ADIT (E)-II(1), MUMBAI V. JEEVAN VIDYA MISSION, MUMBAI

ITA 770/MUM/2014

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 3164 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: J
• Assessment Year: 2009-2010
• Appeal Filed On: 03-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S S RANA
• Assessee Lawyers: ANIL J SATHE
• Keywords: Charitable institution; Benefit of exemption
• Section: 143(3); 12A; 12; 11

Judgement Text

1 JEEVAN V IDYA MISSION ITA 770 /MUM/201 4 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH J , MUMBAI , , BEFORE SHRI AMIT SHUKLA , JUDICIAL MEMBER AND SHRI ASHWANI TANEJA , ACCOUNTANT MEMBER ITA NO. : 770 /MUM/201 4 (ASSESSMENT YEAR: 200 9 - 1 0) ADIT(EXEMPTION) - II(1), 506, 5 TH FLOOR, PIRAMAL CHAMBERS, LALBAUG, MUMBAI - 400 01 2 VS JEEVAN VIDYA MISSION, SHRI HANUMAN MANDIR, NEAR ABHUDAYA BANK, 28 - A, D.L. PATH, KALACHOWKI, MUMBAI - 400 033 . : PAN: A AATN 2486 R (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S S RANA RESPONDENT BY : SHRI ANIL J S AT H E /DATE OF HEARING : 15 - 0 9 - 2015 / DATE OF PRONOUNCEMENT : 30 - 09 - 2015 ORDER , : PER ASHWANI TANEJA , A M: PRESENT APPEAL IS FILED BY THE REVENUE AGAINST THE ORDER PASSED BY LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 1 , (HEREINAFTER REFERRED TO AS CIT(A)), DATED 11.11.2013 FOR ASSESSMENT YEAR 2009 - 10. THE GROUNDS RAISED BY THE R EVENUE ARE REPRODUCED HEREUNDER : - 2 JEEVAN V IDYA MISSION ITA 770 /MUM/201 4 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN HOLDING THAT THE ASSESSING OFFICER HAS NO JURISDICTION TO INVOKE THE PROVISO TO SECTION 2(15) WITHOUT COMMUNICATING TO THE AUTHORITY REGISTERING U/S 12A DESPITE THE EXISTENCE OF THIRD PROVISO TO SECTION 143(3) OF THE INCOME - TAX ACT, 1961. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) ERRED IN HOLDING THAT THE ACTIVITIES OF SALE OF BOOKS AND CASSETTES AT A PRICE CARRIED ON BY THE ASSESSEE ARE IN THE NATURE OF EDUCATION DESPITE IT BEING A REGULAR COMMERCIAL/BUSINESS ACTIVITY. 3. THAT ON THE FACTS AND IN THE C IRCUMSTANCES OF THE CASE AND IN LAW, THE L D. CIT(A) ERRED IN HOLDING THAT THE ACTIVITIES OF THE ASSESSEE ARE NOT COVERED BY THE FIRST PROVISO TO SECTION 2(15) OF THE INCOME TAX ACT, 1961. 4. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN L AW, THE LD. CIT(A) ERRED IN HOLDING THAT THE ACTIVITIES OF SALE OF BOOKS AND CASSETTES IS AN INCIDENTAL ACTIVITY WITHOUT SURPLUS MOTIVE DESPITE THE CLEAR WORDING IN THE FIRST PROVISO TO SECTION 2(15), STATING THAT THE NATURE OF USE OR APPLICATION OR RETENT ION OF INCOME FROM SUCH ACTIVITY IS IMMATERIAL. 2. THE SOLITARY ISSUE RAISED IN THIS APPEAL , BY WAY OF AFORESAID GROUNDS, IS WITH REGARD TO APPLICABILITY OF 3 JEEVAN V IDYA MISSION ITA 770 /MUM/201 4 PROVISO TO SECTION 2(15) OF THE ACT, MAINLY ON THE INCOME EARNED BY THE ASSESSEE TRUST FROM OF S ALE /DISTRIBUTION OF BOOKS , CASSETTES AND CDS . 