TaxTMI 
TaxTMI 
2025 (6) TMI 1585
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....ice tax under the category of 'Club or Association' service under section 65(25a) read with section 65(105) (zzze) and whether doctrine of mutuality applies even in respect of 'Trust' incorporated by Deed of Trust. 2. The brief facts are the Appellant is a Trust as per Section 3 of the Indian Trusts Act, 1882. The Creator/Settlor/Donor/Founder/Trustor of the Appellant-Trust is the company viz., Infosys Limited. The appellant submitted that the company employs thousands of employees and in order to promote the welfare of its employees, the Settlor/Creator created the Appellant as an irrevocable 'Trust, vide Trust Deed dated 15.09.1994. The Appellant-Trust is an "express trust", since it is created by the direct and pos....
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....oceedings were initiated. Thereafter Adjudication authority confirmed the demand of service tax under 'Club or Association' service for the period from 16.06.2005 to 30.04.2006 along with interest and imposed penalties. However, dropped the demand of service tax in respect of Death Benefit Fund proposed in the show cause notice. Aggrieved by said order, present appeal is filed by the appellant before this Tribunal. 3. The Learned Counsel during the hearing submits that; Appellant is a 'Trust' and as per the provisions of Indian Trust Act, 1882, a trust as defined in the Indian Trust Act, 1882 is an obligation annexed to the ownership of property and arising out of a confidence reposed in and accepted by the owner for the ....
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....s. CCT, Bangalore, 2024 (388) ELT 276 (Kar.) reversing the Tribunal decision in ICICI Econet Internet & Tech. Fund Vs. CCT, 2021 (51) GSTL 36 (Tri-Bang.). 4. The learned Counsel further submits that; the Appellant-trust is not a "club or association" and taxable service definition is not attracted; there is no "service provider" and "service recipient" relationship between a trust/trustee and its beneficiaries. A trustee possesses a fiduciary responsibility to the beneficiaries of the trust to follow the terms of the trust. Trustees have a fiduciary duty towards beneficiaries of a trust; as per Black's Law Dictionary, the expression "fiduciary duty" is defined to mean a duty to act to someone else's benefit, while subordinating o....
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....ality" exists between the trust/trustee and its beneficiaries; there are no two distinct persons, which is a sine qua non for attracting any "taxable service" in Section 65(105) of the Act; "No man can trade with himself; he cannot make in what is its true sense or meaning, taxable profit by dealing with himself", this is the doctrine of mutuality. The Appellant- trust is exclusively "for the benefit of the employee-beneficiaries". Hence, the definition of "taxable service" vide section 65 (105) (zzze) of the Act is not attracted to the Appellant-trust. 6. The learned Counsel further submitted that the issue is no longer res integra and is settled in favour of the Appellant-trust vide judgment of the Honorable Supreme Court in the case o....
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....7 (216) ELT 177 (SC) and several other decisions. 8. As regarding penalty, Learned Counsel submits that penalties imposed under various sections including Section 78 are not justified, as there is no "mens-rea" or culpable mental state. There was no deliberate defiance of law, or loss caused to the Revenue and penalties imposed are contrary to Section 80 of the Finance Act, 1994. 9. The Learned Authorized Representative (AR) reiterated the finding in the impugned order and submits that once the Appellant had admitted and paid service tax for the subsequent period, they have no legal right to plead ignorance of law and only after considering the suppression of the facts, Adjudication authority rightly invoked the extended period of lim....