AI Drafter 
TaxTMI 
TaxTMI 
2019 (8) TMI 1821
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....on under section 12A of the Act does not, ipso facto, entitle the appellant-Corporation for the benefit of section 11 read with section 12 & 13 of the Act; vi. The appellant-Corporation is involved in activity of rendering service in relation to any trade, commerce or business for a cess or fee and thereby attracting proviso to section 2(15) read with section 13(8) of the Act; vii. Learned CIT (Appeals) and the Learned Assessing Officer have erred in relying upon the decisions in the cases Jammu Dev. Authority (2011) 5250T 153 (Amritsar), Jalandhar Dev. Authority 3550T 15 (Amritsar), Goa Industrial Dev. Corpn., Greater Cochin Authority, Belgaum Urban Dev Authority, Kerala Indl. Dev. Corpn. (2015) 54 taxmann.com 110 (Coch.), which are out of context and reliance thereon is misplaced; viii. Learned CIT (Appeals) has further erred on the facts and in the circumstances of the case and in law, in holding that the rule of consistency is inapplicable in the context of Income Tax assessment proceedings; ix. learned CIT(A) has further erred on the facts and in the circumstances of the case in law, in denying the benefit of set off of carry forward of loss....
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....eated as an agent of the Government. 5. The Assessing Officer further held that the assessee is engaged in commercial activity. For this proposition he mentioned various reasons. The Assessing Officer observed that the assessee is engaged in activity of bus service. He noted from the website of the assessee following bifurcation of the buses run by the assessee :- Total buses 15500 Simple buses 14022 City buses 651 Semi comfortable 544 Mini buses 199 Deluxe buses 48 Air conditioned 26 Midi 10 6. From the above the Assessing Officer observed that the assessee apart from running simple buses is also running luxury buses in large scale. This according to the Assessing Officer shows that it is engaged in commercial activity. 7. The Assessing Officer further observed that the assessee is also engaged in providing parcel/courier service in large scale from one location to another for fees/charges. 8. The Assessing Officer further observed that from the website it was observed that the assessee was also engaged in carrying out arranging tour and travel packages on commercial basis for fees/charges. He noted following details avai....
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....e as a charitable entity w.e.f. 1.4.2009 under amended definition as per section 2(15). Hence, the Assessing Officer opined that contention of the assessee "appears to be devoid of merit". Hence, the Assessing Officer held that the activities of the assessee are commercial in nature. Thereafter the Assessing Officer referred to several case laws in this regard. The Assessing Officer also referred to the provisions of section 2(15) of the I.T. Act. He held that the object of the assessee falls under the category of "advancement of any other object of general public utility". The Assessing Officer noted that the assessee accepts fees for the services provided by the assessee and the total receipts of the assessee are more than Rs. 25 lakhs. Therefore the Assessing Officer held that the assessee is hit by amendment to section 2(15) w.e.f. 1.4.2009. hence, the Assessing Officer held that the assessee-trust is not eligible for any exemption under section 11 of the Act and accordingly taxed entire income of assessee denying benefit of section 11. 12. Upon assessee's appeal, learned CIT(A) reproduced the submissions of the assessee. However, learned CIT(A) was not convinced. He found that....
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....oordination between any form of road transport and any other form of transport. 18. Learned counsel contended that surplus of receipts over expenses after payment of interest/dividend on the capital as provided by Central/State Government and providing for depreciation and reserves etc. is to be applied for amenities to the passenger, welfare of labour employed, financing the expansion programmes etc, as approved by the Government and remainder, if any, shall be handed over to the State Government for the purpose of road development. In this regard learned counsel placed reliance upon the decision of ITAT, Mumbai in ITA No. 2985/Mum/2012 dated 8.8.2012 in the case of CIDCO for A.Y. 2006-07. 19. Hence, learned counsel submitted that from the above objects of the assessee it is evident that its sole purpose of establishment and operation is to provide relief to the poor, preservation of environment and advancement of coordinated road transport i.e. a public utility for general public in the State of Maharashtra. Learned counsel submitted that the assessee has received approval u/s. 12A of the Act on 4.1.1989 and it is still valid. He submitted that hence the assessee is eligibl....
