2017 (2) TMI 496

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....61. 3. On the facts and in circumstances of the case and when in the statement of computation of total income signed by its Managing Director filed with the return of income, the assessee has stated that its income constitutes income from business, thereby admitting about engaging in business activity dr. ring the previous year 2004-05, the learned CIT(Appeals) erred in holding that the assessee is doing charitable activity. 4. On the facts and in circumstances of the case and when the assessee is engaged in manufacture and supply of food products, mentioned in CoI.No.8(a) pertaining to nature of business or profession in the tax audit report in Form No.3CD, filed u/s.44AB of the IT Act, 1961, the activity of the assessee, under that circumstances, does not come under the purview of Section 2(15) of the I.T Act, 1961, and hence, it is not entitled for exemption u/s 11 of the I.T Act, 1961. 5. On the facts and in circumstances of the case and when the assessee is engaged in production and sale of food products, as observed by the ld. CIT(Appeals) in Para 7.8 of the appellate order, CIT(Appeals) erred ill holding that the objects of the assessee are for charitable purpose. 6.....

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.... dated 25.3.2013 was completed denying the exemption u/s 11 and bringing to tax the income over expenditure. Similarly, exemption u/s 11 was denied in all the later A.Ys also. Aggrieved, the assessee preferred appeals before the CIT (A) for each of the A.Ys and the CIT (A) has allowed the same. Aggrieved by the order of the CIT (A), the Revenue is in appeal before us for all the A.Ys. 5. The learned DR supported the orders of the AO, while the learned Counsel for the assessee supported the orders of the CIT (A). Respective representatives also filed written submissions in support of their contentions. 6. Having regard to the rival contentions and the material on record, we find that undisputedly the assessee has been granted registration u/s 12AA of the Act w.e.f. 23.3.1989 and has been allowed exemption u/s 11 of the Act for all the A.Ys up to A.Y 2004-05. The objects of the assessee society are as under: "I. to provide, expand and facilitate supply of nutritious foods to school and pre-school children, pregnant women and lactating mothers and such other categories of beneficiaries as the Government may from time to time decide within the general frame work of the Government&#3....

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....pt gifts, donations and subscriptions of cash and securities and of any property either movable or immovable; xii. to acquire and hold, whether temporarily or permanently any movable or immovable property necessary, or convenient for the furtherance of the objects of the council whether in India or outside the frontier of India. xiii to sell, lease, exchange and otherwise transfer all or any of the properties, movable or immovable, of the council; xiv, to construct, maintain and alter any buildings or works necessary or convenient for the purpose of the council; xv. to undertake and accept the management of any endowment or trust fund or donations the undertaking whereof may seem desirable from the point of Implementation of Nutrition Programmes; xvi. to offer prizes and to grant scholarships, in furtherance of the objects of the council; xvii. to undertake, organize and facilitate study courses, conferences, lectures, seminars, summer institutes and the like; xviii. to undertake and provide for the publication of books, periodicals journals and research papers in furtherance of the objects of the council; xix. to constitute such committee or committees or such stud....

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....t be referred to as the Contractor to the Govt. of A.P as it is involved in manufacture and supply of food to the beneficiaries and only the supervisory activities are carried on by the Govt. of A.P. in bringing out schemes for the benefit of the beneficiaries and fixing a suitable price to meet the cost of manufacturing and other overheads. Further, the Hon'ble Tribunal has also held that there is no prohibition in the Act that a charitable institution should not indulge in any of the business activities ad that the only restriction is that it should conform to the provisions of sub section 4 and 4a of section 11 of the IT. Act and that the activity should come within the provisions of section 2(15) of the Act defining the charitable purpose. Thus, the grounds on which the assessee has been denied exemption for the A.Ys before us have already been considered by the Coordinate Bench of the Tribunal for restoring the registration to the assessee. 9. The decision of the Hon'ble Supreme Court in the case of Indian Chamber of Commerce (cited Supra) was with regard to the meaning of the term advancement of any object of general public utility not involving the carrying on the a....