TaxTMI 
TaxTMI 
2024 (4) TMI 929
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.... 1961 (the Act) by not appreciating that the activities of the assessee involve rendering of services in relation to carrying on of a trade, commerce or business and hence, hit by the proviso to section 2(15) of the Act. ii. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in directing the AO to allow the exemption u/s 11(1) of the Act without appreciating the fact that the assessee cannot be treated to be engaged in a charitable activity and that the AO has rightly denied the exemption. iii. The Ld. CIT(A) while deciding the matter, relied upon the decision of Hon'ble ITAT in assessee's own case for AY 2011-12 in I.T.A. no 3662/Del/2015. The Hon'ble ITAT while deciding the said appeal relied upon the decision of Hon'ble Delhi High Court in the case of India trade Promotion Organization Vs DGIT(E)-53 Taxmann.com 404 (Delhi) 2015 wherein the Hon'ble High Court, while interpreting the proviso to section 2(15) held that mere on the basis of receipt of fee or charge cannot be said that the assessee is involved in any trade, commerce or business. However, the Revenue had not accepted the decision of this Hon'ble Court in the cas....
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.... to A.Y. 2015-16, 2016-17 & 2017-18. 4. At the outset, learned counsel for the assessee submitted that the issue involved is squarely covered in favour of the assessee and against the Revenue by earlier orders of the Tribunal in assessee's own case, consistently holding that assessee is not engaged in any trade, commerce or business and thus mischief of proviso to Section 2(15) of the Act is not attracted in assessee's case. He submitted that impugned orders of the learned First Appellate Authority for the assessment years in question being in consonance with earlier decisions of the Tribunal and facts of the case in all the years remaining the same, are to be affirmed. He also submitted that the orders of the Tribunal in respective assessment years have also been affirmed by the Hon'ble High Court of Delhi. In support of his contention, learned counsel has also filed copies of respective orders of the Tribunal and the Hon'ble High Court. 5. Per contra, learned DR opposed the submissions and relied on the order of AO, denying benefit of Section 11 of the Act. 6. Having heard rival submissions and perusing the material available on record, including the orders of the Tribunal in ....
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....tricts of the states like, Bihar, Jharkhand, Orissa, Madhya Pradesh, Chhattisgarh and West Bengal etc. The assessee gets grant from Central and State Government and also donation from the various organization like, 'Gate foundation' etc. The assessee has been allowed benefit of exemption under section 11(1) of the Act continuously up to assessment year 2010-11, however, in the instant assessment year the assessee has been denied said exemption by the Assessing Officer invoking the mischief of the proviso to section 2(15) of the Act. On further appeal, the Ld. CIT(A) allowed the exemption under section 11(1) of the Act with all consequential benefits. Aggrieved, the Revenue is in appeal before the Tribunal, raising the grounds as reproduced above. 3. Before us, the Ld. DR relied on the order of the Assessing Officer and referred to main objects of the assessee listed on page 2 of the assessment order. He Submitted that the assessee is engaged in providing training/technical assistance, capacity building, provide know-how and technical guidance, develop and promote technologies and their application in the field, assist development agencies, to do planning and information o....
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....isadvantaged or needy. According to him, the activities of the assessee being in furtherance to the cause of disadvantaged women or children or a small and marginal farmers etc. same falls under the charitable activity of 'relief to poor'. 5. The Ld. counsel submitted that even the proviso to section 2(15) is not applicable as no extra fee has been charged for implementing the project work of various agencies. He further submitted that even in case of entities engaged in advancement of object of general public utility, merely receiving fee or charge, cannot make the assessee as involved in trade, commerce or business as held in the case of India Trade Promotion Organization Vs. DGIT(E) 53, Taxman.com 404 (Delhi). He further submitted that in the case of ICAI Vs DGIT(E) 347 ITR 99(Del) Hon'ble Court has held that profit motive test should be satisfied for holding whether the entity is engaged in trade or commerce or business and there should be facts and other circumstances which justify that the activity undertaken is in the nature of the business. According to the Ld. counsel the Assessing Officer has failed to justify with cogent evidences that activity of the asses....
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....ofit motive. The Ld. DR also even could not controvert the fact that the assessee has not charged any fee from the clients except the cost of project actually incurred. In the sanction letter of grant to the assessee, there is mention of supervision or monitoring of the activities by the donor, but that in itself is not sufficient to hold that any profit motive is involved. It is quite normal that the donor want to verify whether the grants have been incurred for the intended purpose, which in our opinion, is in any manner does not establish that the activities of the assessee is business activity. The Ld. CIT(A) following the decision of the Hon'ble Delhi High Court has decided the issue in favour of the assessee observing as under: "4.4 I have considered the order of the AO and the submissions of the assessee and I find considerable merit in the submissions of the assessee that the mischief of Proviso of section 2(15) is not apparently applicable as, the assessee is not involved in any trade, commerce or business. The assessee is very much a charitable society and is working for the welfare of the poor and rural people and is very much eligible for exemption u/s 11(1) and t....