ITO(E), Ward- 1(1), New Delhi V. Association of Corporations & Apex Societies of Handlooms (ACASH), New Delhi

ITA 6457/DEL/2017

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 2649 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 3 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-02-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 24-10-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AGAINST DATED PASSED
• Keywords: Charitable institution
• Section: 12A; 201; 22; 12; 2; 11

Judgement Text

1 ITA NO. 6457/DEL/2017 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: A NEW DELHI BEFORE SHRI G. S. PANNU, VICE PRESIDEN T AND MS SUCHITRA KAMBLE, JUDI CIAL MEMBER I.T.A. NO. 6457/DEL/20 17 (A.Y 2013-14) (THROUGH VIDEO CON FERENCING) ITO WARD(E), WARD-1(1) NEW DELHI (APPELLANT) VS ASSOCIATION OF CORPORATIONS & APEX SOCIETIES OF HANDLOOMS (ACASH) HANDLOOM PAVILION, NEAR GATE NO. 2, PRAGATI MAIDAN, BHAIRON MARG, NEW DELHI AAATA0822C (RESPONDENT) ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL IS FILED BY THE REVENUE AGAINST ORDER DATED 24/08/2017 PASSED BY CIT (A)-40, DELHI FOR ASSESSMENT YEAR 201 3-14. 2. THE GROUNDS OF APPEAL ARE AS UNDER:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, LD.CIT(A) HAS ERRED IN ALLOWING THE BENEFIT OF SECTION 11 & 1 2 OF THE ACT IGNORING THAT THE ACTIVITIES OF THE TRUST WERE NOT WITHIN THE PUR VIEW OF SECTION 2(15) OF THE ACT, 1961 DURING THE YEAR. APPELLANT BY SH. SATPAL GULATI, CIT DR RESPONDENT BY NONE DATE OF HEARING 15.02.2021 DATE OF PRONOUNCEMENT 22.02.2021 2 ITA NO. 6457/DEL/2017 3. THE ASSESSEE IS A REGISTERED UNDER THE SOCIETIES REGISTRATION ACT, 1860, U/S AS WELL AS U/S 12A OF THE INCOME TAX ACT, 1961 SINCE 11/3/1992. THE SOCIETY IS CONSTITUTED BY THE DEVELOPMENT COMMISSIO NER (HANDLOOM), MINISTRY OF TEXTILES, GOVERNMENT OF INDIA. THE MAIN OBJECT OF THE SOCIETY IS TO PROMOTE THE HANDLOOM SECTOR. IT WORKS AS THE IMPLEMENTING AGENCY FOR THE DEVELOPMENT COMMISSIONER (HANDLOOM), GOVERNMENT OF INDIA FOR ORGANIZAING EXHIBITIONS IN DIFFERENT PARTS OF THE COUNTRY FOR D ISPLAY AND SALE OF HANDLOOM FABRICS/CLOTH MANUFACTURED BY HANDLOOM WEAVERS AND HANDLOOM SOCIETY. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AS SESSEE WAS ASKED AS TO SHOW ITS ACTIVITIES ARE CHARITABLE AND WHY THE SAME SHOULD NOT BE TREATED AS BUSINESS AND WHY THE SAME SHOULD NOT BE COVERED BY THE PROVISO TO SECTION 2(15) OF THE ACT. THE ASSESSEE FILED RESPONSE TO T HE SAID NOTICE. THE ASSESSING OFFICER OBSERVED THAT THE ACTIVITIES OF THE ASSESSE E DO NOT FALL IN THE CATEGORY OF RELIEF OF POOR, EDUCATION, MEDICAL RELIEF, PRESERVA TION OF ENVIRONMENT AND PRESERVATION OF MONUMENTS OR PLACES OR OBJECTS OF A RTISTIC OR HISTORIC INTEREST. THUS, THE ASSESSING OFFICER COMPUTED THE TOTAL INCO ME OF RS. 1,31,99,671/- TOWARDS THE ACCESS OF INCOME AS DECLARED IN THE INC OME AND EXPENDITURE ACCOUNT. 4. BEING AGGRIEVED BY THE ASSESSMENT ORDER, THE ASS ESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT(A) PARTLY ALLOWED THE APPEAL O F THE ASSESSEE. 