TaxTMI 
TaxTMI 
2023 (9) TMI 1536
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....artered Accountant, the filing of ITR and other routine Income-tax work is looked after by the office staff of the applicant society who consult or seek advice of the specialists whenever the need arises and it is so sanctioned by the governing body. Since the office of Executive Director/ Secretary (DST) look after and decide these matters and there are frequent changes/transfers of these officers, delay takes place in taking the decision. Now, when the appellate order dated 10/11/2021 was received, DR Narrottam Sahoo was holding additional charge till 26-12-2021 and when he relieved the additional charge was given to Shri Harshvardhan Modi was given from 27-12-2021 . When the papers/file were put up to him for deciding to go for further appeal or not, he orally directed to refer the matter to CA/tax consultant -CA Sh. B J Shah & Associates but he declined the offer. Hence the new appointment was on 01-12-2021 of M/s NPKU & Associates CA to handle the matter but he declined the offer stating that he was not handling the appellate work at Tribunal. Meanwhile the lower staff also changed at least twice and presently Sh Jignesh Patel has taken over the charge of accounts & taxation w....
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....ndra Mani & Ohters (1996) 3 SCC 132; iii) In State of UP and Others Vs. Harish Chandra & Others (1996) 9 SCC 309 iv) In National Insurance Co. Ltd. Vs. Giga Ram & Ohters (2002) 10 SCC 176; v) In State of Nagaland Vs. Lipok AO and Others (2005) 3 SCC) 752 4. Further, at the outset itself, it was pointed out to us that the issue involved in the appeal pertained to denial of exemption of income as claimed by the assessee u/s. 11 of the Act on account of carrying out charitable activities. That the denial has resulted in income of Rs. 9,95,43,470/- being subjected to tax. And it was also submitted that the issue is covered by the decision of the ITAT in the preceding years, i.e A.Y 2013-14 to A.Y 2015-16 , wherein the issue was restored back to the AO for determining whether the activities qualified as commercially carried out general public utility activities so as to take it out of the purview of charitable activities as defined u/s 2(15) of the Act, following the directions laid down by the Hon'ble Apex Court in this regard in the case of ACIT vs Ahmedabad Urban Development Authority (2022) 449 ITR 1(SC). 5. The assessee, we find, has adduced suffici....
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....tion of income upto Rs. 9,07,65,352 3.1 That in the facts and circumstances of the case as well as the law, the NFAC has failed to appreciate that mere collection of entry fees would not amount to carrying on activity in the nature of trade, commerce or business. Both the lower authorities have erred in holding that the activities of the appellant was not "education" but "advancement of other public utilities" u/s 2(15) so that the exemption u/s 11 was not admissible." 8. A perusal of the grounds would indicate that the only issue involved therein is, whether the assessee is a "charitable" trust within the meaning of section 2(15) of the Act in order to entitle the assessee to claim exemption of its income earned from its activities under sections 11/12 of the Act. The ld.AO while framing the assessment under section 143(3) held that since the activities carried out by the assessee were in the nature of "advancement of any other object of general public utility" as defined in section 2(15) of the Act and not "charitable", being found to be commercial in nature, as defined in first proviso to the said section, and therefore, the claim of the assessee to exemption of its ....
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....he similar issue, which has not been disputed by the ld.counsel for the assessee either. We also noted that the grounds raised in the earlier years are also similarly worded. Therefore, looking to the similarity of the issue on hand i.e. whether the activities carried out by the assessee is a "charitable" as defined in the first limb of section 2(15), and whether the activities related to general public utility services as defined in the last proviso of the said section, we apply the decision of the ITAT in the case of the assessee for the earlier year(in which the Accountant Member herein was also a party), where after detailed discussion made on the issue in the light of various judgments including that of the Hon'ble Apex Court, it has been held that the activities of the assessee qualify as general public utility activities. The ITAT also restored the issue to the AO to determine whether these general public utility activities are commercial in nature in the light of the directions laid down by the Hon'ble Apex Court in this regard in the case of Ahmedabad Urban Development authority (supra) Therefore, it is imperative upon us to reproduce hereunder the relevant part of that or....
