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2016 (3) TMI 828 - ITAT CHENNAI

2016 (3) TMI 828 - ITAT CHENNAI - TMI - Registration granted u/s 12AA cancelled - revenue submitted that the assessee is engaged in rendering service to the trade and commerce, therefore, the assessee is not entitled for registration u/s 12AA - Held that:- Issuing certificate of origin in respect of the goods exported is incidental to the main charitable activity of the assessee. Therefore, as observed by the Delhi High Court in the case of India Trade Promotion Organization(2015 (1) TMI 928 - D .....

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ssessee is directed against the order of the Director of Income-tax (Exemptions), Chennai, dated 7.12.2011 cancelling the registration granted u/s 12AA of the Income-tax Act, 1961. 2. There was a delay of 189 days in filing the appeal by the assessee. The assessee has filed a petition for condonation of delay. We have heard the Sr. Counsel for the assessee and the ld. Departmental Representative. We find that there was sufficient cause for not filing the appeal within the stipulated time. Theref .....

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the course of the activity carried on by the assessee-trust, it has received fee for certificate of origin, income from conducting seminars etc. The DIT(E) found that the activity of the assessee is general public utility in nature and the assessee is receiving commercial receipts for providing service to a particular section of the trade. The DIT(E) has also found that the threshold limit for the assessment year 2009-10 is ₹ 10 lakhs. Since the assessee has received more than ₹ 10 .....

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court while considering the case of the assessee, found that the issue of certificate of origin is incidental to the main activity of the assessee. Once it is incidental to the activity, according to the ld. Sr. Counsel, the assessee-trust is entitled for registration u/s 12AA of the Act, and therefore, the impugned order of cancellation cannot stand in the eye of law. 4. Referring to the amount of receipts which exceeds ₹ 10 lakhs for the assessment year 2009-10, ld. Sr. Counsel submitte .....

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is filed by the Sr. Counsel for the assessee. 5. On the contrary, Shri Pathlavath Peerya, ld. Departmental Representative submitted that the assessee is engaged in rendering service to the trade and commerce, therefore, the assessee is not entitled for registration u/s 12AA of the Act. Referring to proviso to sec. 2(15) of the Act, the ld. DR submitted that when the assessee is rendering service to the trade by issuing certificate of origin for the goods exported by its members and non-members, .....

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issuing certificate of origin in respect of the goods exported from India whether this would amount to rendering service to trade and commerce? This Tribunal is of the considered opinion that when the assessee is rendering service in the form of issuing certificate o origin, it has to be treated as rendering service to the trade and commerce. 7. We have also gone through the judgment of the Delhi High Court in the case of India Trade Promotion Organization (supra). The Delhi High Court, after co .....

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follows: "67. The expressions "trade", "commerce" and "business" as occurring in the first proviso to section 2(15) of the Act must be read in the context of the intent and purport of section 2(15) of the Act and cannot be interpreted to mean any activity which is carried on in an organised manner. The purpose and the dominant object for which an institution carries on its activities is material to determine whether the same is business or not. The purport of t .....

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ance Bill 2008. The relevant extract to the Speech is as under:- , . . . . . .. "Charitable purpose" includes relief of the poor, education, medical relief and any other object of general public utility. These activities are tax exempt, as they should be. However, some entities carrying on regular trade, commerce or business or providing services in relation to any trade, commerce or business and earning incomes have sought to claim that their purposes would also fall under "chari .....

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ll within the expressions "business" , "trade"' or "commerce"." 8. In view of the above judgment of the Delhi High Court, we have to examine whether the activity of the assessee in issuing certificate of origin to its members and non-members is an incidental activity in furtherance of its object or it is a dominant object. The Madras High Court in the assessee's own case in Tax Case No. 186 to 188 of 1976, had an occasion to consider this issue. After c .....

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