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TMI Blog2019 (3) TMI 1738X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in ignoring that commercial activities of the assessee which are squarely covered under the last limb of proviso to section 2(15) of the Act, as the assessee is rendering services and charging fees for it and generating surplus. Thus, the benefit of section 11 & 12 are not allowable to the assessee. 2. The appellant craves leave to add, to alter or amend any ground of appeal raised above at the time of hearing. 2. Briefly stated facts of the case are that the assessee society has been constituted by the Ministry of Textile for promoting the handloom sector by procuring the orders from all government departments and further giving it to the member societies. The assessee society is registered under section 12A of the Income-tax Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction11 and 12 of the Act. 4. On the other hand, the Ld. counsel of the assessee relied on the order of the Ld. CIT(A) and submitted that in earlier as well as in subsequent assessment years, the Ld. CIT(A) has allowed the benefit of section 11 and 12 of the Act and no appeal has been filed by the Department to the Tribunal against those orders of the Ld. CIT(A) and thus, following the rule of consistency, the Revenue should not have filed appeal in the year under consideration also. 5. We have heard the rival submission and perused the relevant material on record. The assessee has filed note on the activity of the society before the Ld. CIT(A), which is reproduced as under for ready reference: "...................................... ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f government of India for supply of handloom items, which is distributed for production and supply to various member societies . The assessee also organized exhibitions in different parts of the country for display and sale of handloom fabrics/clothes manufactured by the handloom weaver and member societies. The assessee submitted that all the incomes, earnings and movable immovable properties of the Association are solely utilized and applied toward the promotion of its aims and objective of promoting handlooms in India . 5.2 On the issue of benefit under section 11 of the Act, the Ld. CIT(A) after considering the activity in detail allowed the benefit observing as under: "8. I have considered the assessment order and the submissions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ide a platform to weavers across the country. The AO has apparently not considered the nature of the activities and the objectives of the society and merely disallowed the benefit of Section 11 by stating that the activities do not fall under the first five limbs of Sec 2(15) & that principle of mutuality does not apply. The case of ITPO (2015) 371 ITR 333 of Delhi High Court applies to this case also, where it was adjudicated that where institution is not driven by motive to earn profit but to do charity through the advancement of objectives of general public utility, it will be regarded as established for charitable purposes. Further in the case of ICAI (2013) 358 ITR 91, it was observed by the High Court that even though fees are char ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... neral public utility shall not be charitable because the assessee is engaged in the activity in the nature of trade, commerce or business or rendering any service in relation to any trade, commerce and business for cess or fee. We find that activity of the assessee are primarily motivated with the objective of promoting handloom sector in India and said activity are not for gain or profit of an individual. The executive committee of the Society also consist of all government officials with no motive of profit sharing or personal interest. The member subscription is received by the assessee in proportion of the supply by the agency and the rate decided. The said subscription fee received cannot be equated with the cess or fee against service ..... X X X X Extracts X X X X X X X X Extracts X X X X
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