FRAGRANCE & FLAVOURS ASSOCIATION OF INDIA, MUMBAI V. DDIT (E) - 1(2), MUMBAI

ITA 6545/MUM/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 9725 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-03-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2009-2010
• Appeal Filed On: 08-11-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAM TIWARI
• Keywords: Reopening of assessment; Charitable institution
• Section: 12A; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH F , MUMBAI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND PAWAN SINGH, JUDICIAL MEMBER ITA NO. 6545 /MUM/2016 (ASS ESSMENT YEAR- 2009-10) FRAGRANCE AND FLAVOURS ASSOCIATION OF INDIA, 2-B, COURT CHAMBERS, 25, SIR VITTHALDAS THACKERSEY MARG, CHURCHGATE, MUMBAI-400020 PAN:AAAAF0029K VS. DDIT(E)-1(2) MUMBAI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI ANIL SATHE (AR) REVENUE BY : SHRI RAM TIWARI (DR) DATE OF HEARING : 22.03.2018 DATE OF PRONOUNCEMENT : 22.03.2018 ORDER UNDER SECTION 254(1) OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER: 1. THIS APPEAL BY ASSESSEE UNDER SECTION 253 OF INCOME TAX ACT (THE ACT) IS DIRECTED AGAINST THE ORDER OF LD. COMMISSIONER O F INCOME-TAX (APPEALS)-1, MUMBAI, [FOR SHORT THE LD. CIT(A)] DAT ED 31.08.2016 FOR ASSESSMENT YEAR 2009-2010. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN NOT APPRECIATING THAT REOPENING OF ASSESSMENT WAS BAD I N LAW. 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING THE DENIAL OF EXEMPTION U/S 11 TO THE APPELLANT TRU ST BY HOLDING THAT THE ACTIVITIES OF THE APPELLANT ARE COMMERCIAL IN NATUR E. 3. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) FAILED TO APPRECIATE THAT THE OBJECT OF THE TRUST FOR CONDUCTING THE SEM INARS WAS TO IMPART KNOWLEDGE, SPREAD AWARENESS AND DEVELOP THE SECTOR OF FRAGRANCES & ITA NO. 6545/MUM/16- FRAGRANCE AND FLAVOURS ASSOCIATION OF INDIA 2 FLAVOURS, AND NOT TO EARN SURPLUS AND THAT THE RESU LTING SURPLUS IS ONLY INCIDENTAL. 4. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN HOLDING THAT THE MAIN ACTIVITY OF THE APPELLANT IS SPONSORI NG OF EVENTS, WITHOUT APPRECIATING THAT WHILE THE APPELLANT MAY RECEIVE S PONSORSHIP/ ADVERTISEMENT FOR ITS PROGRAMS, IT DOES NOT SPONSOR EVENTS. 5. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONSIDERING ONE SINGLE SEMINAR TO DRAW AN ADVERSE CONCLUSION, A ND IN NOT CONSIDERING THE ENTIRE ACTIVITIES OF THE ASSOCIATION IN A HOLIS TIC MANNER. 6. IN THE ALTERNATIVE AND WITHOUT PREJUDICE TO THE ABOVE GROUNDS, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN NOT ALLOWING THE ALTERNATIVE PLEA OF THE APPELLANT FOR BENEFIT OF PR INCIPLE OF MUTUALITY. 7. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN PLACING RELIANCE ON THE DECISION OF SUPREME COURT IN BANGAL ORE CLUB VS. CIT FACTS OF WHICH CASE ARE DISTINGUISHABLE FROM THE CASE OF THE APPELLANT. 2. AT THE OUTSET OF HEARING, THE LD. AUTHORIZED REPRES ENTATIVE (AR) OF THE ASSESSEE SUBMITS THAT THE GROUNDS OF APPEAL RAISED IN THE PRESENT APPEAL IS COVERED IN FAVOUR OF ASSESSEE IN ASSESSEES OWN CAS E FOR ASSESSMENT YEAR 2011-12 IN ITA NO. 5453/MUM/2015. AFTER GOING THROU GH THE ORDER OF TRIBUNAL, THE LD. DEPARTMENTAL REPRESENTATIVE (DR) FOR THE REVENUE CONCEDED THAT THE FACTS OF THE YEAR UNDER CONSIDERA TION ARE NOT AT VARIANCE AND ISSUE IS COVERED AGAINST THE REVENUE. 3. WE HAVE CONSIDERED THE SUBMISSION OF BOTH THE PARTI ES AND FIND THAT SIMILAR GROUND OF APPEAL WAS RAISED BY ASSESSEE IN APPEAL FOR ASSESSMENT YEAR 201-11 IN ASSESSEES OWN CASE FOR ASSESSMENT Y EAR 2011-12 IN ITA NO. 5453/MUM/2015. THE CO-ORDINATE BENCH OF THE TRI BUNAL DECIDED THE ASSESSEES APPEAL VIDE ORDER DATED 08.12.2017 PASSE D THE FOLLOWING ORDER: ITA NO. 6545/MUM/16- FRAGRANCE AND FLAVOURS ASSOCIATION OF INDIA 3 9. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE ISSUE BEFORE US. WE FIND THAT THE ASSESSEE IS REGISTERED AS A CHARITABLE ORG ANIZATION UNDER SEC. 12A WITH THE DIRECTOR OF INCOME-TAX (EXEMPTION), MUMBAI . THAT AS THE ACTIVITIES OF THE ASSESSEE WERE PRIMARILY IN THE NATURE OF 'AD VANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY', THEREFORE, THE A .O. BEING OF THE VIEW THAT AS PER THE POST AMENDED DEFINITION OF THE TERM 'CHARIT ABLE PURPOSE' IN SEC. 2(15) THE COMMERCIAL ACTIVITIES OF THE ASSESSEE COU LD NO MORE BE HELD AS BEING FOR CHARITABLE PURPOSE, AS A RESULT WHEREOF T HE ASSESSEE STOOD DISENTITLED FOR CLAIM OF EXEMPTION UNDER SEC. 11 OF THE ACT. WE FIND THAT THE ASSESSEE HAD DECLINED THAT IT WAS CARRYING ON ANY C OMMERCIAL ACTIVITIES AND HAD RATHER BY REFERRING TO ITS ACTIVITIES WHICH HAD BEEN TAKEN COGNIZANCE OF BY THE A.O, VIZ. (I). SUBSCRIPTION RECEIVED; (II). SALE OF PUBLICATIONS; (III). FAFAI JOURNAL; (IV). WORKSHOP & CONFERENCE; (V). BA NGALORE SEMINAR; AND (VI) DIRECTORY RECEIPTS, SUBMITTED THAT THE SAID RE SPECTIVE ACTIVITIES WERE FOR THE FURTHERANCE OF THE GENERAL PUBLIC UTILITY OBJEC T OF THE ASSESSEE, WHICH BY NO MEANS COULD BE CONSTRUED AS COMMERCIAL ACTIVITIE S. 10. WE HAVE DELIBERATED ON THE OBSERVATIONS OF THE LOWER AUTHORITIES AND FIND THAT THE A.O HAD CONCLUDED THAT THE ASSESSEE W AS CARRYING ON COMMERCIAL ACTIVITIES, PRIMARILY FOR THE REASON THA T IT HAD GENERATED SUBSTANTIAL REVENUE FROM THE SEMINAR HELD AT BANGAL ORE. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE ISSUE BEFORE US AND HAVE DELIBERATED AT LENGTH ON THE CONTENTIONS OF THE LD. A.R IN THE BAC KDROP OF THE FACTS OF THE CASE. WE FIND THAT THE ACTIVITIES OF THE ASSESSEE T RUST WERE DIRECTED TOWARDS PROVIDING KNOWLEDGE, INFORMATION', AWARENESS, DEMON STRATIONS ETC. TO THE MEMBERS OF THE FRAGRANCE AND FLAVOURS INDUSTRY. THE ACTIVITIES OF THE ASSESSEE WERE ESSENTIAL TO UNDERSTAND THE DEVELOPME NT OF THE SAID INDUSTRY IN INDIA. WE HAVE DELIBERATED ON THE NATURE OF ACTI VITIES OF THE ASSESSEE TRUST AND ARE OF THE CONSIDERED VIEW THAT ALL OF ITS ACTI VITIES, VIZ. RECEIPTS BY WAY OF SUBSCRIPTIONS FROM THE MEMBERS, SALE OF PUBLICAT IONS, FAFAI JOURNAL, HOLDING OF WORKSHOPS & CONFERENCES, DIRECTORY RECEI PTS AND HOLDING OF THE SEMINAR AT BANGALORE, WERE ACTIVITIES WHICH WERE AI MED FOR FURTHERANCE OF THE VERY OBJECT OF THE ASSESSEE TRUST, VIZ. PROVIDI NG KNOWLEDGE, INFORMATION, ITA NO. 6545/MUM/16- FRAGRANCE AND FLAVOURS ASSOCIATION OF INDIA 4 AWARENESS, DEMONSTRATIONS ETC. TO THE MEMBERS OF TH E FRAGRANCE AND FLAVOURS INDUSTRY. WE ARE OF THE CONSIDERED VIEW TH AT THE PROVIDING OF THE AFORESAID SERVICES WERE INDISPENSABLY REQUIRED TO F ACILITATE THE FURTHERANCE OF THE VERY INTEREST OF THE FRAGRANCE AND FLAVOURS INDUSTRY. RATHER, WE ARE OF A STRONG CONVICTION THAT IN THE ABSENCE OF THE AFOR ESAID ACTIVITIES OF THE ASSESSEE TRUST, WHICH AS OBSERVED BY US HEREINABOVE CAN SAFELY BE HELD TO HAVE BEEN INDISPENSABLY REQUIRED FOR THE GROWTH OF THE INDUSTRY AND GIVING ITS MEMBERS AN EXPOSURE TO THE DEVELOPMENTS IN THE INDUSTRY AND KEEPING PACE WITH THE DAY TO DAY CHANGES AND INNOVATIONS IN THE INDUSTRY, THE OBJECTS OF THE ASSESSEE TRUST WOULD HAVE BEEN FRUSTRATED AN D RENDERED AS MERELY DUMB AND NAME SAKE IN NATURE, DEFEATING THE VERY PU RPOSE FOR WHICH IT WAS SET UP. WE FIND THAT A PERUSAL OF THE ORDERS OF THE LOWER AUTHORITIES REVEALS THAT THEIR VIEW THAT THE ASSESSEE WAS INVOLVED IN C ARRYING ON OF COMMERCIAL ACTIVITIES WITHIN THE MEANING OF SEC. 2(15), WAS PR IMARILY GUIDED BY THE FACT THAT THE PRODUCTS OF THE SPONSORS FROM WHOM SPONSOR SHIP FEES WERE RECEIVED BY THE ASSESSEE WERE DISPLAYED AT THE SEMINAR HELD AT BANGALORE. WE ARE OF THE CONSIDERED VIEW THAT THE HOLDING OF THE SEMINAR AT BANGALORE WAS IN FURTHERANCE OF THE MAIN OBJECT OF THE ASSESSEE TRUS T OF EMPOWERMENT, BETTERMENT AND CREATING AWARENESS AMONGST THE INDUS TRIALISTS IN ORDER TO BRING ABOUT THE DEVELOPMENT OF THE FRAGRANCE AND FL AVOURS INDUSTRY IN INDIA. WE FURTHER FIND THAT THE ASSESSEE WAS NOT BY WAY OF A REGULAR AND SYSTEMATIC ACTIVITY CARRYING ON SUCH SEMINARS, AND AS OBSERVED BY US HEREINABOVE, THE SEMINAR AT BANGALORE WAS THE ONLY INTERNATIONAL SEMINAR HELD BY THE ASSESSEE TRUST. WE ARE FURTHER OF THE C ONSIDERED VIEW THAT NO SUCH INEXTRICABLE NEXUS BETWEEN THE RECEIPT OF SPON SOR FEES BY THE ASSESSEE AND DISPLAY OF THE PRODUCTS OF THE SPONSORS DOES EM ERGE, ON THE BASIS OF WHICH THE SAME COULD SAFELY BE CHARACTERISED AS A C OMMERCIAL ACTIVITY. 