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TMI Blog2021 (9) TMI 1094X X X X Extracts X X X X X X X X Extracts X X X X ..... g consultancy fee which is in nature of business income. 3. On the basis of facts and circumstances of the case and in law, the Ld. CIT(A) has erred in allowing the exemption u/s 11 with all consequential benefits even when the assessee society is hit by proviso to section 2(15) of the Act. 4. On the basis of facts and circumstances of the case and in law, the Ld. CIT(A) has erred in treating the assessee not involved in any trade, commerce or business and mischief of proviso of section 2(15) of the Act is not applicable to the assessee. 5. The appellant craves leave to add, to alter or amend any ground of appeal raised above at the time of hearing." (B) The only issue involved in the grounds of appeal is whether the assessee is eligible for exemption under Section 11 of Income Tax Act, 1961 ("I.T. Act", for short), with all the consequential benefits. Vide Assessment Order dated 18-11-16 passed by the Assessing Officer under Section 143(3) of I.T. Act; the Assessing Officer denied exemption to the assessee under Section 11 of the I.T. Act. Aggrieved, the assessee filed appeal before the Ld. CIT(A). Vide impugned appellate order dated 13.02.2018, the Ld. CIT(A) directed the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (E) vs. ICAI, 347 ITR 86 (Delhi)(2012). iv) ICAI vs. DGIT(E) 347 ITR 99 (Delhi) (2012). 4.1.3 As per the contention of the appellant its activities fall under the category of relief of poor and, in support, the appellant has relied on the objects of the society as per the Memorandum of Association, details of which are at para5 of the appellant's submissions reproduced above. It is seen from the objects that the society has been established to provide professional, technical and management assistance to various agencies engaged in rural development and related action programmes. It is also providing technical guidance in the field of animal husbandry, water resources, rural industries etc. One of its objects is also assist development agencies at the grass root to effectively utilized physical assets required for the purpose of rural development and evolve systems to ensure equity and justice in their utilization. Copies of MoUs and the financial reports of some of the funding agencies which have been submitted have also been perused. 4.1.4 I have considered the assessment order and thee submissions of the appellant. I have also perused the assessment order for assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the year under consideration. Accordingly, the Assessing Officer is directed to allow exemption under section 11 with all the consequential benefits. Grounds of appeal nos. 1 to 7 of the appeal are allowed." (B.1) This present appeal has been filed by Revenue against the aforesaid impugned appellate order dated 13.02.2018 of the Ld. CIT(A). In the course of appellate proceedings in Income Tax Appellate Tribunal ("ITAT", for short), copies of the following orders in assessee's own case passed by Co-ordinate Benches of ITAT, Delhi were filed from the assessee's side: (i) Copy of the ITAT order dated 3rd Sept. 2019 in ITA No.- 3662/Del/2015 for Assessment Year 2011-12 in the case of DCIT vs. M/s Professional Assistance for Development Action (PRADAN), (ii) Copy of ITAT order dated 8.12.2020 in ITA No. 2826/Del/2017 for Assessment Year 2012-13 in the case of DCIT vs. Professional Assistance for Development Action (PRADAN) (iii) Copy of ITAT order dated 23.02.2021 in ITA No. 5805/Del/2017 for Assessment Year 2013-14 in the case of ACIT vs. Professional Assistance for Development Action. (B.1.1) At the time of hearing before us, Ld. Counsel for the assessee submitted at the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re reproduced as under: "2. Briefly stated facts of the case as culled out from the order of the lower authorities are that the assessee is registered under the Societies Registration Act, 1860 and also registered under section 12AA(1) of the Income-tax Act, 1961 (in short 'the Act') as a charitable society vide order dated 27/10/1984 of the competent authority. The assessee is engaged in activities for upliftment of the poor, providing training and skill development of the poor in the rural area in the backward districts of the states like, Bihar, Jharkhand, Orissa, Madhya Pradesh, Chhattisgarh and West Bengal etc. The assessee gets grant from Central and State Government and also donation from the various organization like, 'Gate foundation' etc. The assessee has been allowed benefit of exemption under section 11(1) of the Act continuously up to assessment year 2010-11, however, in the instant assessment year the assessee has been denied said exemption by the Assessing Officer invoking the mischief of the proviso to section 2(15) of the Act. On further appeal, the Ld. CIT(A) allowed the exemption under section 11(1) of the Act with all consequential benefits. Aggrieved, the Rev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 30 & 34 of the paper-book highlighting the project done in backward areas particularly 'Scheduled Castes' and 'Scheduled Tribes' communities of various states for taking up issues affecting their lives, including accessing basic services, rights and entitlements and their participation in local governance structure. The Ld. counsel referred to CBDT Circular No. 11/2008, dated 19/12/2008 and highlighted that the relief to the poor include welfare of the economically and socially disadvantaged or needy. According to him, the activities of the assessee being in furtherance to the cause of disadvantaged women or children or a small and marginal farmers etc. same falls under the charitable activity of 'relief to poor'. 5. The Ld. counsel submitted that even the proviso to section 2(15) is not applicable as no extra fee has been charged for implementing the project work of various agencies. He further submitted that even in case of entities engaged in advancement of object of general public utility, merely receiving fee or charge, cannot make the assessee as involved in trade, commerce or business as held in the case of India Trade Promotion Organization Vs. DGIT(E) 53, Taxman.com 40 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, same is not in the nature of trade, commerce or business as no profit motive is involved in providing the services and no extra fee is charged from the clients except cost of the projects. 7.1 As far as the activity of the assessee under the limb of advancement of general public utility is concerned, we find that learned Assessing Officer has not brought on record any evidences which could suggest that the activities of the assessee have been carried out with profit motive. The Ld. DR also even could not controvert the fact that the assessee has not charged any fee from the clients except the cost of project actually incurred. In the sanction letter of grant to the assessee, there is mention of supervision or monitoring of the activities by the donor, but that in itself is not sufficient to hold that any profit motive is involved. It is quite normal that the donor want to verify whether the grants have been incurred for the intended purpose, which in our opinion, is in any manner does not establish that the activities of the assessee is business activity. The Ld. CIT(A) following the decision of the Hon'ble Delhi High Court has decided the issue in favour of the assessee obse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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