TMI Blog2019 (5) TMI 620X X X X Extracts X X X X X X X X Extracts X X X X ..... randum of Rules and Regulations of the appellant society. We, thus direct the Learned AO to grant exemption as directed above. - Assessee s appeal is thus allowed. - I.T.A. No.1566/Ahd/2015 - - - Dated:- 6-5-2019 - Shri Pramod Kumar, Vice President And Ms. Madhumita Roy, Judicial Member For the Appellant : Shri Tushar Hemani, A.R. For the Respondent : Shri Mudit Nagpal, Sr.D.R. ORDER PER Ms. MADHUMITA ROY - JM: The instant appeal filed by the assessee is against the order dated 06.02.2015 passed by the Commissioner of Income Tax (Appeals)-5, Vadodara under section 143(3) of the Income Tax Act, 1961 (hereinafter referred as to The Act ) arising out of the order dated 04.02.2014 passed by the ACIT, Circle 2(2), Baroda for the Assessment Year 2011-12. 2. The brief facts leading to this case is this that the appellant, a society registered under Societies Registration Act, 1860 and also registered u/s 12AA of the Act filed its return of income on 29.09.2011 declaring total loss of ₹ 3,22,023/- which was finalized on 04.02.2014 upon determining total income at ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see of organizing the exhibition is nothing but a commercial activity as the assessee has taken space on rent, incurred huge ground development expenditure of ₹ 21,84,664/-, spent ₹ 22,04,005 on advertisement, stall construction expenses of ₹ 71,04,222/- and in return, it collected space rentals amounting to ₹ 2,72,77,989/-. These stalls were given to anyone who wanted to participate in the exhibition. This activity of the assessee is systematic and organized and is, thus, a commercial activity. The stand taken by the assessee that it did not render any services in relation to trade, commerce or business is thus rejected. The assessee s activities do not fall to the object of general public utility as provided by section 2(15) of the Act as opined by the Learned AO. However, charitable purpose, as per u/s 2(15), i.e. relief of the poor, education, medical relief and preservation of environment or preservation of monuments surfaces is not the activities performed by the appellant and thus the claim of exemption u/s 11 has been denied since not covered by the definition of charitable purposes u/s 2(15) of the Act as concluded by the Learned AO. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmission, the Learned representative of the assessee relied upon the judgment passed by the Co-ordinate Bench in the matter of Radiological Imaging Associationvs- DDIT in ITA No.2891/Ahd/2014 wherein under identical circumstances, surplus from exhibition has been held to be eligible for exemption u/s 11 r.w.s. 2(15) of the Act. He, therefore, prayed for the same relief before us. The Learned Departmental representative, on the contrary relied upon the order passed by the authorities below. 4. We have heard the rival contentions made by the parties, we have also perused the relevant materials available on record. The objects of the registered societies of the appellant has been vividly reproduced by the Learned CIT(A) at Page 3 of its order which is as follows: The Objects of the Society as appearing in Constitution are reproduced as under. 1. To achieve and sustain unity and harmony for the issues of common interest of large, medium and small-scale industries, businessmen, firms and their associations. 2. To protect the interest of large, medium and small scale industries, businessmen, firms and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r any use by or for the association. 15. To acquire, sell, improve, manage, develop, lease, rent, mortgage, dispose of or otherwise deal with all or any part of the property and rights of the association. 16. To collect subscriptions and other funds from members to raise or borrow funds with suitable conditions and guarantees and the same funds to be invested or used in the interest of the association. 17. To accept funds or any kind of property as gift or donation and utilise or invest the proceeds of such funds or property in the interest of the association. 18. To invest and otherwise deal with the funds of the association in such manner as may from time to time be determined by the managing committee and to open and operate current, fixed deposit, savings and other accounts with any bank or banks. 19. To frame service rules and regulations for the employees of the association. To create funds for provident fund, gratuity and other specific funds or to assist in creating such funds. 20. To establish or help in establishing Industrial Research Development Centers or other Resea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l observed as follows: 3. The assessee is a trust registered under section 12AA of the Act and is engaged, inter alia, in the activity of promoting the study and practice of radio diagnosis, ultrasound, radio therapy, oncology, radiation medicine and interventional radiology etc. During the relevant previous year, the assessee hosted 63rd National Conference of Indian Radiological and Imaging Association. The Assessing Officer was of the view that income generated by hosting of this conference was not of charitable nature for the reason that the assessee has charged participants on a commercial basis, the assessee has received huge amounts for stalls and participation charges, that the commercial entities making payments have deducted tax at source by treating the payment as for rent etc, and that the receipts are, as such, commercial receipts. The Assessing officer was also of the view that activity of the trust is nothing but devise by eminent radiologists to promote their own brand/profile etc. by arranging the comfortable stay, food and other facilities to participants which will lead to increase the income of the participants which cannot b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... blished by the society, in normal circumstances the registration should be granted to the Trust u/s 12AA and 80-G of the I.T. Act. The scheme of the Income-tax Act provides - (i) procedure at the time of registration and thereafter (ii) rules for assessment of trusts. Since at the time of registration assessee trust is newly formed, therefore, only the objects of the trust and the accounts of the trust and activities of the trust till registration are to be inquired into. In the given facts and circumstances the conference organized by the assessee is authorized by the objects of the Trust; there is no ban or embargo whether conference can be held in five star hotel or not. Therefore, the adverse inference drawn by the DIT(E) is not proper inasmuch as the trustees will have a discretion to organize the conference at a place and in the manner which is befitting into the participants and objects. Consequently, we are unable to draw any adverse inference only because the conference was organized in a five star hotel. 5.2. Coming to the issue about some of the donors being pharmaceutical companies and having deducted TDS. In our view while accepting donation, a donee has limitations an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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