RAJASTHAN STATE ROAD TRANSPORT CORPORATION, JAIPUR V. DEPUTY COMMISSIONER OF INCOME TAX, JAIPUR

ITA 885/JPR/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 7844 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 3 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-10-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 13-07-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHOK KHANNA
• Assessee Lawyers: SUHANI MAMODIA
• Keywords: Charitable institution; Reasonable cause; Commercial expediency
• Section: 12A; 12AA; 201; 11

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENC H A JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SIN GH YADAV, AM VK;DJ VIHY LA- @ ITA NO. 885 & 886/JP/2018 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR :2010-11 & 2011-12 M/S RAJASTHAN STATE ROAD TRANSPORT CORPORATION, PARIVAHAN MARG, C- SCHEME, JAIPUR CUKE VS. DCIT, CIRCLE-05, JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AABCR7187B VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI SUHANI MAMODIA (CA) JKTLO DH VKSJ LS @ REVENUE BY : SHRI ASHOK KHANNA (JCIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 16/07/2019 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 14/10/2019 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. THESE ARE TWO APPEALS FILED BY THE ASSESSEE AG AINST THE ORDER OF LD. CIT(A)- 1, JODHPUR DATED 21.03.2018 & 22.03.2018 FOR THE AS SESSMENT YEAR 2010-11 & 2011-12 RESPECTIVELY. SINCE COMMON ISSUES ARE INVOL VED, BOTH THESE APPEALS WERE HEARD TOGETHER AND ARE DISPOSED OFF BY THIS CO NSOLIDATED ORDER. 2. AT THE OUTSET, IT IS NOTED THAT THIS IS A DELAY OF 24 DAYS IN FILING BOTH THE APPEALS BY THE ASSESSEE CORPORATION. THE ASSESSEE C ORPORATION HAS SUBMITTED CONDONATION APPLICATION ALONG WITH AFFIDAVIT. AFTE R HEARING BOTH THE PARTIES AND PURSUING THE CONDONATION APPLICATION, WE FIND THAT THERE IS IS A REASONABLE CAUSE FOR DELAY IN FILING THE PRESENT APPEALS. HENC E, DELAY IS HEREBY CONDONED AND THE APPEALS ARE ADMITTED FOR ADJUDICATION. ITA NOS. 885 & 886/JP/2018 RA JASTHAN STATE ROAD TRANSPORT CORPORATION, JAIPUR VS. DCIT, JAIPUR 2 3. IN ITA NO. 885/JP/2018, THE ASSESSEE HAS TAKEN T HE FOLLOWING GROUNDS OF APPEAL AS UNDER:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE LD. DCIT CIRCLE-05, JAIPUR AS WELL AS LD. CIT(A) ERRED IN HOLDING THAT THE ACTIVITIES OF APPELLANT IS NOT COVERED UNDER THE GENERAL PUBLIC UTILITY AND RE LIEF TO POOR WITHOUT APPRECIATING THE ENTIRE ACTIVITIES AND OBJECT AND A CCORDINGLY, WITHDRAWAL OF EXEMPTION U/S 11 MAY KINDLY BE QUASHED. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, LD. DCIT CIRCLE-05 JAIPUR AS WELL AS LD. CIT(A) ERRED IN HOLDING THAT THE ACTIVITIES OF APPELLANT IS COVERED UNDER BUSINESS IN SPITE OF CARRYING ACTIVIT Y ON NOMINAL PRICE TO ASSISTING GENERAL PUBLIC WITHOUT ANY PROFIT MOTIVE, AND HENCE THE WITHDRAWAL OF EXEMPTION U/S 11 OF THE I.T. ACT, 1961 IS UNJUSTIFI ED AND MAY KINDLY BE QUASHED. 4. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSEE CORPORATION PROVIDES ROAD TRANSPORTATION SERVICES IN THE STATE OF RAJAST HAN AND IN OTHER STATES. DURING THE YEAR UNDER CONSIDERATION, ITS TOTAL REVENUE REC EIPTS WERE OF RS. 11,53,06,03,093/- AND AFTER CLAIMING VARIOUS EXPEND ITURE, IT HAS SHOWN NET LOSS OF RS. 80,01,94,490/-. THE ASSESSING OFFICER OBSERVED THAT THE CORPORATION IS REGISTERED AS A CHARITABLE INSTITUTION U/S 12A(A) O F THE ACT AND ITS OBJECT FALL IN THE LAST LIMB OF THE DEFINITION OF SECTION 2(15) AS GE NERAL PUBLIC UTILITY AND GIVEN THAT THE REVENUES HAVE EXCEEDED RS. 10 LACS DURING THE Y EAR UNDER CONSIDERATION, THE PROVISO TO SECTION 2(15) OF THE ACT SHALL BE APPLIC ABLE FOR THE YEAR UNDER CONSIDERATION. AFTER ISSUING A SHOW CAUSE TO THE A SSESSEE CORPORATION AND CONSIDERING THE SUBMISSIONS SO FILED BY THE ASSESSE E CORPORATION, THE ASSESSING OFFICER HELD AS UNDER:- REPLY OF THE ASSESSEE HAS BEEN CONSIDERED AND IS N OT FOUND ACCEPTABLE. THE OBJECTS OF THE CORPORATION ARE DEFINITELY CHARITABL E AS THEY ARE OF GENERAL PUBLIC UTILITY AND THERE MAY NOT BE ANY PROFIT MOTIVE. HOW EVER, THE ACTIVITIES BEING ITA NOS. 885 & 886/JP/2018 RA JASTHAN STATE ROAD TRANSPORT CORPORATION, JAIPUR VS. DCIT, JAIPUR 3 CARRIED OUT ARE NOT CHARITABLE. THE CORPORATION RUN S BUSES. PERSON USING ITS