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Facts
The Revenue's appeal for AY 2013-14 arose from the CIT(A)/NFAC's order allowing exemption u/s 143(3). The Revenue contended that the assessee's activities, though charitable, were commercial in nature, making the proviso to Section 2(15) applicable.
Held
The Tribunal held that the issue had attained finality in previous assessment years. Following judicial consistency and the principle of precedence, the Tribunal upheld the CIT(A)'s findings that the assessee was not involved in trade, commerce, or business activities.
Key Issues
Whether the assessee's activities were commercial in nature, thereby disentitling it to exemption under Section 11, in light of the proviso to Section 2(15) of the Income Tax Act.
Sections Cited
143(3), 2(15), 11, 12, 80G
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Income Tax Appellate Tribunal, DELHI BENCH ‘G’, NEW DELHI
Before: Sh. Satbeer Singh Godara & Sh. S. Rifaur Rahman
Asstt. Year : 2013-14 Income Tax Vs M/s Sh. Chatrapati Shivaji Maharaj Officer(Exemption), Memorial National Committee, B- Ward-2(1), 14/A, Chatrapati Shivaji Bhawan, New Delhi Qutab Institutional Are, New Delhi-110016 (APPELLANT) (RESPONDENT) PAN No. AAFTS3397H Assessee by : Sh. Deepesh Jain, Adv., Sh. Rohit Jain, CA Sh. Shaurya Jain, CA Revenue by : Sh. Manish Gupta, Sr. DR Date of Hearing: 15.07.2025 Date of Pronouncement: 15.07.2025 ORDER
Per Satbeer Singh Godara, Judicial Member:
1. This Revenue’s appeal for Assessment Year 2013-14, arises against the CIT(A)/NFAC, Delhi’s DIN & order No. ITBA/NFAC/S/250/2023-24/1057999120(1) dated 16.11.2023, in proceedings u/s 143(3) of the Income Tax Act, 1961 (in short “the Act”).
Heard both the parties at length. Case file perused.
This Revenue’s appeal raises the following substantive grounds:
“1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in allowing the Chatrapati Shivaji Maharaj Memorial National Committee appeal of the assessee by ignoring the fact that even though the objects of the society may have been charitable but the activities carried out by the society which yielded income to the society were commercial in nature.
2. On the facts and in circumstances of the case and in law, the Ld. CIT(A) has erred in ignoring that the assessee's activity falls under the category of Advancement of any other object of General Public Utility and first proviso to Section 2(15) is clearly applicable to it as the total receipts derived by way of income from amenities & maintenance charges, project funds, rent, parking charges etc. are to be treated as receipts & maintenance charges, project funds, rent, parking charges etc are to be treated as receipts of commercial nature since it exceeds 20% of total receipts.”
Both the learned representative next invites our attention to the CIT(A)/NFAC detailed lower appellate discussion reversing the assessment findings denying section 11 exemption to the assessee vide order dated 23.09.2022 thereby holding it to have been carrying activities in the nature of business, trade and commerce; as the case may be, as under:
“1. The appeal is directed against the order u/s 143(3) passed by ITO (E), Ward-1, New Delhi. The assesses is aggrieved of the same and has filed this appeal. The assesses has taken as many as 04 grounds of appeal out of which ground no 1 is general in nature and hence it is not adjudicated separately. Ground No.1 & 2, are against the denial of exemption u/s 11 and 12 of the act ignoring the facts and circumstances, submissions made and the evidence furnished by the appellant in support thereof during the course of the assessment proceedings. Similar issue has arisen in assessment in AY 2011-12 where assesses was denied exemption on the ground that it is involved in trade, commerce or business and applied Proviso to section 2(15), The assesses, appealed against this order and CIT(A) has vide order dt. 27/08/2015 in Chatrapati Shivaji Maharaj Memorial National Committee Appeal no. 42/2014-15 has allowed the appeal. The relevant part of that order is reproduced below:-
1. The appeal is directed against the order u/s. 143(3) passed by ITO(E), Ward-1, New Delhi. The assessee is aggrieved of the same and has filed this appeal. The assessed has taken as many as 08 grounds of appeal out of which ground no. 1 is general in nature and hence it is not adjudicated separately and ground no. 5, 6, 7 & 8 has not been pressed during the course of appellate proceedings and all these grounds are dismissed Ground No. 2, 3 & 4 are against the denial of exemption u/s 11(1) which are adjudicated accordingly.
2. The hearing notice was issued and Shri Rakesh Garg, CA & AR appeared and the case was discussed on 26/03/2015.
3. The facts emanating from the order of the AO and the submissions of the assesses is that the assesses is registered under the Societies Registration Act, 1860 on 03/10/1981 and is also registered w/s 12AA(1) of the .T. Act, 1961 on 28/03/2011 and also enjoys the benefit of section 80G vide the order dated 08/10/2008. The main object of the assesses society is to running public library at Bengaluru, training of underprivileged women to become economically independent by training in vocations at Noida, running public library at Surat, running public reading room at Nasik martial arts training for young men and women and training young people to join armed forces conducted at Delhi. 3.1 During the A.Y 2011-12 the AO found that the assesses had leased out rented Out the property and so the AO had made the addition of Rs. 52,15,158/- mainly on the ground that the assesses is totally involved in trade, commerce or business and denied the exemption u/s 11(1) vide the order of the AO. 3.2 The assesses is in appeal against the order of the AO and ft is submitted that the assesses is a charitable institution and is not involved in any trade, commerce or business and the mischief of the Proviso of section 2(15) is also not applicable as the assesses has leased out / rent out the portion of property with the permission of Delhi Development Authority for carrying out the objects of the trust and assesses also relied on the various case laws like:
1. DIT VS. Sabarmati Ashram Gaushala Trust, of 213 (Gujarat High Court; Chatrapati Shivaji Maharaj Memorial National Committee 1. DGIT(E) Vs. ICAI, 347 ITR 99 (Delhi HC) (2912) 1. GS1 India vs. DGIT(E) W.C No. 7797/2009 (Delhi High Court) 1. India Trade Promotion Organization vs. DGIT(E) W.P.C No. 1872/2013 dated 22/01/2015 of Delhi High Court.
NMB Vs. ACIT, dated 16/01/2015 (Delhi ITAT) 1. State Road Transport vs., CIT, 1/Del/2014 dated 08/03/2015 (Delhi ITAT) 1. India International Centre vs. ADIT, ITA No. 3124/Del/2014 dated 11/03/2015 (Delhi ITAT) 3.3 I have considered the order of the AO and the submission of the assesses and find considerable merit in the submission of the assesses that the mischief of Proviso of section 2(15) is not attracted and the cases relied on by the assesses is also in favour of the assessee's own case and following the principle of precedence and Consistency of the various High Courts and Hon'ble Tribunal I am of the view that the assesses is not involved in any trade commerce or business and accordingly the AO is directed to allow the exemption u/s 11(1) with all the consequential benefits and the addition made by the AO is deleted.
4. In the result, the appeal of the assesses is allowed." The assesse has further submitted that in the assesse's own case for A.Y 2014-15 vide order no.ITBANFACISI250/2023-24/1057999663(1) dt. 16/11/2023, for AY 2018-19 vide ITBANFAC/SI250/2023- 24/1058634383(1) dt. 11/12/2023 and A.Y. 2020-21 vide order no ITBANFAC/SI25012023-24/1057999120(1) dt. 16/11/2023 the Ld CIT(A), NFAC has allowed the benefit of exemption u/s 11 (1). Considering the fact that the issue and the facts and circumstances involved is same this year also, I do not see any reason to deviate from order of the ld. CIT (A). Respectfully following the order of CIT(A) this year also the assesses is considered as entitled for benefit of exemption u/s 11 (1) with all consequential benefits and the addition is deleted. This grounds raised on this issue is allowed.”
5. Suffice to say, the Revenue/appellant could hardly dispute that the CIT(A)/NFAC has followed his earlier order in assessment years 2011-12 & 2014-15 thereby accepting the assessee’s Chatrapati Shivaji Maharaj Memorial National Committee stand that it had not carried out in such trade, commerce or business activities in light of section 2(15) 1st proviso. We find in this factual backdrop that the very issue between the parties has already attained finality. That being the case, we hereby adopt judicial consistency to reject the Revenue’s instant sole substantive ground as well as the main appeal to uphold the learned CIT(A) findings under challenge holding the assessee as eligible for section 11 exemption. Ordered accordingly.