3. BRIEF FACTS, AS CULLED OUT FROM THE ASSESSMENT ORDER ARE THAT THE ASSESSEE TRUST IS ENGAGED IN JEEVAN VIDYA PHILOSOPHY BY ORGANIZING DISCOURSES AT DIFFERENT PLACES AND PUBLISHING BOOKS, CASSETTES AND CDS ON THESE SUBJECTS. THE ASSESSEE TRUST IS REGISTERED WITH THE DIRECTOR OF INCOME TAX (EXEMPTION), MUMBAI U/S 12 A OF THE INCOME TAX ACT. DURING THE COURSE OF HEARING, THE ASSESSEE TRUST FILED REQUISITE DETAILS AS ASKED BY THE ASSESSING OFFICER, AND BOOKS ACCOU NTS WERE ALSO PRODUCED WHICH WERE EX AMINED BY THE ASSESSING OFFICER , AS MENTIONED IN THE ASSESSMENT ORDER. IT WAS NOTED BY THE AO, THAT ASSESSEE TRUST HAS SHOWN INCOME FROM SALE OF BOOKS AND CASSETTES AT RS. 64,43,141/ - AFTER DEDUCTING THE EXPENSES. IT WAS FURTHER OBSERVED THAT SINCE THE ACTIVITIES WERE ORGANIZED AS REGULAR ACTIVITIES, THE ASSESSEE WAS ASKED TO EXPLAIN AS TO WHY THIS MAY NOT BE TREATED AS BUSINESS ACTIVITIES U/S 2(15) OF THE INCOME TAX ACT, 1961 AND INCOME MAY NOT BE TREATED AS TAXABLE INCO ME. IN RESPONSE, THE ASSESSEE SUBMITTED INTER ALIA THAT AS PER CLAUSE 5.3 OF THE TRUST DEED, ONE OF THE OBJECTS OF THE TRUST WAS TO PUBLISH AND MARKET IN THE FORM OF BOOKS OR OTHERWISE THE DISCOURSES, SCIENCE AND PHILOSOPHY OF JEEVAN VIDYA OF SADGURU SHRI WAMANRAO PAI. IT WAS FURTHER SUBMITTED THAT THE TRUST WAS PUBLISHING BOOKS AND CASSETTES ONLY OF SADGURU SHRI 4 JEEVAN V IDYA MISSION ITA 770 /MUM/201 4 WAMANRAO PAI , AND THAT NO OTHER BUSINESS WAS CARRIED ON. IT WAS FURTHER SUBMITTED THAT THIS ACTIVITY WAS INCIDENTAL TO THE ATTAINMENT OF THE OBJEC TS OF THE TRUST. IT WAS FURTHER SUBMITTED THAT A SEPARATE BANK ACCOUNT WAS MAINTAINED AND, THEREFORE, COMPLIANCE WAS MADE U/S 11(4A) OF THE ACT. LASTLY, IT WAS SUBMITTED BY THE ASSESSEE , BEFORE THE ASSESSING OFFICER , THAT THE TRUST WAS HELD AS EDUCATIONAL TRUST BY THE OFFICE OF CHARITY COMMISSIONER. COPY OF THE ORDER OF CHARITY COMMISSIONER WAS ALSO SUBMITTED BEFORE THE ASSESSING OFFICER. IN RESPONSE, IT WAS SUBMITTED BY THE ASSESSING OFFICER THAT, SELLING BOOKS AND CASSETTES WAS SYSTEMATIC AND REGULAR AC TIVITY OF THE ASSESSEE AND THEREFORE IT HAD THE CHARACTERISTIC S OF BUSINESS. SINCE , NO SEPARATE B AN K ACCOUNT W AS MA INTAINED BY THE TRUST , THEREFORE NO DEDUCTION WAS ALLOWABLE U/S 11(4A) OR 11(4). CONSEQUENTLY, THE ASSESSING OFFICER HELD THAT ACTIVITY OF THE ASSESSEE DID NOT F ALL UNDER THE DEFINITION OF EDUCATION AS CONTEMPLATED U/S 2(15) , AND HE DISALLOWED THE EXEMPTION U/S 11 OF THE INCOME - TAX ACT. CONSEQUENTLY , ENTIRE INCOME OF THE ASSESSEE TRUST WAS BROUGHT TO TAX. 4. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A). IT WAS SUBMITTED BEFORE THE CIT(A) BY THE ASSESSEE TRUST THAT ASSESSEE WAS ENGAGED IN EDUCATION. IT WAS SUBMI TTED THAT MAIN OBJECT OF THE AS SESSEE IS TO SPREAD KNOWLEDGE, INFORMATION AND AWARENESS BY PROV IDING DISCOURSES AND SCIENCE AND 5 JEEVAN V IDYA MISSION ITA 770 /MUM/201 4 PHILOSOPHY OF JEEVAN VIDYA OF SADGURU SHRI WAMANRAO PAI . FOR THE PURPOSE OF ATTAINMENT OF THIS OBJECT, THE ACTIVITY OF PUBLISHING AND DISTRIBUTING BOOKS AND CASSETTES OF PREACHING S OF SADGURU WAS INCIDENTAL TO THE OBJECT AN D INTEGRAL PART OF THE MAIN OBJECT OF THE ASSESSEE