11. WE ARE OF THE CONSIDERED VIEW THAT THE FACT THA T HOLDING OF THE SEMINAR AT BANGALORE BY THE ASSESSEE WAS IN FURTHERANCE OF THE DOMINANT OBJECT OF THE ASSESSEE, VIZ. EMPOWERMENT, BETTERMENT AND CREATING AWARENESS AMONGST THE INDUSTRIALISTS OF THE FRAGRANCE AND FLAVOURS INDUST RY, AND DISPLAY OF THE PRODUCTS OF THE SPONSORS CAN SAFELY BE CONCLUDED TO BE FOR FURTHERANCE OF ITA NO. 6545/MUM/16- FRAGRANCE AND FLAVOURS ASSOCIATION OF INDIA 5 AND IN THE INTEREST OF THE MEMBERS OF THE TRADE. WE ARE UNABLE TO PERSUADE OURSELVES TO BE IN AGREEMENT WITH THE VIEW OF THE A .O THAT AS THE PRODUCTS OF THE SPONSORS WERE DISPLAYED AT THE SEMINAR HELD AT BANGALORE, THEREFORE, ON THE SAID STAND ALONE BASIS THE ASSESSEE WAS TO B E HELD TO HAVE CARRIED ON COMMERCIAL ACTIVITIES. VIE ARE OF THE CONSIDERED VI EW THAT ON A CLOSE ANALYSIS OF THE AFORESAID ACTIVITIES OF THE ASSESSE E TRUST, WHICH IF VIEWED IN A BROADER PERSPECTIVE AND PITTED AGAINST THE DOMINANT OBJECT OF THE ASSESSEE TO HOLD A SEMINAR FOR FURTHERANCE OF AND IN THE INTERE ST OF THE MEMBERS OF THE INDUSTRY, CANNOT BE CHARACTERISED AS A COMMERCIAL A CTIVITY WE FIND THAT THE HON'BLE JURISDICTIONAL HIGH COURT 'IN THE CASE OF D IRECTOR OF INCOME-TAX VS. WOMENS INDIA TRUST (2015) 379 ITR 506 (BOM) HAD UPH ELD THE OBSERVATIONS OF THE TRIBUNAL THAT WHERE A TRUST FOR MED TO CARRY OUT THE OBJECT OF EDUCATION AND DEVELOPMENT OF NATURAL TALENTS OF THE PEOPLE HAVING SPECIAL SKILLS, MORE PARTICULARLY THE WOMEN IN THE SOCIETY, HAD IN THE COURSE OF IMPARTING TO THEM TRAINING IN THE FIELD OF CATERING , STITCHING, TOY MAKING, ETC., THEREIN CARRIED OUT SALE OF CERTAIN FINISHED PRODUCTS, VIZ. PICKLES, JAMS, ETC. WHICH WERE IN THE COURSE OF SUCH TRAINING PROD UCED BY THEM, THROUGH SHOPS, EXHIBITIONS AND PERSONAL CONTRACTS, THE SAME COULD NOT BE HELD TO BE ACTIVITIES IN THE NATURE OF TRADE, COMMERCE OR BUSI NESS AS CONTEMPLATED IN THE PROVISO OF SEC. 2(15). WE FIND THAT THE VIEW OF THE TRIBUNAL THAT AS THE DOMINANT OBJECT OF TRUST WAS TO TEACH OR IMPART SKI LLS AND TO INSTILL CONFIDENCE, THEREFORE, THE SALE OF THE GOODS OR ART ICLES PRODUCED IN THE COURSE OF SUCH TRAINING COULD NOT BE CONSTRUED AS C ARRYING ON OF TRADE, COMMERCE OR BUSINESS, DID FIND FAVOUR WITH THE HON' BLE HIGH COURT. WE FIND THAT IN THE CASE OF THE ASSESSEE BEFORE US, TH E HOLDING OF THE SEMINARS AND CARRYING ON OF OTHER ACTIVITIES, VIZ. RECEIPT O F SUBSCRIPTIONS FROM THE MEMBERS, SALE OF PUBLICATIONS, FAFAI JOURNAL, HOLDI NG OF WORKSHOPS & CONFERENCES, DIRECTORY