TMI Blog2019 (9) TMI 761X X X X Extracts X X X X X X X X Extracts X X X X ..... ubstantiate that activity of the assessee were carried out with any profit motive. The assessee is a social science research institution founded in the year 1963. The institution apart from handling individual and group projects operates programs of research and training, namely, The Institute of Chinese Studies , The Institute for Comparative Democracy , Sarai Program on Media and Urbanism , Program on Social and Political Theory . The assessee derives its faculties from Indian Council of social science and receives Grant from government organization, including Ministry of external affairs. The research data of the assessee are used by the Election Commission of India and media for dissemination on the subjects of politics and democracy and is meant for research purposes and for non-profit and non-commercial use - as submitted that more than 90% of activities are for research purposes and only small amount of activities i.e. less than 10% are for media uses. AO has not demonstrated anywhere that fee received by the assessee are exorbitant and excessive then the cost incurred by the assessee. No error in CIT-A as relying on ICAI Vs. DGIT [ 2011 (9) TMI 77 - DELHI HIGH COURT] ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd in law, the Ld. CIT(A) has wrongly applied the ratio of judgment of Hon ble Delhi High Court delivered in the case of ICAI Vs. DGIT(E), 347 ITR 99 (Delhi)-2012 and allowing the relief to the assessee, ignoring that the facts of the case are entirely different. 3. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in accepting the argument of the assessee that the advanced or unspent amount received for ongoing research and project work is not chargeable to tax within the provisions of the Act. 4. The appellant craves leave to add, to alter or amend any ground of appeal raised above at the time of hearing. 2. The cross objections raised by the assessee are reproduced as under: 1. Centre For the Study of Developing Societies (CSDS) is registered under the provisions of the Societies Registration Actl860 with Reg NoS.3369 of 1967-68. 2. CSDS is a social science research institution founded in the year 1963 for Research in social and political processes and their implication for human choices. It is the leading research organization in Asia for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y which are life line of any Democracy. 9. It is also submitted by the assessee that carrying out specialized research projects does not amount to carrying on trade, commerce or business. Research activities are not trade ,commerce or business activities but simply research activities. And all these Research activities are being carried out as per the objects of the Institution. 10. The expertise of the Assessee institution in carrying out research was utilized and therefore it cannot constitute trade, commerce or business activity. The aforesaid projects undertaken is not a regular activity of the assessee institution. Primary activity remains research in matters relating to social and political modernization. Merely because of these project receipts the essential character of the assessee institution does not change and cannot be treated or converted into activity which carries on trade, commerce or business or activity of rendering any service in relation to trade, commerce or business. 11. A profit motive is the essence of trade, commerce or business and therefore in a situation in which services are re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ying on research on various issues and providing consultancy on the issues as desired by their clients. The Assessing Officer held that the assessee was engaged in activities being advancement of any other object of general public utility in the nature of commercial and consultancy. According to the Assessing Officer in view of the proviso 2(15) of the Act introduced w.e.f. assessment year 2009- 10, the advancement of any other object of general public utility shall not be charitable, if it involves the carrying on of any activity in the nature of trade, commerce or business or any activity of rendering service in relation to trade, commerce or business, for a cess or fee or any other consideration. Accordingly, the Assessing Officer disallowed exemption for application of the income in terms of section 11 of the Act and assessed the total income at ₹ 2,23,70,460/-. 3.1 On further appeal, the Ld. CIT(A) held that the activities of the assessee were falling under advancement of any other object of general public utility but the assessee was not engaged in the activity of trade or commerce or the business. Accordingly, he held the assessee as elig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment (including watersheds, forests and wildlife) and preservation of monuments or places or objects of artistic or historic interest, and the advancement of any other object of general public utility: Provided that the advancement of any other object of general public utility shall not be a charitable purpose, if it involves the carrying on of any activity in the nature of trade, commerce or business, or any activity of rendering any service in relation to any trade, commerce or business, for a cess or fee or any other consideration, irrespective of the nature of use or application, or retention, of the income from such activity, unless - (i) such activity is undertaken in the course of actual carrying out of such advancement of any other object of general public utility; and (ii) the aggregate receipts from such activity or activities during the previous year, do not exceed twenty per cent of the total receipts, of the trust or institution undertaking such activity or activities, of that previous year; . 4.4 According to the Assessing Officer, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onment Protection Pollution Control Board vs. CIT (2009) 125 TTJ (Chd) 98 in para 3 in relation to the applicability of the proviso to section 2(15) has held as under: 3. The assessee submitted before the learned CIT (Appeals) that the I.T.A.T., Chandigarh Bench has already decided the appeal of the assessee in ITA No.74/Chd/2009 wherein registration has been restored. Therefore, the assessee is entitled for deduction under sections 11 and 12 of the Act. The submissions on merits were also made. The learned CIT (Appeals) following the order of the Tribunal in ITA No.74/Chd/2009 decided the issue in favour of the assessee and held that the assessee would be treated as registered under section 12AA of the Act. 4. After hearing the rival submissions we do not find any merit in the appeal of the Revenue. The Revenue has raised only ground that the learned CIT (Appeals) has allowed registration under section 12AA of the Act. This issue has already been considered in detail by I.T.A.T., Chandigarh Bench in the case of the assessee in ITA No.74/Chd/2009, against which the appeal of the Revenue is pending before the Hon'ble High Court. Similarly, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t at ₹ 6,48,06,844/-as income of the assessee. The assessee submitted that in subsequent assessment year 2010-11, no such advance fee received or an unspent expenditure has been added as income of the assessee by the Assessing Officer. 5.2 The Ld. CIT(A) deleted the addition to income observing as under: 4.2 I have considered the order of the AO and the submissions of the assessee and I find considerable merit in the submissions of the assessee that the AO is not justified to treat the whole advance amount as income of the assessee as the whole advance amount is received for the entire research and project work which continues for more than one year and as such action of the AO is not justified and the AO has accepted the claim of the assessee in the A.Y. 2010-11 and accordingly the addition made by the AO is deleted. 5.3 We have heard rival submission of the parties on the issue in dispute. The assessee has treated the amount received against the project as and when it has accrued to the assessee, according to the project work carried out by the assessee, which in our opinion is in accordance with law ..... X X X X Extracts X X X X X X X X Extracts X X X X
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