SERVICES HAS TO PAY FARE AS FIXED BY IT. IT IS NOT THE CASE THAT IT IS PROVIDING FREE SERVICES TO THE PUBLIC. THUS, ITS ACTIVITIES ARE DE FINITELY COMMERCIAL IN NATURE. THEREFORE, IN VIEW OF AMENDED PROVISIONS OF SECTION 2(15) WHICH DEFINES THE CHARITABLE PURPOSE, THAT IF THE RECEIPTS FROM ACTIV ITIES WHICH ARE COMMERCIAL IN NATURE ARE EXCEEDING RS. 10 LACS THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY WILL NOT BE CALLED CHARITABL E. THE ARGUMENT THAT ITS INCOME WILL NOT TAXABLE ON THE PRINCIPLE OF MUTUALITY IS A LSO NOT ACCEPTABLE. THE LOGIC GIVEN FOR CALLING THE ORGANIZATION AS MUTUAL ASSOCI ATION IS OVERSTRETCHED. THE BASIC PRINCIPLE FOR EXEMPTION OF THE INCOME OF MUTU AL ASSOCIATION IS THAT THERE IS COMMON IDENTITY OF CONTRIBUTORS AND PARTICIPANTS . HERE THE CORPORATION CANNOT BE EQUATED WITH THE PASSENGERS. IN VIEW OF ABOVE DISCUSSION IT IS HELD THAT THE ASS ESSEE IS NOT ENTITLED FOR EXEMPTION U/S 11 IN VIEW OF AMENDED PROVISIONS OF S ECTION 2(15). ACCORDINGLY FOR THIS YEAR, ITS INCOME IS COMPUTED ON THE PRINCI PLE OF COMMERCIAL EXPEDIENCY AND TAXED ACCORDINGLY. ASSESSED AT DECLARED NET LOS S OF RS 80,01,94,490 5. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTE R IN APPEAL BEFORE THE LD. CIT(A) WHO HAS CONFIRMED THE SAID FINDINGS OF THE A SSESSING OFFICER. AGAINST THE SAID FINDINGS OF THE LD CIT(A), THE ASSESSEE IS NOW IN APPEAL BEFORE US. 6. DURING THE COURSE OF HEARING, THE LD. AR SUBMIT TED THAT ASSESSEE IS A STATE GOVERNMENT OWNED CORPORATION PROVIDING TRANSPORTATI ON SERVICES AND REGISTERED U/S 12AA OF IT ACT 1961. IN THE ASSESSMENT U/S 143 (3), THE LD AO WITHDRAWN THE EXEMPTION U/S 11 AFTER HOLDING THAT ASSESEE IS NOT ENTITLED TO BE REGISTERED IN VIEW OF AMENDED PROVISION U/S 2(15) OF THE IT ACT 1961. THE LD AR DRAWN OUR REFERENCE TO THE PROVISION U/S 2(15) OF THE I.T. ACT, 1961 (A MENDED W.E.F 01.04.2009) WHICH READS AS UNDER: ITA NOS. 885 & 886/JP/2018 RA JASTHAN STATE ROAD TRANSPORT CORPORATION, JAIPUR VS. DCIT, JAIPUR 4 'CHARITABLE PURPOSE' INCLUDES RELIEF OF THE POOR, E DUCATION, YOGA, MEDICAL RELIEF, PRESERVATION OF ENVIRONMENT (INCLUDING WATERSHEDS, FORESTS AND WILDLIFE) AND PRESERVATION OF MONUMENTS OR PLACES OR OBJECTS OF A RTISTIC OR HISTORIC INTEREST, AND THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY: PROVIDED THAT THE ADVANCEMENT OF ANY OTHER OBJECT O F GENERAL PUBLIC UTILITY SHALL NOT BE A CHARITABLE PURPOSE, IF IT INVOLVES THE CAR RYING ON OF ANY ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINESS, OR ANY ACTIV ITY OF RENDERING ANY SERVICE IN RELATION TO ANY TRADE, COMMERCE OR BUSINESS, FOR A CESS OR FEE OR ANY OTHER CONSIDERATION, IRRESPECTIVE OF THE NATURE OF USE OR APPLICATION, OR RETENTION, OF THE INCOME FROM SUCH ACTIVITY, UNLESS (I) SUCH ACTIVITY IS UNDERTAKEN IN THE COURSE OF ACTUAL CARRYING OUT OF SUCH ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC U TILITY; AND (II) THE AGGREGATE RECEIPTS FROM SUCH ACTIVITY OR A CTIVITIES DURING THE PREVIOUS YEAR, DO NOT EXCEED TWENTY PER CENT OF THE TOTAL RE CEIPTS, OF THE TRUST OR INSTITUTION UNDERTAKING SUCH ACTIVITY OR ACTIVITIES , OF THAT PREVIOUS YEAR; 7. THE LD AR SUBMITTED THAT THE AO HELD THAT THE A CTIVITIES OF CORPORATION ARE COVERED UNDER THE LAST LIMB OF DEFINITION I.E., ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY AND WHICH DEBARS T HE ASSESSEE IF IT UNDERTAKES ANY BUSINESS FOR A FEE OR CESS BEYOND CE RTAIN PERCENTAGE. ACCORDINGLY, ASSESSEE WAS HELD NOT ENTITLED TO BE R EGISTERED U/S 12AA AND THEREBY EXEMPTION AVAILABLE U/S 11 WAS WITHDRAW N AND LD CIT (A) AFFIRMED THE ACTION OF THE AO. 8. THE LD AR SUBMITTED THAT THE ASSESSEE CORPORATI ON IS A STATE GOVERNMENT OWNED ORGANIZATION PROVIDING TRANSPORTAT ION FACILITIES TO PASSENGERS BY RUNNING OF VEHICLES IN THE STATE AND OUTSIDE STATE FOR A NOMINAL FARE. THE CORPORATION PROVIDES VARIOUS CONC ESSIONS AND RELIEF TO ITA NOS. 885 & 886/JP/2018 RA JASTHAN STATE ROAD TRANSPORT CORPORATION, JAIPUR VS. DCIT, JAIPUR 5 THE SOCIETY SPECIFICALLY TO POOR, STUDENTS, SENIOR CITIZEN, WOMEN ETC. IT WAS SUBMITTED THAT THE ASSESSEE CORPORATION CONTINU ES TO BE WITHIN THE DEFINITION OF CHARITABLE PURPOSE U/S 2(15) OF THE I .T.ACT, 1961 UNDER THE FIRST LIMB 'RELIEF TO POOR'. RELIEF TO POOR ENCOMP ASSES A WIDE RANGE OF OBJECTS FOR WELFARE OF THE ECONOMICALLY AND SOCIALL Y DISADVANTAGED OR NEEDY. IT WILL THEREFORE, INCLUDE WITHIN ITS AMBIT PURPOSES SUCH AS RELIEF TO DESTITUTE, ORPHANS OR HANDICAPPED, DISADVANTAGES WOMEN OR CHILDREN, OR SENIOR CITIZENS IN NEED OF AID. ENTITIES WHO HA VE THESE OBJECTS WILL CONTINUE TO BE ELIGIBLE FOR EXEMPTION EVEN IF THEY INCIDENTALLY CARRY ON A COMMERCIAL ACTIVITY. AFTER THE INSERTION OF PROVISO CBDT ISSUED A CIRCULAR WHERE THE RELIEF TO POOR IS EXPLAINED. 