9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (11) TMI 632 - AT - Income TaxExemption u/s.11 - activities of the assessee trust was not charitable in nature as it is rendering services to the business organizations - HELD THAT - Assessee before us is a society formed by Government of Tamil Nadu with an object of promoting industrial growth and exports in the state of Tamil Nadu. It process the application submitted by the industrial organization and verify whether the applications are in conformity with the rules relating to environment, local authority, fire protection, water, forest, police etc. Fees were charged for rendering this services as prescribed by the Tamil Nadu Government from the industrial organization. Assessee is duly registered u/s.12A. It is not the case of the assessee that it falls within the preview of first three limbs i.e. relief for poor, education and health but under public general utility. Therefore the provisions of Section 2(15) of the Act are squarely applicable. According to AO, proviso to Section 2(15) of the Act are applicable as it charges fees from the business organizations for the services rendered by it. CIT(A) confirmed the findings of the AO following the decision of the Co-ordinate Bench of the Tribunal in assessee s own case for earlier years. No argument were advanced as to how the proviso to Section 2(15) of the Act is not applicable to the case of the assessee. The whole case of the assessee is premised on the argument that it is instrumentality of the State coming within the meaning of Article 12 of the constitution and therefore it is not an assessable entity. Submissions made by the ld. Counsel cannot be accepted even the State Corporation Societies cannot be equated with State Government though it is instrumentality of the State as held in the case of Arun Kumar and Others vs. Union of India and Others 2006 (9) TMI 115 - SUPREME COURT - Appeal of the assessee stands dismissed.
Issues involved:
1. Appeal against CIT(A) order for AY 2012-2013. 2. Applicability of Article 289 of the Constitution. 3. Charitable nature of activities. 4. Treatment of corpus donation. 5. Depreciation allowance. Issue 1: Appeal against CIT(A) order for AY 2012-2013 The appeal was filed by the Assessee against the CIT(A)'s order for the Assessment Year 2012-2013. The Assessee raised various grounds of appeal challenging the CIT(A)'s decision. Issue 2: Applicability of Article 289 of the Constitution The Assessee claimed that as per Article 289 of the Constitution of India, its income should not be subject to income tax as it is a state entity. The argument was based on the interpretation of Article 289 and the nature of the Assessee's activities. Issue 3: Charitable nature of activities The Assessee contended that its activities were charitable in nature and not commercial. It argued that the fees charged for regulatory services were not for commercial purposes and therefore should not be taxable. The Assessee also highlighted that its work was incidental to its main objective and fell outside the scope of taxation. Issue 4: Treatment of corpus donation The Assessee argued that the corpus donation it received, under the instruction of the Government of Tamil Nadu, was not for any service and should be considered a capital receipt, not subject to taxation. It further contended that once assessed as an Association of Persons (AOP), certain provisions of the Income Tax Act were inoperative for the Assessee. Issue 5: Depreciation allowance The Assessee claimed that depreciation should be allowed as the relevant amendment came into effect without retrospective application. It argued that depreciation is an allowable expenditure and should not be denied based on certain provisions that were not applicable to an AOP. The Tribunal analyzed the arguments presented by both parties. It noted that the Assessee's activities did not fall within the charitable scope as defined by Section 2(15) of the Act. The Tribunal also considered legal precedents and interpretations of the Constitution regarding the status of entities like the Assessee. Ultimately, the Tribunal dismissed the appeal, upholding the orders of the lower authorities based on the legal positions and factual circumstances presented in the case. This detailed analysis of the issues involved in the judgment showcases the legal arguments, interpretations of relevant laws, and the Tribunal's decision based on the presented facts and legal principles.
|
