUNAL BY WAY OF FILING THE PRESENT APPEALS. 6. ASSESSEE HAS NOT PREFERRED TO PUT IN APPEARANCE DESPITE ISSUANCE OF THE NOTICE AND CONSEQUENTLY, WE PROCEED ED TO DECIDE THE PRESENT APPEALS WITH THE ASSISTANCE OF THE LD. DR AS WELL AS ON THE BASIS OF DOCUMENTS AVAILABLE ON THE FILE. 7. WE HAVE HEARD THE LD. DEPARTMENTAL REPRESENTATIV E FOR THE REVENUE TO THE APPEAL, GONE THROUGH THE DOCUMENTS R ELIED UPON AND ITA NO.6288/DEL./2017 ITA NO.6289/DEL./2017 4 ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. 8. BARE PERUSAL OF THE IMPUGNED ORDER PASSED BY THE LD. CIT(A) GOES TO PROVE THAT THE ISSUE AS TO THE ELIGIBILITY OF ASSESSEE SOCIETY TO AVAIL OFF THE BENEFIT UNDER SECTIONS 11 & 12 OF THE ACT, RAISED AND DECIDED BY AO AGAINST THE ASSESSEE SOCIETY, HAS ALREADY BEEN SETTLED AT REST BY THE TRIBUNAL AND SUBSEQUENTLY BY HONBLE DELHI HIGH COURT. IMPUGNED ORDER PASSED BY THE LD. CIT ( A) BY FOLLOWING THE DECISIONS RENDERED BY COORDINATE BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2009-10 IN ITA NO.1115/DEL/2013, FURTHER CONFIRMED BY HONBL E DELHI HIGH COURT IN ITA 284/2016 . OPERATIVE PART OF THE ORDER PASSED BY THE LD. CIT (A) IS EXTRACTED FOR THE SAKE OF BRE VITY AS UNDER :- 5.1.2 I HAVE CONSIDERED THE ASSESSMENT ORDER AND A LSO THE SUBMISSIONS OF THE APPELLANT. I'VE ALSO CONSIDERED THE DECISION OF THE HON'BLE ITAT, DELHI BENCH 'E' IN ITA NO. 1115/D EL/2013 FOR ASSESSMENT YEAR 2009 - 10 IN APPELLANT'S OWN CA SE AND ALSO THE DECISION OF THE HON'BLE DELHI HIGH COURT IN THE APPELLANT'S OWN CASE IN ITA 284/2016. HON'BLE IT AT IN THE APPE LLANT'S OWN CASE FOR ASSESSMENT YEAR 2009 - 10 (SUPRA) HAVE HEL D THAT THE ASSESSEE IS ELIGIBLE FOR EXEMPTION UNDER SECTIONS 1 1 AND 12 AS THE ASSESSEE IS NOT ENGAGED IN ANY TRADE, COMMERCE BUSI NESS AND ITS DOMINANT AND PRIME OBJECTIVE IS CHARITABLE IN NATUR E IN ACCORDANCE WITH SECTION 2(15). THE OPERATIVE PART O F THE JUDGEMENT IS REPRODUCED BELOW: '05. WE HAVE CAREFULLY CONSIDERED THE SUBMISSION OF PARTIES AND ALSO THE ORDERS OF LOWER AUTHORITIES. W E HAVE PERUSED THE OBJECTS OF THE TRUST FOR WHICH IT IS CR EATED AND ALSO THE GOVERNING COUNCIL OF THE TRUST . THE MAIN OBJECT OF THE FORMATION OF THIS SOCIETY IS TO GIVE THE LAB ORATORIES ACCREDITATION BY WHICH THE QUALITY STANDARDS IN THE PRODUCTS AVAILABLE TO CONSUMERS AND PUBLIC AT LARGE CAN ITA NO.6288/DEL./2017 ITA NO.6289/DEL./2017 5 BE IMPROVED. IT HAS NOT BEEN ALLEGED BY AO OR CIT ( A) ANYWHERE THAT THE ASSESSEE IS CHARGING EXORBITANT O R EXCESSIVE FEES. WE FIND THAT IN VIEW OF THE DECISIO N OF HONOURABLE JURISDICTIONAL HIGH COURT IN INDIA TRADE PROMOTION ORGANIZATIONS' V DGIT 371 ITR 333 THE CORRECT INTERPRETATION