RECEIPTS ETC., WERE ACTIVITI ES WHICH WERE CARRIED OUT IN ORDER TO FACILITATE THE FURTHERANCE OF THE DOMINANT OBJECT OF THE ASSESSEE TRUST, VIZ. PROVIDING KNOWLEDGE, INFORMATION, AWARE NESS, DEMONSTRATIONS ETC. TO THE MEMBERS OF THE FRAGRANCE AND FLAVOURS INDUST RY, THEREFORE, NEITHER THE CARRYING ON OF EITHER OF THE AFORESAID ACTIVITI ES, SPECIFICALLY THE DISPLAY OF THE PRODUCTS OF THE SPONSOR MEMBERS OF THE INDUS TRY IN THE COURSE OF THE ITA NO. 6545/MUM/16- FRAGRANCE AND FLAVOURS ASSOCIATION OF INDIA 6 SEMINAR AT BANGALORE, WHICH WE FIND HAD BEEN EMPHAS IZED BY THE REVENUE AS THE PRIMARY REASON FOR CONCLUDING TJ:1AT THE ASS ESSEE WAS CARRYING ON COMMERCIAL ACTIVITIES COULD BE HELD AS SUCH AND BRO UGHT WITHIN THE SWEEP OF THE FIRST PROVISO OF SEC. 2(15). WE FURTHER FIND TH AT THE HON'BLE HIGH COURT OF MADRAS IN THE CASE OF DIRECTOR OF INCOME TAX. (E XEMPTION) VS. THE CHARTERED ACCOUNTANT STUDY CIRCLE (2012) 250 CTR 70 (MAD), HAD THE OCCASION TO .DELIBERATE ON THE SCOPE AND GAMUT OF T HE FIRST PROVISO OF SEC. 2(15) IN THE CASE OF AN ASSESEEE TRUST WHOSE OBJECT S AMONG OTHER THINGS WAS TO CONDUCT PERIODICAL MEETINGS ON PROFESSIONAL SUBJ ECTS. THE HIGH COURT OBSERVED THAT THE PUBLISHING AND SALE OF BOOKS, BOO KLETS ETC. ON PROFESSIONAL SUBJECTS RELATED TO AUDIT AND NOT ON ANY OTHER SUBJ ECT BY THE ASSESSEE. THE SALE OF THE BOOKS WAS PRIMARILY MADE TO THE MEMBERS OF THE SOCIETY, AS WELL AS MADE AVAILABLE TO THE GENERAL PUBLIC, WITH THE A IM TO HELP THE SOCIETY TO GET BETTER, WELL-EQUIPPED AND SKILLED SET OF CHARTE RED ACCOUNTANTS FOR MAINTAINING AUDIT QUALITY, WHICH HOWEVER COULD NOT BE CONSTRUED AS A TRADE OR COMMERCE OR BUSINESS. THUS, THE HIGH COURT OBSER VED THAT THE ACTIVITIES OF THE ASSESSEE TRUST IN PUBLISHING AND SELLING BOO KS OF PROFESSIONAL INTEREST, WHICH WERE MEANT TO BE USED AS A REFERENCE MATERIAL EVEN BY THE GENERAL PUBLIC AS WELL AS THE PROFESSIONALS IN RESPECT OF B ANK AUDIT, TAX AUDIT, ETC., COULD NOT BE CONSTRUED AS A COMMERCIAL ACTIVITY. WE ARE OF THE CONSIDERED VIEW THAT IN THE CASE OF THE PRESENT ASSESSEE BEFOR E US, THE SERVICES, VIZ. RECEIPT OF SUBSCRIPTIONS FROM THE MEMBERS, SALE OF PUBLICATIONS, FAFAI JOURNAL, HOLDING OF WORKSHOPS & CONFERENCES, DIRECT ORY RECEIPTS ETC., WERE PROVIDED FOR FACILITATING THE DOMINANT OBJECT OF TH E ASSESSEE TRUST, VIZ. PROVIDING KNOWLEDGE, INFORMATION, AWARENESS, DEMONS TRATIONS ETC. TO THE MEMBERS OF THE FRAGRANCE AND FLAVOURS INDUSTRY. WE FURTHER FIND THAT EVEN THE DISPLAY OF THE PRODUCTS OF THE SPONSORS OF THE SEMINAR AT BANGALORE, WHO WERE PRIMARILY THE MEMBERS OF THE INDUSTRY, WAS ALS O IN FURTHERANCE OF THE INTEREST OF THE MEMBERS OF THE INDUSTRY, I.E. BOTH BY FACILITATING THE