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TMI Blog2018 (7) TMI 1890X X X X Extracts X X X X X X X X Extracts X X X X ..... ities and they continue to be regarded as charitable in nature. Accordingly we find no reason to interfere with the findings of the Ld. CIT (A) in this regard and we dismiss the grounds raised by the department. - ITA No. 2653/Del/2015 AY: 2010-11 - - - Dated:- 4-7-2018 - Shri G.D. Agrawal And Shri Sudhanshu Srivastava, JJ. Appellant by: Ms Ashima Neb, Sr. DR Respondent by: None ORDER Sudhanshu Srivastava, This appeal is preferred by the department against the order dated 24.02.2015 passed by the Ld. CIT (Appeals)-40, New Delhi for assessment year 2010-11. 2. The brief facts of the case are that the assessee society is registered under the Society s Registration Act, 1860 and is also registered u/s 12A of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of first proviso to section 2(15) of the Income Tax Act, 1961 and, therefore, commercial receipts would not be entitled to get the benefit of exemption in respect of such income. The Assessing Officer proceeded to tax the surplus generated for the year amounting to ₹ 39,08,961/- at the maximum marginal rate after denying the benefit of exemption u/s 11/12 of the Act. 2.2 Aggrieved, the assessee approached the Ld. First Appellate Authority who allowed the assessee s appeal and directed the Assessing Officer to allow exemption u/s 11(1) of the Act to the assessee. Now, the department has approached the ITAT and has challenged this action of the Ld. CIT (A). 3. None was present on behalf of the assessee when the appeal was calle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has laid down the strict and literal interpretation of the proviso to section 2(15) and has held that mere receipt of fee or charge will not mean that the assessee is involved in any trade, commerce or business. In the case of India Trade Promotion Organisation, the Ld. DGIT (E) had passed an order stating that though the assessee was engaged in the advancement of any other object of general public utility , as per s. 2(15) of the Act, its object could not be regarded as charitable purposes due to the new proviso to s. 2(15) and further that it was not eligible for exemption u/s 10(23C)(iv). It was held by the Ld. DGIT (E) that as the assessee had huge surpluses in banks, it had given its space for rent during Trade Fairs and Exhibitions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... commerce or business. It is clear from the facts of the present case that the driving force is not the desire to earn profits but, the object of promoting trade and commerce not for itself, but for the nation both within India and outside India. Clearly, this is a charitable purpose, which has as its motive the advancement of an object of general public utility to which the exception carved out in the first proviso to Section 2(15) of the said Act would not apply; (ii) If a literal interpretation were to be given to the said proviso, then it would risk being hit by Article 14 (the equality clause enshrined in Article 14 of the Constitution). It is wellsettled that the courts should always endeavour to uphold the Constitutional validity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... activities in the nature of trade, commerce or business or any activity of rendering any service in relation to any trade, commerce or business for a cess or fee or any other consideration. In both the activities, in the nature of trade, commerce or business or the activity of rendering any service in relation to any trade, commerce or business, the dominant and the prime objective has to be seen. If the dominant and prime objective of the institution, which claims to have been established for charitable purposes, is profit making, whether its activities are directly in the nature of trade, commerce or business or indirectly in the rendering of any service in relation to any trade, commerce or business, then it would not be entitled to clai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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