OF THE PROVISO TO SECTION 2( 15) OF THE SAID ACT WOULD BE THAT IT CARVES OUT AN EXCEPTION F ROM THE CHARITABLE PURPOSE OF ADVANCEMENT OF ANY OTHER OBJE CT OF GENERAL PUBLIC UTILITY AND THAT EXCEPTION IS LIMITE D TO ACTIVITIES IN THE NATURE OF TRADE, COMMERCE OR ANY ACTIVITY OF RENDERING ANY SERVICE IN RELATION TO ANY TRADE, COMMERCE OR BUSINESS FOR A CESS OR FEE .OR ANY OTHE R CONSIDERATION. IN BOTH THE ACTIVITIES, IN THE NATUR E OF TRADE, COMMERCE OR BUSINESS OR THE ACTIVITY OF REND ERING ANY SERVICE IN RELATION TO ANY TRADE, COMMERCE OR BUSINESS, THE DOMINANT AND THE PRIME OBJECTIVE HAS TO BE SEEN. IF THE DOMINANT AND THE PRIME OBJECTIVE OF TH E INSTITUTION, WHICH CLAIMS TO HAVE BEEN ESTABLISHED/ OR CHARITABLE PURPOSES, IS PROFIT MAKING, WHETHER ITS ACTIVITIES ARE DIRECTLY IN THE NATURE OF TRADE, COM MERCE OR BUSINESS OR INDIRECTLY IN THE RENDERING OF ANY SERV ICE IN RELATION TO ANY TRADE, COMMERCE OR BUSINESS, THEN I T WOULD NOT BE ENTITLED TO CLAIM ITS OBJECT TO BE A 'CHARIT ABLE PURPOSE'. ON THE FLIP SIDE, WHERE AN INSTITUTION IS NOT DRIVEN PRIMARILY BY A DESIRE OR MOTIVE TO EARN PROF ITS BUT TO DO CHARITY THROUGH THE ADVANCEMENT OF AN OBJECT OF GENERAL PUBLIC UTILITY, IT CANNOT BUT BE REGARDED A S AN INSTITUTION ESTABLISHED FOR CHARITABLE PURPOSES. HONOURABLE HIGH COURT HAS HELD THAT :- 55. IT WOULD BE APPROPRIATE TO ALSO EXAMINE THE OBSERVATIONS OF ANOTHER DIVISION BENCH OF THIS COUR T IN GS1 (SUPRA). WHILE CONSIDERING CIRCULAR NO. 11 OF 2 008 ISSUED BY THE CENTRAL BOARD OF DIRECT TAXES, TO WHI CH A REFERENCE HAS BEEN MADE EARLIER IN THIS JUDGMENT, T HE DIVISION BENCH HELD THAT IT WAS EVIDENT FROM THE SA ID CIRCULAR THAT THE NEW PROVISO TO SECTION 2(15) OF T HE SAID ACT WAS' APPLICABLE TO ASSESSEES, WHO ARE ENGAGED I N COMMERCIAL ACTIVITIES, I.E., CARRYING ON BUSINESS, TRADE OR COMMERCE, IN THE GARB OF 'PUBLIC UTILITIES' TO AVOI D TAX LIABILITY AS IT WAS NOTICED THAT THE OBJECT 'GENERA L PUBLIC UTILITY' WAS SOMETIMES USED AS A MASK OR DEVICE TO HIDE THE TRUE PURPOSE, WHICH WAS 'TRADE, COMMERCE OR BUSINESS'. FROM THIS, IT IS EVIDENT THAT THE INTROD UCTION OF THE PROVISO TO SECTION 2(15) BY VIRTUE OF THE FINAN CE ACT, 2008, WAS DIRECTED TO PREVENT THE UNHOLY PRACTICE O F PURE TRADE, COMMERCE AND BUSINESS ENTITIES FROM MASKING THEIR ACTIVITIES AND PORTRAYING THEM IN THE GARB OF AN AC TIVITY WITH THE OBJECT OF A GENERAL PUBLIC UTILITY. IT WAS NOT DESIGNED TO HIT AT THOSE INSTITUTIONS, WHICH HAD TH E ITA NO.6288/DEL./2017 ITA NO.6289/DEL./2017 6 ADVANCEMENT OF THE OBJECTS OF GENERAL PUBLIC UTILIT Y AT THEIR HEARTS AND WERE CHARITY INSTITUTIONS. THE ATT EMPT WAS TO REMOVE THE MASKS FROM THE ENTITIES, WHICH WERE P URELY TRADE, COMMERCE OR BUSINESS ENTITIES, AND TO EXPOSE THEIR TRUE IDENTITIES. THE OBJECT WAS NOT TO HURT GENUINE CHARITABLE ORGANISATIONS. AND, THIS WAS ALSO THE AS SURANCE GIVEN BY THE FINANCE MINISTER WHILE INTRODUCING THE FINANCE BILL 2008. 