TMI Blog2021 (3) TMI 1106X X X X Extracts X X X X X X X X Extracts X X X X ..... ccountant Member And Before Ms. Suchitra Kamble, Judicial Member For the Assessee : Sh. Vivek Mehta, Advocate For the Department : Sh. Makesh Thakur, Sr. DR ORDER PER N.K. BILLAIYA, ACCOUNTANT MEMBER, This appeal by the Revenue is preferred against the order of the CIT(A)-40, Delhi dated 22.12.2017 pertaining to assessment year 2013-14. The grievance of the Revenue reads as under:- 1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in allowing the appeal of the assessee by ignoring the fact that though the objects of the assessee seems to be charitable, but the activities carried out by the assessee are commercial in nature. 2. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in allowing the appeal of the assessee by ignoring the fact that when deduction is allowed in respect of capital expenditure, no depreciation is allowed on the same assets as this will lead to double deduction as in this case exemption u/s 11 12 was not allowed by the assessing officer. 3. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in allowing the appeal of the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heds, forests and wildlife) and preservation of monuments or places or objects of artistic or historic interest]and the advancement of any other object of general public utility: Provided that the advancement of any other object of general public utility shall not be a charitable purpose, if it involves the carrying on of any activity in the nature of trade, commerce or business or any activity of rendering any service in relation to any trade, commerce or business, for a cess or fee or any other consideration, irrespective of the nature of use or application, or retention, of the income from such activity: [Provided further that the first proviso shall not apply if the aggregate value of the receipts from the activities referred to therein is (twenty five lakh rupees) or less in the previous year]. 18. This proviso was added only in respect of the last limb of the provisions of Sec. 2(15) which relates to the advancement of any other object of general public utility shall not be a charitable purpose if it involves carrying on of an activity in the nature of trade, commerce or business for a cess or fee. The second limb is not relevant to the fact under consideration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under charitable purpose. 23. The CBDT Circular No. 11/2008 dated 19.12.2008 has explained the implications arising from the amendment brought to the provisions of Sec 2(15) of the Act. The CBDT clarifies that the newly inserted proviso to Sec. 2(15) will not apply in respect of the first three limbs of Sec. 2(15) i.e. relief of the poor, education or medical relief. Consequently where the purpose of a trust or institution is relief of the poor, education or medical relief, it will constitute charitable purpose, even if it is incidentally involves the carrying on of commercial activity. The Board further clarified that the newly inserted proviso to Sec. 2(15) will apply only to entities whose purpose is advancement of any other object of general public utility i.e. 4th limb of the definition of the charitable purpose contained in Sec. 2(15). The Circular further clarified in the final analysis, whether the assessee has for its objects the advancement of any other object or general public utility is a question of fact. If such assessee is engaged in any activity in the nature of trade, commerce or business or renders any service in relation to trade, commerce or business, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10(23C)(iv) of the Act because in the opinion of the DGIT (Exem.) the institute was holding coaching classes and therefore was not an educational institution, consequently the institute was covered under the last limb of charitable purpose i.e. advance of any other object of general public utility in the light of the amendment brought o Sec. 2(15) of the Act as the institute was charging fees for conducting coaching clauses and making huge money in a systematic and organized manner. Considering the facts in the light of the amended provisions of Sec. 2(15), the Hon'ble Delhi High Court held that the order denying the exemption was not valid. 28. Reliance by the ld. DR on various decisions to buttress his submissions are misplaced in as much as the dominant activity cannot be brushed aside lightly even after the amendment. 26. After considering the entire facts in totality in the light of discussion hereinabove and also drawing support from the speech of the Finance Minister and subsequent clarification issued by the CBDT within the framework of amended provisions of section 2(15) of the Act, in our considered opinion, there was no material which may suggest that the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion in ITA 110/2019, we dismiss this appeal since no substantial question of law arises. 5. Vide order dated 04.02.2019 in ITA No. 110/2019, the Hon ble High Court of Delhi held as under:- The first question of law urged by the Revenue is with respect to the admissibility of Sections 11 and 12 of the Income Tax Act; the Assessing Officer (AO) had ruled that the assessee was disentitled to the exemptions. The CIT(A) and the ITAT, however, reversed the decision and relied upon the decision of this Court in India Trade Promotion Organization vs. DGIT (2015) 371 ITR 333. The second question urged is with respect to the alleged double benefit claimed by the assessee i.e. towards depreciation reported in respect of the assets acquired out of previous exempt income. On this too the Tribunal relied upon a binding decision of the Supreme Court in CIT vs. Rajasthan Gujarat Charitable Foundation (2018) 402 ITR 441. 6. Respectfully following the aforementioned decisions which are in favour of the assessee, we do not find any merit in this appeal of the Revenue and the same is accordingly dismissed. The order is pronounced in the open court on 23//03/2021. - - TaxT ..... X X X X Extracts X X X X X X X X Extracts X X X X
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