TaxTMI 
TaxTMI 
2017 (9) TMI 1032
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....cuting projects such as Chattisgarh Education Resource Centre and sale of books under the Bihar reading Improvement programme. 3. Ld. CIT(A) ignored that the assessee has accepted that no separate books of accounts have been maintained an attempt was made to cull out the same from the consolidated accounts. Clearly, this is a violation of section 11 (4) rws 11(4A) also. 4. The impugned order passed by Ld. CIT(A) is perverse both in law & facts." ITA 2870/Del/14 A.Y. 2010-11 1. "On the facts and in the circumstances of the case and in law, the Ld.CIT(A) has erred in holding that the assessee is not involved in any business or commercial activity and the provisions of s.2(15) of the I.T. Act is not attracted in the case of the assessee. 2. On the facts and circumstances of the case, the Id. CIT(A) has failed to appreciate the facts that assessee society was involved in publishing and selling of text books which are not in the nature of imparting education and as such, the assessee in neither in the field of education, nor in the field of medical relief or relief of the poor and it can be considered after seeing the activities carried out by the assessee as falling with....
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....haritable purposes. A.O. after verifying the submissions of the assessee and relying on some case laws made additions as stated above and also recommended for withdrawal of registration u/s 12AA of the Act also. 3. Aggrieved by these additions made by the A.O. the assessee carried the matter in appeal before the First Appellate Authority. 4. Ld.D.R. relied on the order of the A.O. and submitted that the assessee is purely engaged in the business of sale of books, substantive part of the revenue of the society is coming from the sale of books and their publications. The Society was not engaged in any charitable activity as defined in S.2(15) of the Act. The assessee society has not supplied any text books to the Bihar and Jarkhand government. It is only story books for the students. It is wholly running in commercial way and the assessee has also not satisfied the conditions laid for maintaining separate books of accounts for the business activity undertaken by the Society. The case laws as relied by the assessee society in his written submissions before the A.O./CIT(A) are distinguishable on facts. Therefore the A.O. has rightly made additions on the facts and circumstances of th....
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....of commercial activities. 2.2. 'Relief of the poor' encompasses a wide range of objects for the welfare of the economically and socially disadvantaged or needy. It will, therefore, include within its ambit purposes such as relief to destitute, orphans or the handicapped, disadvantaged women or children, small and marginal farmer, indigent artisans or senior citizens in need of aid. Entities who have these objects will continue to be eligible for exemption even if they incidentally carry on a commercial activity, subject, however, to the conditions stipulated under section 11(4A) or the seventh proviso to section 10(23C) which are that - (i) the business should be incidental to the attainment of the objectives of the entity, and (ii) separate books of account should be maintained in respect of such business. Similarly, entities whose object is 'education' or 'medical relief' would also continue to be eligible for exemption as charitable institutions even if they incidentally carry on a commercial activity subject to the conditions mentioned above. The newly inserted proviso to section 2(15) will apply only to entities whose purpose is 'adva....
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.... no generalization is possible. Assessees, who claim that their object is 'charitable purpose' within the meaning of Section 2(15), would be well advised to eschew any activity which is in the nature of trade, commerce or business or the rendering of any service in relation to any trade, commerce or business." 5.1. Ld. A.R. also relied on the following case laws. i. Jaypee Institute of Information Technology Society vs. DGIT(E), (2009) 227 CTR 124 (DHC) dt. 21.8.2009. ii. Gujarat State Co-operative Union vs. CIT (1992) 195 ITR 279 (Guj HC) dated 7.2.1992. (iii) Soorya Education Trust vs. ITO (2012) 22 Taxmann.com 222 (Chennai Tribunal) dt. 31.5.2012. (iv) Delhi Music Society vs. DGIT WP(C) No.4726/2011 (DHC) dt. 16.12.2011. (v) ITO vs. Science Olympaid Foundation (2014) 48 taxmann.com 382 (Delhi Trib.) dt. 16.5.2014. 6. After hearing both the parties, perusing material available on record, orders of authorities below, case laws cited, we find that the Ld. First Appellate Authority has adjudicated this issue at page no.13 to 16 of the impugned order which is reproduced hereunder for the sake of convenience. "4.2 I have gone through the findings of the AO in t....
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....tem, providing resource support to state governments 'viz, Kerala, Chattisgarh, Bihar, Publications of educational materials. So these activities are in the nature of education. The finding of the AO that appellant society is not providing education is found to be very myopic view. It may not be doing education directly, but indirectly it is engaged in educating teachers and doing various research work with regard to improve educational curriculum and publishing books and other material in collaboration with various State Government as well as with NCERT which is a well known and reputed Organization in the field of education and it is Publishing books for various standards from Class 1 to 12. I have gone through the paper book submitted during the course of appellate proceedings, wherein, audit report has been discussed and share of publications for last 5 years has been discussed as under:- Year Income from sale of Eklavya Publications & TLM - Rs. Total income for the year - Rs. PerCent 2003-04 13,07,140.00 1,92,58,904.61 6.79 2004-05 13,61,667.00 1,67,40,430.54 8.13 2005-06 18,92,459.55 2,24,85,994.53 8.42 2006- 07 16,45,056.95 2,07,43,863.60 ....
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....Authority has rightly concluded that Eklavya Foundation is engaged in social cause without any profit motive and A.O. alleged that it is not an educational institution and is carrying out business activities and it is not maintaining separate books of accounts, all these allegations are misconceived notions of the A.O. After going through the impugned order we find that the Ld. First Appellate Authority has rightly allowed the appeal of the assessee, after taking into consideration the impugned order, case laws cited, paper book filed. We find no infirmity in the impugned order which accepted the contentions of the assessee that Eklavya Society is engaged in charitable purpose as defined u/s 2(15) of the Act. 8. After going through the rules and regulations of Eklavya Foundation it appears that the society is purely engaged for charitable purpose and the society is also granted registration u/s 12A of the Act vide order no.1696 of DIT(E) dt. 15.12.1984 and notified u/s 80G(5) of the Act dt. 27th August,2007. We extract the utilisation of Society's Income and Properties towards Aims and Objects as per the Memorandum of Association(provided at page no.93 of assessee's paper book. "V....