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TMI Blog2024 (11) TMI 1193X X X X Extracts X X X X X X X X Extracts X X X X ..... Nil. The case was selected for scrutiny. Notice u/s. 143(2) of the Act was issued on 22.09.2012 followed by notice u/s. 142(1) dated 16.08.2013. In response, the assessee filed details. On consideration of the submissions, the assessee was of the opinion that the assessee was hit by the provision to Section 2(15) of the Act because the assessee is systematically exploiting its property in commercial way by rendering its services in relation to business of parties to whom it is allowing its space to be utilized commercially like exhibitions of commercial entities, professional artists, corporate meetings, functions etc. It was further held by the Ld. AO that the assessee has been using its space for other parties for various purposes which was not related to the objects of the trust and therefore not incidental to the attainment of the objects of the trust. Further, the assessee has not maintained separate books of accounts and separate balance sheet for these income receipts as required under proviso Section 11(4)A of the Act. Therefore, the benefit of Section 11 and 12 of the Act was declined and total addition of Rs. 4,05,96,202/- was made and penalty proceedings were also initia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 43 taxmann.com 276 (SC), the term 'education' is meant to include only 'formal and scholastic education' and thus the activities of the assessee shall attract the provisions of the proviso to section 2(15) as "advancement of any other object of general public utility and hence the assessee is not entitled to exemption u/s. 11 of the Act?" 5. On summarizing the grounds of appeal, it transpires that the grievance of the revenue is that the majority of the income of the assessee is coming from letting out of the property held by it and interest income and thus the object of the trust falls under the category of 'advancement of any other object of general public utility' and shall attract the provisions of the proviso to section 2(15) of the Act on income from the activities such as exhibitions of commercial entities, professional artists, space for corporate meetings and functions etc. as activities in the nature of commerce or business and therefore such income is not exempt in view of section 13(8) of the Act. 6. We have heard the Ld. AR on behalf of the assessee and Ld. DR on behalf of the revenue. The Ld. DR at the very outset submitted that the judgment of the Ld. CIT(A) was pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 04.2012; and now 20% of total receipts of the previous year, w.e.f. 01.04.2016); A.3. Generally, the charging of any amount towards consideration for such an activity (advancing general public utility), which is on cost-basis or nominally above cost, cannot be considered to be "trade, commerce, or business" or any services in relation thereto. It is only when the charges are markedly or significantly above the cost incurred by the assessee in question, that they would fall within the mischief of "cess, or fee, or any other consideration" towards "trade, commerce or business". In this regard, the Court has clarified through illustrations what kind of services or goods provided on cost or nominal basis would normally be excluded from the mischief of trade, commerce, or business, in the body of the judgment. A.4. Section 11(4A) must be interpreted harmoniously with Section 2(15), with which there is no conflict. Carrying out activity in the nature of trade, commerce or business, or service in relation to such activities, should be conducted in the course of achieving the GPU object, and the income, profit or surplus or gains must, therefore, be incidental. The requirement in Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e engaged in advancement of any other object of general public utility and falls within the four corners of proviso to Section 2(15) of the Act. But whether the case of the assessee falls within the four corner of Section 11(4A) of the Act is a matter to be examined in order to ascertain whether the advancement of any other object of general public utility is incidental to the attainment of the objectives of the trust or the requirement of separate books of account are fulfilled by the assessee trust or not? 10. Section 11(4A) reads as under: 11. "Income from property held for charitable or religious purposes. (4A) Sub-section (1) or sub-section (2) or sub-section (3) or sub-section (3A) shall not apply in relation to any income of a trust or an institution, being profits and gains of business, unless the business is incidental to the attainment of the objectives of the trust or, as the case may be, institution, and separate books of account are maintained by such trust or institution in respect of such business." 11. What is required on the part of the Ld. AO for examining the matter afresh, he may take guidance from para no. 171 and 172 of the order of the Hon'ble Supre ..... X X X X Extracts X X X X X X X X Extracts X X X X
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