2019 (7) TMI 671

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.... Chennai 'D' Bench (for short, the Tribunal) for the assessment year 2012-13. 2. The assessee filed this appeal by raising the following substantial questions of law : "1. Whether the Appellate Tribunal is correct in law in denying the tax exemption under Section 11 of the Act for the assessment year under consideration despite the continued availability of registration under Section 12A(a) of the Act for the appellant as a public charitable trust? 2. Whether the Appellate Tribunal is correct in law in denying the tax exemption under Section 11 of the Act for the assessment year under consideration on the misconstruction of the Provisos below Section 2(15) of the Act while recording perverse findings of fact on ....

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....e Revenue. 5. The relevant portions of the said common judgment dated 24.6.2019 in TCA.Nos.705 to 707 of 2018 read as follows : "10. It was also necessary to consider the fact of Circular No.11 of 2008 dated 19.12.2008, issued by the CBDT and the operative portion of which are as follows: '3.1. There are industry and trade associations who claim exemption from tax u/s 11 on the ground that their objects are for charitable purpose as these are covered under 'any other object of general public utility'. Under the principle of mutuality, if trading takes place between persons who are associated together and contribute to a common fund for the financing of some venture or object and in this respect have no dealings or r....

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....India Skins and Hide Tanners and Merchants Association in ITA. No.1851/Mds/ 2017 dated 06.10.2017. 13. In this case also the earlier decision of the Tribunal dated 25.03.2013 has been referred to. We have pointed out these orders only for the purpose that in those cases the objectives of the concerned assessee were analysed by the Tribunal. However, we find such exercise was not done in the instant case, which was required to be done. We also make it clear that we have not expressed any opinion on the merits of the matter but, what we are concerned is that, an exercise should be done to examine the contention advanced by the assessee. More particularly, the contention which were raised in this appeal and ....

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....arried out for any cess or fee or any other consideration. i.) Proviso to section 2(15) of Income Tax Act doesn't exclude the activity involves in the nature of trade, commerce or business or rendering any service in relation to any trade, commerce, or business in entirety from the definition of "charitable purpose", but it outlined the above referred activities from the ambit of the definition of "charitable purpose" only if it is carried out for a cess or fee or any other consideration. j.) In our Association's case, from the wattle extract distribution activity some surpluses are arising due to the following reasons: i.) At the time of clearing the consignment of wattle extract from foreign countries, t....

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.... treated as non-charitable and would not justify the cancellation of the registration of the trust as a whole. In the above circumstances, we request the Hon'ourable DIT(E) to drop his proposal to initiate proceedings u/s.12AA(3).' 15. The learned counsel appearing for the appellant/assessee submitted that on receipt of the aforementioned reply the proceeding proposing to cancel the said registration under Section 12AA was dropped and till date the assessee is enjoying such registration. However, Mr.J.Narayanaswami, learned Senior Standing Counsel, does not have any instructions in that regard but would submit that in any event, the facts of the case is only relevant factor to be gone into. 16. In the ligh....