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TMI Blog2020 (10) TMI 1094X X X X Extracts X X X X X X X X Extracts X X X X ..... the facts and circumstances of the case, the Tribunal was right in law in holding that the appellant is not entitled for the benefit of Section 11, merely because the appellant received certain additional amounts without considering the dominant object of the trust? (iii) Whether on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the income received by the appellant such as advertisement income from the souvenir, seminar surplus etc., are in the nature of commercial transaction and cannot be considered as charitable purpose? (iv) Whether on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the receipt from members is outside the purview of the concept of mutuality? 3. We have elaborately heard Ms.Radhika Chandrasekar, learned counsel for the appellant-assessee and Mr.J.Narayanaswamy, learned Senior Standing Counsel for the respondent-Revenue. 4. The Assessee is registered Trust in the name and style of M/s.Employers Federations of Southern India, who enjoys registration under Section 12(A)(a) of the Income Tax Act, 1961. The assessee filed the return of income for the assessment year un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come, income from conduct of seminars and miscellaneous receipts and interests from bank deposits etc., and therefore, they are not governed by the additional conditions stipulated in the second proviso under Section 2(15) of the Act. 8. Aggrieved by the said order of CIT(A) , the assessee preferred an appeal before the Tribunal, raising various grounds and in particular, contending that the CIT(A) did not give any findings that the activity carried on by the assessee was in the nature of trade, commerce or business; or carrying on any activity or rendering any service in relation to trade, commerce or business. The assessee relied on several decisions in support of their claim. The Tribunal by the impugned order, has dismissed the appeal filed by the assessee. This is how they are before this Court, by way of present tax case appeal. 9. The Tribunal, while confirming the order passed by CIT(A), was also guided by the fact that the assessee conducts conferences, seminars, which are open to persons other than members of the Assessee-Trust and fees is collected from those persons, and this being their major activity as projected in their Annual Report, it cannot be considered as an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated in the proviso to section 2 (15). 3.2. In the final analysis, however, whether the assessee has for its object 'the advancement of any other object of general public utility' is a question of fact. If such assessee is engaged in any activity in the nature of trade, commerce or business or renders any service in relation to trade, commerce or business, it would not be entitled to claim that its object is charitable purpose. In such a case, the object of 'general public utility' will be only a mask or a device to hide the true purpose which is trade, commerce or business or the rendering of any service in relation to trade, commerce or business. Each case would, therefore, be decided on its own facts and no generalization is possible. Assessees, who claim that their object is 'charitable purpose' within the meaning of Section 2(15), would be well advised to eschew any activity which is in the nature of trade, commerce or business or the rendering of any service in relation to any trade, commerce or business." As could be seen from the above circular, the newly inserted proviso to Section 2(15) which was inserted with effect from 01.4.2009, would stand attracted to the entitie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... " under Section 2(15) to deny exemption, should examine facts and record a finding that the activity is a commercial activity, i.e., in the nature of trade, commerce or business or any activity of rendering any service in relation to trade, commerce or trade. 13. We have no hesitation to hold that the Assessing Officer nor the CIT(A) or the Tribunal has rendered any such finding. Thus, in the absence of a finding to the said effect, which is the most essential feature, any amount of legal interpretation or application of precedents of Courts or Tribunals, cannot be effected. This aspect of the matter has been dealt with in the case of India Trade Promotion Organization Vs. Director General of Income- Tax (Exemptions) and Others [(2015) 371 ITR 33 (Del)], wherein it was held as follows : " If the dominant and the prime objective of the institution, which claims to have been established for charitable purposes, is profit making, whether its activities are directly in the nature of trade, commerce or business or indirectly in the rendering of any service in relation to any trade, commerce or business, then it would not be entitled to claim its object to be a "charitable purpose". O ..... X X X X Extracts X X X X X X X X Extracts X X X X
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