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....ndia. Learned counsel further submitted that Hon'ble Jurisdictional High Court in writ petition in the context of PIL No. 2978 of 2017 vide order dated 20.10.2017 has accepted the 'corporation' to be 'the undertaking public utility services'. 23. Learned counsel further submitted that the Assessing Officer has totally erred in coming to a decision that the assessee is engaged in commercial activity. Learned counsel submitted that the very chart which the Assessing Officer has mentioned in his report showing type of buses run by the assessee show that only a miniscule percent thereof can be said to be buses of higher type. Furthermore, learned counsel submitted that other income used by the Assessing Officer to prove that the assessee is engaged into commercial activity has to be considered in the context of overall receipts of the assessee from provision of passenger transport. He submitted that the same would be very miniscule percentage. He submitted that from the website the Assessing Officer has copied eight tours and considered it large scale activity. He submitted that 8 tours cannot be a representative of 100s and 1000s of transportation activities of the assessee. Le....
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....y Vs CIT (35 SOT 15). 2. Goa Industrial Development Corporation vs Commissioner of Income Tax, Panaji. 3. Greater Cochin Development Authority vs. Jt.DIT (OSD)(Exemp.), Range-4, Kochi. 4. The Belgaum Urban Development Authority Vs. The Commissioner of Income Tax, Belgaum. 5. Asst. DIT(Exemption), Trivandrum vs. Kerala Industrial development Corporation [2015] 54 taxmann.com 110 (Cochin - Trib.) 25. Learned Departmental Representative submitted that assessee's case is covered by proviso to section 2(15) and profits exceeding Rs. 25 lakhs from commercial activity. Hence, it is not entitled to exemption u/s. 11 of the Act. Learned Departmental Representative further referred to assessee's income from non-operating activities like rent, advertising, sale of scrap material, license fees and miscellaneous receipts. Hence, he submitted that the orders of the authorities below have to be upheld on this issue. 26. In rejoinder learned Counsel of the assessee submitted that the fact that the activities of the corporation would come within the ambit of advancement of any other object of general public utility is not denied. In this regard he referred ....
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....apital as provided by Central/State Government and providing for depreciation and reserves etc. is to be applied for amenities to the passenger, welfare of labour employed, financing the expansion programme etc., as approved by the Government and remainder, if any, is to be handed over to the State Government for the purpose of development. It is noted that there is no change in the activity of the assessee since beginning and it is all along providing road transportation facility to the general public for a ticket as a token contribution. Prior to introduction of proviso to section 2(15), there was no dispute that the assessee was established for charitable purpose and assessee has all along been granted relief u/s. 2(15) and exemption under section 11 of the Act. Now the Revenue's plea is that amendment to section 2(15) of the Act shall take assessee's activity subject to denial of exemption u/s. 11 of the Act. In this regard we note that such a plea of the Revenue that introduction of proviso to section 2(15) shall lead to denial of exemption to Karnataka State Road Transport Corporation has been rejected by Hon'ble Karnataka High Court in the case of Karnataka State Road Tr....
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....ssee the terms "any trade, commerce or business" refer to the trade, commerce or business pursued by the recipient to whom the service is rendered (as there may be a situation involving letting out the premise? for purposes other than involving trade, commerce or business as well). Since the petitioners have not chosen to implead the Union Government in the party array, to consider and finalise the scope and amendment in this regard, this Court is not in a position to lay down the law on this aspect for the time being and hence it is left open. " [Emphasis Supplied." 30. This view of Hon'ble Kerala High Court was endorsed by Hon'ble Andhra Pradesh High Court in the Judgment dated 17.12.2012 in the case of Andhra Pradesh State Seed Certification Agency (28 Taxman.com 218). From the above decision it is amply clear that adverse view taken by the authorities below that the assessee should be denied exemption u/s. 11 simply because of amendment to section 2(15) is not sustainable. 31. In this regard, we also note that this Tribunal in the case of National Institute of Bank Management Vs. ACIT in ITA No. 2913 & Others vide order dated 25.1.2018 has elaborately considere....
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....s controversy, we may briefly touch upon the objects of the assessee as appearing in the Memorandum of Association and also the activities that are being carried out by the assessee over the years. The main objects of the assessee have been reproduced by us in the earlier part of this order and a perusal thereof clearly shows that the main object of the assessee is to promote and provide training in operation and management of banking and financial institutions, besides organising and facilitating seminars, study courses, lectures and similar other activities for the said purpose. Considering the stated objects, we are not inclined to accept the plea of the Revenue that the main objects of the assessee is not 'education'. Besides the stated objects, the written submissions which have been filed by the assessee before the lower authorities also give an insight to the activities being actually pursued by the assessee. It emerges that the assessee is recognised by the University of Pune as an approved centre for post-graduate research and also by the Department of Scientific and Industrial Research, Ministry of Science and Technology, Government of India. It is pointed out tha....
