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TMI Blog2024 (11) TMI 641X X X X Extracts X X X X X X X X Extracts X X X X ..... is to secure and promote the business interest of its members and, therefore, it cannot be said to be a public charitable organization. We are of the considered view that any organization primarily formed to secure or promote the interest of its members who were themselves engaged in business activity does not lead to an inference that the objective of the society is also commercial in nature. It is unfair to label the assessee as lobbying agency. The fact that it came into existence as an initiative of the Government of India shows that the purpose was to bring all the stakeholders on one platform and ultimate beneficiary was to be the consumers only. Merely because the participants includes private sector members also, that will not make the nature of activities, as a facilitator, to the hydrocarbon industry, to be that of a commercial nature. The impugned order does not show if from the expenditure of the assessee company anything could be culled out to show that the funds were utilized for promoting the business or financial interest of any individual member or members collectively. As we go through the expenditure statement of the assessee available, we find that there is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1)(d) of the Act. The ld. Revisionary Authority was of the view that membership contribution is a voluntary contribution within the meaning of section 12 which can be made with contribution to form part of corpus and the membership, however, is in the nature of consideration for getting approvals, rights or benefits of institution. The assessee had given detailed reply, but, the Revisionary Authority was not satisfied and cancelled the assessment order dated 29.12.2016 and directed the AO to pass a fresh assessment in the light of the observations. 3. In furtherance to the order dated 26.03.2019 u/s 263 of the Act, the AO has passed the effect giving order dated 20.12.2019 which was challenged by the assessee by way of appeal u/s 250 of the Act and the appeal of the assessee stands dismissed by order of NFAC dated 21.12.2023. 3.1 Accordingly, the assessee has filed these two appeals wherein vide ITA No.3967/Del/2019, the impugned order u/s 263 of the Act has been challenged by raising following grounds:- 1. That the order passed u/s 263 by the Ld. CIT (Exemption) on 26.03.2019 is perverse to the law and to the facts of the case, on holding that the assessment order passed by the As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y giving direction to the concerned Assessing Officer to re-frame assessment of the society that the legitimate and bonafide claim of exemption u/s 11 12 of the Act is continuously to be allowed in the preceding Assessment Years and also the society still avail the benefit of Section 12A of the Income Tax Act 1961. 8. That the Ld. CIT (Exemption) further failed to consider and appreciate that it has never been hold at any stage that the said society is ever engaged to carry on any activity in the nature of trade, commerce or business whatsoever due to which their exemption claimed u/s 11 12 could be denied at all. 9. That the aims, objects and activities of the appellant society for which it was registered were same in this Assessment Year also. 10. That the order passed by the Ld. CIT (Exemption) was further not correct under the law and to the facts of the case, because on the similar activities as contained from the inception of the society, the basis on which section 12A was granted is still in existence during the Financial Year 2013-14 (A. Y. 2014-15). 11 That the assessment order passed by the Assessing Officer clearly mandate after examination and verification of the inform ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allowed u/s 12AA(1)(b) of the Act and exemption u/s 80G(5)(vi) of the Act were valid till 5th September 2016 and, thereafter, the society had merged with another society M/s Petrotech, which had identical objectives and was also registered similarly under the Act. 5. The ld. AR had submitted all the assessments of the society for the last three years i.e., AYs 2011-12 to 2013-14 were completed u/s 143(3) of the Act, after taking into consideration, examination and scrutiny of the information provided, documents produced and placed upon record and after taking into consideration all the registration of the society u/s 12AA(1)(b) of the Act and the exemption u/s 80G holding that the assessee is engaged in charitable activities for the purpose of section 2(15) of the Act. 6. Then, the ld. AR has submitted that the assessee company was merged with M/s Petrotech which had identical objects and in the case of M/s Petrotech this Tribunal and then the Hon ble Delhi High Court has held that the activities of the M/s Petrotech are apparently charitable in nature and, as such, covered within the meaning of section 2(15) of the Act. 7. On the other hand, the ld. DR has supported the findings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evidence to show that the objects of the assessee are not education . In view of this we do not find any infirmity in the order of the Ld. CIT (A) in holding that assessee is entitled for deduction or exemption under section 11 and 12 of the income tax act as assessee is carrying on the activity of education only and income generated there from is also used for the charitable objects of education only. 9. As a matter of fact, the Revenue s appeal before the Hon ble High Court in ITA 1172/2017 has been dismissed by order dated 20.12.2017 and again, the relevant part of the order of the Hon ble High Court dated 20.12.2017 made available at pages 158 to 159 of the paper book is reproduced below:- 1. The Appellant/Revenue s grievance in this appeal under Section 260A of the Income Tax Act, 1961 (hereafter referred to as the Act ) is that the Income Tax Appellate Tribunal (ITAT) fell into error in upholding the assessee s plea with respect to the charitable nature of its activities. 2. The assessee is a registered under Section 12A of the Act by an order dated 02.08.2000. It also secured registration under Section 80G of the Act for AY 2009-10. The Assessing Officer (AO) after noticing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inference that the objective of the society is also commercial in nature. It is unfair to label the assessee as lobbying agency. The fact that it came into existence as an initiative of the Government of India shows that the purpose was to bring all the stakeholders on one platform and ultimate beneficiary was to be the consumers only. Merely because the participants includes private sector members also, that will not make the nature of activities, as a facilitator, to the hydrocarbon industry, to be that of a commercial nature. The impugned order does not show if from the expenditure of the assessee company anything could be culled out to show that the funds were utilized for promoting the business or financial interest of any individual member or members collectively. As we go through the expenditure statement of the assessee available at page 12 of the paper book, we find that there is no head of expenditure which would show that any part of the fund was used for procurement of any business for the members. We further find that the incidental fee and annual subscriptions of the members is on the basis of their turnover, etc., for which no opinion can be formed that it was for t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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