6. AT THE TIME OF HEARING, NONE APPEARED FOR THE AS SESSEE, WE ARE TAKING THE SUBMISSIONS OF THE ASSESSEE BEFORE THE ASSESSING OF FICER AS WELL BEFORE THE CIT(A) AS THE SUBMISSIONS BEFORE US. 7. THE LD. DR SUBMITTED THAT THE DEPARTMENT IS RELY ING UPON THE ASSESSMENT ORDER. THE LD. DR FURTHER CLARIFIED THAT IN ASSESSMENT YEAR 2010- 11 AND 2011-12, THE TRIBUNAL HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE 3 ITA NO. 6457/DEL/2017 AND AGAINST THE REVENUE (ITA NO. 4788/DEL/2016 ORDE R DATED 27/03/2019, ASSESSMENT YEAR 2010-11 AND ITA NO. 2086/DEL/2017 O RDER DATED 4/07/2019 ASSESSMENT YEAR 2011-12). 8. WE HAVE HEARD THE LD. DR AND PERUSED THE MATERIA L AVAILABLE ON RECORD. AS THE LD. DR SUBMITTED THAT IN ASSESSMENT YEAR 201 0-11, THE TRIBUNAL HAS DECIDED THIS ISSUE IN FAVOUR OF THE ASSESSEE AND AG AINST THE REVENUE. WE HAVE GONE THROUGH THE ORDER DATED 27/03/2019 PASSED BY T HE TRIBUNAL PASSED BY THE TRIBUNAL IN ITA NO. 4788/DEL/2016 WHEREIN THE T RIBUNAL HELD AS UNDER:- 5.3 EVIDENTLY, THE ACTIVITY OF THE ASSESSEE AR E OF ADVANCEMENT OF ANY OTHER OBJECT OF THE GENERAL PUBL IC UNITY, WHICH FALLS UNDER THE DEFINITION OF THE CHARITABLE PURPOSE AS DEFINED UNDER SECTION 2(15) OF THE ACT. BUT THE CON TENTION OF THE ASSESSING OFFICER IS THAT SAID OBJECT OF GENERAL PU BLIC UTILITY SHALL NOT BE CHARITABLE BECAUSE THE ASSESSEE IS ENGAGED I N THE ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINESS OR REN DERING ANY SERVICE IN RELATION TO ANY TRADE, COMMERCE AND BUSI NESS FOR CESS OR FEE. WE FIND THAT ITA NO. 4788/DEL/2016 ACTIVITY OF THE ASSESSEE ARE PRIMARILY MOTIVATED WITH THE OBJECTIVE OF PROMOTING HANDLOOM SECTOR IN INDIA AND SAID ACTIVITY ARE NOT FOR GAIN OR PROFIT OF AN INDIVIDUAL. THE EXECUTIVE COMMITTEE OF THE SOCIETY ALSO CONSIST OF ALL GOVERNMENT OFFICIALS WITH NO MOTIVE OF PROFIT SHARING OR PERSONAL INTEREST. THE MEMBER SUBSCRIPTION IS RE CEIVED BY THE ASSESSEE IN PROPORTION OF THE SUPPLY BY THE AGENCY AND THE RATE DECIDED. THE SAID SUBSCRIPTION FEE RECEIVED CANNOT BE EQUATED WITH THE CESS OR FEE AGAINST SERVICES RENDERED. WE ARE OF THE VIEW THAT THE ASSESSING OFFICER HAS NOT APPRECIATED THE ACTIVITIES AND OBJECTIVE OF THE SOCIETY PROPERLY AND THEREFORE HE IS NOT JUSTIFIED IN HOLDING THAT PROVISION TO SECTION 2(15) WILL BE ATT RACTED IN THE CASE OF THE ASSESSEE. IN OUR OPINION, THE FINDING OF THE LD. CIT(A) ON THE 4 ITA NO. 6457/DEL/2017 ISSUE IN DISPUTE IS WELL REASONED, AND WE DO NOT FI ND ANY ERROR IN THE SAME. ACCORDINGLY WE UPHOLD THE SAME. THE GROUN D OF THE APPEAL OF THE REVENUE IS ACCORDINGLY DISMISSED. SINCE, THE ISSUES ARE IDENTICAL IN THE PRESENT APPE AL AS WELL AND THERE IS A CLEAR FINDING OF THE CIT(A) THAT SINCE THE FACTS OF THE C ASE ARE SAME AS IN ASSESSMENT YEAR 2010-11, 2011-12 & 2012-13, THE ASSESSING OFFI CER WAS DIRECTED TO ALLOW THE BENEFIT OF SECTION 11 WITH CONSEQUENTIAL BENEFI TS. THUS, THERE IS NO NEED TO INTERFERE WITH THE ORDER OF THE CIT(A) IN THE PRESE NT ASSESSMENT YEAR. HENCE, THE APPEAL OF THE REVENUE IS DISMISSED. 9. IN RESULT, THE APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 22 ND DAY OF FEBRUARY, 2021 IN PRESENCE OF LD. DR. SD/- SD/- (G. S. PANNU) (SUCHITRA KAMBLE) VICE PRESIDENT JU DICIAL MEMBER DATED: 22/02/2021 R. NAHEED * COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI 5 ITA NO. 6457/DEL/2017