Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2017 (12) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (12) TMI 344 - AT - Income TaxCharitable institution within the meaning of s.11(1) - whether the assessee was engaged in commercial activities and proviso to s.2(15) was clearly applicable in this case - appellant had receipts from services provided to both members and non-members. The Assessing Officer has held that the income/fee received from members and nonmembers are purely commercial - Held that:- It is an admitted fact that the assessee is registered under section 12A. The main objects of the assessee are to promote and protect trade, commerce and manufacture in Delhi and to watch over and protect the general commercial interest in Delhi and adjoining area and to protect the interest of persons engaged in trade, commerce and industry. The assessee charge nominal fee for admission fee, subscription fee and certificate of origin fee as per the guidelines of Ministry of Commerce, Government of India. The motive of the assessee is not to earn any profit since there are no profit that can be distributed. The surplus or the profits remain with the assessee chamber and is applied towards achieving the objects. So it cannot be said that the assessee is involved in any business activity. It is apparent that the assessee exists only for the Welfare of its members and there is nothing on record to prove that the assessee is involved in any business activities. In the assessment years 2009-10 to 2012-13, the AO similarly denied exemption under section 11 of the act. However the Ld.CIT(A) allowed the appeals of the assessee in all these years, copies of the orders are placed in the paper book. The assessee in all these years submitted before the Ld.CIT(A) that the issue is covered by the judgement of Delhi High Court in the case of PhD Chamber of Commerce and Industry vs. DIT(E) (2012 (11) TMI 429 - DELHI HIGH COURT) and the Ld.CIT(A) allowed the claim of the assessee. In the Assessment Year 2009-10 the department filed an appeal before the Tribunal which was dismissed vide order dated 30th December, 2015 finding the tax effect being below ₹ 10 lakhs. However, nothing is explained about the remaining years. It is well settled law that the rule of consistency do apply to the income tax proceedings It may also be noted here that the claim of the assessee has been denied under section 13(3) of the Act. However it was explained by the assessee all these items have been purchased and used for meetings with delegations and attending conferences. These items are necessities and could not be considered as luxury because of the development of day today technology. Therefore there is nothing wrong if the assessee purchased these items for achieving its objects. Admittedly the issue is covered in favour of the assessee by the judgement of Hon’ble Delhi High Court in the case of Phd Chamber of Commerce and Industry (2012 (11) TMI 429 - DELHI HIGH COURT) wherein on identical facts the claim of the assessee for exemption u/s 11 have been allowed. The AO has not brought any evidence on record as to what business activities are conducted by the assessee with a profit motive and whether the items purchased for achieving the objects are misused by any of the persons covered u/s 13(3) of the Act. Merely because SLP of the department is pending before the Hon’ble Supreme Court in the case of Phd Chamber of Commerce and Industry (supra) is no ground to take a different view against the assessee. Considering all find no merit in the departmental appeal and the same is dismissed.
|