TaxTMI 
TaxTMI 
2016 (5) TMI 146
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....olding that the activities carried on by the assessee were hit by the provisio to section 2(15) of the Income Tax Act and holding that the activities carried out by the assessee are in nature of business and denying the registration u/s. 12A of the Act. That the DIT(E) be directed to grant registration u/s. 12A of the Act in the interest of justice. iii) That the appellant craves leave to add, to modify, rescind, supplement or alter any of the grounds stated hereinabove, either before or at the time of hearing of this appeal." 3. The brief facts of the case are that the Assessee Society has filed an application in Form No. 10A on 30.3.2013 seeking registration u/s. 12A of the Income Tax Act, 1961. Accordingly, the assessee was issued Notice dated 25.4.2013 requesting it to submit certain documents / explanations. In response thereto Assessee's Authoised Representative and its Secretary attended the proceedings and filed the details/documents from time to time. After considering the same, Ld. DIT(E) has rejected the Application for grant of registration u/s. 12A by holding that activities of the Applicant fall under the category of General Public Utility (GPU) and are in....
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....eem expedient. 3.1 The applicant has filed note on activities, As per activities note, the applicants holds structured courses for classroom teaching for welders, fresh engineers, etc. on various welding related subjects. Certain fees is collected from the participants to meet the expenses under the head Structured Course subscription. Similarly, certain education seminars, symposiums, workshop and training, etc. are also being conducted for which also fee is charged. Delegate fee is charged from the attendees to meet the cost of food, printing materials, venue rent, honorariums to speakers and trainers, etc. There are programmes, which are conducted free or at concessional amounts also depending on the type of people attending the education programmes. Another head of income is 'through advertisement and sponsorship contributions received from entities who wish to participate. A perusal of the details filed by the applicant revealed that it intends to upgrade the skills of the interested people in trade and students in the field of welding. For this purpose, it is running regular courses, distance learning courses and has entered into MOU with various Universities, i.....
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....panel discussion of experts/ etc. vi) Participation/ association / interaction with international forum in welding. vii) Participation with national Government / Semi Government agencies and programmes /scheme viii) Publication of Course material and books. ix) Library at Tiruchirappalli x) Encouragement to students and recognition xi) National welders skill competition. II. Activities related to relief to poor. III. Role in medical Relief IV. Role in preservation of environment (Including water sheds/ forests and wild life) and preservation of monuments or place or objects of artistic or historic interest. In the light of above, the applicant stated that activity of the society is to provide education in field of welding and it fully complies to the charitable purpose as per section 2(15) of Income Tax. 5.4 I have carefully considered the submissions made by the applicant and gone through the details filed by it. There is no merit in applicant's submission that its activities fall under the definition of education. The activities of the applicant - running skill enhancement cours....
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.... by the assessee, it is clear that applicant is in fact Conducting full time and part time courses on welding, Conducting distance education in welding with affiliated universities / institutions, Education, training and skill development of the welder, Publishing welding journal, Conducting seminar, workshop symposium, conference panel discussion of experts, etc. The applicant is charging fees for these services. It is a clear case of service provider and service seeker. Thus, the activities of the applicant are in the nature of business for which fees is being charged. Business normally has the following ingredients: (i) Continuance and systematic activity, (ii) Transaction between two persons, (iii) Element of reciprocity; and (iv) Profit motive. 6.2 Normally, profit motive test must be satisfied, but it is not final. If there is evidence and material to show that the activities were carried out on sound and recognized business principles and pursued with reasonable continuity, it would constitute business, even if there is no profit motive. In the case of P. Krishnamanon (356 ITR 48), the Apex Court has held that it is not motive of ....
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.... the I.T. Act dated 25.3.2013 on Form 10A; Copy of written submission dated 6.6.2013 filed before the DIT(E) on the Role and Activity of Indian Welding Society and Procedure For Certification of skilled welders before DIT(E); copy of written submission dated 11.7.2013 filed before the DIT(E); copy of the written submission dated 19.7.2013 filed before the DIT(E); Copy of Written Submission dated 25..2013 filed before DIT(E) and the copies of the financial statements for the assessment years 2011-12; 2012-13 and 2013-14. He relied upon the all the written submissions filed before the Ld. DIT(E) and stated that the applicant is a registered society to promote the advancement of knowledge and provide education in the field of welding, cutting and hard facing, related technologies and allied sciences. It facilities exchange of ideas, information, and knowledge among members by organizing lectures, workshops, seminars, symposia, conferences and development programs, publishing periodicals, books, journals and magazines and to develop software and educational programs video files and training packages as per the objective of the society. The Society is engaged in academic education & tra....