VERY HOLDING OF THE SEMINAR, AS WELL AS PROVIDING THEM K NOWLEDGE AND INFORMATION OF THE WIDE RANGE OF PRODUCTS AVAILABLE IN THE INDUSTRY. WE ARE THUS OF THE VIEW THAT THE AFORESAID ACTIVITIES OF T HE ASSESSEE TRUST BEFORE US, IN THE BACKDROP OF THE AFORESAID OBSERVATIONS OF TH E HIGH COURT OF MADRAS ITA NO. 6545/MUM/16- FRAGRANCE AND FLAVOURS ASSOCIATION OF INDIA 7 CAN SAFELY BE HELD TO BE IN THE COURSE OF FURTHERAN CE OF THE DOMINANT OBJECT OF THE ASSESSEE TRUST, AND WOULD NOT FALL WITHIN TH E REALM OF COMMERCIAL ACTIVITIES. WE FURTHER FIND THAT A SIMILAR VIEW HAD ALSO BEEN TAKEN BY THE HON'BLE HIGH COURT OF DELHI IN THE CASE OF THE INST ITUTE OF CHARTERED ACCOUNTANTS OF INDIA VS, DIRECTOR GENERAL OF INCOME (TAX (EXEMPTION) (2013) 260 CTR L (DEL). THE HIGH COURT HELD THAT NO DOUBT THE ASSESSEE INSTITUTE WAS HOLDING CLASSES AND- PROVIDING COACHI NG FACILITIES FOR THE MEMBERS AND ARTICLED CLERKS ETC. WHO WANTED TO APPE AR IN THE EXAMINATION CONDUCTED BY THE INSTITUTE OF CHARTERED ACCOUNTANTS , BUT THESE CLASSES WERE NOT HELD FOR COACHING OR FOR APPEARANCE IN AN EXAMI NATION CONDUCTED BY SOME OTHER ENTITY. THE HIGH COURT OBSERVED THAT AS CONDUCTING OF COACHING CLASSES WAS WITH THE PREDOMINANT OBJECT OF MAINTAIN ING AND UPHOLDING THE STANDARDS OF THE ACCOUNTANCY PROFESSION AND IN FURT HERANCE OF THE OBJECT AND PURPOSE FOR WHICH THE INSTITUTE WAS ESTABLISHED, I. E., PROFESSIONAL EXCELLENCE AND PROMOTION OF ACCOUNTANCY AS A PREFERRED PROFESS ION, AND TO SHARPEN THE SKILLS AND KNOWLEDGE OF THE MEMBERS OF INSTITUTE WH O WOULD ATTEND THE COURSES/LECTURES ETC., THEREFORE, THE ACTIVITIES OF PROVIDING COACHING CLASSES OR UNDERTAKING CAMPUS PLACEMENT INTERVIEWS FOR A FE E WERE IN RELATION TO THE MAIN OBJECT OF THE ASSESSEE INSTITUTE, WHICH COULD NOT BE HELD TO BE TRADE, BUSINESS OR COMMERCE. THE HIGH COURT WHILE CONCLUDI NG AS HEREINABOVE, HAD OBSERVED AS UNDER: 'AFTER GOING THROUGH THE PROVISIONS OF THE ICAI ACT AND THE REGULATIONS FRAMED THEREIN AS WELL AS VARIOUS ACTIVITIES CARRIE D ON BY THE PETITIONER, WE ARE OF THE VIEW THAT THE PETITIONER INSTITUTE DO ES NOT CARRY ON ANY BUSINESS, TRADE OR COMMERCE. THE ACTIVITY OF IMPART ING EDUCATION IN THE FIELD OF ACCOUNTANCY AND CONDUCTING COURSES BOTH AT PRE-QUALIFICATION AS WELL AS POST-QUALIFICATION LEVEL ARE ACTIVITIES IN FURTHERANCE OF THE OBJECT FOR WHICH THE PETITIONER HAS BEEN CONSTITUTE D. ACTIVITIES OF PROVIDING COACHING CLASSES OR UNDERTAKING CAMPUS PL ACEMENT INTERVIEWS FOR A FEE ARE IN RELATION TO THE MAIN OB JECT OF THE PETITIONER WHICH AS STATED EARLIER CANNOT BE HELD TO BE TRADE, BUSINESS OR COMMERCE. ACCORDINGLY, EVEN THOUGH FEES ARE CHARGED BY THE PETITIONER INSTITUTE FOR PROVIDING