TaxTMI 
TaxTMI 
2022 (7) TMI 1004
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.... to the pandemic situation, had excluded the period from 15.03.2020 to 28.02.2022 in computing the period of limitation for any suit, appeal, application or proceedings. Further, as per the judgment of the Hon'ble Apex Court, notwithstanding the actual balance period of limitation, all persons shall have a limitation period of 90 days from 01.03.2022. Further, the Hon'ble Supreme Court held that in the event the actual balance period of limitation remaining, with effect from 01.03.2022 is greater than 90 days, that larger period shall apply. In this case, the appeals have been filed before the ITAT on 08.10.2021 (i.e. well within the period of limitation contemplated by the Hon'ble Apex Court). Therefore, in view of the above judgment of the Hon'ble Apex Court, there is no delay in filing these appeals and we proceed to dispose of the same on merits. 3. Identical grounds are raised in these appeals, they read as follows:- "1. On the facts and circumstances of the case, the learned Commissioner of Income Tax (Exemption) for the Assessment Year 2016-17, vide order dated 05.03.2021 is not maintainable in law and liable to be set aside in the interest of justice. 2. On the facts a....
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....o to section 2(15) of the I.T.Act. The assessee filed objections to the proposed orders u/s 263 of the I.T.Act. However, the objections of the assessee were rejected and the CIT(E) passed the impugned orders for assessment years 2016-2017 and 2017-2018. The CIT(E) held that the assessee is not carrying out any charitable activities and in view of the proviso to section 2(15) of the I.T.Act, the assessee is not entitled to exemption u/s 11 and 12 of the I.T.Act. In taking the above view, the CIT(E) relied on the judgment of the Hon'ble Andhra Pradesh High Court in the case of M/s.Andhra Pradesh State Seed Certification Agency in WP No.31640 of 2011 (judgment dated 17.12.2012). The relevant finding of the CIT(E) reads as follows:- "8. Since, the assessee trust is performing similar services as performed by M/s.Andhra Pradesh State Seed Certification Agency and the assessee has failed to prove that it is providing services to the farmers and public at large, it is observed that the assessee trust is not performing charitable activities and the services provided by the assessee trust are in the nature of trade, commerce and services. Accordingly, looking to the facts and circumstance....
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....esh State Seed Certification Agency (supra) was considering identical issue wherein the activities of the assessee in the said case was similar to the activities carried on by the assessee in the instant case. The Hon'ble High Court held that the activities of the assessee falls within the meaning of trade, commerce or business and is hit by proviso to section 2(15) of the I.T.Act. Further, it was held by the Hon'ble High Court that the assessee was not providing any charitable activities to farmers or public at large. Therefore, it was held that the assessee was not entitled to the benefit of section 10(23C)(iv) of the I.T.Act as well as exemption u/s 11 and 12 of the I.T.Act. The relevant finding of the Hon'ble High Court reads as follows:- "14. Before dealing with the respective contentions, we propose to take note of Section 10 (23C) (iv) of the Act and Section 2 (15) of the Act. "Section 10. Incomes not included in total income: In computing the total income of a previous year of any person, any income falling within any of the following clauses shall not be included- ........... (23C) any income received by any person on behalf of - ** ** ** (iv) any other fund or i....
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....eeds Act. The petitioner was registered under the Andhra Pradesh (Telangana Area) Public Societies Registration Act, 1350 Fasli with registration No. 334/76. By G.O.Ms.No.435 Food and Agriculture (EP-II) Department dated 01-06- 1977, the State Government approved the proposal of the Director of Agriculture and directed that the petitioner shall carry on the functions of the certification agency under the Seeds Act, 1966 in the Andhra Pradesh State with effect from 01-06-1977. The objects of the petitioner have already been set out above. The petitioner thus certifies the Seeds which meet the minimum seeds certification standards as per Indian Minimum Seed Certification Standards, 1988. Seed growers enter into contract with a society/agent, who approaches the petitioner for certification of the seeds and after securing certification, they sell the certified seeds to the farmers at a market price determined by them. The petitioner collects a fee for providing certification as the process of certification involves technical and scientific evaluation of the seeds although the fee collected by it would be enough to enable it to sustain its activities and may not result in much profit. T....
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....ision Bench does not appear to have been drawn to the proviso to Section 2 (15) of the I.T. Act more particularly the portion "any activity of rendering any service in relation to any trade, commerce or business, for a cess or fee or any other consideration..........". Since agricultural market committees render services "in relation to trade, commerce or business" by facilitating trade in agricultural commodities by farmers/growers of agricultural produce or livestock, we are of the opinion that the activity of agricultural market committee may not come within the ambit of "charitable purpose". 19. The counsel for the petitioner submits that the petitioner is itself not engaging in any activity which is in the nature of trade, commerce or business and therefore it has to be held to be an agency whose activities are for "charitable purpose" under Section 2 (15) of the Act and therefore entitled to the benefit under Section 10 (23C) (iv) of the Act. The contention of the petitioner's counsel if accepted would mean that the words "any activity of rendering any service in relation to any trade, commerce or business" in the first proviso to Section 2 (15) of the Act have to be ignore....
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....ss" as they appear in the second limb of clause (b) are in connection with the service referred to the trade, commerce or business pursued by the institutions to which the service is given by the assessee. If the said words are actually in respect of the trade commerce or business of the assessee itself, the said clause (second limb of the stipulation under clause (b) is rather otiose. Since the activity of the assessee involving any trade commerce or business, is already excluded from the charitable purpose by virtue of the first limb (clause (a)) itself, there is no necessity to stipulate further, by way of clasue (b), adding the words "or any activity of rendering any service in relation to any trade, commence or business. As it stands so, giving a purposive interpretation to the statute, it may have to be read and understood that the second limb of exclusion under clause (b) in relation to the service rendered by the assessee, 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 premises for purposes other than involving trade, commerc....
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.... the Chief Commissioner cannot be faulted for rejecting the applications seeking approval under Section 10 (23C) (vi) of the Act. This judgment therefore is of no assistance to the Revenue. 25. For the above reasons, we hold that the 1st respondent had rightly rejected the application of the petitioner for approval under Section 10 (23C) (iv) of the Act on the ground that the petitioner has not rendered its services directly to the farmers but is rendering its services directly to its clients/agents who are engaged in trading of the certified seeds with profit motive and therefore its activities are not for the "advancement of any other object of general public utility" and hence not for "charitable purpose" in view of second limb of the first proviso to Section 2 (15) of the Act. 26. Accordingly, the writ petition is dismissed. No costs." 8. Since the facts considered by the Hon'ble Andhra Pradesh High Court is identical to the facts of the instant case, we hold that the CIT(E) is justified in invoking the revisionary powers u/s 263 of the I.T.Act and denying the benefit of exemption u/s 11 and 12 of the I.T.Act. 9. The assessee has raised a contention that the CIT(E) has erre....