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TMI Blog2020 (7) TMI 460X X X X Extracts X X X X X X X X Extracts X X X X ..... and activities falls under the last limb of section 2(15) and hit by the proviso to section 2(15) of the Income Tax Act. 3. On the basis of facts and circumstances of the case and in law, whether the Ld. CIT(A) has erred in referring to the decision of Hon'ble Delhi High Court in the case ofNASSCOM, related to the issue of provision of doubtful debt which is neither emanating from grounds of appeal nor adjudicated nor applicable in the present case looking into the nature of additions made by the Assessing Officer. " 02. Brief facts of the case shows that assessee is a society registered under the Societies Registration Act, 1860 and under Section 12A of The Income Tax Act, 1961 (the Act) as per order dated 5.07.1974. The assessee Trust's basic aim is to promote spiritual, intellectual, physical and social interest of people especially youth within the territorial jurisdiction of association irrespective of their caste, color and creed and to co-operate and or to associate with any other association or body of persons having objects similar to the objects of the association. 03. Assessee filed its return of income declaring 'NIL' income on 14.09.2013 claiming exemption under S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s that in the past. Reliance has also been placed on the decision of the Hon'ble IT AT, Delhi in appellant's own case for assessment year 2012-13 in ITA No.4983/Del/2015. 5.1.2 I have considered the assessment order and the submissions of the appellant I have also referred to the orders of my Id. predecessor for assessment years 2009-10 (appeal no.197/2013-14), 2010-11 (appeal no.198/2013-14), 2011-12 (appeal no.537/2013-14) and 2012-13 (appeal no.407/2014-15) wherein on similar facts exemption has been allowed. I have also referred to the decision of the Hon'ble ITAT in appellant's own case for assessment year 2012-13 (supra)wherein on similar facts the Hon'ble ITAT have held as under: "25. We have considered rival contentions and have gone through the impugned order, the Paper Book and also the case laivs which have been cited before us. We are of the view that the order of the CIT(A) is flawless and so the assessee has to succeed in this case. That is because the assessee Association, which is registered as a charitable entity u/s 12A of the Act, has carried out its activities in terms of the objectives as approved by the Department at the time of securin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d rightly applied the provisions of Section U(4)(A) of the Act by holding the same as business activity.In AY 1993-94 once again the departmental appeal was dismissed by the Tribunal where the point in issue was that the CIT(A) erred in allowing the benefit u/s 11 of the Act by holding that the activities of the Society were chargeable (sic) although the Assessing Officer had rightly applied the provisions of Section 11(4)(A) of the Act by holding the same as business activity. It seems that the CIT (A)'s first appeal order in AY 1992-93 became final where it was held by the CIT(A) that the Appellant was entitled to exemption u/s 11 of the Act and the provisions of Section 11 (4)(A) of the Act were not applicable to the case. There-after in AY 1997-98 the Assessing Officer himself in the assessment order dated 11.01.2000 conferred charitable status to the assessee by applying Section 11 of the Act. While fees may be charged and there may even to be a surplus out of charitable activities, the principle that so long as the surplus funds are redeployed in charitable activities no objection can be taken as to the charitable pursuits is inexceptionable. This has been so held by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate Bench in assessee's own case for Assessment Years 2009-10 to 2013-14 for holding that assesse is eligible for exemption u/s 11 & 12 of The Act. 07. With respect to disallowance on account of various provisions, he relying upon the decision of the Hon'ble Delhi High Court in DIT (E) vs. NASSCOM [345 ITR 362 (DEL)] deleted the same holding that the provisions are bonafide and income is required to be computed on commercial principles where reasonable provisions are required to be deducted. Thus, Revenue aggrieved with the above order is in appeal before us. 08. Ground Nos. 1 and 2 of the appeal is with respect to the allowability of exemption under Section 11 and 12 to the assessee trust subject to the proviso to Section 2(15) of the Act. 09. The learned Senior Departmental Representative vehemently submitted that when the assessee has violated provisions of section 13(1) (b) of the Act and 13(1) (d), ld AO could not have allowed assessee benefit of section 11 & 12 of the Act. She extensively referred to the various observations of the ld. Assessing Officer. She also submitted that she relies on the decision ofYoung Women's Christian Association of Madras Vs. Jt. Director of I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there is nothing in the Act which prohibits the carrying on of any such course so long as it is educational. Charitable entities can rent out their idle premises to raise funds for charity. No objection can be taken to that action. As to the hostel facilities, the same as urged on behalf of the assessee is aligned to the objective of the Association to provide education. Nothing has been brought on record by the Assessing Officer to show that the hostel facilities are de hors the educational activities of the Association and are for commercial purpose. That being the case the provision of hostel facilities cannot in the facts of this case, be held to fall under the 4th limb of charity viz any other object of general public utility. So long as hostel facility is aligned to education, no plausible objection can be raised as to the charitable nature of the activities. The amendment as made to the definition of charity by insertion of the proviso by the Finance Act, 2010 is thus of no consequence to the facts in the subject case. 26. We notice that in the past similar objections have been taken in assessment by the respective Assessing Officers. In AY 1989-90 the Tribunal in the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rial on record and based on the history of the case and the existing precedents on this point, we have no hesitation in holding that the CIT(A) has rightly decided the issue in favour of the assessee Association by directing relief u/s 11 read with Section 12AA of the Act. Resultantly the appeal filed by the Department is dismissed. 28. As to the cross objection filed by the Assessee-Association no separate submissions were made. Consequently, the Departmental Appeal having been dismissed the cross objection stands disposed off pro-tanto." 12. The Hon'ble High Court in ITA. 537 of 2018, ITA. 1131 of 2018 and ITA. 67 of 2019 have also upheld the above findings of the Co-ordinate Bench. The Hon'ble High Court dismissed the appeal of the Revenue. 13. In view of the decision of the Hon'ble High Court in assessee's own case, other decision cited by ld DR are not of any help, we hold that assessee is eligible for exemption under Section 11 and 12 of the Act and the activities of the assessee are not hit by proviso to Section 2(15) of the Act. The assessee trust's income is also required to be computed on the commercial basis. In view of this all the grounds of appeal filed by the ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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