9. IT WAS FURTHER SUBMITTED THAT EVEN IF THE ACTIVI TIES OF CORPORATION IS DEEMED TO BE UNDER ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY THAN STILL THE ACTIVITIES OF CORPORATION DO ES NOT QUALIFY THE TEST OF RUNNING TRADE, COMMERCE OR BUSINESS ACTIVITY FOR FE E FOR THE FOLLOWING REASONS: 1. OBJECT OF CORPORATION IS TO PROVIDE COMPETITIVE SERVICES OF PASSENGER TRANSPORTATION TO GENERAL PUBLIC AT LARGE AND POOR AND NEEDY PERSONS AND TO VARIOUS POOR PART OF SOCIETY I N SPECIFIC AGAINST SUBSIDIZED PRICE. RSRTC ALSO PROVIDE THE TR ANSPORTATION SERVICES IN THOSE RURAL AREAS WHERE PRIVATE BUSES O PERATORS DON'T EVEN BOTHER TO GO. 2. THE CHARGES OF FARE ARE FIXED ONLY FOR THE PURP OSE OF CONTINUITY OF ITS OPERATION AND FOR THE PURPOSE OF MAKING CORP ORATION GOING CONCERN. THE ASSESSEE IS INCURRING LOSSES AS ITS RE COVERY OF OPERATION COST IS LESS THAN 100% FROM PASSENGER FAR E. ITA NOS. 885 & 886/JP/2018 RA JASTHAN STATE ROAD TRANSPORT CORPORATION, JAIPUR VS. DCIT, JAIPUR 6 3. COMMERCIAL ACTIVITY FOR FEE OR CESS MEANS THE BU SINESS FOR MONEY MAKING. CORPORATION IS THE STATE GOVERNMENT U NDERTAKING. IT IS A SERVICE ORGAN OF THE STATE AND IT FUNCTIONS IN PUBLIC INTEREST FOR RELIEF TO POOR AND TO PROVIDE TRANSPORTATION FACILI TY IN DISTANT INTERIOR AFTER PROVIDING ALL AMENITIES EVEN AFTER BEARING LO SSES. 4. THE ASSESSEE CORPORATION FILED RETURN OF INCOME OF THE YEAR UNDER CONSIDERATION BY DECLARING LOSS OF RS. 80 CRO RE AND IT'S ACCUMULATED LOSSES ARE NOW MORE THAN RS 2000 CRORES . FROM THE YEARLY DATA OF LOSSES, IT MAY BE NOTED THAT CORPORA TION IS NOT RUNNING WITH THE OBJECTIVE OF PROFIT MAKING ACTUALL Y CORPORATION LOSS IS BASICALLY A RELIEF TO MAJORITY OF PEOPLE OF RAJASTHAN AND ALSO THE OTHER STATES BY PROVIDING SERVICES IN VERY LOW OR FREE FARE AND THIS LOSS IS INCREASING DAY BY DAY. 5. THE STATE GOVERNMENT PRINCIPALLY DECIDES THE ROU TES FACILITIES, FARE, CONCESSIONS, AMENITIES AND ALL SUCH DECIDES A FTER TAKING CARE INTEREST SPECIALLY TO POOR PEOPLE, WIDOWS, ST, SC E TC. ASSESEE CORPORATION CANNOT INCREASE OR DECREASE THE RATES O N ITS OWN AND THE ORDER FOR FIXING THE PRICE BY STATE GOVERNMENT IS PLACED ON RECORD. 6. ASSESEE CORPORATION IS CHARGING MUCH LOW FARE I N COMPARISON TO THE PRIVATE TOUR OPERATORS FOR INSTANCE IN ONE CASE , PRIVATE TOUR OPERATORS CHARGES RS. 300/- AND FOR THE SAME ROUTE, RSRTC CHARGE 228/-. 7. AMENDMENT IN SECTION 2(15) WAS MADE BY FINANCE MINISTER IN FINANCE BILL 2008 WITH THE INTENSION TO LIMIT THE B ENEFIT OF EXEMPTION TO REAL CHARITABLE PURPOSES AND HE TARGET ED THOSE WHO ITA NOS. 885 & 886/JP/2018 RA JASTHAN STATE ROAD TRANSPORT CORPORATION, JAIPUR VS. DCIT, JAIPUR 7 WERE DOING COMMERCIAL ACTIVITIES AND EARNING TAX FR EE INCOME IN THE GARB OF NGO AS STATED BY FM IN PARLIAMENT. 10. IN VIEW OF ABOVE, IT WAS SUBMITTED BY THE LD AR THAT THE ASSESSEE CORPORATION QUALIFIES BOTH THE LIMB OF DEFINITION O F CHARITABLE PURPOSE I.E., RELIEF TO POOR AS WELL AS ADVANCEMENT OF ANY OTHER OBJECT FOR GENERAL PUBLIC UTILITY. AND ITS ACTIVITY DOES NOT COME UNDER THE PURVIEW OF COMMERCIAL ACTIVITY FOR FEE OR CESS. 11. IN SUPPORT, RELIANCE WAS PLACED ON THE ITAT HYD ERABAD DECISION IN CASE OF DCIT VS A.P. STATE CIVIL SUPPLIES CORPORATI ON WHEREIN IT WAS HELD THAT THE AIM OF FINANCE MINISTER WAS TO LIMIT THE C OMMERCIAL ACTIVITIES GENERATING PROFIT IN THE MASK OF CHARITY. THE PROVI SO TO SECTION 2(15) IS APPLICABLE ONLY IN RELATION TO THE LAST LIMB OF DEF INITION OF CHARITABLE PURPOSE I.E., ADVANCEMENT OF ANY OTHER OBJECT OF GE NERAL PUBLIC UTILITY WHICH MEANS THE ACTIVITIES WHICH PROMOTE THE WELFAR E OF GENERAL PUBLIC AND NOT THE INDIVIDUAL INTEREST OF SOME PERSON OR P RIVATE PROFIT OR PRIVATE GAIN. READING OF PROVISO TO SECTION 2(15) ALONG WIT H THE SPEECH OF FM IN PARLIAMENT AND THE CBDT CIRCULAR 11 OF 2008 DATED 1 9.12.2008 MAKE IT CLEAR THAT ONLY THE INSTITUTION CARRYING ON COMMERC IAL ACTIVITIES WITH THE INTENTION TO EARN PROFIT ARE INTENDED TO BE IN THE NATURE OF TRADE, COMMERCE AND BUSINESS. THIS VIEW WAS AGAIN UPHELD B Y GUJARAT HIGH COURT IN CASE OF DIRECTOR OF INCOME TAX VS SABARMAT I ASHRAM TRUST 362 ITR 539. 