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TMI Blog2019 (7) TMI 2003X X X X Extracts X X X X X X X X Extracts X X X X ..... e objectives of the Trust and even savings effected in any year were to be transferred to the corpus fund to be spent towards fulfilling the objectives of the Trust. The trust- deed also prescribes the manner in which the scheme is to be implemented and it also provides for a Board of Trustees, whereby the Chairman Managing Director of SIDBI is to be its Ex- officio Chairman and other members being drawn from the officials of the Government of India. The Management and administrative affairs of the Trust are under the overall supervision and superintendence of the Board of Trustees. Thus object and purpose of the Trust is focussed on small scale industries and micro enterprises and is not available to entrepreneurs at large. Apart there-from, it is also prescribed in the scheme operationalized by the Trust that the benefits are to be made available only to credit facilities aggregating upto Rs.10.00 lacs sanctioned and disbursed by the lending institutions. Therefore, considering the focused area of the Trust, it could not be inferred that there is any profit motive so as to view the activities to be 'trade, commerce or business as understood for the purposes of proviso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he case and in law the Ld. CIT(A) was justified by relying upon the decision of Hon 'ble ITAT in assessee 's own case for A. Y.2010-11 in which the Hon'ble ITAT was right in holding that the assessee performs charitable activities within the meaning of proviso to section 2(15) of the Income Tax Act, 1961. 2. Whether on the facts of the case and in law the Ld. CIT(A) was justified by relying upon the decision of Hon'ble ITAT in assessee 's own case for A. Y.2010-11 in which the Hon'ble ITAT was right in directing to allow exemption u/s 11 to the assessee when the activities of assessee are akin to those of a mutual association and do not fall within the definition of Charitable purpose as per proviso to Section 2(15) of the Income Tax Act, 1961. 3. Whether on the facts of the case and in law the Ld. CIT(A) was justified by relying upon the decision of Hon'ble ITAT in assessee's own case for A. Y.2010-11 in which the Hon'ble ITAT was right in directing the Assessing Officer to allow exemption u/s 11 of the I.T. Act, 1961, even though the assessee Trust is providing guarantees any/or counter guarantees for credit facilities enjoyed by small ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. counsel for the assessee, the Ld. CIT (A) has decided the identical issue in favour of the assessee by following the decision of the coordinate Bench rendered in the assessee s case (supra). The relevant portion of the order passed by the Ld. CIT (A) is reproduced as under:- 6.2.2 I have gone through the order of the ITAT and the facts of the Hon tie ITAT are placed hereunder: a). The appeal filed by the assessee pertaining to assessment year 2010-11 is directed against an order passed by CIT(A)-1, Mumbai dated 28/07/2014, which in turn, arises out of an order passed by the Assessing Officer under section 143(3) dated 05/03/2013. In this appeal, a perusal of the Grounds of appeal which are similar to the present which mainly revolves on controversy around the stand of the income tax authorities in denying the claim of exemption made by the assessee-trust under sections 11 12 of the Act The Hon'ble ITAT has touched upon the manner and the purpose for which assessee-trust has been formed and also the history of the past assessments in the case of the assessee. The relevant portion of the order is as follows: The appellant before us is a Trust, which has b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cussed as to whether the assessee Trust has been established for charitable purpose or not;' The nature of income earns and how to treat such income whether is it conclusive to determine that the assessee Trust is not established for charitable purpose. These questions were answered the Hon'ble ITAT is mentioned as under: In other words, the existence or otherwise of the profit motive in the activities carried out by the assessee Trust would be crucial to determine the applicability of the proviso to section 2(15) of the Act; may it be to examine whether its activities are in the nature of trade, commerce or business or whether it is rendering any service in relation to any trade, commerce or business, as prescribed in the proviso to section 2(15) of the Act. 6.2.4 The Hon'ble ITAT also dealt the object and purpose of the assessee Trust and with a finding as under: is to enable the small scale industries and micro enterprises to pursue their income generation activities. The said object is sought to be achieved by providing guarantees or counter guarantees to the lending institutions who disburse loans or provide other credit facilities to the small scale ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ferred that there is any profit motive so as to view the activities to be 'trade, commerce or business as understood for the purposes of proviso to section 2(15) of the Act. Therefore, in our considered opinion, on facts, it is not possible to infer that assessee Trust is carrying on any regular 'trade, commerce or business' and on the contrary it is an entity which is essentially existing for charitable purposes but conducting some activities for consideration or fee. In this background, the proviso to section 2(15) of the Act cannot be invoked to exclude assessee Trust from the purview of section 2(15) of the Act since the said proviso only seeks to exclude institutions which are carrying on regular business, as inferred by us following the legal position explained by the Hon'ble Delhi High Court in the cases referred herein above. In conclusion, we therefore, set-aside the order of the CIT(A) and direct the Assessing Officer to allow the claim of the assessee for exemption under section 11 12 of the Act. Before parting, the Hon ble Bench further observed that we may note that the appellant has made an alternate plea that its activities fall within the s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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