56. IN GS1 (SUPRA) IT WAS CONTENDED BY THE REVENUE THAT GS1 (INDIA) HAD ACQUIRED INTELLECTUAL PROPERTY RIGHTS FROM GS1 (BELGIUM) AND THEREAFTER RECEIVED REGISTRA TION FEES FROM THIRD PARTIES IN INDIA. THIS WAS SOUGHT T O BE EQUATED TO ROYALTY PAYMENTS. IT WAS ALSO CONTENDED THAT GS1 (INDIA) HAD HUGE SURPLUSES OF RECEIPTS OVER EXPENDITURE AND THAT PAYMENTS WERE MADE TO GS1 (BELGIUM). ACCORDING TO THE REVENUE, ALL THIS ENTAI LED THAT GS1 (INDIA) WAS ENGAGED IN 'BUSINESS, TRADE OR COMMERCE'. THE PETITIONER HEREIN REFUTED THIS. IN T HIS BACKDROP, THIS COURT ASKED THE QUESTION-SCAN IT BE SAID THAT THE PETITIONER IS ENGAGED IN ACTIVITIES WHICH CONSTITUTE BUSINESS, COMMERCE OR TRADE ? WHILE ANSWERING THE S AID QUESTION, THE COURT HELD AS UNDER (PAGE 153 OF360 I TR) : 'AS OBSERVED ABOVE, THE LEGAL TERMS, 'TRADE', 'COMMERCE' OR 'BUSINESS' IN SECTION 2(15), MEAN ACTIVITY UNDERTAKEN WITH A VIEW TO MAKE OR EARN PROFIT. PROFIT MOTIVE IS DETERMINATIVE AND A CRITIC AL FACTOR TO DISCERN WHETHER AN ACTIVITY IS BUSINESS, TRADE OR COMMERCE.' THE COURT FURTHER HELD (PAGE 153 OF 360 ITR) : 'BUSINESS ACTIVITY HAS AN IMPORTANT PERVADING ELEMENT OF SELF- INTEREST, THOUGH FAIR DEALING SHOULD AND CAN BE PRESENT, WHILST CHARITY OR CHARITABLE ACTIVITY IS ANTITHESIS OF ACTIVITY UNDERTAKEN WITH PROFIT MOTIVE OR ACTIVITY UNDERTAKEN ON SOUND OR RECOGNISED BUSINESS PRINCIPLES. CHARITY IS DRIVEN BY ALTRUISM AND DESIR E TO SERVE OTHERS, THOUGH ELEMENT OF SELF- PRESERVATION MAY BE PRESENT. FOR CHARITY, BENEVOLENCE SHOULD BE OMNIPRESENT AND DEMONSTRABLE BUT IT IS NOT EQUIVALENT TO SELF- SACRIFICE AND ABNEGATION. THE ANTIQUATED DEFINITION OF CHARITY, WHICH ENTAILS GIVING AND RECEIVING NOTHING IN RETURN IS OUTDATED. A MANDATORY FEATURE WOULD BE CHARITABLE ACTIVITY SHOULD BE DEVOID OF SELFISHNESS OR ILLIBERAL SPIRIT . ENRICHMENT OF ONESELF OR SELF-GAIN SHOULD BE ITA NO.6288/DEL./2017 ITA NO.6289/DEL./2017 7 MISSING AND THE PREDOMINANT PURPOSE OF THE ACTIVITY SHOULD BE TO SERVE AND BENEFIT OTHERS. A SMALL CONTRIBUTION BY WAY OF FEE THAT THE BENEFICIARY PAYS WOULD NOT CONVERT CHARITABLE ACTIVITY INTO BUSINESS, COMMERCE OR TRADE IN THE ABSENCE OF CONTRARY EVIDENCE. THE QUANTUM OF FEE CHARGED, ECONOMIC STATUS OF THE BENEFICIARIES WHO PAY, COMMERCIAL VALUE OF BENEFITS IN COMPARISON TO THE FEE, PURPOSE AND OBJECT BEHIND THE FEE, ETC. AR E SEVERAL FACTORS WHICH WILL DECIDE THE SEMINAL QUESTION, IS IT BUSINESS?' 