9911796707
TMI Blog2020 (10) TMI 516X X X X Extracts X X X X X X X X Extracts X X X X ..... r passed in relation to the AY 2009-10 as lead matter, we do not find any case to take a contrary view then the view taken by the CIT(A) as well as Income-tax Appellate Tribunal. We do not find that this is a fit case to interfere in appeal under section 260-A of the Act as the findings of fact are not perverse. - Decided in favour of assessee. - R/Tax Appeal No. 223 of 2020 - - - Dated:- 21-9-2020 - R.M. Chhaya And Ilesh J. Vora, JJ. For the Appellant : Mrs. Mauna M. Bhatt ORDER R.M. CHHAYA, J. 1. Heard Mr. Manish Bhatt, learned Senior Advocate assisted by Mrs. Mauna Bhatt, learned advocate for the appellant -revenue. 2. By this appeal under section 260-A of the Income-tax Act, 1961 (hereinafter referred to as the Act for the sake of brevity) the appellant - Revenue has challenged the order dated 27-11-2019 passed by the Income-tax Appellate Tribunal, A Bench, Ahmedabad in ITA No. 114/AHD/2018 for AY 2014-15. 3. The following noteworthy facts emerge from the record of the appeal. 3.1 That the respondent -assessee is a trust and had filed its return of income on 11-10-2014 and declared its income to be NIL. The Assessing Officer under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Whether, on the facts and in the circumstances, the Income-tax Appellate Tribunal was justified in affirming the view of the Commissioner (Appeals) that the activities of the assessee fall within the ambit of Preservation of Environment as envisaged under section 2(15) of the Income-tax Act, 1961 ? B. If the above question is answered in the negative, whether the activities carried out by the assessee fall within the ambit of the proviso to Section 2(15) of the Income-tax Act, 1961 ? C. Whether, on the facts and in the circumstances of the case and in law, the Hon'ble Tribunal is correct in deleting the additions relying on the decision of Coordinate Bench of Ahmedabad in ITA No. 546/AHD/2013 against which Tax Appeal 627 of 2015 filed and the decision of the Hon'ble High Court has not been accepted though further SLP was not preferred looking to the quantum of tax involved? 5. It is an admitted position that in case of the respondent - assessee itself by the judgment and order dated 29-1-2015 which relates to AY 2009-10, the CIT(A) as well as Tribunal had come to the conclusion that the respondent- assessee is engaged in the preservation of environment and theref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Agrawal v. State of Madhya Pradesh, reported in (1999) 8 SCC 667) 45. The first and the foremost thing we want to clarify is that the registration of the assessee as a Charitable Institution and the license granted to the assessee as a company under section 25 of the Companies Act would, prima facie, clothe the assesseee with the character of a charitable institution. However, neither of the above two events is conclusive and the question whether the assessee is established for a charitable purpose or not must be examined independently with reference to the provisions of the Act. The registration of the assessee as a charitable institution under section 12A of the Act, 1961 and the license granted to the assessee under s. 25 of the Companies Act are only relevant factors in reaching an appropriate conclusion. Unless the positive requirements of law are satisfied, the assessee, only by virtue of the above two events, cannot be regarded as a Charitable Institution. The objects, for which, the assessee is established either as a Society or as a Company should spell out any charitable purpose. 6.1 Relying upon the catena of judgments on the issue has examined the similar substan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e preservation of environment including the watersheds, forest and wild life, and preservation of monuments or places/objects of artistic or historic interest are also included in the definition 'charitable purpose'. Be that as it is, what is important is any institution or organization or entity for the advancement of object of general public utility is also considered as an institution or trust for charitable purpose. Section 11 exempts various categories of incomes as enumerated under section 11(1)(a) to (d) from the total income of the previous year. Section 12 exempts the voluntary contributions received by a trust created for charitable purposes from the total income. The benefit of Section 11 and/or 12 can be claimed only when the conditions as stipulated under section 12A are satisfied. One such condition is that a person in receipt of the income has to apply for the registration of the trust or institution in the prescribed form on or before the expiry of a period of one year from the date of creation of the trust or establishment of institution. The proviso to Section 12A(1) confers the power on the Commissioner to entertain an application under section 12A (1) ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Commerce (supra)], even if in an insignificant manner the person makes some profit in carrying out the objects [Surat Art Silk (supra)]. In other words, any activity for the benefit of the public or a section of the public, as distinguished from the benefit to an individual or a group of individuals, would be charitable purpose as the object is for advancement of general public utility. The expression includes all objects to promote the welfare of the public, and when an object is to promote or protect the interest of particular trade or industry that object becomes an object of public utility and would be charitable purpose (Gujarat Maritime Board (2007) 295 ITR 561 (SC) [see Commissioner of Income-tax v. Agricultural Market Committee, (2011) 336 ITR 641 (AP)]. 89. In our opinion, this could be termed as a charitable purpose which has as its motive advancement of an object of general public utility to which the exception carved out in the first proviso to Section 2(15) of the Act would not apply. 6.2 Further considering the judgment of this Court in the case of Director of Income-tax (Exemption) v. Sabarmati Ashram Gaushala Trust reported in 360 ITR 539 (Guj) has observed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t up, then it will not be caught within the sweep of the proviso notwithstanding the fact that there results some income from carrying out such activity. The core of the matter is to see whether the activity which resulted into some income or loss was carried on with the object of doing some trade, commerce or business, etc., or it was in furtherance of the objects (non-business) etc., for which the assessee was set up. In other words, the predominant object of the activities should be seen as to whether it is aimed at carrying on some business, trade or commerce or the furtherance of the object for which it was set up. If it falls in the first category, then, the case would be covered within the proviso to section 2(15) and, in the otherwise scenario, the assessee will be construed to have carried on its activities of general public utility. (see Society of Indian Automobile Manufactures v. ITO, Delhi). 6.3 The Division Bench further relying upon the judgment of the Delhi High Court in the case of Institute of Chartered Accountants of India v. Director General of Income-tax (Exemptions) reported in (2013) 358 ITR 91 has observed thus: 92. The Delhi High Court in the Institut ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
