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TMI Blog2025 (3) TMI 1172X X X X Extracts X X X X X X X X Extracts X X X X ..... g Foundation [hereafter 'the Assessee'] was incorporated on 27.09.1999 as a not-for-profit company under Section 25 of the Companies Act, 1956 [hereafter 'the Companies Act']. The Assessee was also registered under Section 12A of the Act vide order dated 10.01.2001. The Assessee is an association of broadcasters formed to protect the interests of various stakeholders and related entities in the field of television broadcasting, including the television viewing audience. Its objectives include spreading awareness about the latest developments in the television industry, disseminating knowledge among its members, and supporting, protecting, and defining the rights of its members. 3. The Assessee filed its return of income declaring Nil income on 30.09.2015 for the AY 2015-16, claiming exemption under Sections 11 and 12 of the Act. The case was subsequently selected for scrutiny assessment under the Computer-Assisted Scrutiny Selection (CASS). A notice under Section 143 (2) of the Act, dated 26.07.2016, was issued and served upon the Assessee. Thereafter, a notice under Section 142 (1) of the Act was issued, along with a questionnaire, requiring the Assessee to furnish information an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 2, 40, 00, 000/- were later refunded to the Assessee in the FY 2015-16. 7. The Assessee contended before the AO that the deployment of funds towards BARC's equity capital was directly aligned with its objectives and was made in compliance with the directions of the Ministry of Information and Broadcasting [hereafter 'MIB'] and the recommendations of the Telecom Regulatory Authority of India [hereafter 'TRAI']. It was submitted that the funds were deployed solely to fulfill its objectives and not for earning any income, interest, or profit, and thus should be treated as application of income rather than an investment. The Assessee relied on certain judgments to assert that the deployment of funds towards BARC's equity did not constitute an investment violating Section 13 (1) (d) of the Act, as no income was earned from the funds deployed. In the alternative, citing CBDT Circular No. 387 dated 06.07.1984 and various case laws, the Assessee submitted that even if the deployment was deemed a violation under Section 13 (1) (d) of the Act, the exemption withdrawal should be restricted to any income earned from such deployment, which in this case was Nil, and not on the entire income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... way of an appeal (ITA No. 5589/Del/2018) before the learned ITAT. The Revenue contended that the learned CIT(A) had erred in relying on the observations made by this Court in Indian Broadcasting Foundation v. Chief Commissioner of Income Tax (E) & Ors. (supra), as this Court had not rendered a final decision on the merits but had merely directed the CIT(A) to adjudicate the matter on merits. The Revenue also contended that the transactions involving the purchase of shares worth Rs. 15 lakhs and the deployment of Rs. 45 lakhs as share application money in BARC constituted an investment, and therefore, the findings of the AO were justifiable. On the other hand, the Assessee contended that the core issue was whether the deployment of funds in BARC, made pursuant to Central Government policy, TRAI recommendations, and MIB directives, amounted to an investment violating Section 11 (5) read with Section 13 (1) (d) of the Act. The Assessee asserted that the funds deployed in BARC should be treated as an application of income, not an investment, and therefore, Section 13 (1) (d) of the Act was inapplicable. 11. The learned ITAT, by way of the impugned order, dismissed the appeal preferred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made in the writ petition as conclusive. The learned counsel further submitted that the learned ITAT has erred in holding that the transactions of purchasing shares and deploying funds by way of share application money fall within the permissible modes of investment under Section 11 (5) (vii) of the Act. It was argued that such transactions constitute 'investment' and are in violation of Section 13 (1) (d) of the Act, which restricts investments that do not conform to the prescribed modes. 15. It was contended on behalf of the Revenue that the learned ITAT has erred in confirming the order of the CIT(A), which allowed the Assessee's exemption under Sections 11 and 12 of the Act. The Revenue asserted that the words 'investment' and 'deposit' in Section 13 (1) (d) of the Act are broad and include investments in shares and deposits made for charitable purposes, irrespective of whether such investments are intended to generate profit or income. The learned counsel emphasizes that investment in shares or share application money, even if made for charitable objectives, falls within the scope of Section 13 (1) (d) of the Act unless it conforms strictly to the forms and modes prescribed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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