57. ULTIMATELY, IN THE CONTEXT OF THE FACTUAL MATRI X OF THAT CASE, THIS COURT HELD THAT (PAGE 155 OF 360 IT R): 'CHARGING A NOMINAL FEE TO USE THE CODING SYSTEM AN D TO AVAIL OF THE ADVANTAGES AND BENEFITS THEREIN IS NEI THER REFLECTIVE OF THE BUSINESS APTITUDE NOR INDICATIVE OF THE PROFIT ORIENTED INTENT'. THE COURT FURTHER OBSERVE D (PAGE 155 OF 360 ITR) : 'THUS, THE CONTENTION OF THE REVENUE THAT THE PETITIONER CHARGES FEE AND, THEREFORE, IS CARRYING ON BUSINESS, HAS TO BE REJECTED. THE INTENTION BEHIND THE ENTIRE ACTIVITY IS PHILANTHROPIC AND NOT TO RECOUP OR REIMBURSE IN MONETARY TERMS WHAT IS GIVEN TO THE BENEFICIARIES. THE ELEMENT OF GIVE AND TAKE IS MISSING, BUT DECISIVE ELEMENT OF BEQUEATHING IS PRESENT. IN THE ABSENCE OF 'PROFIT MOTIVE' AND CHARITY BEING THE PRIMARY AND SOLE PURPOSE BEHIND THE ACTIVITIES OF THE PETITIONER IS PERSPICUOUSLY DISCERNIBLE AND PERCEPTIBLE. ' THE COURT ALSO HELD (PAGE 155 OF 360 ITR) : 'AS OBSERVED ABOVE, FEE CHARGED AND QUANTUM OF INCO ME EARNED CAN BE INDICATIVE OF THE FACT THAT THE PERSO N IS CARRYING ON BUSINESS OR COMMERCE AND NOT CHARITY, B UT WE MUST KEEP IN MIND THAT CHARITABLE ACTIVITIES REQUIR E OPERATIONAL/RUNNING EXPENSES AS WELL AS CAPITAL EXP ENSES TO BE ABLE TO SUSTAIN AND CONTINUE IN LONG RUN. THE PETITIONER HAS TO BE SUBSTANTIALLY SELF-SUSTAINING IN LONG- TERM AND SHOULD NOT DEPEND UPON GOVERNMENT, IN OTHE R WORDS, TAXPAYERS SHOULD NOT SUBSIDIZE THE SAID ACTI VITIES, WHICH NEVERTHELESS ARE CHARITABLE AND FALL UNDER TH E RESIDUARY CLAUSE 'GENERAL PUBLIC UTILITY'. THE IMPU GNED ORDER DOES NOT REFER TO ANY STATUTORY MANDATE THAT A CHARITABLE INSTITUTION FALLING UNDER THE LAST CLAUS E SHOULD BE WHOLLY, SUBSTANTIALLY OR IN PART MUST BE FUNDED BY VOLUNTARY CONTRIBUTIONS. NO SUCH REQUIREMENT HAS BE EN POINTED OUT OR ARGUED. A PRACTICAL AND PRAGMATIC VI EW IS ITA NO.6288/DEL./2017 ITA NO.6289/DEL./2017 8 REQUIRED WHEN WE EXAMINE THE DATA, WHICH SHOULD BE ANALYSED OBJECTIVELY AND A NARROW AND COLOURED VIEW WILL BE COUNTER-PRODUCTIVE AND CONTRARY TO THE LANGUAGE OF SECTION 2(15) OF THE ACT.' 58. IN CONCLUSION, WE MAY SAY THAT THE EXPRESSION 'CHARITABLE PURPOSE', AS DEFINED IN SECTION 2(15) C ANNOT BE CONSTRUED LITERALLY AND IN ABSOLUTE TERMS. IT HA S TO TAKE COLOUR AND BE CONSIDERED IN THE CONTEXT OF SECTION 10(23C)(IV) OF THE SAID ACT. IT IS ALSO CLEAR THAT IF THE LITERAL INTERPRETATION IS GIVEN TO THE PROVISO TO S ECTION 2(15) OF THE SAID ACT THEN THE PROVISO WOULD BE AT RISK OF RUNNING FOWL OF THE PRINCIPLE OF EQUALITY ENSHRINED IN ARTICLE 14 OF THE CONSTITUTION OF INDIA. IN ORDER T O SAVE THE CONSTITUTIONAL VALIDITY OF THE PROVISO, THE