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TMI Blog2018 (12) TMI 115X X X X Extracts X X X X X X X X Extracts X X X X ..... ieties under the societies registration act, 1860 and also registered under section 12 A of the income tax act vide order dated 30/8/2006. The main object of the society is to promote, coordinate, guide, implement and maintain act addition system for laboratories suitable in the country in accordance with the relevant national and international standards and guides. Further to ensure that all measurements either during calibration or testing by accredited laboratories are related to appropriate national and international standards. It filed its return of income gaming exemption under section 11 and 12 of the income tax act on 28/9/2010 declaring nil income. The learned assessing officer examined the income and expenditure account of the assessee society and found that it has received fees and subscription of Rs. 4.37 crores and grant and subsidy of Rs. 6 crores. On consideration of the reply of the assessee the learned assessing officer noted that the assessee trust is carrying on business as it is charging fees and therefore invoking the proviso to section 2 (15) held that activity undertaken by the assessee is capable of generating profit as seen from excess of income or expendit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n autonomous society registered under the societies registration act and formed by Department of science and technology, government of India and approved by Department of scientific and industrial research, New Delhi scientific and industrial research Organisation. The assessee is a society in the field of science and technology and the income of the society has been exempted from tax under section 10 (21) of the income tax act for each approval was granted earlier. Undisputedly the assessee is also registered under section 12 AA of the income tax act. The objectives of the assessee are already set out earlier. The activities of the assessee are spread all over India for the common benefit of public at-large and it provides act addition to testing and calibration laboratories in a nondiscretionary manner regardless of their ownership, legal status, size and degree of independence and other activities such as to plan, prepare, develop and disseminate certified reference materials for enhancement in quality and accuracy et cetera of testing, calibration, research and development of laboratories. Learned Commissioner of income tax (appeals) has considered all the arguments of the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alibration and related activeness as per requirements of national and international guidelines n) To undertake special studies related to testing and calibration e.g. proficiency testing, uncertainty of measurements o) To establish and maintain strong linkages with international and regional for a such as International Laboratory Accreditation Conference (hitherto referred to as EAL), Asia Pacific Laboratory Accreditation Cooperation (hitherto referred to as APLAC) etc. and to take active participation in Plenary Sessions, Committee Meetings etc. in order to keep pace with the latest developments and for promoting Bi-lateral /Multi-lateral Recognition Agreements p) To undertake all the activities which shall promote undertaking bilateral/ multi-lateral recognition agreements between NABL and laboratoryaccreditation bodies in other countries so that test results of NABL accredited laboratories become acceptable in all countries (q) q) To develop and operate an appeal mechanism to deal with complaints r) To raise or acquire funds, monetary assistance or property from Central Government and State Government(s), and other agencies including international organizations an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts, which are highlighted, are mentioned (a), (c) through (e) above. However, as an impact on the users, the object at (g) above is equally important as it enhances sense of confidence. 5.1 It is gathered from records that accreditation of laboratories was initiated by Government of India as a Plan scheme under the Department of Science & Technology and accordingly the following three accreditation boards were constituted - * National Accreditation Board for Testing and Calibrating Laboratories (NABL) * Nation Accreditation Board for Products and Quality Systems Certifications (renamed as National Accreditation Board for Certification Bodies (NABCB) and * National Accreditation Board for Quality Management Personnel Training Organization [renamed as National Registration Board for Personnel and Training (NRBPT) National Accreditation Board for Testing and Calibration Laboratories (NABL) is an autonomous body registered under Societies Registration Act 1886. In fact, most advanced hospitals and medical testing laboratories carry the accreditation from NABH/NABL. This ensures reliability of the procedures, competency of the medical / testing personnel and quality (accu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rade, commerce or manufacture or any adventure of trade commerce or manufacture and several courts have elucidated the term „business‟ means some real, substantive, systematic or organized course of activity or conduct capable of producing profit iv. Hon‟ble Delhi High Court in ICAI v DGIT Delhi (2011) observed that profit motive is not the sole or relevant consideration that has to be kept in mind. It is one of the aspects. Normally intention to earn profit is required. Emphasis, however, it does appear, has shifted and the concept and principle of „economic activity‟ has gained acceptability. The definition of the term „business‟ may also vary when one examines taxability under sales tax, excise duty, value added tax, etc., because these are not taxes on income but the taxable event occurs because of the „economic activity‟ involved. Even if a person/ organization is carrying on Wading on the principle of „no loss no profit‟, it may be liable to apply taxes or comply with the statute when the charge, or incidence of tax, is on the „economic activity‟... Normally the profit motive test should be satis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ‟. It is further stated in the said judgement, inter alia. The primary object for setting up such regulatory bodies would be to ensure general public The prescribing of standards, and enforcing those standards, through accreditation and continuing supervision through inspection etc, cannot be considered as trade, bust commercial activity, merely because the testing procedures, or accreditation involves charging of such fees. It cannot be said that the public utility activity of evolving, prescribing enforcing standards, "involves" the carrying on of trade or commercial activity". 5.5 It would be in the fittest of things, even at the cost of repetition, to state the relevant portion of the judgement of the Hon‟ble Delhi High Court in the ICAI case in 2013 clarifies the legislative intent behind the amendment brought about by the Finance Act 2008 in respect of Section 2(15) of the Act. 5.6 It is mentioned by the Hon‟ble Delhi High Court, in July 2013, in the case of Institute of Chartered Accountants of India (ICAI) that a plain reading of section 2(15) of the Income-tax Act, 1961, indicates that the expression "charitable purpose" has been divided into six ca ..... X X X X Extracts X X X X X X X X Extracts X X X X
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