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....cally held that education means imparting formal scholastic learning for the purposes of qualifying as charitable purposes under Section 2(15) of the Act. The Hon'ble Apex Court has referred to its decision in the case of T.M.A Pai Foundation, wherein the meaning of the word "education" as scholastic structured learning was derived from the Article 21-A, Articles 29 & 30 and Articles 45 & 46 of the Constitution. It also referred to its decision in the case of Sole Trustee, Loka Shikshana Trust Vs. CIT [1975] 101 ITR 234 (SC) (supra), pointing out that in the said decision, "education", in the context of the Income-tax Act, was defined as the systematic instruction, schooling or training given to the young; that it has not been used in a wide and extended sense. Deriving from its above two decisions, the Hon'ble Apex Court categorically held that, in terms of Section 2(15) of the Act, "education" means only imparting formal scholastic learning. We are reproducing the findings of the Hon'ble Apex Court in this regard as again hereunder:- "32. Education ennobles the mind and refines the sensibilities of every human being. It aims to train individuals to make the right choices....
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....e assessee that the decision of the Hon'ble Apex Court in the case of New Noble Educational Society (supra) did not apply to the facts of the present case; and accordingly we hold that in view of the narrow and restricted meaning given to the term "education" as used in Section 2(15) of the Act, the activities carried out by the assessee being primarily run as a science museum does not qualify as education. The findings of the learned CIT(A), therefore, holding so are set aside. "32. As for the contention of the learned Counsel for the assessee that the law declared by the Hon'ble Apex Court in the case of New Noble Educational Society (supra) was operative prospectively, we do not find any merit in the same. As a perusal of paragraph No. 78 of the order of the Hon'ble Apex Court reveals that the prospective operation was to the interpretation/meaning given to the term "solely" used in Section 10(23C)(vi) of the Act along with the word "education" where the exemption was allowed to institution existing "solely for education". The Hon'ble Apex Court at paragraph No. 78 of the order has noted in a very clear terms that "since in the present judgment it has departed from the ....
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....er also; but to exclude it from the definition of charitable purpose as defined under Section 2(15) of the Act invoking first and second proviso to the said section stating that all general public utility activities carried out in a commercial manner are not to be treated as charitable activities, the learned Counsel for the assessee has contended that the Hon'ble Apex Court in the case of AUDA (supra) has laid down certain guidelines for determining whether the general public utility activities qualify as commercial activities. He has drawn our attention to paragraph No. 253(A) of the order which is reproduced above containing the said guidelines. For the sake of convenience, the same is reproduced again hereunder:- A. General test under section 2(15) A.1 It is clarified that an assessee advancing general public utility cannot engage itself in any trade, commerce or business, or provide service in relation thereto for any consideration ("cess, or fee, or any other consideration"); A.2 However, in the course of achieving the object of general public utility, the concerned trust, society, or other such organization, can carry on trade, commerce or business....
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....His request before us, therefore, was that the matter may be restored back to the Assessing Officer to determine its character as commercial or not in the light of the guidelines laid down by the Hon'ble Apex Court in the case of AUDA (supra). The learned DR has fairly admitted before us to the fact that the Assessing Officer has not arrived at his finding of the assessee's activities being commercial in nature in the light of the guidelines as laid down by the Hon'ble Apex Court and has agreed to the matter being restored back to the Assessing Officer for the said purpose. 36. In vie w of the same, we restore the issue back to the Assessing Officer to determine whether the activities carried out by the assessee being in the nature of general public utility can be said to be commercial in nature so as to disqualify it from being categorised as charitable activities in terms of the first and second proviso to Section 2(15) of the Act by following the guidelines laid down by the Hon'ble Apex Court in the case of AUDA (supra) for the said purpose. 37. Having said so, we have noted that both the parties are in dispute regarding the manner of treatment of specific purp....