SAME WO ULD HAVE TO BE READ DOWN AND INTERPRETED IN THE CONTEXT OF SECTION 10(23C)(IV) BECAUSE, IN OUR VIEW, THE CONTE XT REQUIRES SUCH AN INTERPRETATION. THE CORRECT INTERP RETATION OF THE PROVISO TO SECTION 2(15) OF THE SAID ACT WOU LD BE THAT IT CARVES OUT AN EXCEPTION FROM THE CHARITABLE PURPOSE OF ADVANCEMENT OF ANY OTHER OBJECT OF GENER AL PUBLIC UTILITY AND THAT EXCEPTION IS LIMITED TO ACT IVITIES IN THE NATURE OF TRADE, COMMERCE OR BUSINESS OR ANY AC TIVITY OF RENDERING ANY SERVICE IN RELATION TO ANY TRADE, COMMERCE OR BUSINESS FOR A CESS OR FEE OR ANY OTHER CONSIDERATION. IN BOTH THE ACTIVITIES, IN THE NATUR E OF TRADE, COMMERCE OR BUSINESS OR THE ACTIVITY OF REND ERING ANY SERVICE IN RELATION TO ANY TRADE, COMMERCE OR BUSINESS, THE DOMINANT AND THE PRIME OBJECTIVE HAS TO BE SEEN. IF THE DOMINANT AND THE PRIME OBJECTIVE OF TH E INSTITUTION, WHICH CLAIMS TO HAVE BEEN ESTABLISHED FOR CHARITABLE PURPOSES, IS PROFIT MAKING, WHETHER ITS ACTIVITIES ARE DIRECTLY IN THE NATURE OF TRADE, COM MERCE OR BUSINESS OR INDIRECTLY IN THE RENDERING OF ANY SERV ICE IN RELATION TO ANY TRADE, COMMERCE OR BUSINESS, THEN I T WOULD NOT BE ENTITLED TO CLAIM ITS OBJECT TO BE A 'CHARIT ABLE PURPOSE'. ON THE FLIP SIDE, WHERE AN INSTITUTION IS NOT DRIVEN PRIMARILY BY A DESIRE OR MOTIVE TO EARN PROF ITS BUT TO DO CHARITY THROUGH THE ADVANCEMENT OF AN OBJECT OF GENERAL PUBLIC UTILITY, IT CANNOT BUT BE REGARDED A S AN INSTITUTION ESTABLISHED FOR CHARITABLE PURPOSES. 06. WE ARE ALSO OF THE VIEW THAT AMENDMENT MADE IN SECTION 2(15) OF THE ACT WITH EFFECT FROM 1.4.2016 BY SUBSTITUTING THE FIRST PROVISO AND SECOND PROVISO B Y A SINGLE PROVISO, WHICH WOULD NOW EXEMPT THE BUSINESS INCOME, WHERE THE ACTIVITY 'IS UNDERTAKEN IN THE CO URSE OF ACTUAL CARRYING OUT OF SUCH ADVANCEMENT OF ANY OTHE R OBJECT OF GENERAL PUBLIC UTILITY SO THAT IT RECOGN IZES ALL THE ACTIVITIES CONSISTENT WITH THE OBJECTS, WHERE T HE OBJECTS ITA NO.6288/DEL./2017 ITA NO.6289/DEL./2017 9 ARE NOT PROMPTED BY PROFIT MOTIVE, FROM THE PURVIEW OF LIABILITY BRINGING THE LAW TO CONFORM THE CONSTITUT ION WHICH WAS CHALLENGED BEFORE HONOURABLE DELHI HIGH COURT IN ABOVE DECISION. THE EFFECT OF THIS PROVISI ON WOULD BRING THOSE TRUSTS AND INSTITUTIONS, LIKE ASSESSEE, WITH THE OBJECT OF GENERAL PUBLIC UTILITY ON PAR WITH THOSE WITH THE OTHER THREE OBJECTS IN RESPECT OF THE TREATMENT FOR INCOME FROM BUSINESS, IF IT IS INCIDENTAL TO THE OBJECTS A S PROVIDED UNDER SECTION 11 (4A) OF THE ACT, SUBJECT TO CERTAI N LIMITATION. 