2016 (6) TMI 782

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... we heard them together and disposing of the same by this common order. 2. Smt. Pushya Seetharaman, learned senior counsel for the assessee, submitted that the assessee is a charitable institution registered under section 12AA of the Income-tax Act, 1961. The assessee claimed exemption under section 11 of the Act in respect of the fees for certificate of origin, subscription fee, entrance fee and seminar income, etc. However, the Assessing Officer disallowed the claim of the assessee on the ground that the assessee-society falls within the fourth limb of section 2(15) of the Act being its objects of general public utility. Since the receipts exceeds Rs. 10 lakhs, the assessee is not entitled for exemption under section 11 of the Act in vie....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....or issue of certificate of origin are incidental to the main activity, according to the learned senior counsel, the Commissioner of Income-tax (Appeals) is not justified in saying that issue of certificate of origin is commercial in nature. 4. On the contrary, Shri A. V. Sreekanth, learned Departmental representative, submitted that the assessee is issuing certificate of origin and collecting fees. The activity of charging fee and issuing certificate of origin was carried on for a profit motive, therefore, the activity of issue of certificate of origin is in the nature of trade, commerce or business. Referring to the first proviso to section 2(15) of the Act, the learned Departmental representative submitted that when the receipts of the a....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....High Court found that the fees received by the assessee for arbitration and issue of certificate are only incidental to the main object. This judgment of the Madras High Court was not taken note of by both the authorities below. This Tribunal is of the considered opinion that this judgment of the Madras High Court in the assessee's own case is binding on the authorities below. Once the High Court found that the fees received by the assessee for arbitration and issuance of certificate are incidental to the main activity, the Revenue cannot contend now that the activity of issuing certificate of origin amounts to trade or commerce. Therefore, this Tribunal is of the considered opinion that even though the assessee is receiving fees for is....