TRUST. IT WAS FURTHER SUBMITTED THAT MERELY BECAUSE ANY CHARITABLE ACTIVIT Y WAS CARRIED OUT A N ORGANIZED MANNER , IT DOES NOT MAKE THE ACTIVITY TO BE T RADE, COMMERCE OR B USINESS. IT WAS FURTHER SUBMITTED TH AT THERE WAS NO PROFIT MOTIVE OF THE ASSESSEE TRUST AND ALL THE ACTIVITIES W ERE DONE IN THE CHARITABLE MANNER ONLY. RELIANCE WAS PLACED ON THE JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF CST VS SAI PUBLICATION FUND, 258 ITR 70, WHEREIN HONBLE COURT HELD THAT IF THE MAIN ACTIVITY OF THE TRUST IS NOT BUSINESS, THEN ANY TRANSACTION , INCIDENTAL OR ANCILLARY WOULD NOT AMOUNT TO BUSINESS, UNLESS UNDERLYING INTENTION IS PROFIT MOTIVE. IT WAS FURTHER SUBMITTED THAT THE PUBLICATION FOR THE PURPOSE OF SPREA DING MESSAGE OR PUBLIC AWARENESS OF THE PREACHING , IS INCIDENTAL TO THE OBJECTS OF THE TRUST AND CANNOT BE TERMED AS BUSINESS IN NATURE. THE LD. CIT(A) CONSIDERED ALL THE SUBMISSIONS OF THE ASSESSEE TRUST AND AFTER CONSIDERING THE SAME, LD. CIT(A) DECIDED THE APPEAL IN FAVOUR OF THE ASSESSEE BY HOLDING THAT ASSESSEE WAS IMPARTING EDUCATION. IT WAS FURTHER HELD THAT ASSESSEE WAS NOT ENGAGED IN THE BUSINESS AND ACCORDINGLY, THE ASSESSING OFFICER WAS DIRECTED TO ALLOW EXEMPTION U/S 11 TO THE ASSESSEE TRUST. 6 JEEVAN V IDYA MISSION ITA 770 /MUM/201 4 5. BEING AGGRIEVED, THE R EVENUE HAS FILED AN APPEAL BEFORE US. DURING THE HEARING, THE LD. DR VEHEMENTLY SUPPORTED THE ORDER OF THE ASSESSING OFFICER AND SUBMITTED THAT SINCE ASSESSEE WAS ENGAGED IN THE BUSINESS OF SALE OF BOOKS AND CASSETTES, THE EXEMPTIO N WAS RIGHTLY WITHDRAWN BY THE ASSESSING OFFICER. IT WAS FURTHER SUBMITTED THAT IF THE ASSESSEE HAS EARNED PROFIT BY WAY OF SALE OF BOOKS AND CASSETTES ETC. , THEN IT SHOULD BE LIABLE TO PAY TAX THEREON. HOWEVER, IN RESPONSE TO OUR QUERY TO LD. DR THAT WHET HER THE ASSESSEE WAS ENGAGED IN ACTIVITY OF IMPARTING EDUCATION, THE RESPONSE OF THE LD. DR WAS VERY FAIR BY STATING THAT LD. CIT(A) HAS GIVEN DETAILED FINDINGS WHILE HOLDING THAT ASSESSEE WAS ENGAGED IN ACTIVITIES OF IMPARTING EDUCATION AND NOTHING WRONG COULD BE FOUND , ON FACTS , IN THESE FINDINGS OF LD. CIT(A). THE LD. DR ALSO PLACED RELIANCE ON THE JUDGMENT OF PRABODHAN PRAKASHAN VS ITO, (36 TAXMAN.COM125) (MUMBAI TRIBUNAL), WHEREIN IT WAS HELD THAT WHERE THE ASSESSEE TRUST WAS PUBLISHING A NEWSPAPER ON COMMERCIAL LINES OF THE OBJECT TO ESTABLISH LARGE PUBLISHING HOUSE, THE SAID ACTIVITY NOT BEING CHARITABLE IN NATURE, ASSESSEES CLAIM FOR EXEMPTION OF INCOME U/S 11 WAS TO BE REJECTED. 6. IN RESPONSE, THE LD. COUNSEL FOR THE ASSESSEE VEHEMENTLY SUPPORTED ORDER OF THE LD. CIT(A). THE CRUX OF THE ARGUMENT OF LD. COUNSEL WAS THAT THE ASSESSEE TRUST WAS ENGAGED IN IMPARTING EDUCATION AND THEREFORE PROVISO TO SECTION 2(15) WAS NOT APPLICABLE IN THE CASE OF 7 JEEVAN V IDYA MISSION ITA 770 /MUM/201 4 THE ASSESSEE. IT WAS FURTHER SUBMITTED THAT ASSESSEE W AS CARRYING OUT THE ACTIVITY OF DISTRIBUTION OF BOOKS, CASSETTES AND CDS AS INTEGRAL PART OF ITS MAIN OBJECT OF SPREADING AWARENESS AND EDUCATING THE PEOPLE ABOUT THE PREACHING S ON JEEVAN VIDYA. H E HAS PLACED RELIANCE ON THE JUDGMENT OF HONBLE SUPREME C OURT IN THE CASE OF CST VS SAI PUBLICATION FUND ( SUPRA ). HE REQUESTED FOR UPHOLDING THE ORDER OF LD. CIT(A). 