07. IN VIEW OF ABOVE WE REVERSE THE ORDER OF CIT ( A) AND HOLD THAT ASSESSEE IS ELIGIBLE FOR EXEMPTION U/ S 11 & 12 OF THE INCOME TAX ACT AS ASSESSEE IS NOT ENGAGED IN ANY TRADE, COMMERCE OR BUSINESS AND ITS DOMINANT AN D PRIME OBJECTIVE IS CHARITABLE IN NATURE IN ACCORDAN CE WITH SECTION 2 (15) OF THE INCOME TAX ACT. 5.1.3 FURTHER, THE HON'BLE DELHI HIGH COURT IN APP ELLANT'S OWN CASE IN ITA 284/2016 BY THE ORDER DATED 02.05.2016 HAVE HELD AS UNDER: 3. THE SHORT QUESTION IS WHETHER THE RESPONDENT NATIONAL ACCREDITATION BOARD FOR TESTING AND CALIBRATION LABORATORIES IS ENTITLED TO EXEMPTION U NDER SECTION 11 AND 12 OF THE INCOME TAX ACT, 1961. 4. THE POSITIVE FINDINGS OF THE ITAT ON FACTS IS T HAT THE ASSESSEE IS NOT ENGAGED IN TRADE, COMMERCE AND BUSINESS AND ITS DOMINANT AND PRIME OBJECTIVE IS CHARITABLE IN NATURE IN ACCORDANCE WITH SECTION 2(1 5) OF THE 1. T. ACT, 1961. THE COURT ALSO NOTES THAT THE RESPONDENT IS PART OF THE CENTRAL GOVERNMENT. THE C OURT IS UNABLE TO BE PERSUADED TO HOLD THAT THE FINDINGS OF THE [TAT ARE PERVERSE. NO SUBSTANTIAL QUESTION OF LAW A RISES. THE APPEAL IS DISMISSED. 5. WE ALSO FURTHER OBSERVE THAT THE RESPONDENT ASSESSEE IS A CHARITABLE INSTITUTION.' 5.1.4 SINCE THE FACTS OF THE CASE AND THE SAME AS T HOSE FOR ASSESSMENT YEAR 2009-10, RESPECTFULLY FOLLOWING THE DECISION OF THE HON'BLE ITAT, DELHI BENCH 'E' IN IT A NO.1115/D EL/2013 IN APPELLANT'S OWN CASE AND ALSO THE DECISION OF TH E HON'BLE DELHI HIGH COURT IN APPELLANT'S OWN CASE IN ITA 284 /2016, IT IS HELD THAT THE ASSESSEE IS NOT ENGAGED IN TRADE, COM MERCE AND BUSINESS AND ITS DOMINANT AND PRIME OBJECTIVE IS CH ARITABLE IN NATURE IN ACCORDANCE WITH SECTION 2(15). THE ASSESS ING OFFICER IS DIRECTED TO ALLOW EXEMPTION UNDER SECTION 11 WITH A LL ITA NO.6288/DEL./2017 ITA NO.6289/DEL./2017 10 CONSEQUENTIAL BENEFITS. GROUNDS OF APPEAL NOS. 1 AN D 2 ARE ALLOWED. 9. LD. DR FOR THE REVENUE IN ORDER TO CHALLENGE THE IMPUGNED ORDER PASSED BY THE LD. CIT (A) HAS FAILED TO BRING ON RECORD ANY MATERIAL IF THE FACTS QUA THE CASES UNDER CONSIDERA TION VIS--VIS EARLIER YEAR ARE DISTINGUISHABLE NOR HAS BROUGHT ON RECORD ANY OTHER CASE LAW HAVING DIVERGENT VIEW. SINCE ASSESSEE SOC IETY HAS BEEN HELD TO BE A CHARITABLE INSTITUTION BY THE HONBLE DELHI HIGH COURT IN AY 2009-10 AND SINCE THEN THERE IS NO CHANGE IN THE AIMS AND OBJECTS OF THE ASSESSEE SOCIETY, FINDING NO ILLEGAL ITY OR INFIRMITY IN THE IMPUGNED ORDERS, BOTH THE AFORESAID APPEALS FIL ED BY THE REVENUE ARE HEREBY DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THIS 24 TH DAY OF SEPTEMBER, 2021. SD/- SD/- (PRASHANT MAHARISHI) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 24 TH DAY OF SEPTEMBER, 2021 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-40, DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.