Charitable exemption under section 2(15) and allowability of industry promotion expenses upheld on identical facts and prior-year consistency.

Activities already accepted in earlier assessment years on identical facts were held not to fall within the mischief of section 2(15), so exemption under sections 11 and 12 was upheld. The Tribunal found no distinguishing material from the Revenue and followed the coordinate Bench view. Global Trade Development expenses were found to be incurred to strengthen and promote the Indian IT-BPO industry, and their consistent allowance in earlier and subsequent years supported deductibility; the disallowance was deleted. The CIT(A)'s order was sustained on both issues.

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Issues: (i) Whether the assessee's activities fell within the mischief of section 2(15) and thereby disentitled it from exemption under sections 11 and 12; (ii) whether the disallowance of Global Trade Development expenses was sustainable.

Issue (i): Whether the assessee's activities fell within the mischief of section 2(15) and thereby disentitled it from exemption under sections 11 and 12.

Analysis: The assessee's claim had already been accepted by the Tribunal in earlier assessment years on the same issue. The Revenue was unable to point out any distinguishing feature or contrary material. The Tribunal followed the earlier coordinate Bench view and accepted that the assessee's case was covered in its favour.

Conclusion: The issue was decided in favour of the assessee and against the Revenue.

Issue (ii): Whether the disallowance of Global Trade Development expenses was sustainable.

Analysis: The expenses were found to be incurred for strengthening the Indian IT-BPO industry and promoting the industry's interests at a global level. The Tribunal also noted that similar expenses had been allowed in earlier and subsequent years, including by coordinate Bench decisions, and that the Revenue's consistent acceptance of such expenditure supported allowability.

Conclusion: The disallowance of Global Trade Development expenses was held to be unsustainable and was deleted.

Final Conclusion: The Revenue's challenge failed on both issues, and the order of the CIT(A) was sustained.

Ratio Decidendi: Where an assessee's activities and expenditure are already accepted in earlier and subsequent years on identical facts, and the expenditure is shown to serve the objects of the assessee and the wider industry, the Revenue cannot sustain a contrary disallowance without distinguishing material.

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