7. WE HAVE GONE THROUGH THE SUBMISSION MADE BY BOTH THE SIDES AND THE MATERIAL PLACED BEFORE US FOR OUR CONSIDERATION AND ALSO GONE THROUGH VARIOU S JUDGMENTS RELIED BY BOTH THE PARTIES AS WELL AS BY THE LD. CIT(A) WHILE ADJU DI CATING THE APPEAL OF THE R EVENUE ON THE ISSUE S INVOLVED . IN OUR CONSIDERED OPINION, FIRST ISSUE TO BE DECIDED HERE IS WHETHER THE ASSESSEE IS ENGAGED IN THE ACTIVITY OF IMPARTI NG EDUCATION. IF IT IS SO, WHETHER THE NEW LY INSERTED FIRST PROVISO TO SECTION 2(15) OF THE INCOME - TAX ACT , CAN BE APPLIED TO THE FACTS OF THIS CASE , AND , IF THIS PROVISO CANNOT BE APPLIED TO THE FACTS OF THIS CASE, THEN WHETHER THE AFORESAID ACTIVITY OF D ISTRIBUTION OF BOOKS, CASSETTES AND CDS BY THE ASSESSEE TRUST CAN BE SAID TO BE THE T RADE, COMMERCE OR B USINESS , IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE OR NOT. 8. WE HAVE PONDERED OVER ALL THE ISSUES. IT IS NOTICED THAT THE CIT(A) HA S MADE DETA ILED ANALYSIS IN DECIDING ALL THESE THREE ISSUES. 8 JEEVAN V IDYA MISSION ITA 770 /MUM/201 4 8.1 IN OUR CONSIDERED OPINION, BASED UPON ANALYSIS OF THE FACTS OF THIS CASE, THE ASSESSEE TRUST IS ENGAGED IN THE FIELD OF EDUCATION. IN OUR CONSIDERED VIEW , BASED UPON OUR UNDERSTANDING OF LAW, THERE IS NO MERIT IN THE ORDER OF ASSESSING OFFICER TO GIVE A RESTRICTED MEANING TO THE SCOPE OF MEANING OF TERM EDUCATIONAL ACTIVITIES . IT IS NOT NECESSARY THAT THERE SHOULD BE HOLDING OF REGULAR CLASSES OR WHOLESOME EDUCATIONAL ACTIVITIES TO BE ONLY ELIGIBLE T O BE CALLED EDUCATIONAL ACTIVITIES ELIGIBLE FOR BENEFITS UNDER SECTION 11 AND 12. AS PER OUR UNDERSTANDING , THE TERM EDUCATION IS OF WIDE SCOPE AND AMPLITUDE , ESPECIALLY IN THE CONTEXT OF SECTION 2(15) . IN THIS FAST EVOLVING SOCIETY, TH E TERM EDUCATIO N H AS ASSUMED GREATER ROLE AND SIGNIFICANCE , TH E N EVER. E DUCATION HAS GOT PIVOTAL ROLE IN EVOLUTION OF A SOCIETY. THEREFORE, KEEPING THIS CRUCIAL ASPECT IN MIND, THE LEGISLATURE IN ITS WISDOM HAD DECIDED TO PLACE THIS ACTIVITY WITHIN THE DEFINITION CLAUSE OF THE TERM CHARITABLE PURPOSE , AS PER SECTION 2(15) OF THE INCOME - TAX A CT, WHEREIN IT HAS BEEN SPECIFICALLY MENTIONED THAT THE TERM CHARITABLE PURPOSE INCLUDES . EDUCATION . THUS, THE VERY ACTIVITY OF EDUCATION ITSELF HAS BEEN INCLUDED WIT HIN THE MEANING OF THE TERM CHA RITABLE PURPOSE . IT MAY FURTHER BE SEEN THAT ACTIVITY OF IMPARTING EDUCATION HAS BEEN SPECIFICALLY INCLUDED IN THE DEFINITION , THUS SHOWING THAT THE INTENTION OF THE LEGISLATURE , VERY CLEARLY, IS TO PROMOTE EDUCATION, WHICH IS F URTHER FORTIFIED BY THE FACT THAT WHEN THE FIRST PROVISO WAS INSERTED TO SECTION 2(15), THE ACTIVITY OF EDUCATION WAS NOT COVERED THEREIN AND 9 JEEVAN V IDYA MISSION ITA 770 /MUM/201 4 ONLY OTHER OBJECT OF GENERAL PUBLIC UTILITY ALONE WAS COVERED THEREIN. THE FIRST PROVISO WAS BROUGHT