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2019 (2) TMI 231 - ITAT MUMBAIDenial of Exemption under Section 11 - action of AO that the activities conducted by the appellant does not fall within the meaning of education as included in the definition of charitable purpose under Section 2(15) - Held that:- The nature of this expenditure incurred by the assessee which includes event management expenses, summit expenses, expenditure on food and beverages, videography etc to the tune of ₹ 3 crores also support the case that the assessee is in the business of rendering services for a fee which is like any other business/commercial activity carried out by any business/ entity in the market. Hence, on this account also, proviso to section 2(15) is applicable. The assessee’s contention that it is a non-profit entity and it receives funds to meet its operative cost without any motive to earn profit is clearly in contradiction to the surplus of ₹ 1.22 crores generated by the assessee in this year. Here it would be relevant to note that if a charitable organization carrying out objects of 'advancement of general public utility' is involved in carrying on any activity in the nature of trade, commerce, business or is charging fees for services in relation to any trade, commerce, business, it is excluded from being 'charitable.' The assessee’s plea that it is covered by mutuality has also been rightly set aside by the CIT(A). There is absence of complete identity between contributors and participants. The contributors and beneficiary are different. Furthermore, the assessee is rendering services to non members for getting profit. CIT(A) has rightly held that the assessee does not fulfill the condition of mutual organization. It is settled law that before one submits to the rule of precedence, the fact of the case has to be taken into account. The assessee has contended that none of its activities are carried out with an object or any motive to earn profit or surplus. That the earning of revenue is only incidental to the predominant object of providing education and skill development to the entrepreneurs. This submission is quite in contradiction to the fact that the assessee is charging huge amounts for sponsorship fee from corporate against which it provides various types of advertisement services and free passes are also provided. These facts clearly also negate the assessee’s submission that donations obtained by way of advertisements are purely voluntary in nature and therefore, there is no element of quid pro quo. Making slabs for sponsorship fee and specifying the types of service against it are certainly for commercial gains with predominant objective to make profit. Hence, in our considered opinion, there is no infirmity in the orders of the authorities below. - Decided against assessee.
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