TaxTMI 
TaxTMI 
2018 (8) TMI 1707
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....n confirming the action of the Ld. Assessing Officer of denial of claim for exemption under section II of the Income Tax Act, 1961 to the appellant by invoking the proviso to section 2(15) of the Income Tax Act, 1961 and the reasons assigned for doing so is wrong and contrary to the facts and circumstances of the case, provisions of Income Tax Act, 1961. and Rules made there under 1(b) On the facts and in the circumstances of the case and in law, the lower authorities erred in holding the appellant activity in the nature of trades commerce or business and thereby erred in holding that the appellant is not eligible for claim of exemption uls 11 of the Income Tax Act, 1961. 2 On the facts and in the circumstances of the case and in law, the lower authorities erred in holding that interest of Rs. 77,91,750 earned on Fixed deposit with schedule banks is chargeable to tax being not covered by principles of mutuality without appreciating the fact that the appellant has already considered the same as a taxable receipts and the reasons assigned for doing so is wrong and contrary to the facts and circumstances of the case, provisions of Income Tax Act, 1961, and Rules made thereunder. ....
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....so as assist the advertisers in estimating the value of any publication for advertising purposes. For ascertaining the circulation figure, the assessee conducted an independent audit of its members. The Bureau gives a certificate of circulation to its members on the basis of the audit report. The ABC certificate indicates the actual number of circulation of newspapers, magazines, etc. This copy was said to be printed and supplied to members on no profit no loss basis. The ABC certificate was used by members as authenticated proof of figures of circulation with advertisers and other agencies. The publishers also used to get their quota of newsprint based on this certificate. In view of the amended provision of Section 2(15) of the Act, the notice was given to the assessee and after getting the reply the Assessing Officer was of the view that the Bureau independent audit of circulation figures essentially assist the advertiser in estimating the value of benefit of advertisement in a periodicals or newspapers. It is the advertiser of advertising agencies that benefited from circulation figure. There was no utility/benefit to the general public. The assessee also received the contribut....
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....ion speaks about object of the assessee which nowhere leads the nature of the work of assessee as commercial in nature, therefore, the finding of the CIT(A) is not sustainable and the claim of the Assessee is liable to be allowed. It is also argued that after amendment of Section 2(15) of the Act, the claim of the mutuality has also wrongly been declined by revenue which is also liable to be allowed in the interest of justice. In support of the said contention, the Ld. Representative of the assessee has relied upon the cases titled as Bombay Presidency Golf Club Ltd. Vs. DIT (Ex.) (23 taxmann.com 319) (Mum ITAT), Hiralal Bhagwati Vs. CIT (246 ITR 188) (2000) (Bom. High Court), Bar Council of Maharashtra Vs. CIT (126 ITR 27) (1980) (Bom. H.C.), Shri Khot Hindu Steel Mandal Vs. CIT (209 ITR 396 (1993) (Bom High Court), Banglore Club Vs. CIT (29 taxmann.com 29) (2013) (SC) and CIT Vs. Wellington Sports Club (302 ITR 279) (2008) (Bom. High Court). However, on the other hand, the Ld. Representative of the department has strongly relied upon the order passed by the CIT(A) in question. With due regards to the contention raised by the Ld. Representative of the parties and perusing the reco....
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....audits, digital audits of publications printed and published within India or outside India as well as measurements of websites carrying advertisements through any electronic device and disseminate such information to all members, b) To collect and distribute amongst members of this Association information relating to all forms and methods of advertising. bb) To secure, collect, circulate and distribute information relating to all or any of the matters specified in the preceding three Sub- Clauses (a), (aa) and (b) amongst any Government in India or abroad or any statutory authority constituted by any such Government interested, directly or indirectly in advertising, and amongst associations, bureaux, societies, institutions and federations. whether in India or elsewhere and whether or not members of this Association, having objects similar to those of this Association. bbb) To promote, join as member, associate, or otherwise he interested in, and take hold and dispose of shares in, any other company, association, bureau, society, institution, federation or other organisation, whether in India or elsewhere, having objects similar to those of this Association, or otherwise in a....