IN TO CURTA IL THE SCOPE OF CHARITABLE PURPOSE WITH RESPECT TO THE ACTIVITIES OF GENERAL PUBLIC UTILITY , B Y EXCLUDING THE SAME FROM THIS DEFINITION , IF IT INVOLVED CARRYING ON OF ANY ACTIVITY IN THE NATURE OF T RADE, COMMERCE OR B USINESS. FURTHER , EVEN AFTER HUGE LIT IGATION WITH RESPECT TO BLANKET EXEMPTION TO EDUCATIONAL INSTITUTIONS, WHEN THE AMENDMENT WAS MADE BY THE FINANCE ACT, 2009, THE ACTIVITY OF THE EDUCATION WAS KEPT OUTSIDE THE PURVIEW OF NEWLY INSERTED PROVISO. THUS , IMPLIEDLY , IT CAN BE SAID THAT, IT IS C LEAR THAT THE LEGISLATURE HAS GIVEN GREAT SIGNIFICANCE TO THE UTILITY OF EDUCATION IN OUR COUNTRY. 9 . NOW, KEEPING AFORESAID DISCUSSION ON CONCEPTUAL FRAMEWORK IN MIND, LET US ANALYSE THE FACTS OF THE PRESENT CASE AND DECIDE THE REMAINING ISSUES INVOL VED HERE . IN OUR CONSIDERED VIEW, SINCE T HE ASSESSEE IS ENGAGED IN IMPARTING EDUCATION, IN THAT CASE IF THE BOOKS, CASSETTES ETC. HAVE BEEN DISTRIBUTED AS INTEGRAL PART OF THAT ACTIVITY , TO ATTAIN THE MAIN OBJECT AND WITHOUT ANY PROFIT MOTIVE, IN THAT CASE IT CANNOT BE SAID THAT THIS ACTIVITY HA S BEEN CARRIED OUT IN THE NATURE OF T RADE, COMMERCE OR B USINESS , AND ACCORDINGLY , FIRST PROVISO TO SECTION 2(15) SHALL NOT BE APPLICABLE AND THE EXEMPTION GRANTED TO THE ASSES S EE TRUST CANNOT BE WITHDRAWN ON THAT REA SON ALONE. 9.1 IN THIS REGARD , WE SHALL TAKE FIRST GUIDANCE FROM THE JUDGMENT OF HON BLE SUPREME COURT IN THE CASE OF CST VS SAI 10 JEEVAN V IDYA MISSION ITA 770 /MUM/201 4 PUBLICATION FUND 258 ITR 70 (SC) . THE BRIEF FACTS IN THIS CASE WERE THAT THIS TRUST WAS SET UP BY SOME DEVOTEES OF SAI BABA O F S H IRDI FOR SPREADING HIS M ASSAGES. IN PURSUANCE TO THIS O BJECT , THE ASSESSEE TRUST PUBLISHED AND DISTRIBUTED BOOKS, PAMPHLETS AND OTHER LITERATURES CONTAINING MASSAGES OF SAI BABA UNDER THE AEGIS OF SAI PUBLICATION, DISTRIBUTED BY THE TRUST TO THE DEVO TEES OF SAI BABA , AT COST PRICE . UNDER THESE CIRCUMSTANCES, A QUESTION AROSE WHETHER THIS ACTIVITY WOULD AMOUNT TO CARRYING ON THE BUSINESS BY THE ASSESSEE TRUST. IN THAT CONTEXT, HONBLE APEX COURT HELD THAT IF THE MAIN ACTIVITY IS NOT BUSINESS, THEN ANY TRANSACTIONS INCIDENTAL OR ANCILLARY WOULD NOT NORMALLY AMOUNT TO BUSINESS, UNLESS AN IN DEPENDENT INTENTION TO CARRY ON BUSINESS IN THE IN CIDENTAL OR ANCILLARY ACTIVITY IS ESTABLISHED. IT WAS FURTHER HELD THAT PUBLICATION FOR THE PURPOSE OF SPREADING ME SSAGES IS IN CIDENTAL TO THE MAIN ACTIVITY WHICH TRUST DOES NOT CARRY AS BUSINESS, AND THAT ACTIVITY OF TRUST IN BRINGING OUT PUBLICATIONS AND SELLING THEN AT COST PRICE TO SPREAD MASSAGES OF SAI BABA DOES NOT MAKE IT A BUSINESS ACTIVITIES, AND THAT THE QUE STION OF PROFIT MOTIVE OR NO PROFIT MOTIVE WOU LD BE RELEVANT ONLY WHEN A PERSON CARRIES ON TRADE, COMMERCE, MANUFACTURE OR ADVENTURE IN THE NATURE OF TRADE, COMMERCE, OR BUSINESS ETC. 9 .2 . FURTHER, WE FIND THAT EVEN AFTER THE AMENDMENT HAS BEEN MADE UNDE R THE LAW, BY INSERTING PROVISO TO SECTION 2(15), THE POSITION OF LAW, AS WAS LAID DOWN BY HONBLE SUPREME COURT IN