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TMI Blog2018 (4) TMI 1423X X X X Extracts X X X X X X X X Extracts X X X X ..... d:- 22-3-2018 - SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND PAWAN SINGH, JUDICIAL MEMBER For The Assessee : Shri Anil Sathe (AR) For The Revenue : Shri Ram Tiwari (DR) 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 of Income-Tax (Appeals)-1, Mumbai, [for short the ld. CIT(A)] dated 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 in law. 2. The Learned Commissioner of Income Tax (Appeals) erred in confirming the denial of exemption u/s 11 to the appellant trust by holding that the activities of the appellant are commercial in nature. 3. The Learned Commissioner of Income Tax (Appeals) failed to appreciate that the object of the trust for conducting the seminars was to impart knowledge, spread awareness and develop the sector of Fragrances Flavours, and not to earn surplus and that the resulting surplus is only incidental. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ec. 11 of the Act. We find that the assessee had declined that it was carrying on any commercial 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). Bangalore Seminar; and (vi) Directory receipts, submitted that the said respective activities were for the furtherance of the general public utility object of the assessee, which by no means could be construed as commercial activities. 10. We have deliberated on the observations of the lower authorities and find that the A.O had concluded that the assessee was carrying on commercial activities, primarily for the reason that it had generated substantial revenue from the seminar held at Bangalore. 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 backdrop of the facts of the case. We find that the activities of the assessee trust were directed towards providing knowledge, information', awareness, demonstrations etc. to the members of the Fragrance and Flavours industry. The activi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... splay of the products of the sponsors does emerge, on the basis of which the same could safely be characterised as a commercial activity. 11. We are of the considered view that the fact that 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 industry, and display of the products of the sponsors can safely be concluded to be for furtherance of 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 be held to have carried on commercial activities. Vie are of the considered view that on a close analysis of the aforesaid activities of the assessee 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 interest of the members of the industry, cannot be characterised as a commercial activity We find that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nduct periodical meetings on professional subjects. The High Court observed that the publishing and sale of books, booklets etc. on professional subjects related to audit and not on any other subject 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 aim to help the society to get better, well-equipped and skilled set of Chartered Accountants for maintaining audit quality, which however could not be construed as a trade or commerce or business. Thus, the High Court observed that the activities of the assessee trust in publishing and selling books 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 Bank 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 before us, the services, viz. receipt of subscriptions from the members, sale of publications, Fafai Journal, holding of workshops conferences, directory receipts etc., were provided for facilitating the dominant object of the assessee trust, viz. prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, trade or commerce. The activity of imparting 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 constituted. Activities of providing coaching classes or undertaking campus placement interviews for a fee are in relation to the main object 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 holding interviews with respect to campus placement, the said activities cannot be stated to be rendering service in relation to any trade, commerce or business as such activities are undertaken by the petitioner institute in furtherance of its main object which as held earlier are not trade, commerce or business. We are further of the considered view that the proviso to Sec. 2(15) is not aimed at excluding genuine charitable trusts of general public utility, but rather, a trust would not be held to be for 'Charitable purpose', if it is engaged in any activity in nature of trade, commer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opment 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 holding such type of seminars by way of a regular and systematic activity, nor for the general public at large, therefore, on the said count also the same can safely be held as not being in the nature of a commercial activity. We have also deliberated on the order of the ITAT, Kolkata, in the case of Indian Chamber of Commerce Vs. Income Tax Officer (2015) 167 TTJ 1 (Kolkata) as had been relied upon by the Ld. A.R, and find that a similar view in context of the issue before us was taken by the coordinate bench of the Tribunal. 13. We thus, in the backdrop of our aforesaid observations are unable to persuade ourselves to be in agreement with the view of the lower authorities that the assessee was involved in carrying of commercial 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 object of general public utility and is not carrying on any commercial activity, therefore, uphold the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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