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TMI Blog2024 (9) TMI 140X X X X Extracts X X X X X X X X Extracts X X X X ..... ct in the light of the Judgment of the Hon ble Supreme Court in the case of Ahemdabad Urban Development Authority (supra). Hence, accordingly we set aside the all these four appeals to the file of AO to do denovo assessment with respect to the claim of exemption u/s 11 of the Act as per ratio laid down by the Hon ble Supreme Court in the case of Ahemdabad Urban Development Authority (supra). Consequently, we also set aside the other issues raised viz; issue of TDS, sundry creditors, depreciation, interest u/s 244A and issue of 234B arising in respective appeals to the file of AO to look into a fresh as per law. - Hon ble Shri Manu Kumar Giri, Judicial Member And Hon ble Shri Amitabh Shukla, Accountant Member For the Appellant : Shri R. Vijayaraghavan, Advocate For the Respondent : Ms. Gouthami Manivasagam, IRS, JCIT. ORDER MANU KUMAR GIRI (JUDICIAL MEMBER) These four appeals filed by the assessee are directed against the separate orders of the Ld. Commissioner of Income Tax(Appeals)(NFAC) Delhi [CIT(A)] dated 08.02.2024 for Assessment Years 2011-12, 2013-14, 2015-16 and 2016-17. 2. First we take up ITA No. 943/Chny/2024 for assessment year 2011-12 as lead case for adjudication wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the assessee Accordingly, the appeal is being decided on the basis of the information available in records and the older submissions, statement of facts and the grounds of appeal. 4. Aggrieved with the assessment order, appeal has been filed before the ld.CIT(A). The ld.CIT(A) has given several notices of hearing to assessee but assessee failed to appear before him. Further, ld.CIT(A) in the light of the judgment in the case of Ahemdabad Urban Development Authority (supra) denied the exemptions of assessee u/s 11 of the Act and made various additions in respective assessment years. Now the assessee is in further appeal before us. 5. Before us, the ld.Counsel for the assessee submitted as under: The Appellant is a Society registered under Societies Act and has been approved under Section 12A of the Income Tax Act as a Charitable Organization. The main purpose of the Appellant is for the uplift of the Artisans working on traditional craft in India having unique heritage skills which are to be preserved, strengthened and promoted. The aim and object of the Appellant is mainly to provide facilities and opportunities for craftsmen to exhibit their skill to Public and also provide re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on various issues dealt with by the Apex Court and has come to the conclusion that the proviso to Section 2(15) would be applicable in the case of the Appellant and for all the years he has held that sum total of receipts from these activities is clearly more than 20% of the total receipts. Further the Assessee is earning hefty profit from these activities. Accordingly, it is held that the Assessee is not eligible for exemption u/s. 11 of the Income tax Act as a GPU (General Public Utility) charity (see Page 17 of the assessment order for the AY 2011-12 in ITA No 943/Chny/2024). He has held similarly in all the other years also. While the Appellant is carrying out only activities for the furtherance of its objects viz providing support and helping the artisans and craftsman in marketing their products, it could do so only by purchasing the products to help the cash flow and market the same through the outlets of the appellant. This will help the artisan and craftsman to receive the sale proceeds for the products immediately and not wait for the product to be sold in the public over a period. In achieving the objective to help the Artisans to market their products through the outle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the prohibition against carrying on business or service relating to business is not attracted - if the quantum of such profits do not exceed 20% of its overall receipts (or 10 lakhs or 25 lakhs as the case may be, depending on the Assessment Year). They have also given other examples where Proviso to sec. 2(15) will not be applicable-like providing low-cost hostels to weaker segments of society, where the fee or charges recovered cover the costs plus nominal mark up; or renting marriage halls for low amounts, again with a fee meant to cover costs; or blood bank services, again with fee to cover costs, are not activities in the nature of business. Further, while summing up conclusion the Apex Court at para 253 at A.3, has held that the Court has clarified through illustrations what kind of services or goods provided on cost or nominal basis would normally be excluded from the mischief of trade, commerce, or business, in the body of the judgment. Thus it is clear that the lower authorities have not appreciated and applied the correct ratio of the Apex Court cited supra and they have omitted the important portion of the judgment wherein the Apex Court has accepted and permitted that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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