THE CASE OF SAI PUBLICATION FUND, SUPRA , REMAINS THE SAME . IN SUPPORT OF OUR VIEW, WE RELY UPON THE JUDGMENT OF HONBLE 11 JEEVAN V IDYA MISSION ITA 770 /MUM/201 4 DELHI HIGH COURT IN GS1 VS DIRECTOR GENERAL OF INCOME TAX (EXEMPTIONS) 360 ITR 138, WHEREIN IT WAS HELD THAT THE PROVISO TO SECOND LIMB WILL NOT APPLY IN THE CASE OF A RENDITION OF A SERVICE PER SE, FOR A CESS, FEE OR ANY OTHER CONSIDERATION, OR TO A TRADE, COMMERCE OR BU SINESS, BUT THAT THIS CLAUSE CAN COME INTO PLAY FOR THE PURPOSE OF EXCLUDING AN ASSESSEE WHO CARRIES ON BUSINESS, TRADE OR COMMERCE TO FEED THE CHARITABLE ACTIVITIES. IN OTHER WORDS, THE SCOPE OF SECOND LIMB, AS HELD BY HIGH COURT, EXTENDS ONLY TO SUCH C ASES IN WHICH A BUSINESS IS CARRIED OUT TO FEED THE CHARITABLE ACTIVITIES. IT WOULD THUS FOLLOW THAT EVEN FOR INVOKING SECOND LIMB OF FIRST PROVISO TO SECTION 2(15), IT IS SINE QUA NON THAT THE ASSESSEE HAS EXTENDED SERVICES TO BUSINESS, TRADE OR COMMERCE AND SUCH SERVICES HAVE BEEN EXTENDED IN THE COURSE OF BUSINESS CARRIED ON BY THE ASSESSEE. IT IS THUS CLEAR THAT EVEN IN A SITUATION IN WHICH AN ASSESSEE RECEIVES A FEES OR CONSIDERATION FOR RENDITION OF A SERVICE TO THE BUSINESS, TRADE OR COMMERCE, AS LON G AS SUCH A SERVICE IS SUBSERVIENT TO THE CHARITABLE CAUSE AND IS NOT IN THE NATURE OF BUSINESS ITSELF, THE DISABILITY UNDER SECOND LIMB OF FIRST PROVISO TO SECTION 2(15) WILL NOT COME INTO PLAY; 9.3 . SIMILARLY, IN THE INSTITUTE OF CHARTERED ACCOUNTANTS O F INDIA VS DGIT (EXEMPTIONS) 358 ITR 9 , HONBLE DELHI HIGH COURT HAS HELD THAT, EVEN THOUGH FEES ARE CHARGED BY THE PETITIONER INSTITUTE FOR PROVIDING COACHING CLASSES AND FOR HOLDING INTERVIEWS WITH RESPECT TO CAMPUS PLACEMENT, THE SAID ACTIVITIES CANNO T BE STATED TO BE RENDERING SERVICE IN RELATION TO ANY TRADE, COMMERCE OR BUSINESS AS SUCH ACTIVITIES ARE 12 JEEVAN V IDYA MISSION ITA 770 /MUM/201 4 UNDERTAKEN BY THE PETITIONER INSTITUTE IN FURTHERANCE OF ITS MAIN OBJECT WHICH AS HELD EARLIER ARE NOT TRADE, COMMERCE OR BUSINESS. IN THIS CASE ALSO , THE RENDITION OF SERVICES BY THE ASSESSEE IS VIEWED IN CONJUNCTION WITH THE OVERALL OBJECTIVES OF THE ASSESSE E AND ONCE IT IS SEEN THAT THESE SERVICES ARE NOT IN THE NATURE OF TRADE, COMMERCE OR BUSINESS PER SE, THE MERE CHARGING OF FEES FOR SERVICES SO RENDERED, WHICH WERE HELD TO SUBSERVIENT TO THE CHARITABLE OBJECTIVES, IS HELD TO HAVE NO EFFECT ON THE OVERALL CHARITABLE OBJECTS OF THE ASSESSEE; 10. COMING BACK TO THE FACTS OF THE CASE , IT IS NOTED THAT LD. CIT(A) HAS EXAMINED THE FACTS IN DETAIL AND HAS GIVEN DETAILED FINDINGS WITH RESPECT TO NATURE OF ACTIVITIES CARRIED OUT BY THE ASSESSEE AND ELIGIBILITY OF THE ASSESSEE FOR AVAILING EXEMPTION U/S 11 & 12 , KEEPING IN VIEW NATURE OF THESE ACTIVITIES AND LATEST POSITION OF LAW APPLICABLE . IT IS SEEN THAT, AS NOTED BY LD. CIT(A) IN PARA 8.1, ONE OF THE OBJECTS OF THE TRUST READS AS FOLLOWS : - TO PUBLISH AND MARKET IN THE FORM OF BOOKS OR OTHERWISE THE DISCOURSES OF SADGURU SHRI WAMANRAO PAI, THE PHILOSOPHY OF JEEVAN VIDYA AND