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2014 (12) TMI 256 - AT - Income TaxExemption u/s 11 - Activity carried on by assesse charitable or not u/s 2(15) – Effect of amendment u/s 2(15) w.r.e.f. 01.04.2009 – Whether the activities of assessee association is hit by the newly inserted proviso by the Finance (No.2)Act in section 2(15) of the Act w.r.e.f. 01.04.2009 and thereby falling u/s 28(iii) of the Act being profit of business – Held that:- Held that:- The assessee was a “charitable’ association registered u/s.12A of the Act and carrying on its objects of advancement of trade and commerce - even though the years 1964-65 to AY 1984-85, when exemption u/s 11 of the Act was denied to the assessee, it was nowhere held that the assessee was engaged in “business” activities - all through right from its inception, the facts remained the same whereby none of its activities were ever held to be “business” in nature except in this relevant AY 2008-09 - in a situation where the factual and legal position remains unchanged, any action by revenue to the contrary to what was taken earlier, is not justified - in view of facts remaining same and also legal position being the same, in the face of the history, dominant object for which assessee association was constituted, being a charitable one i.e. promotion and protection of trade, commerce and industries and particularly trade, commerce and industries in or with which Indian are engaged or concerned, any income arising from activity is exempt u/s 11 of the Act. In assessee’s own case as decided in Commissioner of Income-Tax, West Bengal II Versus Indian Chamber Of Commerce [1970 (9) TMI 13 - CALCUTTA High Court] - the expression “any other object of general public utility” u/s 2(15) does not expressly refer to trade or business, for a normal connotation of “general public utility” would not directly include trade or business - the word used in this new law is “activity” and not trade or business - Normally, a trade or business is always with profit or with profit motive, though no doubt, under some recent statutes as in the Sales Tax Act, the new concept of business without profit is being introduced - as defined in section 2(15) post amendment in 1961 Act post amendment is that “activity not involving profits” hits the case of assesse. The purpose for which the assessee association, i.e. The Indian Chamber of Commerce, was established is a charitable purpose within the meaning of S.2(15) of the Act - The assessee is carrying out the said activities which are incidental to the main object of the Association and which are conducted only for the purpose of securing the main objet which is the advancement and development of trade and commerce and industry in India - The activities are not in the nature of business and there is no motive to earn profit - The income arising to the assessee is only incidental and ancillary to the dominant object for the welfare and common good of the county’s trade, commerce and industry - The profits earned are utilized only for the purpose of feeding its dominant object and no part of such profit is distributed amongst its members. Profit making is not the object of the assesse - Profit is merely a by-product which resulted incidentally in the process of carrying out the charitable purpose – Thus, the income of the assessee for both the AYs in question is exempted from tax u/s 11 of the Act – Decided in favour of assessee.
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