12. IT WAS FURTHER SUBMITTED THAT IN CASE OF STATE OF ANDHRA PRADESH VS ANDHRA PRADESH STATE ROAD DATED 17 AUGUST, 1988, IT WAS HELD THAT APSRTC DOES NOT CARRY ON ANY BUSINESS EXCEPT TO PROVIDE TR ANSPORT SERVICE TO THE PEOPLE WHERE THE PRIMARY ACTIVITY OF THE CORPORATIO N ITSELF CANNOT BE TREATED AS A BUSINESS ACTIVITY 'FROM THE FOREGOING, WE HAVE NO HESITATION TO HOLD ITA NOS. 885 & 886/JP/2018 RA JASTHAN STATE ROAD TRANSPORT CORPORATION, JAIPUR VS. DCIT, JAIPUR 8 THAT THE ACTIVITIES OF THE CORPORATION DO NOT CONST ITUTE 'BUSINESS' WITHIN THE MEANING OF SECTION 2(1)(BBB) OF THE ANDHRA PRADESH GENERAL SALES TAX ACT AND, THEREFORE, IT CANNOT BE SAID TO BE A 'DEALER' WITHIN THE MEANING OF SECTION 2(1)(E) OF THE ACT'. 13. IT WAS FURTHER SUBMITTED THAT THE ISSUE HAS ALS O BEEN COVERED BY JURISDICTIONAL HIGH COURT DECISION IN CASE OF CIT J ODHPUR VS. JODHPUR DEVELOPMENT AUTHORITY AND CIT BIKANER VS. URBAN IMP ROVEMENT TRUST BIKANER, IT WAS HELD THAT WHEN THE OBJECT OF INSTIT UTION TO PROVIDE FACILITY WHICH INVOLVES THE ADVANCEMENT OF ANY OTHER OBJECT FOR GENERAL PUBLIC UTILITY AND FOR THAT PURPOSE, THE SETTLED POSITION OF LAW EMERGED THAT IF THE PRIMARY OR PREDOMINANT OBJECT OF AN INSTITUTION IS CHARITABLE ANY OTHER OBJECT WHICH MIGHT NOT CHARITABLE BUT WHICH IS ANCI LLARY OR INCIDENTAL TO THE DOMINANT PURPOSE MAY BE INVOLVING ELEMENT OF PR OFIT WOULD NOT PREVENT THE INSTITUTION FROM BEING A VALID CHARITAB LE TRUST. 14. IT WAS FURTHER SUBMITTED BY THE LD AR THAT THE PREDOMINANT OBJECT FOR WHICH THE CORPORATION HAS BEEN ESTABLISHED BY THE S TATE IS TO PROVIDE EFFICIENT TRANSPORT SERVICES TO THE PEOPLE IN PUBLIC INTEREST AND EVEN AFTER SUFFERANCE OF LOSSES. AS PER SECTION 3 OF THE RAJASTHAN STATE ROA D TRANSPORT CORPORATIONS ACT, 1950 WHICH READS AS UNDER: (A) THE ADVANTAGES OFFERED TO THE PUBLIC, TRADE AND INDUSTRY BY THE DEVELOPMENT OF ROAD TRANSPORT; (B) THE DESIRABILITY OF CO-ORDINATING ANY FORM OF ROAD TRANSPORT WITH ANY OTHER FORM OF TRANS PORT; (C) THE DESIRABILITY OF EXTENDING AND IMPROVING THE FACILITIES FOR ROAD TRANSPORT IN ANY AREA AND OF PROVIDING AN EFFICIENT AND ECONOMICAL SYSTEM OF ROAD TRANSPORT SERVICE THEREIN. 15. IT WAS FURTHER SUBMITTED THAT ON ACCOUNT OF ITS PRIMARY OBJECT BEING RELIEF OF THE POOR, SUCH LOSSES ARE BEING MET/BORNE BY THE STATE OF RAJASTHAN. RSRTC IS NOT CARRYING ANY ACTIVITY OF TRADE, COMMERCE OR BUSINESS WITH A MOTIVE TO ITA NOS. 885 & 886/JP/2018 RA JASTHAN STATE ROAD TRANSPORT CORPORATION, JAIPUR VS. DCIT, JAIPUR 9 EARN PROFIT/INCOME. SECTION 18 OF RSRTCA,1950 ALSO PROVIDE THAT 'IT SHALL BE THE GENERAL DUTY OF A CORPORATION SO TO EXERCISE ITS POWERS AS PROGRESSIVELY TO PROVIDE OR SECURE OR PROMOTE THE P ROVISION OF, AN EFFICIENT, ADEQUATE, ECONOMICAL AND PROPERLY COORDI NATE SYSTEM OF ROAD TRANSPORT SERVICES IN THE STATE'. THOUGH THE ACT E MPOWERED A CORPORATION TO ISSUE SHARES AND TO PAY DIVIDENDS, NO SHARE CAPITAL WAS RAISED BY THE RESPONDENT AND IT ENTIRE SHARE CAPITAL WAS PROVIDED BY THE GOVERNMENT U/S 23(1) OF RSRTCA, 1950. SEC 30 OF RSRTCA, 1950 PROVI DES THAT 'A CORPORATION MAY UTILIZE ITS NET ANNUAL PROFITS FOR THE PROVISION OF AMENITIES TO THE PASSENGERS USING THE ROAD TRANSPORT SERVICES , WELFARE OF LABOUR EMPLOYED BY THE CORPORATION ANY BALANCE UTILIZED FO R FINANCING THE EXPANSION PROGRAMMES OF THE CORPORATION AND THE REM AINDER, IF ANY, SHALL BE MADE OVER TO THE STATE GOVERNMENT FOR THE PURPOS E OF ROAD DEVELOPMENT. 16. IT WAS SUBMITTED BY THE LD AR THAT THE ACTIVITY OF CORPORATION WAS NOT CARRIED ON WITH THE OBJECT OF MAKING PROFIT WAS MAD E ABUNDANTLY CLEAR BY PROVISION OF SEC 30 OF THE ACT. THE AMOUNT LEFT OVE R AFTER UTILIZATION FOR THE PURPOSE SET OUT IN SECTION 30 WAS TO MADE OVER TO T HE STATE GOVERNMENT FOR THE PURPOSE OF ROAD DEVELOPMENT. THE AMOUNT HANDED OVER TO THE STATE GOVERNMENT DID NOT BECOME PART OF THE GENERAL REVENUES OF THE STATE BUT WAS IMPRESSED WITH OBLIGATION THAT IS SHOULD BE UTILIZED ONLY FOR THE PURPOSE FOR WHICH IT WAS ENTRUSTED, VIZ., ROAD DEVELOPMENT. 