SADGURUS SAYINGS 10.1. I T HAS BEEN RIGHTLY OBSERVED BY LD. CIT(A) THAT WHEN AN ACTIVITY IS INTEGRATED TO THE OBJECT ITSELF , THEN THE SAID ACTIVITY CANNOT BE CALLED AS BUSINESS, PARTICULARLY IN VIEW OF THE FACT THAT THERE DOES NOT APPEAR TO BE A N Y INTENT ION TO MAKE A SURPLUS OUT OF THE SAID ACTIVITY. THE PUBLICATION OF BOOKS IS ONE OF THE OBJECTS AND INTIMATELY CONNECTED WITH THE MAIN OBJECT OF 13 JEEVAN V IDYA MISSION ITA 770 /MUM/201 4 THE ASSES S EE TRUST I.E. TO SPREAD AWARENESS AND EDUCATE THE PEOPLE WITH RESPECT TO JEEVAN VIDYA AND THE PHILOSOPHY ATTACHED THERETO. IT H AS BEEN NOTED FROM THE FACTS MENTIONED IN THE ORDER OF LD. CIT(A) THAT THERE ARE NEARLY 43 PUBLICATIONS RANGING BETWEEN RS. 5/ - PER PUBLICATION TO RS. 60/ - PER PUBLICATION WHICH HAVE BEEN SOLD BY THE ASSESSEE TRUST. THERE IS NO DOUBT THAT SAID ACTIVITY IS ANCILLARY AND INCIDENTAL TO THE MAIN OBJECT, RATHER IT CAN BE SAID THAT THIS IS ONE OF THE OBJECT IN ITSELF. 11 . FURTHER , WITH RESPECT TO THE SUBMISSIONS OF ASSESSEE TRUST THAT ITS AFORESAID ACTIVITY CANNOT BE SAID TO BE IN THE NATURE OF T RADE, C OMMERCE OR B USINESS IN THE CONTEXT OF WORDS USED IN SECTION 2(15), IT IS NOTED THAT THE LD. CIT(A) HAS GIVEN PROPER ANALYSIS AND DETAILED FINDINGS AFTER ANALYZING THE FACTS OF THE CASE. WE DEEM IT APPROPRIATE TO REPRODUCE THESE FINDINGS FOR THE SAKE OF READY REFER ENCE : - 8.5 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE APPELLANTS CASE AS WELL AS THE ARGUMENTS OF THE LEARNED A/R AS WELL AS THE VARIOUS JUDICIAL PRONOUNCEMENTS CITED BY THE AUTHORIZED REPRESENTATIVE. FOR THE REASONS AND AS PER FACTS OF THE CASE, IN FOREGOING PARAGRAPHS, IT IS HELD THAT ACTIVITY OF PUBLICATION OF BOOKS, WAS ONE OF THE CHARITABLE OBJECTS OF THE TRUST. IT IS IN PURSUANCE OF THOSE OBJECTS THAT THE APPELLANT UNDERTOOK THE ACTIVITY OF DISTRIBUTION OF BOOKS. 14 JEEVAN V IDYA MISSION ITA 770 /MUM/201 4 8.6 IT IS ALSO ABUNDANTLY CLEA R THAT THE APPLICATION OF THE PROVISO AND THE DECISION AS TO WHETHER A PARTICULAR ACTIVITY CAN BE TREATED AS TRADE BUSINESS OR COMMERCE WILL DEPEND ON THE FACT OF THE CASE. NO GENERALIZATION IN THIS REGARD CAN BE MADE. THE LEARNED A/R HAS SUBMITTED THAT EV EN THOUGH, THERE MAY HAVE BEEN A SURPLUS IN THE INCOME AND EXPENDITURE ACCOUNT OF THE APPELLANT TRUST THAT WAS ON ACCOUNT OF THE DONATIONS WHICH WERE CREDITED TO THE INCOME AND EXPENDITURE ACCOUNT. IF THOSE DONATIONS ARE EXCLUDED THEN THE TRUST WOULD HAVE SUFFERED A DEFICIT. THIS IS AN INDICATOR OF THE FACT THAT THE ACTIVITY UNDERTAKEN WAS NOT WITH INTENT TO MAKE A PROFIT. 8.7 FURTHER THE PRICING OF THE BOOKS AS WELL AS THE CD (BOOKS PRICED AT RS. 5 TO RS. 60 AND CD AT RS. 50) WOULD INDICATE THAT THE INT ENT WAS PROPORTION OF THE TEACHINGS OF THE SADGURU AND INTENT WAS NOT TO MAKE A PROFIT. IN FACT THE NUMBER OF JUDICIAL PRONOUNCEMENTS ADVERTED TO BY THE LEARNER REPRESENTATIVE HAVE CLEARLY MADE OUT A CASE THAT PRESENCE OF AN INTENT TO MAKE PROFIT IS OF PAR AMOUNT IMPORTANCE AND IT IS A SIGNIFICANT CONDITION THOUGH ONE MAY URGE THAT IT IS NOT THE ONLY CONDITION. 