ADVERTISING AGENCIES ASSOCIATION OF INDIA,MUMBAI vs. COMMISIONER OF INCOME TAX (EXEMPTIONS), MUMBAI, MUMBAI

आदेश / ORDER PER SMT. BEENA PILLAI, JUDICIAL MEMBER:

Present appeal filed by the assessee is directed against the order dated 30/03/2026 passed by the Ld. Commissioner of Income-tax (Exemptions), Mumbai [“Ld. CIT(E)”], rejecting the assessee’s application for renewal of registration u/s 12AB of the Income-tax Act, 1961 [“the Act”].

“I. The application for renewal of registration ought not to have been rejected

II. The Appellant’s objects and activities satisfy the test of charitable purpose

III. The Goafest related receipts do not cease to be in furtherance of charitable objects

The assessee was originally formed in the year 1945 for advancement of the advertising profession in India. In the year 1980, it was registered as a society under the Societies Registration Act, 1860 and thereafter, in the year 1981, was registered as a public charitable trust under the Bombay Public Trusts Act, 1950. Registration u/s 12A of the Act was granted to the assessee by the Ld. Commissioner of Income-tax, Bombay City-IV vide certificate dated 24/02/1981. The said registration remained operative thereafter.

3.1. Pursuant to the amended registration regime introduced by the Finance Act, 2020, the assessee was granted registration in Form No.10AC on 30/09/2021 for A.Ys. 2022-23 to 2026-27. Subsequently, on 26/11/2021, the assessee was converted into a company registered u/s.8 of the Companies Act, 2013, continuing as a non-profit entity. Consequent upon the change in its legal status, registration was thereafter granted by the Ld.CIT(E) vide order dated 20/03/2024.

3.2. The objects of the assessee, inter alia, are to promote and advance the advertising and publicity industry in India, encourage high standards of professionalism, organise advertising festivals, knowledge seminars, symposia, conclaves and round-table discussions, undertake research and generally promote sound business practices amongst advertisers, advertising agencies and media. The assessee also organises seminars, conferences and workshops in furtherance of the aforesaid objects. One of its flagship annual events is the “Goa Knowledge Fest”, commonly known as “Goafest”, centred around knowledge-sharing, professional advancement, industry interaction and recognition of excellence in the advertising and communication industry. The Memorandum of Association further provides that the surplus, if any, is to be applied solely towards promotion of the objects of the assessee and is not distributable amongst its members.

3.3. As the subsisting registration was due to expire on 31/03/2026, the assessee filed an application in Form No.10AB on 29/09/2025 seeking renewal of registration u/s.12AB of the Act. Notice dated 29/11/2025 was issued by the Ld.CIT(E) calling for certain information and documents. In response thereto, the assessee furnished details and explanations vide replies dated 02/01/2026, 23/01/2026, 20/02/2026 and 16/03/2026, explaining the nature of its activities and also bringing to the notice of the Ld. CIT(E) the orders passed by the Coordinate Bench of this Tribunal in assessee’s own case for the earlier assessment years.

3.4. The Ld.CIT(E), after considering the submissions of the assessee, rejected the application vide impugned order dated 30/03/2026. According to the Ld.CIT(E), the activities of the assessee were carried out for the benefit of a restricted and ascertainable section of society, namely, its members. The Ld.CIT(E) therefore held that the assessee was in the nature of a mutual association and not a charitable institution. It was further observed that receipts in respect of “Goa fest” were divided between members and non-members, whereas the expenditure was not identified as attributable to members and non-members separately. On this basis, the Ld.CIT(E) concluded that the assessee was engaged in commercial/business activity and that the claim of charitable purpose was required to satisfy the negative test contained in the proviso to section 2(15) of the Act.

3.5. The Ld.CIT(E) further observed that the assessee had received delegate fees, brand promotion charges and sponsorship fees from “Goa fest” which, according to him, constituted commercial receipts. The aggregate of such receipts was worked out at 78.74%, 81.41% and 75.23% of the total receipts for F.Ys. 2022-23, 2023- 24 and 2024-25 respectively. The Ld.CIT(E), accordingly, held that the threshold contemplated under the proviso to section 2(15) stood breached and rejected the application for renewal of registration u/s 12AB of the Act.

Aggrieved by the order passed by Ld.CIT(E), the assessee is in appeal before us.

4.1. The Ld.AR submitted that the objects contained in the Memorandum of Association specifically authorise the assessee to arrange advertising festivals, knowledge seminars, symposia, conclaves, round-table discussions and exhibitions of advertising and other displays. He further submitted that the Memorandum and Articles of Association categorically provide that the funds and properties of the assessee shall be applied solely towards promotion of its objects and no portion of the income or surplus can be distributed directly or indirectly amongst its members by way of dividend, bonus or otherwise.

4.2. The Ld.AR further submitted that the assessee collaborates with national as well as international statutory and regulatory bodies and industry organisations and acts as a link between the advertising industry and the Ministry of Information and Broadcasting. Its activities are aimed at promoting the advertising industry as a whole and are not meant for conferring any private benefit upon individual members. It was submitted that even non- members participate in the seminars, conferences and workshops organised by the assessee and, therefore, the observation of the Ld.CIT(E) that the assessee exists only for the benefit of its members is factually incorrect.

4.3. In respect of “Goa fest”, the Ld.AR submitted that the same is essentially a knowledge conference/seminar/workshop organised for promoting excellence in the advertising and publicity sector and providing a common platform to advertisers, advertising agencies, broadcasters and publishers. The sponsorship contributions received are utilised towards meeting and subsidising the cost of conducting the event, whereas delegate fees are nominal amounts charged towards venue, materials, food, refreshments and other organisational expenses. It was vehemently submitted that there is no independent activity in the nature of trade, commerce or business and the receipts merely arise incidentally in the course of carrying out the objects of the assessee.

4.4. The Ld. AR further submitted that the assessee cannot be denied the character of a charitable institution merely because its activities benefit a particular section of the public. It was submitted that for an object to qualify as one of general public utility, it is not necessary that the benefit should extend to the entire mankind or to all persons within a country or State. What is material is that the section of the community sought to be benefited should be sufficiently defined and identifiable and should not consist of specified individuals. In support of this proposition, reliance was placed upon the decisions of the Hon’ble Supreme Court in CIT v. Andhra Chamber of Commerce [1965] 55 ITR 722 (SC), CIT v. Bar Council of Maharashtra [1981] 130 ITR 28 (SC) and Ahmedabad Rana Caste Association v. CIT [1971] 82 ITR 704 (SC).

4.5. The Ld.AR further submitted that the present proceedings are for renewal of registration u/s 12AB and the scope of examination is principally with reference to the objects of the institution, genuineness of its activities and compliance with such laws as are material for achieving its objects. It was submitted that whether the proviso to section 2(15) gets attracted in a particular previous year and the consequential availability of exemption u/s.11 are matters capable of being examined in the assessment proceedings for the respective years. According to the Ld.AR, the renewal of registration could not be denied merely on the basis that the receipts alleged to be commercial receipts exceeded the prescribed percentage in particular years.

4.6. It was also submitted that the Ld.CIT(E) had himself granted registration to the assessee vide order dated 20/03/2024 for A.Ys. 2022-23 to 2026-27 and there had been no change either in the objects of the assessee or in the nature of the activities carried on by it thereafter. The Ld.AR submitted that the impugned order does not record any finding regarding any change in the objects or any non-genuineness of the activities of the assessee. The synopsis further records that the registration granted on 20/03/2024 followed an earlier order of this Tribunal dated 30/06/2023 remanding the registration matter to the Ld.CIT(E).

4.7. The Ld. AR lastly submitted that the very activity of organising “Goa fest” and the receipts arising therefrom have repeatedly been examined by the Coordinate Bench in assessee’s own case. For A.Y. 2011-12, the Tribunal held that none of the objects of the assessee were in the nature of trade, commerce or business and that “Goa fest” was wholly towards advancement of the objects of the assessee. The said view was followed for A.Y. 2012-13 and again in subsequent assessment years. It was thus submitted that the Ld.CIT(E) could not have taken a contrary view on the very same activity in the absence of any material change in facts or in law.

We have perused the submissions advanced by both sides in light of the record placed before us.

• that the assessee is essentially a mutual association whose activities are carried out for the benefit of its members. • That the delegate fees, brand promotion charges and sponsorship fees arising out of “Goa fest” was treated as commercial receipts and, having regard to the percentage of such receipts to the total receipts, invoked the proviso to section 2(15) of the Act.

6.1. We note that the nature of the assessee’s objects and, more particularly, its activity of conducting seminars and other programmes under the banner of “Goa Fest”, is not a new issue. The same activity has already been examined by the Coordinate Bench in assessee’s own case in the earlier assessment years. For A.Y.2011-12 in ITA no.2072/Mum/2016 vide order dated 01/03/2019, the Coordinate Bench of this Tribunal considered whether receipts from “Goa fest” could be regarded as arising out of trade, commerce or business and held that the assessee was not carrying on any such business activity and that “Goa fest” was undertaken in furtherance of the main objects of the assessee.

6.2. The aforesaid view was followed by the Coordinate Bench while deciding assessee’s appeal for A.Y.2012-13 in ITA no.6687/Mum/2016 vide order dated 06/05/2019. The same position was again reiterated by the Coordinate Bench for the subsequent assessment years 2013-14, 2015-16 and 2017-18 in ITA nos.4422 to 4424/Mum/2023 vide order dated 20/09/2024.

The relevant finding recorded at para 10, as reproduced in the written synopsis before us, reads as under:-

“10. After hearing both sides, it is decided that the activity of conducting seminar and other activities under the banner of “Goa Fest” is not in the nature of business as it only promotes the main object of the appellant trust. Respectfully following the decisions of earlier years of Hon’ble ITAT for A.Y. 2011-12, 2013-13, it is decided that the surplus generated on conducting Goa fest income is exempt u/s. 11 of the Act. Consequently, the addition made by the Ld. A.O. is deleted.” 6.3. The above finding makes it clear that the very activity which formed the basis for rejection of renewal in the present proceedings has already been held by the Coordinate Bench preceding assessment years to be an activity carried out in furtherance to the principal objects of the assessee and not an activity in the nature of business. The Coordinate Bench also held that, surplus generated from conducting the said event would not, by itself, alter the character of the activity.

6.4. We further note that the objects of the assessee have remained substantially unchanged. The assessee has been enjoying registration since 24/02/1981. It was thereafter registered under the amended regime and, subsequent to its conversion into a Section 8 company, the Ld.CIT(E) himself granted registration vide order dated 20/03/2024 for A.Ys. 2022-23 to 2026-27. There is no finding in the impugned order that, subsequent to the grant of such registration, the assessee amended its objects or commenced any materially different activity. On the contrary, the activity of conducting “Goa fest” was admittedly being undertaken even in the earlier years and had already been considered by this Tribunal.

6.5. Coming to the first objection of the Ld.CIT(E), we are unable to concur with the finding that merely because the assessee represents or advances the interests of persons associated with the advertising profession, its objects cease to constitute an object of “general public utility” within the meaning of section 2(15) of the Act. The expression “general public utility” does not necessarily contemplate an activity which benefits the public at large without any identifiable class or section being the immediate beneficiary. An object may constitute an object of general public utility even where its advancement is directed towards a sufficiently identifiable section of the public, provided the object is directed towards the advancement of an interest extending beyond the private or mutual interests of the members of the institution.

6.6. In the present case, the objects of the assessee are directed towards the promotion, development and advancement of the advertising and publicity profession, including dissemination of knowledge, professional development and promotion of standards in the field. Such activities are not, on the material before us, shown to be undertaken merely for the private benefit of the members. The seminars, conferences and knowledge-sharing programmes undertaken by the assessee are also not demonstrated to be confined exclusively to its members. Therefore, the mere fact that persons connected with the advertising profession may derive a benefit from such activities cannot, by itself, take the objects outside the ambit of “advancement of any other object of general public utility.”

6.7. We further note that the Memorandum of Association contains a specific prohibition against distribution of the surplus or income amongst the members and requires the income and property of the assessee to be applied towards the promotion of its objects. This provision assumes significance while examining whether the objects are directed towards a general public utility or merely towards private or mutual benefit. The incidental benefit accruing to members by reason of activities undertaken for advancement of the advertising profession cannot, in our view, be equated with the assessee existing for the benefit of its members. What is relevant is the predominant nature and purpose of the objects and activities, and not the mere fact that an identifiable section connected with the profession may also benefit from their advancement.

6.8. As regards the second objection, the Ld.CIT(E) has proceeded on the premise that delegate fees, brand promotion charges and sponsorship fees received in connection with “Goa fest” constitute commercial receipts. Based upon such characterisation, the Ld.CIT(E) has thereafter applied the twenty per cent threshold under the proviso to section 2(15). However, the fundamental premise itself stands contrary to the findings of the Coordinate Bench in assessee’s own case, wherein the activity of organising “Goa fest” has already been held not to be in the nature of trade, commerce or business and to have been undertaken in furtherance of the assessee’s objects. Consequently, the receipts arising from such activity cannot be characterised as commercial receipts merely by reference to their nomenclature, without examining the dominant purpose and the nature of the underlying activity in the context of the assessee’s object of general public utility.

6.9. Once the underlying activity itself has been held, on identical facts, not to constitute trade, commerce or business, the mere quantum of receipts arising in connection with such activity cannot, without anything further, result in the activity being re- characterised as commercial for the purpose of rejecting renewal. The Ld.CIT(E) has not brought on record any distinguishing feature in the conduct of “Goa fest” during the relevant period which would warrant departure from the consistent view taken in assessee’s own case.

6.10. We further find that there is no adverse finding in the impugned order regarding genuineness of the activities carried on by the assessee, nor is there any finding that the assessee has deviated from its stated objects. The rejection essentially proceeds upon a different characterisation of the same activities which had already been examined by this Tribunal in earlier years.

6.11. In these circumstances, and particularly in the absence of any material change in the objects or manner in which the relevant activities are carried out, we find no justification for taking a view contrary to the consistent orders passed by the Coordinate Bench in assessee’s own case. The observations contained in para 3.4 of the impugned order therefore cannot be sustained the rejection of the assessee’s application for renewal of registration.

Accordingly, the grounds raised by the assessee stand allowed.

In the result, the appeal filed by the assessee stands allowed.

Order pronounced in the open court on 18/09/2026

Sd/- Sd/-

JAGADISH BEENA PILLAI ACCOUNTANT MEMBER JUDICIAL MEMBER

Mumbai Dated: 18/09/2026 Shamik Sr. P.S.

Copy to: ADVERTISING AGENCIES ASSOCIATION OF INDIA, 502-B, 5TH FLR, MARATHON FUTUREX N M JOSHI MARG, LOWER PAREL , 1 MUMBAI, MAHARASHTRA, INDIA - 400013, MUMBAI-400013, MAHARASHTRA COMMISIONER OF INCOME TAX (EXEMPTIONS), MUMBAI, 6TH FLOOR, MTNL TELEPHONE 2 EXCHANGE, CUMBALLA HILL, PEDDER ROAD, TARDEO, MUMBAI 400026., MUMBAI-400026, MAHARASHTRA 3 THE PCIT / CIT, 4 THE D.R., ITAT, MUMBAI BENCH 5 GUARD FILE