ACIT(E), CIRCLE- 2(1), NEW DELHI vs. NATIONAL ASSOCIATION OF SOFTWARE AND SERVICE COMPANIES, NEW DELHI

The grievance of the revenue read as under :-

At the very outset the Counsel for the assessee stated that the impugned issues have been decided by this Tribunal in favour of the assessee and against the revenue in earlier assessment years. The Counsel supplied the copies of the judgment of the Tribunal in A.Y.2009-10, 2010-11 and 2012-13. The DR could not bring any distinguishing decision in favour of the revenue.

We have given a thoughtful consideration to the orders of the authorities below. Briefly stated the facts of the case are that the assessee is a premier trade body and the chamber of commerce of the IT-BPO industries in India. It was set up in 1988 and is registered under the Indian Societies Act 1860. It aims to drive the overall growth of the technology and service market and maintain India’s leadership position, by taking up the role of a strategic advisor to the industry.

While scrutinising the return of income the AO noticed that the assessee has following source of income :-

The AO further found that the surplus generated through all these activities amounts to Rs.134681039/- which is invested in FDR and Savings Bank account.

The AO asked the assessee to show cause why the society should not be considered as general public utility body u/s. 2(15) of the Act. Assessee filed a detailed reply claiming that the said section alongwith amended provision do not apply on the facts of the case. The contention of the assessee did not find any favour with the AO who was of the firm belief that as per the amended provision of section 2 (15) of the Act. The assessee society is a case of general public utilities and, therefore, no longer enjoys charitable status. The AO denied the claim of exemption u/s. 11 and 12 of the Act and assessed the assessee as normal AOP.

Proceeding further the AO noticed that the assessee has claimed expenditure on account of global trade development activities. The assessee was asked to explain the nature of payment and necessity of expenditure in terms of its aims and objectives. The assessee filed a detailed reply in support of its claim which was rejected by the AO who observed as under :-

As mentioned elsewhere the impugned additions/ disallowances have been decided by this Tribunal in favour of the assessee in earlier assessment years.

In so far as the applicability of section 2(15) of the Act is concerned this Tribunal in for A.Y.2009- 10 has decided this issue as under :- “13. For the above reasons, we concur with the findings of the Ld. CIT(A) that the case law relied upon by the Ld. AR supports the view taken by the Ld. CIT(A) on the aspect of principle of mutuality and the entitlement of the assessee to claim the benefit of Section 11 of the Act. We, therefore, uphold the same and find the grounds of appeal as devoid of merits.”

In A.Y.2010-11 in this Tribunal has followed the decision of the coordinate Bench given in ITA No.6521/Del/2013 (supra). Similarly in A.Y.2012-13 the decision was followed in ITA No.5738/Del/2016.

In so far as the quarrel relating to the decision of Global Development Activities expenses is concerned we find that the CIT(A) upheld the partial disallowance reducing the disallowance from 41345917/-to 20808291/- on the grounds that donations given by Government of India ought not to be disallowed. The assessee also preferred an appeal before this Tribunal and this Tribunal in held as under :-

Respectfully following the decision of the coordinate Bench (supra) we decline to interfere with the findings of the CIT(A) the appeal filed by the revenue is accordingly dismissed.

Decision announced in the open court on 06.09.2022.