COACHING CLASSES AND FOR HO LDING INTERVIEWS WITH RESPECT TO CAMPUS PLACEMENT, THE SAID ACTIVITIES CA NNOT BE STATED TO BE RENDERING SERVICE IN RELATION TO ANY TRADE, COMMERC E OR BUSINESS AS ITA NO. 6545/MUM/16- FRAGRANCE AND FLAVOURS ASSOCIATION OF INDIA 8 SUCH ACTIVITIES ARE UNDERTAKEN BY THE PETITIONER IN STITUTE IN FURTHERANCE OF ITS MAIN OBJECT WHICH AS HELD EARLIER ARE NOT TR ADE, COMMERCE OR BUSINESS. WE ARE FURTHER OF THE CONSIDERED VIEW THAT THE PROV ISO TO SEC. 2(15) IS NOT AIMED AT EXCLUDING GENUINE CHARITABLE TRUSTS OF GEN ERAL PUBLIC UTILITY, BUT RATHER, A TRUST WOULD NOT BE HELD TO BE FOR 'CHARIT ABLE PURPOSE', IF IT IS ENGAGED IN ANY ACTIVITY IN NATURE OF TRADE, COMMERC E OR BUSINESS OR RENDERS ANY SERVICE IN RELATION TO TRADE, COMMERCE OR BUSIN ESS FOR A CESS, FEE AND/ OR ANY OTHER CONSIDERATION. WE FIND THAT OUR AFORESAID VIEW IS FORTIFIED BY THE JUDGMENT OF THE HON'BLE HIGH COURT OF GUJARAT IN TH E CASE OF DIT (EXEMPTION) VS. SABARMATI ASHRAM GAUSHALA TRUST (20 14) 362 ITR 539 (GUJ). 12. WE THUS IN THE BACKDROP OF OUR AFORESAID OBSERV ATIONS ARE OF THE CONSIDERED VIEW THAT ACTIVITIES OF THE ASSESSEE TRU ST WHICH WAS SET UP FOR A CHARITABLE PURPOSE WITHIN THE MEANING OF SEC. 2(15) OF THE ACT, VIZ. ADVANCEMENT OF AN OBJECT OF THE GENERAL PUBLIC UTIL ITY WERE WELL WITHIN THE REALM OF CHARITABLE PURPOSE FOR WHICH IT WAS SET UP . WE ARE OF THE VIEW THAT AS DELIBERATED BY US AT LENGTH HEREINABOVE, THE HOL DING OF THE SEMINAR AT BANGALORE AND THE OTHER ACTIVITIES OF THE ASSESSEE TRUST, VIZ. RECEIPT OF SUBSCRIPTIONS FROM THE MEMBERS, SALE OF PUBLICATION S, FAFAI JOURNAL, HOLDING OF WORKSHOPS & CONFERENCES, DIRECTORY RECEIPTS WERE INCIDENTAL TO AND IN FURTHERANCE OF THE MAIN OBJECT OF SECURING THE ADVA NCEMENT AND DEVELOPMENT OF THE FRAGRANCE AND FLAVOURS INDUSTRY IN INDIA. WE ARE FURTHER OF THE CONSIDERED VIEW THAT THE AFORESAID ACTIVITIE S OF THE ASSESSEE TRUST ARE NEITHER IN THE NATURE OF TRADE, COMMERCE OR BUSINE SS, NOR AN ACTIVITY RENDERED IN RELATION TO ANY TRADE, COMMERCE OR BUSI NESS. WE FURTHER FIND THAT THE ACTIVITIES OF THE ASSESSEE TRUST ARE NOT WITH A NY MOTIVE TO EARN PROFIT, WHICH THOUGH WE ARE NOT OBLIVIOUS WOULD NOT CONCLUS IVELY DETERMINE AS TO WHETHER AN ACTIVITY IS IN THE NATURE OF A TRADE, CO MMERCE OR BUSINESS, BUT THEN, THE SAME UNDOUBTEDLY REMAINS A CRUCIAL FACTOR FOR CHARACTERISING AN ACTIVITY, AS ONE. WE FIND THAT THE SURPLUS ARISING TO THE ASSESSEE IS ONLY INCIDENTAL AND ANCILLARY TO THE DOMINANT OBJECT OF THE ASSESSEE, VIZ. ITA NO. 6545/MUM/16- FRAGRANCE AND FLAVOURS ASSOCIATION OF INDIA 9 ADVANCEMENT AND DEVELOPMENT OF THE FRAGRANCE AND FL AVOURS INDUSTRY IN INDIA. WE FURTHER FIND THAT THE SURPLUS