TMI Blog2016 (5) TMI 361X X X X Extracts X X X X X X X X Extracts X X X X ..... profit and, therefore, it has to be held that the assessee did not carry on ‘business’ as the term is understood in common parlance. The assessee, therefore, is a public charitable institute. For the purpose of granting exemption, the dominant or min object is to be seen even if it is found that at some point of time the persons at the helm of affairs did not observe rules and acted in a manner not authorized by rules that would not make any difference to the claim of the assessee. A breach of a duty by public or private holder of an office cannot change the character of office or institution. Thus even if it is proved that certain favours were done by the Executive Committee in allotment of quota that would not make the assessee a non-cha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee has been claiming exemption under section 11 of the Act from the A.Y. 1979-80 to 199-91 and exemption was granted u/s 11 of the Act. It was only during the A.Y. 1991-92 that the A.O. held the that the assessee is not entitled to exemption under section11 of the Act, as it was carrying on business. On appeal the Income Tax Appellate Tribunals held that the assessee is entitled to exemption under section11 of the Act. Subsequently an amendment was brought to Section 11 (4A) of the Act and the assessee was required to maintain separate books of account. The A.O. again denied exemption under section11 of the Act. On appeal the issue was decided in favour of the assessee. The Hon ble Delhi High Court upheld the order of the ITAT in a j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st Appellate Authority called for the remand report from the Assessing Officer after receiving written submissions along with affidavits from the assessee. Thereafter he concluded that the issue as to whether the assessee is entitled to exemption u/s 11 of the Act is no more res integra, as the Hon ble Delhi High Court has resolved the issue in favour of the assessee. As there is no change in facts and circumstance of the case he allowed ground No. 1. On principle of mutuality the Ld. First Appellate Authority followed the binding decision of the Tribunal in the assessee s own case for the Assessment Years 2002-2003, and 2003 04, as well as A.Y. e 2004 05, 2005 6, wherein it is held that entrance fee and subscription should not be includ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the case and in law, the Ld.CIT(A) has erred in allowing the assessee benefit of S.11 of the Income Tax Act, 1961. 5. The appellant craves leave to add, to alter or amend any ground of appeal raised above at the time of hearing. 4. We have heard Shri KK Jaiswal, Ld.DR on behalf of the Revenue and Shri Kidus Puri, Ld.Counsel for the assessee. On a careful consideration of the facts and circumstances of the case and a perusal of material on record and orders of authorities below, case laws cited, we hold as follows. 5. Ground No. 1 is admittedly covered in favour of the assessee by the Jurisdictional High Court in the case of Vishwa Jagriti Mission (supra). The First Appellate Authority has rightly applied this binding decisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is being carried on for profit. Activity carried on business principles does not mean that the assessee was carrying on business. It is clear from material on record that all activities of the assessee are directed towards achieving its main object of promoting export on ready made garments from India. It did not carry any activity for earning profit and, therefore, it has to be held that the assessee did not carry on business as the term is understood in common parlance. The assessee, therefore, is a public charitable institute. For the purpose of granting exemption, the dominant or min object is to be seen even if it is found that at some point of time the persons at the helm of affairs did not observe rules and acted in a manner not a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issue. Thus we uphold the findings of the First Appellate Authority and dismiss this ground. 7. On the grievance of the revenue on ground No. 3 is devoid of merit, for the reason that the First Appellate Authority has asked the A.O. to verify this claim of the assessee and dispose off the same in accordance with law. Hence this ground is dismissed 8. Ground No. 4 is against the allowing of benefit under section11 of the Act to the assessee. As this issue was already considered and resolved in favour of the assessee, in its own case, for the earlier Assessment Years by the Jurisdictional High Court, this ground is dismissed. 9. In the result the both appeals of the Revenue are dismissed. 10. As we have dismissed the quantum appe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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