TaxTMI 
TaxTMI 
TaxTMI 
2017 (5) TMI 405
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.... concerning the relations between the employers and employees in Southern India in order to protect the interest of employers engaged in trade, commerce, manufacture and industry of Southern India". As per the learned Assessing Officer apart from collecting annual subscription from members, the assessee had also collected delegate fees for seminars conducted by it, raised income through advertisements placed in a souvenir brought out by it and also had other miscellaneous income. The learned Assessing Officer was of the opinion that the assessee, though it was carrying on an object of general public utility activity, had aggregate receipts in the nature of fees which exceeded Rs. 10,00,000. The learned Assessing Officer was of the opinion that the assessee was hit by the second proviso of section 2(15) of the Act. He denied the exemption claimed by the assessee under section 11 of the Act. He treated the income, earned over the expenditure incurred, falling under the heads "building fund and general fund", as its total income after allowing the claim of depreciation. 3. Aggrieved, the assessee moved in appeal before the learned Commissioner of Income-tax (Appeals). The arguments t....
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.... to any trade, commerce or business for consideration. As per the learned authorised representative advertisement income earned by the assessee from its souvenir and delegate fees from seminars were incidental to the main object of the assessee-trust. The contention of the learned authorised representative was that object of the assessee-trust did not involve carrying on any such activity which could be considered as trade, commerce or business or any services related thereto. As per the learned authorised representative conducting seminars and bringing out souvenirs were all activities which were incidental to the main object of the trust, which was maintaining relationship between employers and employees in Southern India and promoting good feeling between them. The submission of the learned authorised representative was that the seminars conducted and the souvenirs issued and the activities akin to them were all incidental to the main object and was never the primary object of the assessee-trust. Reliance was placed by the learned authorised representative on the decision of the co-ordinate Bench in the case Madras Chamber of Commerce and Industry v. Asst. CIT [2016] 46 CCH 681.....
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....17,03,028 Other income 6 15,73,822 20,13,213 32,96,566 37,16,241 Less : Expenditure 7 24,72,100 25,29,681 Depreciation 3 2,46,146 2,39,846 Excess of income over expenditure 5,78,320 9,46,714 Transferred to : Building fund 2,25,000 7,00,000 General fund 3,53,320 2,46,714 5,78,320 9,46,714 The expenditure incurred by the assessee which is given in schedule 7 also is relevant and details thereof as appearing in schedule 7 of its audited accounts is reproduced hereunder : Year ended 31st March 2010 Year ended 31st March 2009 Expenditure Electricity charges 41,942 43,444 Affiliation charges to employers federation of India 17,000 16,000 Subscription to the association 6,000 6,000 Establishment charges 13,02,693 13,22,408 Repairs and renewals and maintenance 56,992 49,392 Rent 1,12,200 1,12,200 Rates and taxes 21,000 24,500 Printing and stationery 2,07,383 2,71,611 Postage ....
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....y proceedings before Conciliation Officers, Conciliation Boards, Courts of Enquiry, Industrial Tribunals, Labour Court or any Court or other judicial or quasi-judicial body and any tripartite bodies or other statutory bodies; (vi) to reconcile controversies, if any, between members of the Federation ; (vii) to arbitrate in the settlement of disputes arising out of matters affecting the relationship of employers and employees, between parties agreeing to abide by the judgment of the Federation ; (viii) to negotiate on behalf of employers with trade unions and/or other employees' organisations ; (ix) to communicate with Chambers of Commerce, Employers Federations, Trade Unions and other employees' organisations, mercantile and public bodies throughout the world, and concert and promote measures connected with these objects or any of them ; (x) to promote, examine and offer suggestions to legislative or other measures affecting the terms and conditions of service, welfare, health, education and regulations and control of employees, and to make representations to local, State, Central, Commonwealth, International and other authorities on matters connected with these o....
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....ll persons irrespective of caste, creed, religion, sex etc." In my opinion, none of the expenditure listed by me at paragraph 7 above could be considered as incurred in furtherance to any objects mentioned (supra). There might be some indirect nexus of a few heads of expenditure with the objects. However, chapter 4 of its annual report which gives the gist of the activities speaks predominantly of conferences like "labour law implications in the changed scenario" conducted on September 12, 2009, "employment laws-managements perspective" conducted on February 6, 2010, "building organisations and human capabilities in challenging times" held on April 9, 2009 and "innovative wage settlements-sharing of experiences" held on January 28, 2010, of which at least two were in collaboration with the Bangalore Chamber of Industry and Commerce. It is not being disputed by the learned authorised representative that these conferences and seminars were open to persons other than members of assessee-trust and fees were collected from such non- members also. The major activity of the assessee-trust, as per its annual report was conducting such seminars and therefore in our opinion the claim of the....
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....assessee, which was a society registered under the Societies Registration Act, was founded for the promotion and protection of trade and commerce and that, therefore, the objects of the assessee were of general public utility within the meaning of section 2(15) of the Act. The decision of the Calcutta High Court, which was followed by the Appellate Assistant Commissioner, and the decision of the Kerala High Court, which was followed by the Tribunal, were all considered by the Supreme Court in the Indian Chamber of Commerce v. CIT. The Kerala decision was reversed and the Calcutta decision was affirmed. Subsequently the Supreme Court in the case of the Addl. CIT v. Surat Art Silk Cloth Manufacturers Association [1980] 121 ITR 1 (SC) has dissented from the judgment in the Indian Chamber of Commerce v. CIT. The latest decision of the Supreme Court has been considered by us in T. C. No. 352 of 1974 and applied in the judgment pronounced today. 4. The first point to be considered in the present case is whether the assessee is pursuing an object of general public utility. In the light of the judgment of the Supreme Court in CIT v. Andhra Chamber of Commerce it has to be held that the a....