GENERATED B Y THE ASSESSEE TRUST WAS UTILIZED ONLY FOR THE PURPOSE OF FEEDING ITS DOMINA NT OBJECT, AND NO PART OF SUCH SURPLUS WAS DISTRIBUTED AMONGST ITS MEMBERS. W E HAVE DELIBERATED ON THE RECORDS PERTAINING TO THE NATURE OF THE ACTIVIT IES OF THE ASSESSEE TRUST, AND HAVE OBSERVED THAT THE GENERATION OF THE SURPLUS IN ITS HANDS WAS MERELY A BY PRODUCT OF ITS MAIN OBJECT, WHICH HAD INCIDENTAL LY RESULTED IN THE COURSE OF FURTHERANCE OF ITS DOMINANT OBJECT, VIZ. ADVANCE MENT AND DEVELOPMENT OF THE FRAGRANCE AND FLAVORS INDUSTRY IN INDIA. WE ARE FURTHER OF THE VIEW THAT AS THE INTERNATIONAL SEMINAR AT BANGALORE WAS HELD BY THE ASSESSEE FOR THE VERY FIRST TIME, AND THE ASSESSEE WAS NEITHER HOLDI NG SUCH TYPE OF SEMINARS BY WAY OF A REGULAR AND SYSTEMATIC ACTIVITY, NOR FO R THE GENERAL PUBLIC AT LARGE, THEREFORE, ON THE SAID COUNT ALSO THE SAME C AN SAFELY BE HELD AS NOT BEING IN THE NATURE OF A COMMERCIAL ACTIVITY. WE HA VE ALSO DELIBERATED ON THE ORDER OF THE ITAT, KOLKATA, IN THE CASE OF INDI AN CHAMBER OF COMMERCE VS. INCOME TAX OFFICER (2015) 167 TTJ 1 (KOLKATA) A S HAD BEEN RELIED UPON BY THE LD. A.R, AND FIND THAT A SIMILAR VIEW IN CON TEXT OF THE ISSUE BEFORE US WAS TAKEN BY THE COORDINATE BENCH OF THE TRIBUNAL. 13. WE THUS, IN THE BACKDROP OF OUR AFORESAID OBSER VATIONS ARE UNABLE TO PERSUADE OURSELVES TO BE IN AGREEMENT WITH THE VIEW OF THE LOWER AUTHORITIES THAT THE ASSESSEE WAS INVOLVED IN CARRYING OF COMME RCIAL ACTIVITIES. WE THUS BEING OF THE VIEW THAT AS THE ASSESSEE IS CARRYING ON ITS CHARITABLE ACTIVITIES, WHICH ARE IN THE NATURE OF ADVANCEMENT OF THE OBJEC T OF GENERAL PUBLIC UTILITY AND IS NOT CARRYING ON ANY COMMERCIAL ACTIVITY, THE REFORE, UPHOLD THE ENTITLEMENT OF THE ASSESSEE TOWARDS CLAIM OF EXEMPT ION UNDER SEC. 11 OF THE ACT. WE THUS IN TERMS OF OUR AFORESAID OBSERVATIONS SET ASIDE THE ORDER OF THE CIT(A). 14. THE APPEAL OF THE ASSESSEE IS ALLOWED. 4. CONSIDERING THE DECISION OF TRIBUNAL IN ASSESSEES OWN CASE FOR SUBSEQUENT ASSESSMENT YEAR WHEN THE FACTS OF THE CA SE IN THE YEAR UNDER CONSIDERATION ARE NOT AT VARIANCE, WE FIND THAT GRO UNDS OF APPEAL RAISED BY ITA NO. 6545/MUM/16- FRAGRANCE AND FLAVOURS ASSOCIATION OF INDIA 10 ASSESSEE IS COVERED IN FAVOUR OF ASSESSEE AND AGAIN ST THE REVENUE. THUS, RESPECTFULLY FOLLOWING THE DECISION OF CO-ORDINATE BENCH, THE GROUNDS OF APPEAL RAISED BY ASSESSEE IS ALLOWED. 5. IN THE RESULT, APPEAL FILED BY ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND DAY OF MARCH 2018. SD/- SD/- (SHAMIM YAHYA) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED 22/03/2018 S.K.PS COPY OF THE ORDER FORWARDED TO : BY ORDER (ASSTT.REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE C