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TMI Blog2013 (10) TMI 1126X X X X Extracts X X X X X X X X Extracts X X X X ..... duced proviso to sub-section (15) of Section 2 of the Act. The assessee is charging admission fee and monthly subscription fee from its Members. Apart from this, the assessee is also accepting grants and special contributions, admission/registration fee for seminars/conferences conducted by the Society. The assessee is not charging any fee for the services rendered by it. The fees charged by way of admission fee, monthly subscription, admission and registration fee etc., are utilized only for the promotion of the aims and objects of the Society. Clause-1 of the aims and objects put complete embargo on earning profit from any of the activities of the Society. Profit is the essence of trade, commerce or business. When services are rendered without profit motive, the element of trade, commerce or business disappears from such activities. Therefore, it can be safely construed that the activities of the assessee are not hit by the newly added proviso to Section 2(15) of the Act - Assessee deserves to be registered under the provisions of Section 12AA of the Act – Decided in favor of Assessee. - ITA No. 808/Mds/2013 - - - Dated:- 17-9-2013 - O K Narayanan And Vikas Awasthy, JJ. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rdinating various infrastructure projects in the state of Tamil Nadu relating to the construction and maintenance of roads, port, small and medium size industries, power supply and Industrial Park etc., The ld. Counsel further contended that the first proviso to Section 2(15) does not apply to the assessee. The ld. Counsel relied on Board Circular No. 11 of 2008 dated 19-11-2008 wherein it has been clarified that the said proviso applies where the object of 'general public utility' is only a mask or a device to hide the true purpose of trade, commerce or business or rendering of any service in relation to trade, commerce or business which is not at all the situation in the present case. As regards the other objections raised by the Director of Income Tax (Exemptions), the ld. Counsel submitted that in assessee's own co-ordinate body's case, the Delhi Bench of the Tribunal vide order dated 25th April 2008 in case titled Japan Chamber of Commerce and Industry in India Vs. Director of Income Tax (Exemptions), New Delhi reported as 23 SOT 42 (Del) has held that the assessee is a charitable society and is entitled to registration u/s. 12A of the Act. The Delhi Bench of the Tribunal dire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ined the impugned order and the judgments/orders cited by representatives of both the sides. The assessee-society has been formed with the following aims and objects: 1. "To undertake, encourage, facilitate and promote the relationship between India and Japan in general without any element of profit; 2. To facilitate economic co-operation and strengthen the relationship between Indian and Japan; 3. To establish and exchange social relationship among members; 4. To promote mutual interest between members; 5. To invite whenever desired intellectuals, industrialist, scholars and creative artists etc., to address the seminars/conference conducted by the Society". The ld. Counsel for the assessee has relied on the decision of the Delhi Bench of the Tribunal in assessee's own co-ordinate body's case in Japan Chamber of Commerce and Industry in India Vs. DIT(Exemptions), New Delhi (supra). A perusal of the order of the Delhi Bench of the Tribunal shows that the society formed in Delhi had similar aims and objects. The issues raised before the Delhi Bench of the Tribunal were almost the same as are raised before us. The Delhi Bench of the Tribunal after consideri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pe, extent and frequency of the activity. 3.1. There are industry and trade associations who claim exemption from tax u/s 11 on the ground that their objects are for charitable purpose as these are covered under 'any other object of general public utility'. Under the principle of mutuality, if trading takes place between persons who are associated together and contribute to a common fund for the financing of some venture or object and in this respect have no dealings or relations with any outside body, then any surplus returned to the persons forming such association is not chargeable to tax. In such cases, there must be complete identity between the contributors and the participants. Therefore, where industry or trade associations claim both to be charitable institutions as well as mutual organizations and their activities are restricted to contributions from and participation of only their members, these would not fall under the purview of the proviso to section 2(15) owing to the principle of mutuality. However, if such organizations have dealings with non-members, their claim to be charitable organizations would now be governed by the additional conditions stipulated in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee's aims and object, held: "............So far as object No.6 is concerned, there can be no doubt that it is a charitable object since inviting intellectuals, industrialists, scholars, tends to enlighten the faculties of the members which is to their ultimate benefit and may help them in becoming more evolved and better human beings. In fact, the Rajasthan High Court in CIT v. Jodhpur Chartered Accountant Society [2002] 258 ITR 548 has held that organizing such seminars and conferences to educate people in different fields of knowledge is a chartibale object of general public utility without any profit motive". 7. Another objection raised in the impugned order is that the benefit of the Society would not be available to general public and are restricted to its Members. The Delhi Bench of the Tribunal on this issue has held as under: "6. The Director of Income-tax(Exemptions) is also not right in his view that the activities of the society are restricted to Japanese companies and Japanese government institutions who alone can become members of the society and, therefore, the Indian public at large is not benefited by the activities. It has to be remembered that the so ..... X X X X Extracts X X X X X X X X Extracts X X X X
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