17. IT WAS ACCORDINGLY SUBMITTED BY THE LD AR THAT CALLING THE ACTIVITIES OF THE ASSESEE AS NORMAL BUSINESS ACTIVITIES IS TOTALL Y INCORRECT AND WITHOUT ANY EVIDENTLY VALUE. THE OBJECTS OF ASSESEE ARE CHARITA BLE IN NATURE AND AS SUCH IT HAD BEEN CLAIMING ITS INCOME IF ANY AS EXEMPT U/S 1 1 OF IT ACT 1961 AND THE ORDER OF THE LOWER AUTHORITIES SHOULD ACCORDINGLY B E SET-ASIDE. ITA NOS. 885 & 886/JP/2018 RA JASTHAN STATE ROAD TRANSPORT CORPORATION, JAIPUR VS. DCIT, JAIPUR 10 18. PER CONTRA, THE LD. DR IS HEARD WHO HAS RELIE D ON THE FINDINGS OF THE AO AND THE LD. CIT(A) AND OUR REFERENCE WAS DRAWN TO T HE FINDINGS OF LD CIT(A) WHICH READS AS UNDER:- 7. I HAVE CONSIDERED THE FACTS OF THE CASE AND APP ELLANT'S SUBMISSIONS AND I FIND THAT THE ISSUE TO BE DECIDED IN THE INST ANT APPEAL IS THAT WHETHER THE APPELLANT'S ACTIVITIES I.E. RUNNING /PLYING OF BUSES FALL UNDER THE DEFINITION OF CHARITABLE PURPOSE OR WHETHER THESE ACTIVITIES A RE COMMERCIAL IN NATURE. THE AO SPECIFICALLY HELD THAT THE OBJECTS OF THE CO RPORATION ARE DEFINITELY CHARITABLE AS THEY ARE OF GENERAL PUBLIC UTILITY AN D THERE MAY NOT BE ANY PROFIT MOTIVE, HOWEVER, THE ACTIVITIES BEING CARRIED OUT W ERE NOT CHARITABLE AS IT RUNS BUSES AND FOR ITS SERVICES IT RECEIVED FARE FROM TH E PASSENGER AND AS PER AMENDED PROVISIONS OF SECTION 2(15) THESE ACTIVITIE S DO NOT FALL COVERED BY DEFINITION OF CHARITABLE PURPOSE. THE APPELLANT SUB MITTED BEFORE ME THAT ITS CASE IS NOT HIT BY PROVISO TO SEC 2(15) AS ITS ACTI VITY FALL UNDER THE DEFINITION OF CHARITABLE PURPOSE AND 'RELIEF OF THE POOR. TO SUPP ORT ITS CASE, THE APPELLANT POINTED OUT THAT IN DUE PROCESS OF PROVIDING RELIEF TO POOR IT CHARGED LOWEST FARE AND HENCE, ITS ACCUMULATED LOSSES INCREASING D AY BY DAY. TO ADJUDICATE THE ISSUE, LETS US CONSIDER THE RELEVANT PROVISIONS . 7.1. SECTION 11 OF THE INCOME-TAX ACT 1961 PROVIDES FOR EXCLUSION OF INCOME DERIVED FROM PROPERTY HELD UNDER TRUST WHOLLY FOR C HARITABLE OR RELIGIOUS PURPOSES, TO THE EXTENT TO WHICH SUCH INCOME IS APP LIED TO SUCH PURPOSES IN INDIA; AND, WHERE ANY SUCH INCOME IS ACCUMULATED OR SET APART FOR APPLICATION TO SUCH PURPOSES IN INDIA, TO THE EXTEN T TO WHICH THE INCOME SO ACCUMULATED OR SET APART IS NOT IN EXCESS OF [FIFTE EN] PER CENT OF THE INCOME FROM SUCH PROPERTY; 7.2. SECTION 2(15) OF THE INCOME-TAX ACT 1961 DEFIN ES CHARITABLE PURPOSES AS UNDER:- ITA NOS. 885 & 886/JP/2018 RA JASTHAN STATE ROAD TRANSPORT CORPORATION, JAIPUR VS. DCIT, JAIPUR 11 '2(15) 'CHARITABLE PURPOSE' INCLUDES RELIEF OF THE POOR, EDUCATION, MEDICAL RELIEF, PRESERVATION OF ENVIRONMENT (INCLUD ING WATER HEADS, FORESTS AND WILDLIFE) AND PRESERVATIONS OF MONUMENT S OR PLACES OF OR OBJECTS OF ARTISTIC OR HISTORICAL INTEREST AND THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY:' PROVIDED THAT THE ADVANCEMENT OF ANY OTHER OBJECT O F GENERAL PUBLIC UTILITY SHALL NOT BE A CHARITABLE PURPOSE, IF IT IN VOLVES THE CARRYING ON OF ANY ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BU SINESS, OR ANY ACTIVITY OF RENDERING ANY SERVICE IN RELATION TO ANY TRADE, COMMERCE OR BUSINESS, FOR A CESS OR FEE OR ANY OTHER CONSIDERATION, IRRES PECTIVE OF THE NATURE OF USE OR APPLICATION, OR RETENTION, OF THE INCOME FRO M SUCH ACTIVITY;' PROVIDED FURTHER THAT FIRST PROVISO SHALL NOT APPLY IF THE AGGREGATE VALUE OF THE RECEIPTS FROM THE ACTIVITIES REFERRED TO THEREI N IS TWENTY FIVE LAKH RUPEES OR IESS IN THE PREVIOUS YEAR.' 7.2.1. THE PRESENT DEFINITION IN SECTION 2(15) WAS SUBSTITUTED BY FINANCE ACT 2008 WITH EFFECT FROM 1-4-2009 AND FIRST PROVISO WA S ADDED TO STATE THAT THE 'ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY' WILL CEASE TO BE A 'CHARITABLE PURPOSES' IF IT INVOLVES ANY TRADE COMM ERCE OR BUSINESS. PRESERVATION OF ENVIRONMENT AND PRESERVATION OF MON UMENTS OR PLACES OF HISTORICAL OR ARTISTIC INTEREST HAVE ALSO BE ADDED TO THE DEFINITION IMPLYING THAT THESE ARE NOW TAKEN OUT OF THE CATEGORY OF GEN ERAL PUBLIC UTILITY 7.2.2. SECOND PROVISO TO SECTION 2(15) ADDED BY F INANCE ACT 2010 WITH EFFECT FROM 1-4-2009 PROVIDES AN EXCEPTION TO THE A PPLICATION OF FIRST PROVISO IF THE TURNOVER FROM THE ACTIVITY OF TRADE, COMMERCE OR BUSINESS DOES NOT EXCEED RS. 10 LAKH IN THE PREVIOUS YEAR. T HE LIMIT OF RS. 10 LAKH ITA NOS. 885 & 886/JP/2018 RA JASTHAN STATE ROAD TRANSPORT CORPORATION, JAIPUR VS. DCIT, JAIPUR 12 WAS INCREASED TO RS. 25 LAKH BY THE FINANCE ACT 201 1 WITH EFFECT FROM 1.4.2012. 7.2.3. THE FINANCE MINISTER IN HIS BUDGET SPEECH OF 2008 HAD STATED THAT THE CBDT WOULD ISSUE GUIDE LINES TO DETERMINE WHETHER AN ENTITY IS CARRYING ON ANY ACTIVITY IN THE NATURE OF TRADE COM MERCE OR BUSINESS AND THAT CHAMBER OF COMMERCE AND SIMILAR ORGANIZATIONS WOULD NOT BE AFFECTED BY THE AMENDMENT. HOWEVER NO SUCH GUIDE LI NES WERE ISSUED. 7.2.4. THE HON'BLE DELHI HIGH COURT IN THE CASE O F INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA AND ANOTHER V. DIRECTOR GENERA L OF INCOME-TAX (EXEMPTIONS) AND OTHERS. [2012] 347 ITR 99 (DEL.) H ELD THAT 'THE FIRST PROVISO TO SECTION 2(15) INTRODUCED WITH EFFECT FROM APRIL 1, 2009 APPLIES ONLY IF AN INSTITUTION IS ENGAGED IN ADVANC EMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY AND POSTULATES THAT SUCH AN INSTITUTE IS NOT 'CHARITABLE' IF IT IS INVOLVED IN CARRYING ON ANY A CTIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINESS OR ANY ACTIVITY OF RENDERING A NY SERVICE IN RELATION TO ANY TRADE, COMMERCE, OR BUSINESS. IT FURTHER HELD THAT THE PROVISO IS INAPPLICABLE FO R THE ENTITIES ENGAGED IN THE ACTIVITIES OF (I) RELIEF OF THE POOR; (II) EDUCATIO N; (III) MEDICAL RELIEF; (IV) PRESERVATION OF ENVIRONMENT (INCLUDING WATERSHEDS, FORESTS AND WILDLIFE); (V) PRESERVATION OF MONUMENTS OR PLACES OR OBJECTS OF A RTISTIC OR HISTORICAL IMPORTANCE THE CONSTITUTIONAL VALIDLY OF PROVISO TO SECTION 2( 15) OF THE INCOME-TAX ACT 1961 WAS CHALLENGED IN THE DELHI HIGH IN THE CA SE OF INDIA TRADE PROMOTION ORGANIZATION VS. U01 ( WWW.ITATONLINE.ORG ) THE HIGH COURT VIDE JUDGMENT DATED JANUARY 22, 2015 HELD THAT IF THE DE FINITION OF ITA NOS. 885 & 886/JP/2018 RA JASTHAN STATE ROAD TRANSPORT CORPORATION, JAIPUR VS. DCIT, JAIPUR 13 'CHARITABLE PURPOSE 'IN SECTION 2(15) AND SECTION 1 0(23C) (IV) IS CONSTRUED LITERALLY, IT IS VIOLATIVE OF THE PRINCIP LES OF EQUALITY & UNCONSTITUTIONAL. IN ORDER TO UPHOLD THE CONSTITUTIONAL VALIDITY OF T HE PROVISO TO SECTION 2(15) IT WAS HELD THAT THE PROVISO SHALL HAVE TO BE READ DOWN; 'THE EXPRESSION 'CHARITABLE PURPOSE', AS DEFINED IN SECTION 2(15) CANNOT BE CONSTRUED LITERALLY AND IN ABSOLUTE TERMS . IT HAS 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 SECTION 2(15) OF THE SAID ACT, THEN THE PROVISO WOU LD BE AT RISK OF RUNNING FOUL OF THE PRINCIPLE OF EQUALITY ENSHRINED IN ARTICLE 14 OF THE CONSTITUTION INDIA. IN ORDER TO SAVE THE CONSTITUTI ONAL VALIDITY OF THE PROVISO, THE SAME WOULD HAVE TO BE READ DOWN AND IN TERPRETED IN THE CONTEXT OF SECTION 10(23C)(IV) BECAUSE, IN OUR VIEW , THE CONTEXT REQUIRES SUCH AN INTERPRETATION. THE CORRECT INTERPRETATION OF THE PROVISO TO SECTION 2(15) OF THE SAID ACT WOULD BE THAT IT CARVES OUT A N EXCEPTION FROM THE CHARITABLE PURPOSE OF ADVANCEMENT OF ANY OTHER OBJE CT OF GENERAL PUBLIC UTILITY AND THAT EXCEPTION IS LIMITED TO ACTIVITIES IN THE NATURE OF TRADE, COMMERCE OR BUSINESS OR ANY ACTIVITY OF RENDERING A NY SERVICE IN RELATION TO ANY TRADE, COMMERCE OR BUSINESS FOR A CESS OR FE E OR ANY OTHER CONSIDERATION. IN BOTH THE ACTIVITIES, IN THE NATUR E OF TRADE, COMMERCE OR BUSINESS OR THE ACTIVITY OF RENDERING ANY SERVICE I N RELATION TO ANY TRADE, COMMERCE OR BUSINESS, THE DOMINANT AND THE PRIME OB JECTIVE HAS TO BE SEEN. IF THE DOMINANT AND PRIME OBJECTIVE OF THE IN STITUTION, WHICH CLAIMS TO HAVE BEEN ESTABLISHED FOR CHARITABLE PURPOSES, I S PROFIT MAKING, WHETHER ITS ACTIVITIES ARE DIRECTLY IN THE NATURE O F TRADE, COMMERCE OR BUSINESS OR INDIRECTLY IN THE RENDERING OF ANY SERV ICE IN RELATION TO ANY TRADE, COMMERCE OR BUSINESS, THEN IT WOULD NOT BE E NTITLED TO CLAIM ITS ITA NOS. 885 & 886/JP/2018 RA JASTHAN STATE ROAD TRANSPORT CORPORATION, JAIPUR VS. DCIT, JAIPUR 14 OBJECT TO BE A 'CHARITABLE PURPOSE'. ON THE FLIP SI DE, WHERE AN INSTITUTION IS NOT DRIVEN PRIMARILY BY A DESIRE OR MOTIVE TO EARN PROFITS, BUT TO DO CHARITY THROUGH THE ADVANCEMENT OF AN OBJECT OF GENERAL PUB LIC UTILITY, IT CANNOT BUT BE REGARDED AS AN INSTITUTION ESTABLISHED FOR C HARITABLE PURPOSES (INFO PARKS KERALA V. DEPUTY COMMISSIONER OF INCOME-TAX ( 2010) 329 ITR 404 (KER) AND ANDHRA PRADESH STATE SEED CERTIFICATION A GENCY V. CHIEF COMMISSIONER OF INCOME-TAX-ILL, HYDERABAD 256 CTR 3 80 (AP) DISSENTED FROM) FINANCE BILL, 2015 PROPOSES TO AMEND SECTION 2(15) AS UNDER:- IN SECTION 2 OF THE INCOME-TAX ACT, WITH EFFECT FRO M THE 1ST DAY OF APRIL, 2016, (A) (B) IN CLAUSE (15), (I) AFTER THE WORD 'EDUCATION,', THE WORD 'YOGA,' SHALL BE INSERTED; (II) FOR THE FIRST AND THE SECOND PROVISOS, THE FOLLOWI NG PROVISO SHALL BE SUBSTITUTED, NAMELY: 'PROVIDED THAT THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY SHALL NOT BE A CHARITABLE PURPOSE, IF IT INVOLVES T HE CARRYING ON OF ANY ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINESS, OR AN Y ACTIVITY OF RENDERING ANY SERVICE IN RELATION TO ANY TRADE, COMMERCE OR B USINESS, FOR A CESS OR FEE OR ANY OTHER CONSIDERATION, IRRESPECTIVE OF THE NAT URE OF USE OR APPLICATION, OR RETENTION, OF THE INCOME FROM SUCH ACTIVITY, UNL ESS (I) SUCH ACTIVITY IS UNDERTAKEN IN THE COURSE OF ACTUAL CARRYING OUT OF SUCH ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC U TILITY; AND ITA NOS. 885 & 886/JP/2018 RA JASTHAN STATE ROAD TRANSPORT CORPORATION, JAIPUR VS. DCIT, JAIPUR 15 (II) THE AGGREGATE RECEIPTS FROM SUCH ACTIVITY OR ACTIVI TIES DURING THE PREVIOUS YEAR, DO NOT EXCEED TWENTY PER CENT. OF THE TOTAL R ECEIPTS, OF THE TRUST OR INSTITUTION UNDERTAKING SUCH ACTIVITY OR ACTIVITIES , OF THAT PREVIOUS YEAR;'; 7.3. FROM THE ABOVE DISCUSSION, IT IS CLEAR THAT IN VIEW OF AMENDED PROVISIONS OF SEC. 2(15), THAT IF THE RECEIPTS FROM ACTIVITIES WHICH ARE COMMERCIAL IN NATURE ARE EXCEEDING RS. 10 LACS THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY WILL NOT BE CALLED CHARITABLE. IN THE INSTANT CASE, THE APPELLANT I.E. RAJASTHAN STATE RO AD TRANSPORT CORPORATION, ESTABLISHED TO RUN BUSES AND PROVIDING SERVICE TO G ENERAL PUBLIC, HOWEVER, THESE ACTIVITY CANNOT BE REGARDED AS CHARITABLE PUR POSE AS DEFINED IN SEC. 2(15) AS DISCUSSED ABOVE. THE APPELLANT'S CLAIM THA T IT INCURRED HUGE LOSS WHILE PROVIDING SERVICE TO GENERAL PUBLIC AT LOWEST FARE, DOES NOT SUPPORT IN ANY CASE THAT ITS ACTIVITY ARE OF CHARITABLE PURPOS E. THE CORPORATION WAS NOT ESTABLISHED WITH AIM THAT IT WOULD INCUR LOSS, MERE LY CHARGING OF LOW FARE IS NOT ONLY THE REASON FOR LOSS, THERE MAY BE MANY OTH ER VARIOUS VIZ. MANAGEMENT, THAT ADVERSELY AFFECTED BUSINESS OF COR PORATION. THE APPELLANT'S RELIANCE ON THE DECISION OF HON'BLE ITA T BANGALORE IN THE CASE OF KARNATAKA STATE ROAD TRANSPORT CORPORATION DATED 20 -02-2015 IS MISPLACED. IN THE CASE OF KARNATAKA STATE ROAD TRANSPORT CORPO RATION, THE ISSUE OF REJECTION OF REGISTRATION U/S. 12A WAS UNDER CONSID ERATION WHEREAS IN THE INSTANT CASE, NO SUCH ISSUE IS UNDER CONSIDERATION. IN LIGHT OF THE ABOVE DISCUSSION, IT IS CLEAR THAT ACTIVITIES BEING CARRIED OUT ARE NOT CHARITABLE IN VIEW OF AMENDED PROVISIONS OF SECTION 2(15). ACCORDINGLY, IT IS HELD THAT THE AO PERFECTLY HELD THAT ASSESSEE IS NOT ENTITLED FOR EXEMPTION U/S 11 IN VIEW OF AMENDED PROVISIONS OF SECTION 2(15) AND HENCE, THE AO RIGHTLY COMPUTED THE ASSESSEES ACTIV ITY ON THE PRINCIPLE OF ITA NOS. 885 & 886/JP/2018 RA JASTHAN STATE ROAD TRANSPORT CORPORATION, JAIPUR VS. DCIT, JAIPUR 16 COMMERCIAL EXPEDIENCY AND TAXED ACCORDINGLY. THE GR OUNDS RAISED BY THE APPELLANT REGARDING THIS ISSUE ARE DISMISSED. 19. WE HAVE HEARD THE RIVAL CONTENTIONS AND PURSUE D THE MATERIAL AVAILABLE ON RECORD. THE ASSESSEE CORPORATION IS REGISTERED UND ER SECTION 12A(A) OF THE ACT. THE LIMITED ISSUE UNDER CONSIDERATION IS WHETHER TH E ASSESSEE CORPORATION IS ENTITLED FOR EXEMPTION U/S 11 FOR THE YEAR UNDER CO NSIDERATION IN VIEW OF AMENDED PROVISIONS OF SECTION 2(15) OF THE ACT. 20. THE ASSESSEE CORPORATION IS ENGAGED IN PROVIDIN G TRANSPORTATION SERVICES IN THE STATE OF RAJASTHAN. PROVISION OF TRANSPORTA TION SERVICES THROUGH RUNNING OF BUSES IS CLEARLY AN ACTIVITY OF GENERAL PUBLIC UTILITY AS THE SAID SERVICES ARE MEANT AND AVAILED BY THE PUBLIC AT LARGE AND THEREF ORE, IT WOULD FALL IN THE LAST LIMB OF DEFINITION OF CHARITABLE PURPOSE AS SO DEFI NED IN SECTION 2(15) OF THE ACT. THE ARGUMENT OF THE LD AR THAT THE ASSESSEE C ORPORATION PROVIDES VARIOUS CONCESSIONS AND RELIEF IN FARE TO POOR, STUDENTS, S ENIOR CITIZENS, WOMEN, ETC DOESNT TAKE AWAY THE INHERENT AND FUNDAMENTAL ASPE CT OF PROVIDING A PUBLIC UTILITY SERVICE OF RUNNING OF BUSES FOR THE PUBLIC AT LARGE. THE SERVICES ARE NOT LIMITED TO PARTICULAR SECTION OF THE SOCIETY BUT OP EN TO ALL INCLUDING THE POOR, MARGINALIZED AND NEEDY SECTION OF OUR SOCIETY NAMEL Y SENIOR CITIZENS, WOMEN ETC. THEREFORE, THE LAST LIMB GENERAL PUBLIC UTIL ITY CLEARLY DEFINED IN SECTION 2(15) AND BEING MORE SPECIFIC WILL BE APPLICABLE IN THE INSTANT CASE AND HAS BEEN RIGHTLY INVOKED BY THE ASSESSING OFFICER. 