TMI Blog2020 (8) TMI 362X X X X Extracts X X X X X X X X Extracts X X X X ..... 12A as a charitable institution, the actual work done by the assessee in the year under consideration is not charitable in nature particularly when no formal and systematic educational function is discharges by it rather commercial in view of the receipt on turnkey project basis, from RBI in lieu of the service rendered by the assessee which involves the activities carrying on in the nature of trade, commerce or business for consideration coming under the periphery of First Proviso to Section 2(15) of the Act which has already been clarified by the First Appellate Authority. No infirmity in the order impugned passed by the First Appellate Authority observing the project under contract with RBI for setting up of the financial museum by the assessee does not reflect discharging of any formal and systematic education rather the same is enough indicative for the commercial purposes, rejection thereon, in our considered opinion, is just and proper so as to warrant any interference. The assessee has no legs to stand upon in order to claim the relief u/s 11 of the Act and hence in the absence of any merit we dismiss the appeal preferred by the assessee. Appeals of the assessee are dism ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a (in short RBI ). In fact the assessee becomes the successful bidder in an open tender process floated by RBI for setting up the said museum project on turnkey basis and hence awarded with the said contract for executing the work. 3. Taking into consideration this particular aspect of the matter, the Learned Assessing Officer came to a finding that the assessee is engaged in full-fledged commercial activities during the year and applying the 6th limb of the definition of charitable purpose under the 1st proviso of Section 2(15) read with Section 13(8 ) of the Act denied the claim of the assessee under Section 11 of the Act and assessed the assessee s income at ₹ 99,23,870/-, which was in turn, confirmed by the First Appellate Authority. Hence, the instant appeal before us. 4. At the time of hearing of the instant appeal the Learned counsel appearing for the assessee submitted before us that the object of the assessee is to take up all kinds of museum/science centre projects on turnkey basis including conceptualization design and development of exhibits, exhibition of gallery, construction of building and structures including installation and supply of related techno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ic utility. 8. The case of the assessee is this that since the activity in the year under consideration relates to construction of the building and structure of the reserve Bank s Museum cum - financial literacy centre at Kolkata although under ,the guidance of the RBI the same is charitable in nature since ultimately it relates to non-formal science education/programs/activities and scheme and therefore,the income is entitled to exemption under section 11 of the Act. The further plea of the assessee is this that whether the activity is carried out by it is in line of its objectives has not relevant at all otherwise the registration u/s 12AA would have been cancelled and consequently the benefit u/s 11 read with Section 13 would have been automatically denied without showing any further reason thereof. However, such contentions made by the assessee was found to be an acceptable by the revenue. The Learned Assessing Officer rejected the claim of the assessee holding the assessee s activities falling under the periphery of 6 limb of the definition of charitable purpose as envisaged under section 2 (15 ) of the Act. The activity carried out by the assessee with the sole ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... To enter into any contract or arrangement for efficient conduct of the business of the Company or any part thereof and to sub-let any contracts from time to time. 6. Subject to the provisions of the Companies Act, 1956, to invest, buy or otherwise acquire and hold shares in any other Company having objects, altogether or in part, similar to those of this Company to underwrite solely or jointly with another, shares in such Company and to invest buy or otherwise acquire shares in any other Company if the acquisition of such shares seems likely to promote further or benefit the business or interests of this Company. 7. To sell, let out on hire, or otherwise deal with, all or any of the property of the Company, whether immovable or movables including all and whatever description of apparatus or appliances, on such terms and conditions as the Company may think fit. 8. To enter into partnership or into any arrangement for sharing or pooling profits, and resources, amalgamation, union of interests, co-operation, joint venture, reciprocal concessions or otherwise or amalgamate with any person or Company carrying on or engaged in or about to carry on or engage in any busines ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lity but undoubtedly it is in the nature of trade; commercial activities is glaring on the face of it. The construction of museum though done by the assessee the same is guided by the Agreement entered into by and between the assessee and the RBI. We find the assessee has been deputed by RBI as a mere agent for the construction of the museum which constitutes a commercial activity. The assessee before us is only to execute the work endorsed to it in lieu of money and then leave. Though the assessee got registered under section 12AA of the Act, the present activities, as reflected from the submissions made by the assessee and also from the corroborative evidences only show the commercial activities particularly in the absence of any core project enunciated by the assessee for public utility directly without the influence of any other authorities. Needless to mention participating in some project work at the instance of RBI upon been successful in a tender process does not qualify the activities of the assessee as charitable purposes particularly when the same is done in lieu of money and if anyone is spreading financial literacy then it is RBI who is funding the project of settin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us fund to the assessee, it being incidental to main object of the assessee could not be said to be commercial activity of the assessee and there was no violation of the provision of section 2 (15 ) of the Act. It is pertinent to mention that the type of business and / or activities rendered by the assessee as referred in those judgments as relied upon by the Learned AR in order to claim the exemption u/s 11 in the year under consideration is completely different from that of the fact available before us in the present case. These judgements have no manner of application to the instant case before us when we find that the activities of the assessee before us is indicative enough of profit oriented intent moreso when the activities /project by the assessee is done at the behest of the RBI for general public utility. The clauses of the memorandum of Association clearly clarify the actual status of the appellant read with the letter dated 08.06.20 12 issued by RBI It is the settled principle of law that the claim under Section 11 is to be extended to a registered organization under Section 12A of the Act provided the activities of such organization should be in consonance with the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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