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TMI Blog2018 (9) TMI 1694X X X X Extracts X X X X X X X X Extracts X X X X ..... of which registration was granted to the assessee. Keeping in view the aforesaid facts and circumstances, keeping all issues open, we deem it fit to restore the matter back to the file of Ld. AO for re-adjudication of the same with a direction to the assessee to substantiate its claim as argued before us - I.T.A. No.5531/Mum/2015 - - - Dated:- 26-9-2018 - SHRI C.N. PRASAD, JM AND SHRI MANOJ KUMAR AGGARWAL, AM For The Revenue : Rajesh Kumar Yadav, Ld.DR For The Assessee : Hiro Rai, Ld.AR ORDER Per Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year [AY] 2010-11 contest the order of the Ld. Commissioner of Income-Tax (Appeals)-1 [CIT(A)], Mumbai, Appeal No.CIT(A)-I/IT/E-2 (56)/2013-14 dated 14/09/2015. The original grounds as well as additional grounds filed on 28/03/2018 as urged before us reads as under:- 1. The learned CIT (Appeals)-1 was not justified in confirming the order of the learned ADIT denying the exemption u/s 11 of the Act to the appellant. He has erred in holding that the proviso to section 2(15) was applicable to the case of the appellant. The reasons given both by the learned CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in the field of advertising. Further, the surplus being generated out of the said activities was ploughed back in furtherance of Trust s objects. Reliance was placed on certain judicial pronouncements. It was pointed out that the decision of the Tribunal as relied upon by Ld. AO could not be applied since subsequent to the said decision, the Trust obtained registration u/s 12A and the claim was to be examined at the realm of the statutory provisions as contained u/s 11 12. However, not convinced, Ld. CIT(A) upheld the stand of Ld. AO by observing as under:- 5.2 I have considered the facts and circumstances of the case, gone through the assessment order of the A.O and the submissions of the appellant and also discussed the case with the AR of the appellant. The contentions and submissions of the appellant are being discussed and decided herein in under: i. The appellant contended that in its opinion there is no element of business nature in any activities carried out by it and hence, provisions of section 11(4A) or proviso to section 2(15) are not applicable. In this regard it is clarified that the assessment year being 2010-11, the proviso to section 2(15) is relevant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roviso to section 2(15) is attracted even in a case where the assessee is not carrying out business, trade, commerce by itself. The charging of tees and consideration 'in relation to' services (or any trade, business and commerce or 'involvement' in trade, commerce and business is sufficient to attract the proviso to section 2(15). The decision in the case of Subhram Trust vs. DIT (E) (2009) 317 ITR (AT)(Bang.) that 'the term in relation to should be broadly Interpreted i.e. to say if any activity which directly or indirectly facilitates the rendering of any service in relation to any trade, commerce or business, is carried on by trust, then it will be covered under proviso to section 2(15)1 is relevant in deciding that the carrying out of trade, commerce, business by the assessee itself is not necessary For applicability of proviso to section 2(15). Therefore, the arguments of the appellant that it is not engaged in carrying out business, commerce, trade per se is not relevant to the issue in hand and such arguments are against the legal provision of section 2(15) and its applicability under the facts and circumstances as in the case of the appellant. The Leg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... service in relation to any trade, commerce or business. Under the circumstances, and facts of the case the activities of the appellant are not within the ambit of- charitable purpose. The decision in the case of ACIT Vs The Tribune Trust,ITAT (Chandigarh) in ITA No. 1273/Chd/2012 is also relevant where it was held that publishing of journals / newspapers and deriving income from Advertisement etc. is not charitable purpose / activity. It is noticed from the sources of income and revenues derived by the appellant that they are in the nature of realization of fees for various services rendered by way of organizing award functions, income from exhibitions, seminars, workshops and so on, from year to year on regular basis in furtherance of the interest of a particular Industry / business interest devoid of carrying out any charitable activities as defined in Section 2(15) of the I.T. Act, 1961. Thus from the above discussion and facts of the case it is clear that the proviso to section 2(15) of the I.T. Act, 1961 is applicable for the year on facts and as per law. iii. Further it would be relevant to mention here that if a charitable organization carrying out objects of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eal is therefore dismissed. Aggrieved, the assessee is in further appeal before us. 4. The main plea of Ld. Auhtorized Representative for Assessee [AR], Shri Hiro Rai revolves around the fact that the activities being carried out by the assessee Trust were incidental to the attainment of the main objective and there was no profit motive since the surplus were ploughed back in furtherance of main objectives of the assessee Trust. It was further submitted that reliance of the decision of this Tribunal for AY 1978-79 was misplaced since the assessee, subsequently, obtained registration u/s 12A. An alternative submission has also been put forwarded in the shape of the fact that an amount of ₹ 78.85 Lacs as credited in the Profit Loss Account during impugned AY had already been offered to tax in earlier years and therefore, the same was excludible while computing the surplus earned by assessee during impugned AY. Per Contra, Ld. Departmental Representative, Shri Rajesh Kumar Yadav submitted that the assessee did not carry out any charitable activities during the year and was operating more like an event management entity and therefore, the lower authorities were ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... certain judicial pronouncements have been cited before us. The Ld. AR has also raised an alternative plea that the amount of ₹ 78.85 Lacs as written-off by way of credit to Profit Loss Account had already been offered to tax in earlier years and therefore, the same is excludible while computing the surplus for impugned AY. In our opinion, these submissions require proper appreciation of factual matrix which has not been done by Ld. AO particularly the submissions that the activities being carried out by the assessee were incidental to carrying out the objectives on the basis of which registration was granted to the assessee. 5.3 Keeping in view the aforesaid facts and circumstances, keeping all issues open, we deem it fit to restore the matter back to the file of Ld. AO for re-adjudication of the same with a direction to the assessee to substantiate its claim as argued before us failing which Ld. AO shall be at liberty to decide the same as per law on the basis of material available on record. 6. The appeal stand allowed for statistical purposes in terms of our above order. Order pronounced in the open court on 26th September, 2018. - - TaxTMI - TMITax - Inc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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