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....purposes. The Hon'ble Court also explained that in order to ascertain whether an entity is being run with the object of making profit or not, the existence of profit is not paramount, but what is of importance is whether or not the resultant income is being applied wholly and exclusively for the objects for which the entity has been set-up. In the context of the assessee before us, there is no repudiation to the fact-situation that the surplus, if any, is being applied only in furtherance of its stated objects. 11. The learned representative before us referred to the judgment of the Hon'ble Supreme Court in the case of text books was also held to be an activity falling within the scope of 'education'. Similarly, the judgment of the Hon'ble Gujarat High Court in the case of Gujarat State Co-operative Union vs CIT, 195 ITR 279 (Guj.) has also been relied upon. In the case of Gujarat State Co-operative Union (supra), assessee was engaged in conducting courses for Higher Diploma in Co-operation, Diploma in Land Development Banking, Certificate Course in Co-operative Credit and Banking and Specialised Short-term Courses/ Orientation Courses. The assessee the....
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....e was carrying out any 'education' activity. In this context, we may refer to the judgment of the Hon'ble Gujarat High Court in the case of DIT(E) vs Ahmedabad Management Association, [2014] 47 taxmann.com 162 (Gujarat), wherein the association undertook multifaceted activity, viz. conducting continuing education, Diploma & Certificate programme, Management Development programmes, public talks, seminars, workshops, etc. Such like activities were also held to be in the nature of 'education' eligible for the benefit of Sections 11 & 12 of the Act. In fact, the Hon'ble Delhi High Court in the case of Council for the Indian School Certificate Examinations vs DGIT(E), 362 ITR 436 (Delhi) was considering the activities of an assessee who was neither conducting any classes and nor was directly engaged in teaching students, but was only affiliating schools, prescribing syllabus and conducting examinations. The institution carrying out such activities was also understood by the Hon'ble Court to be an educational institution. 14. When we apply the aforesaid principles to the admitted nature of activities in the present case, we have no hesitation in holdi....
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....art from other things, a report of a Committee appointed by the RBI on "The Training and Development of Higher Banking Personnel" of 1969 has been placed. In 1969, nationalisation of banks undertaken by the Government of India brought in the policy of social control over banking which intended to provide a new direction to the banking industry in India. Since banking was made a more effective instrument of national development, it was recognised that appropriate personnel policies had to be evolved in order to encourage the right attitudes to development of management skills, capabilities and also to impart new technological skills. The Committee appointed by the RBI in this direction made a major recommendation for establishment of the National Institute of Bank Management. This was a precursor to the establishment of the assessee by the RBI in consultation with the Government of India in 1969 as an autonomous non-profit institution in the area of banking and finance. The Committee on Training and Development of Higher Banking Personnel carved out the role of assessee as being an entity to "translate national policies relating to the banking sector into meaningful training program....
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.... through a Governing Board consisting, inter-alia, of nominees of the Government and member- nationalised banks, it can hardly be said that there is any profit motive in carrying out its activities. No doubt, there may remain some surplus in the course of carrying on activities since assessee is undertaking programmes by charging fee and/or subscription from its member nationalised banks, etc., but that by itself will not mean that the motive is to earn profit. In fact, the Hon'ble Supreme Court in the case of American Hotel & Lodging Association (supra) noted that it may not be possible to carry on activities in such a way that the expenditure exactly matches the income and there is no resultant profit. As per the Hon'ble Supreme Court, such an objective is not only difficult to achieve for practical considerations, but also reflects unsound principles of management. To reiterate what we have noted earlier, in such a situation, the test to examine the existence or otherwise of profit motive is to find out the purpose for which the resultant surplus is being applied for. Factually speaking, in the present case, there is no allegation, much less any evidence, brought out by ....
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....ange which warrant denial of exemption. Hence, to quote from the aforesaid precedent even if we were to go along with the stand of the Assessing Officer that the activities of the assessee falls within the expression "advancement of any other object of general public utility" contained in section 2(15) then introduction of proviso does not disentitle the assessee's activities from being considered as for charitable purposes because the aforesaid discussion. Accordingly, in our considered opinion there is no merit in the orders of the authorities below denying the assessee's exemption on the plank that the assessee is not entitled to exemption in view of introduction of the proviso to section 2(15). 32. Yet another limb of Revenue's adverse inference in this case is that the assessee is engaged in commercial activity and that also in large scale. This so called large scale has been observed from the data of buses operated by the assessee. Out of 15500 buses, from the website data gathered by the Assessing Officer himself this includes Deluxe buses-48, air conditioned buses-46 and midi-10. From the above how can the Assessing Officer make a deduction that the assessee is running l....