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.... on the basis of the relevant provisions of law as well as by citing various case laws mentioned in the impugned order. He relied upon the impugned order and requested that the Appeal of the Applicant may be dismissed by upholding the impugned order. 7. We have heard both the parties and perused the relevant records specially the order of the Ld. DIT(E), Written Submission filed by the Applicant and the case laws cited therein. We find that the applicant has filed a Paper Book containing pages 1 to 114 and filed the written submissions dated 06.6.2013, 11.7.2013, 19.7.2013 and 25.9.2013 before the Ld. DIT(E), which he relied and reiterated before the Tribunal during the hearing. In our view, there is a need to discuss the Memorandum of Association in which the aims and objects of the society are mentioned. The following are the aims and objects of the society:- i. To promote the advancement of Welding, Cutting, Reclamation, Hard Facing and related technologies and other allied sciences which the Society may decide from time to time. ii. To facilitate exchange of ideas, information, development work etc. amongst members; by organising lectures, workshops, semina....
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.... xii. The objects of the society extend to all States and Union Territories in India; and for the purpose of the above objects: a) Establish, maintain, control and manage chapters/ branches of the society in Indian and elsewhere, and to determine the constitution, rights, privileges, obligations and duties of such chapters / branches and when thought fit to modify or dissolve the same. b) enroll members and collect funds by way of annual / one time subscriptions; donations or otherwise from scientific, industrial and other organizations, corporate houses, firms and societies, individual scientists, technologists, industrialists or any other person(s) for the purposes of the Society. c) Print and publish any pamphlets / journals or other literature considered desirable for the promotion of the objects of the society. d) administer the funds and utilize the income and assets of the said fund for the purposes of the Society and invest and deal with the money of the Society not immediately required upon such security or securities and in such manner as may from time to time be determined by the Governing Council for the Society and its Chapte....
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....iated with universities and international organizations to conduct its mandate. It holds programs for skill development of the poor and the unemployed under the government programems under various State and Central Government schemes. It also conducts knowledge based programmes for updating the industry with international technology and new materials etc. It reveals from the records, that the Applicant Society is engaged in the field of technical education and training through its above programmes and courses for a wide areas of society. The society plays an immense role in providing technical education and enrichment of knowledge through its interactive programmes and courses without having any commercial or profit motive. It is managed by very eminent and senior officials and personalities from industry and the government, who work at honorary positions and provide their skills and time to the programmes of the society. 7.3 On going through the Provisional Income Expenditure account for AY 2013-14, it reveals that applicant-society hold structured for classroom teaching for welders, fresh engineers etc. on various welding related subjects. Certain fees is collected from the pa....
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....ement of Welding, Cutting, Reclamation, Hard Facing and related technologies and other allied sciences which the Society may decide from time to time. i. To promote the advancement of Welding, Cutting, Reclamation, Hard Facing and related technologies and other allied sciences which the Society may decide from time to time. ii. To facilitate exchange of ideas, information, development work etc. amongst members; by organising lectures, workshops, seminars, symposia, conferences and development programs; publish periodicals, books, journals, and magazines; and develop software and educational programs, video films and training packages relating to the objectives of the Society. iii. To offer flexible class room/distance learning programs in various aspects of welding & related technology that suit the requirement of various levels..........." From the above, it is established that the Society is carrying out the activities for the benefit of the public at large, in as much as any person desirous of enhancing his knowledge and training in the field of welding may participate in the programmes, classes, etc. held by the Society. To further classify the act....
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.... seminar, workshop symposium, conference panel discussions of experts. etc. 7.7 In the background of the aforesaid discussions and precedent, it is established that the applicant-society's main activity is to provide education in the field of welding which fully complies to the charitable purposes as per section 2(15) of the Income Tax Act, 1961, because poor and indigent people are allowed to participate in the course, training programmes free of cost for acquiring the skill and getting the employment indirectly improving their living standard; the school drop outs and youth or rural area below poverty line get free training in welding to bring them in the main stream of their life; special programme for disadvantaged women for their own livelihood for welder training. As per the Rules & Regulations of the society the main source of the Society is membership fee, donations, royalties, government grants, savings from conferences, workshops, seminar course fees and sale of publication etc. The income and property of the Society, however, derived, shall be applied towards the promotion of the objects subject nevertheless in respect of the expenditures of grants or donations made w....