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....erwise howsoever by way of profit to the members of the Association. PROVIDED that nothing herein shall prevent the payment, in good faith, of reasonable and proper remuneration to any officer or servant of the Association, or to any memorandum of the Association in return for any services actually rendered to the Association, nor prevent the payment of interest at a rate not exceeding 6 percent per annum on money lent or reasonable and proper rent for premises demised or let by any member of the Association; but so that no member of the Council of Management or Governing Body of the Association shalt be appointed to any salaried office of the Association paid by fees, and that no remuneration or other benefit in money or money's worth shell be given by the Association to any member of such Council or Governing Body except repayment of out-of-pocket expenses and interest at the rate aforesaid on money lent or reasonable and proper (ant for premises demised or let to the Association provided that the provision last aforesaid shall not apply to any payment to any gas, electric lighting, water or cable company of Which a member of the Council of Management or Governing Body may be a....
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....ssee u/s 11 of the Act was declined. The amended provision u/s 2(15) is hereby reproduced below.:- "Charitable purpose" includes relief of the poor, education, medical relief, preservation of environment (including watersheds, forests and wildlife) and preservation of monuments or places or objects of artistic or historic interest, and the advancement of any other object of general public utility. Provided that the advancement of any other object of general public utility shall not be a charitable purpose, if it involves the carrying on of any activity in the nature of trade, commerce or business or any activity of rendering any service in relation to any trade, commerce or business, for a cess or fee or any other consideration, irrespective of the nature of use or application, or retention, of the income from such activity: Provided further that the first proviso shall not apply if the aggregate value of the receipts from the activities referred to therein in (twenty five lakh rupees) or less in the previous year." 8. No doubt, it is required to be seen whether the object of the assessee falls within the purview of Section 2(15) of the Act or not. There is no change of the ....
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....venue which was allowed by the ITAT in the assessee's own case. Since then there was no change in the objects of the assessee till date. Merely came into existence of provision of Section 2(25) of the Act nowhere makes the object of the Assessee commercial in nature. Instances of business and profession are also not on record. Taking into account all the facts and circumstances of the case, we are of the view that the CIT(A) has wrongly denied the claim of the assessee u/s 11 of the Act which is liable to be allowed in the interest of justice. Accordingly, we order, The issue no. 1 and 4 are decided in favour of the assessee against the revenue. ISSUE NO.2 :- 9. So far as the claim of the assessee in connection with the interest on deposit are concerned, we are of the view that the said income doesn't falls within the principle of mutuality which is not liable to be allowable in view of the law settled Bangalore Club Vs. CIT (2013) 212 taxman 566(SC) Civil Appeal No. 124 & 125 of 2007 dated 14.01.2013. However, the appellant stated that the said interest income has already been offered to tax in the return of income for the A.Y.2011.12. ISSUE NO.3 :- 10. Issue no. 3 is in conne....
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....circumstances of the case and in law, the lower authorities erred in holding that the membership subscription and entrance fees are tainted with commerciality and beyond the scope of mutuality and thereby erred in denying the appellant's claim for exemption u/s 11 of the Income Tax Act, 1961, and the reasons assigned for doing so is wrong and contrary to the facts and circumstances of the case, provisions of Income Tax Act, 1961, and Rules made there under. I (d) (i) On the facts and iii the circumstances of the case and in law the action of lower authorities in holding the appellant activity in the nature of trade, commerce or business and thereby in holding that the appellant is not eligible for claim of exemption u/s 11 of the Income Tax Act, 1961 which is contrary to the decision of the Hon'ble ITAT in the appellant's own case in ITA No. 285 & 2861Bom195 for A.Y's 1989-90 & 1990-91- (II) That the order of the Assessing Officer is legally unsustainable as under section 13(8) read with section 2(15), the Assessing Officer cannot challenge the primary activities of the assessee based on which the charitable status was granted and reaffirmed by the Hon'ble I....