9911796707
TMI Blog2019 (9) TMI 761X X X X Extracts X X X X X X X X Extracts X X X X ..... utility but the assessee was not engaged in the activity of trade or commerce or the business thus eligible for exemption u/s 11 - HELD THAT:- In the instant case, the Assessing Officer has not able to substantiate that activity of the assessee were carried out with any profit motive. The assessee is a social science research institution founded in the year 1963. The institution apart from handling individual and group projects operates programs of research and training, namely, The Institute of Chinese Studies , The Institute for Comparative Democracy , Sarai Program on Media and Urbanism , Program on Social and Political Theory . The assessee derives its faculties from Indian Council of social science and receives Grant from government organization, including Ministry of external affairs. The research data of the assessee are used by the Election Commission of India and media for dissemination on the subjects of politics and democracy and is meant for research purposes and for non-profit and non-commercial use - as submitted that more than 90% of activities are for research purposes and only small amount of activities i.e. less than 10% are for media uses. AO has not demonstrated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CAI Vs. DGIT(E), 347 ITR 99 (Delhi)-2012 and allowing the relief to the assessee, ignoring that the facts of the case are entirely different. 3. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in accepting the argument of the assessee that the advanced or unspent amount received for ongoing research and project work is not chargeable to tax within the provisions of the Act. 4. The appellant craves leave to add, to alter or amend any ground of appeal raised above at the time of hearing. 2. The cross objections raised by the assessee are reproduced as under: 1. Centre For the Study of Developing Societies (CSDS) is registered under the provisions of the Societies Registration Actl860 with Reg NoS.3369 of 1967-68. 2. CSDS is a social science research institution founded in the year 1963 for Research in social and political processes and their implication for human choices. It is the leading research organization in Asia for the study of Politics, nature of the State and Democracy, Education, Urban Development etc. 3. The Institution has been duly registered as a Trust under section 12 A(a) of the Income tax Act 1961 vide no 29198 dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per the objects of the Institution. 10. The expertise of the Assessee institution in carrying out research was utilized and therefore it cannot constitute trade, commerce or business activity. The aforesaid projects undertaken is not a regular activity of the assessee institution. Primary activity remains research in matters relating to social and political modernization. Merely because of these project receipts the essential character of the assessee institution does not change and cannot be treated or converted into activity which carries on trade, commerce or business or activity of rendering any service in relation to trade, commerce or business. 11. A profit motive is the essence of trade, commerce or business and therefore in a situation in which services are rendered without a profit motive, such rendering of service will not have anything in common with trade, commerce or business. 12. In order to invoke second limb of proviso to sec.2(15) "rendering of services to trade, commerce or business must be such that it has a profit motive essentially. 13. On perusal of the order it will be observed that the learned CIT (A) in para no 3.4 has clearly mentioned that &quo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not be charitable, if it involves the carrying on of any activity in the nature of trade, commerce or business or any activity of rendering service in relation to trade, commerce or business, for a cess or fee or any other consideration. Accordingly, the Assessing Officer disallowed exemption for application of the income in terms of section 11 of the Act and assessed the total income at ₹ 2,23,70,460/-. 3.1 On further appeal, the Ld. CIT(A) held that the activities of the assessee were falling under "advancement of any other object of general public utility" but the assessee was not engaged in the activity of trade or commerce or the business. Accordingly, he held the assessee as eligible for exemption under section 11 of the act. The Ld. CIT(A) also accepted the objection of the assessee for treating advance received as part of the gross receipt during the year under consideration. 3.2 Aggrieved, the Revenue is in appeal raising the grounds as reproduced above and the assessee is before us by way of cross objections on the appeal. 4. In grounds No. 1 and 2 of the appeal, the Revenue challenged the finding of the Ld. CIT(A) of holding the activities of the assessee as cha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f actual carrying out of such advancement of any other object of general public utility; and (ii) the aggregate receipts from such activity or activities during the previous year, do not exceed twenty per cent of the total receipts, of the trust or institution undertaking such activity or activities, of that previous year;………." 4.4 According to the Assessing Officer, the activities of research and consultancy etc. provided by the assessee are in the nature of the trade, commerce or business, whereas according to the Ld. CIT(A) the activities of the assessee are not in the nature of the trade, commerce and business. According to the Ld. CIT(A), merely because assessee receive some fees for research and project work, it does not mean that the assessee is involved in the commercial business activity. The activity of the assessee remains same starting from 1963 and there is no change in the activity of the society. The society was granted exemption under section 11 of the Act for assessment year 2008-09 and the CBDT has also granted approval for exemption wide notification No. 82/2010 dated 20/10/2010. The Ld. CIT(A) has relied on the decision of the Hon'ble Del ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Revenue has raised only ground that the learned CIT (Appeals) has allowed registration under section 12AA of the Act. This issue has already been considered in detail by I.T.A.T., Chandigarh Bench in the case of the assessee in ITA No.74/Chd/2009, against which the appeal of the Revenue is pending before the Hon'ble High Court. Similarly, the I.T.A.T., Chandigarh Bench in ITA No.835/Chd/2012 for assessment year 2009-10 vide order dated 16.4.2013 dismissed the departmental appeal by following the same order of the Tribunal in ITA No.74/Chd/2009. Therefore, there is no infirmity in the order of the learned CIT (Appeals) in following the order of the Tribunal through which the assessee was conferred the registration under section 12AA of the Act and consequentially the assessee would be entitled for deduction under sections 11 and 12 of the Act. Merely because the departmental appeal is pending in Hon'ble High Court against the order of the Tribunal, is no ground to take different view at the stage. We do not find any infirmity in the order of the learned CIT (Appeals). The departmental appeal has no merit and is dismissed." 4.5 In view of the above facts and circumstances, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ject as and when it has accrued to the assessee, according to the project work carried out by the assessee, which in our opinion is in accordance with law. We do not find any error in the finding of the Ld. CIT(A) on the issue in dispute and accordingly, we uphold the same. The ground No. 3 of the appeal of the revenue is accordingly dismissed. 6. The ground No. 4 of the appeal, being general in nature, we are not required to adjudicate upon and the same is dismissed as infructuous. 7. The grounds raised in cross objection are in support of the order of the Ld. CIT(A), which we have already upheld, and thus the ground of cross objection are allowed. 8. The ground No. 1 and 2 of the ITA No. 6617/Del/2015 are identical to grounds No.1 and 2 of ITA No. 1422/12/2014 for assessment year 2009-10, thus to have consistency in our decision, following the same the ground No. 1 and 2 of ITA No. 6617/Del/2015 are also dismissed. 9. The cross objection raised by the assessee against ITA No. 6617/del/2015 are allowed following the finding in ITA No. 1422/Del/2014. 10. In the result, both the appeals of the Revenue are dismissed, whereas both the cross objections of the assessee are allowed. ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