8.8. ON A CAREFUL CONSIDERATION OF FACTS I HAVE COME TO THE CONCLUSION THAT THE SAID ACTIVITY IS INTRINSIC TO THE MAIN OBJECTS OF THE TRUST AND NOT A BUSINESS. 15 JEEVAN V IDYA MISSION ITA 770 /MUM/201 4 THEREFORE, THIS GROUND (GROUND NO. 7) OF THE APPELLANT IS ALSO ALLOWED. THE ASSESSING OFFICER IS DIRECTED TO ALLOW THE EXEMPTION UNDER SECTION 11 TO THE APPELLANT TRUST. 12 . WE FIND THAT FINDINGS OF LD CIT(A) ARE FACTUALLY CORRECT AND IN LINE WITH THE LATEST POSITION OF LAW , AS DISCUSSED ABOVE . IT IS FURTHER ANALYZED BY US THAT, ACTIVITY OF DISTRIBUTION OF BOOKS AS WELL AS CDS IS N EITHER AN INDEPENDENT ACTIVITY, NOR A STAND ALONE ACTIVITY. IT CANNOT STAND ON ITS OWN. IT HAS BEEN CARRIE D OUT BY THE ASSESSEE TRUST AS PART OF THE MAIN OBJECT OF SPREADING AWARENESS AND IMPARTING EDUCATION ON JEEVAN VIDYA. WHATEVER HAS BEEN DONE , IN THIS REGARD BY THE ASSESSEE , IT WAS FOR THE PURPOSE OF PURSUING THE MAIN OBJECT OF SPREADING AWARENESS ABOUT J EEVAN VIDYA . D ISTRIBUTION OF BOOKS , WHETHER BY WAY SALE OR OTHERWISE , COULD HAVE BEEN TERMED AS ACTIVITY IN THE NATURE OF T RADE, C OMMERCE OR B USINESS , IF IT W OULD HAVE BEEN DONE BY THE ASSES S EE TRUST ON A STAND - ALONE BASIS I.E. INDEPENDENT OF ITS MAIN OB JECT; L IKE A BUSINESSMAN DOES. APPARENTLY , FROM THE FACTS GATHERED, IT CAN BE CONCLUDED THAT THERE WAS NO MOTIVE TO EARN PROFIT. THESE CRUCIAL FACTS HAVE NOT BEEN CONTROVERTED BY THE LD. ASSESSING OFFICER IN HIS ASSESSMENT ORDER OR BY THE LD. DR BEFORE US. 1 3 . THEREFORE UNDER THESE FACTS AND CIRCUMSTANCES, TAKING HELP FROM THE JUDGMENTS DISCUSSED ABOVE , WE CAN SAFELY HOLD THAT ASSESSEE WAS ENGAGED IN THE ACTIVITY OF IMPARTING EDUCATION , SINCE THERE WAS NO NEED TO GIVE RESTRICTED MEANING 16 JEEVAN V IDYA MISSION ITA 770 /MUM/201 4 TO SCOPE OF MEANI NG OF THE TERM EDUCATIONAL ; AND THAT D ISTRIBUTION OF BOOKS AND CDS EVEN BY WAY OF SALE OR OTHERWISE, IN PURSUIT OF THE AFORESAID OBJECT CANNOT BE SAID TO B E AN ACTIVITY IN THE NATURE OF T RADE, COMMERCE OR B USINESS, ESPECIALLY IN THE ABSENCE OF ANY PROF IT MOTIVE. IN VIEW OF THESE FACTS AND CIRCUMSTANCES, THE ASSESSING OFFICER WAS NOT CORRECT IN DENYING THE BENEFIT OF EXEMPTION . LD. CIT(A) HAS RIGHTLY REVERSED THE ORDER AND WAS JUSTIFIED IN GRANTING THE BENEFIT OF EXEMPTION TO THE ASSESSEE TRUST, THEREFOR E, NO INTERFERENCE IS CALLED FOR THEREIN, THEREFORE, WE UPHOLD THE ORDER OF LD. CIT(A) . 1 4 . IN THE RESULT, APPEAL OF THE R EVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH SEPTEMBER , 2015. SD/ - SD/ - ( ) ( ) ( AMIT SHUKLA ) ( ASHWANI TANEJA ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATE: 30 TH SEPTEMBER , 20 15 / COPY TO: - 1 ) / THE APPELLANT. 2 ) / THE RESPONDENT. 3 ) THE C IT ( A ) 1 , MUMBAI. 4 ) THE DIT(E) _ CONCERNED /CIT CONCERNED _____ , MUMBAI. 5 ) , , / THE D.R. J BENCH, MUMBAI. 6 ) \ COPY TO GUARD FILE. / BY ORDER 17 JEEVAN V IDYA MISSION ITA 770 /MUM/201 4 / / TRUE COPY / / / , DY. / ASSTT. REGISTRAR I.T.A.T., MUMBAI * . . *CHAVAN, SR.PS