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2019 (7) TMI 671

..... he assessment years 2009-10, 2010- 11 and 2011-12, the Tribunal, by a common order [2016 (8) TMI 1445 - ITAT CHENNAI] dismissed the appeals filed by the assessee thereby denying the benefit of tax exemption computation despite recognition in the form of continued registration under Section 12A(a) of the Act. The said common order dated 03.8.2017 was challenged by the appellant - assessee before this Court and by a common judgment [2019 (7) TMI 620 - MADRAS HIGH COURT] , we allowed the appeals, set aside the common order passed by the Tribunal and remanded the matters to the Tribunal for a fresh consideration on all issues that may be raised by both the assessee as well as the Revenue. - Tax Case Appeal No.402 of 2019 - 28-6-2019 - Mr. Justi .....

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..... Section 2(15) of the Act would get attracted to the activity of the appellant aimed at protecting the environment for the purpose of testing the availability of tax exemption benefit under Section 11 of the Act? 3. We have heard Mr.A.S.Sriraman, learned counsel appearing for the assessee and Mr.J.Narayanaswamy, learned Senior Standing Counsel accepting notice for the respondent - Revenue. 4. In the assessee's own case for the assessment years 2009-10, 2010- 11 and 2011-12, the Tribunal, by a common order dated 03.8.2017, dismissed the appeals filed by the assessee thereby denying the benefit of tax exemption computation despite recognition in the form of continued registration under Section 12A(a) of the Act. The said common order dated .....

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..... y their members, these would not fall under the purview of the proviso to section 2(15) owing to the principle of mutuality. However, if such organizations have dealings with nonmembers, their claim to be charitable organizations would now be governed by the additional conditions stipulated in the proviso to section 2 (15).' 11. Further, we may note the decisions on this point more particularly the followings: India Trade Promotion Organization Vs. The DGIT (371 ITR 333); Institute of Chartered Accountants of India Vs. DGIT (358 ITR 91); ACIT Vs. South India Hire Purchase Association (116 ITR 793); CIT Vs. India Pepper & Spice Trade Association (111 ITR 206) and Madras Kirana Merchants Association Vs. Commissioner of Income Tax (111 .....

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..... or of Income Tax (Exemptions) issued another show cause notice on 01.11.2011 for the same purpose. The assessee submitted their reply dated 16.11.2011. In the said reply, the following stand was taken by the assessee: 'g.) As explained above, our Association have imported wattle extract, a raw material essential for leather tanning and available only in African countries, and distributed among the members of the trade at a lesser rate than usually available in the market. For the service the Association has never charged any fee, cess are any other consideration from the individual receivers and users. h.) Instead of individual member placing order in the foreign countries, wasting time, labour and money in import formalities, the Assoc .....

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..... on and the cost fixing for the distribution are done neither for any profit motive nor for any cess, fee or other consideration. k.) Thus wattle extract distribution activity carried out by the Association is not done for any cess or fee or any other consideration and hence submit that the Association does not violate the provisions contained in section 2(15) of the Income Tax Act. 8.) To sum up, the Honorable DIT(E)'s proposal to initiate proceeding u/s.12AA(3) is wholly devoid of merits and is not based on any valid or proper provisions of law. The amendment to section 2(15) by itself does not vest in DIT(E) the power to cancel the registration of a Trust which carries on, among others, certain objects constituting the Advancement of .....

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..... unsel for the Revenue. 17. Consequently, the substantial questions of law are left open. 6. The order impugned before us in this appeal is identical to that of the common order impugned in TCA.Nos.705 to 707 of 2018, as the said common order was followed in the present order passed by the Tribunal. Therefore, this appeal needs to be disposed of on the same lines as TCA.Nos. 705 to 707 of 2018 were disposed of. 7. In the result, the above tax case appeal is allowed, the impugned order passed by the Tribunal is set aside and the matter is remanded to the Tribunal for a fresh consideration of all the issues that may be raised by both the assessee as well as the Revenue. The appeal filed before the Tribunal for the assessment year 2012-13 can b .....

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