21. THE NEXT QUESTION THAT ARISE FOR CONSIDERATION IS WHETHER THE ACTIVITIES OF THE ASSESSEE CORPORATION INVOLVES CARRYING ON OF AC TIVITIES IN THE NATURE OF TRADE, COMMERCE OR BUSINESS OR ANY ACTIVITY OF REND ERING OF SERVICES IN RELATION TO ANY TRADE, COMMERCE OR BUSINESS FOR A CESS, FEE OR ANY OTHER CONSIDERATION AND THE PROVISO TO SECTION 2(15) IS APPLICABLE IN T HE INSTANT CASE. AS PER THE ASSESSING OFFICER, THE ACTIVITIES OF THE ASSESSEE C ORPORATION ARE COMMERCIAL IN ITA NOS. 885 & 886/JP/2018 RA JASTHAN STATE ROAD TRANSPORT CORPORATION, JAIPUR VS. DCIT, JAIPUR 17 NATURE FOR THE REASON THAT IT IS RUNNING BUSES AND CHARGING FARE FROM THE PASSENGERS AND IT IS NOT PROVIDING FREE SERVICES TO THE PUBLIC. THE LD CIT(A) REFERRED TO THE DECISION OF THE HONBLE DELHI HIGH COURT IN CASE OF INDIA TRADE PROMOTION CORPORATION VS UOI WHEREIN IT WAS HELD TH AT THE DOMINANT AND PRIME OBJECTIVE OF THE INSTITUTION HAS TO BE SEEN. WHERE THE DOMINANT AND PRIME OBJECTIVE IS PROFIT MAKING, IT WOULD NOT BE ENTITLE D TO CLAIM ITS OBJECTS TO BE CHARITABLE PURPOSES AND WHERE THE INSTITUTION IS NO T DRIVEN PRIMARLY BY A DESIRE OR MOTIVE TO EARN PROFIT BUT TO DO CHARITY THROUGH THE ADVANCEMENT OF AN OBJECT OF GENERAL PUBLIC UTILITY, IT CAN BE REGARDED AS AN INSTITUTION ESTABLISHED FOR CHARITABLE PURPOSES. THE LD AR HAS FURTHER REFERRE D TO THE DECISION OF THE HONBLE RAJASTHAN HIGH COURT IN CASE OF JODHPUR DEV ELOPMENT AUTHORITY AND URBAN IMPROVEMENT TRUST, BIKANER WHEREIN SIMILAR LE GAL PROPOSITION HAS BEE LAID DOWN. HOWEVER, WHEN IT COMES TO FINDING ON FA CTS IN THE INSTANT CASE, THE LD CIT(A) MERELY HELD THAT SINCE ITS RECEIPTS FROM ACTIVITIES WHICH ARE COMMERCIAL IN NATURE EXCEEDS THE PRESCRIBED THRESHO LD, THE ASSESSEE CORPORATION WILL BE NOT A CHARITABLE CORPORATION. W E THEREFORE FIND THAT THERE IS NO FINDING BY THE AO OR THE LD CIT(A) AS TO THE DOM INANT INTENT AND PURPOSES FOR WHICH THE ASSESSEE CORPORATION WAS SET UP AND W HETHER THE DOMINANT PURPOSES WAS TO EARN PROFIT OR PROVIDE PUBLIC UTILI TY SERVICES TO THE PUBLIC AT LARGE. THE LD AR IN HER SUBMISSIONS HAS REFERRED T O VARIOUS PROVISION OF RAJASTHAN STATE ROAD TRANSPORTATION CORPORATION ACT 1950 AND HAS ARGUED THAT THE OBJECT WAS TO PROVIDE EFFICIENT TRANSPORT SERVI CES TO THE PUBLIC AND NOT TO EARN PROFITS. WE FIND THAT THE PROVISION OF RAJAST HAN STATE ROAD TRANSPORTATION CORPORATION ACT 1950 NEED TO BE EXAMINED IN DETAIL TO DETERMINE THE DOMINANT INTENT AND PURPOSE OF SETTING UP OF THE ASSESSEE CO RPORATION AND IN THE ABSENCE OF FINDINGS OF THE LOWER AUTHORITIES, WE AR E CONSTRAINED TO REMAND THE MATTER BACK TO THE FILE OF THE LD CIT(A) TO EXAMINE THE SAME AFRESH TAKING INTO CONSIDERATION THE DECISIONS OF THE HONBLE DELHI AN D RAJASTHAN HIGH COURT REFERRED SUPRA. THE ASSESSEE CORPORATION IS AT LIBE RTY AT RAISE ITS AFORESAID ITA NOS. 885 & 886/JP/2018 RA JASTHAN STATE ROAD TRANSPORT CORPORATION, JAIPUR VS. DCIT, JAIPUR 18 CONTENTIONS BEFORE THE LD CIT(A). IN THE RESULT, T HE MATTER IS SET-ASIDE TO THE FILE OF THE LD CIT(A) AFTER PROVIDING REASONABLE OP PORTUNITY TO THE ASSESSEE CORPORATION. 22. IN ITA NO. 886/JP/2018, SINCE FACTS AND CIRCUM STANCES OF THE CASE ARE EXACTLY IDENTICAL TO FACTS AND CIRCUMSTANCES OF THE CASE IN ITA NO. 885/JP/2018, OUR FINDINGS AND DIRECTIONS CONTAINED THEREIN SHALL APPLY MUTATIS MUTANDIS TO THIS APPEAL. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 14/10/2019. SD/- SD/- FOT; IKY JKO FOE FLAG ;KNO (VIJAY PAL RAO) (VIKRAM SINGH YAD AV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 14/10/2019 * GANESH KR. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- RAJASTHAN STATE ROAD TRANSPORT CORPO RATION, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- THE DCIT, CIRCLE-05, JAIPUR 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE {ITA NO. 885 & 886/JP/2018} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR