COMMISSIONER OF INCOME TAX (EXEMPTION) vs. SOCIETY FOR PARTICIPATORY RESEARCH IN ASIA

PDF · subscribers
ITA/845/2016HC DelhiDLHC01279571201625 November 2016Bench: HON'BLE MR. JUSTICE S. RAVINDRA BHAT,HON'BLE MR. JUSTICE NAJMI WAZIRI2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that no substantial question of law arose for consideration. The Court noted that the reasoning of the ITAT, which relied on the judgment in India Trade Promotion Organisation vs Director General of Income Tax (2015) 371 ITR 333, had been affirmed and applied in several other judgments. This precedent established that if the predominant activity of an institution is not business or commerce, and the income in dispute arises from subsidiary or incidental activities, the exemption under Section 11 of the Act cannot be denied. Consequently, the High Court found no error in the ITAT's decision and dismissed the appeal.

What were the facts?

The Revenue, represented by the Commissioner of Income Tax (Exemption), appealed against an order of the Income Tax Appellate Tribunal (ITAT). The assessee, Society for Participatory Research in Asia, had received research and training grants and other income amounting to Rs. 1.36 crores. The Assessing Officer (AO) treated the latter income as commercial receipts and, invoking the proviso to Section 2(15) of the Income Tax Act, 1961, denied the assessee the benefit of Section 11(23) of the Act. The ITAT, however, allowed the assessee's claim, relying on a previous judgment.

What were the issues?

1. Whether, having regard to the facts of the case, the Income Tax Appellate Tribunal (ITAT) acted in accordance with law in holding that the proviso to Section 2(15) of the Income Tax Act, 1961 was not attracted so as to deny the benefit of Section 11 of the Act. Assessee's Contention: The ITAT correctly held that the proviso to Section 2(15) was not attracted. The ITAT relied on the judgment in India Trade Promotion Organisation vs Director General of Income Tax (2015) 371 ITR 333, which held that exemption cannot be denied if the predominant activity of an institution is not business or commerce, and the income in question is derived from subsidiary or incidental activities. Revenue's Contention: The Revenue argued that the ITAT erred in its decision and that the proviso to Section 2(15) should have been applied to deny the exemption.

Which sections of the Income-tax Act were involved?

Section 2(15),Section 11,Section 11(23)

AI-generated summary — verify with the full judgment below

$~27 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 845/2016 & CM No. 43732/2016 COMMISSIONER OF INCOME TAX (EXEMPTION) ..... Appellant Through: Mr. P. Roychoudhuri, Adv. versus SOCIETY FOR PARTICIPATORY RESEARCH IN ASIA ..... Respondent Through: Mr. Ajay Vohra, Sr. Adv. with Mr. Rohit Jain and Mr. Aniket D. Agrawal, Advs. CORAM: HON'BLE MR. JUSTICE S. RAVINDRA BHAT HON'BLE MR. JUSTICE NAJMI WAZIRI O R D E R % 25.11.2016 The standard question of law sought to be urged is whether having regard to the facts of the case the Income Tax Appellate Tribunal (ITAT) acted in accordance with law in holding that the proviso to Section 2(15) of the Income Tax Act, 1961 was not attracted so as to deny the benefit of Section 11 of the Act. The assessee was a recipient of research and training grant and other income to the tune of Rs. 1.36 crores. The Assessing Officer (AO) determined that the latter were commercial receipts and guided by proviso to Section 2(15) and held that the assessee could not avail the benefit under Section 11(23) of the Act. The ITAT relied upon the judgment in the case of India Trade Promotion Organisation vs Director General of Income Tax (2015) 371 ITR 333 which had observed that that as long as the predominant activity of an institution

is not business or commerce, and that the so called suspect income is derived on the basis of some subsidiary or incidental activity, the exemption cannot be denied. This court notices that the reasoning in India Trade Promotion Organisation (supra) has been affirmed and applied in several other judgments, therefore, no question of law arises. The appeal is, consequently, dismissed. S. RAVINDRA BHAT, J NAJMI WAZIRI, J NOVEMBER 25, 2016/kk

More judgments on Section 2(15)

All 2,878 judgments and leading authorities on Section 2(15) →

Recent GST High Court judgments

Search GST case law →