ITO (EXEM.)-2(1), MUMBAI vs. SATVICHAR DARSHAN, MUMBAI

Since common grievance is involved in captioned appeal, they were heard together and disposed off by this common order for the sake of convenience and brevity.

3. The common grievance of the revenue read as under:- “1. Whether on the facts and circumstances of the case, and in law the Ld. CIT(A) erred in holding that the activities of the assesses was not in nature of trade, commerce or business based on the definition in the decision of Civil Appeal -9445 of 1996 in the case of Sai Publication Fund ? , 3029 & 3030/Mum/2024 2 2. Whether on the facts and circumstances of the case and in law and in light of the law the Ld. CIT( A) has erred that activities claimed to be for education can still be not charitable as per and can be hit by the provision of section 2(15) of the Act ?

Whether on the facts and circumstances of the case and in law, the Ld. CIT(A)erred in not appreciating that the assessee is not entitled to exemption u/s 11 of the Act because it is hit by proviso to section 2(15) of the Act as the assessee is involved printing and publication only without imparting the formal education, which are in toe- nature of trade, commerce or business?

Whether on facts and circumstances of the case and in law, the Ld. CIT(A) was justified in concluding that the activities of assessee being incidental to education do not qualify to be trade, commenced business covered vide proviso to section 2(15) of the Act not withstanding laid down by the Hon'ble Supreme Court in civil appeal no. 21762 of 2017 in various batch of appeal and -SLPs [lead case ACIT(E) vs Ahmedabad Urban Development Authority (2022) 143 taxmann.com 278 (SC)] ?” 4. At the very outset, the ld. Counsel for the assessee brought to the notice of the Bench that the impugned quarrel has been decided by the Co-ordinate Bench in assessee’s own case in AY 2015-16 in favour of the assessee and against the revenue. The ld. D/R tried to distinguish the decision by bringing some judicial orders of the Co-ordinate Bench.

We have carefully considered the decisions brought to our notice by rival parties. We are convinced that the impugned quarrel has been decided by the Co-ordinate Bench in assessee’s own case in favour of the assessee and against the revenue in AY 2015-16 vide order dated 30/01/2024. The relevant findings of the Co- ordinate Bench read as under:- “10. We have heard the rival submissions and perused the materials available on record. It is observed that the assessee trust is engaged in the activity of imparting education by means of printing of books and publication related to swadhyayees of discourses on Gita, Vedas and Upanishads and also printing of books and magazines based on Dadaji’s Pravachans which the ld. A.O. claims to be in the nature of trade, commerce or business and the assessee claims it to be part of the charitable activity carried out by the assessee trust. The ld. A.O. has rejected the assessee’s contention on the ground that the assessee’s entire revenue is out of the sales and subscription I.T.A. No. 3028, 3029 & 3030/Mum/2024 3 which are not relatable to the charitable activities as claimed for by the assessee.

The ld. CIT(A) by placing reliance on the decision of Hon'ble Apex Court in the case of Sai Publication Fund (supra) deleted the impugned addition made by the ld. A.O. The moot question here is whether the income generated out of the sale and subscription of journals, magazines would be in the nature of business activity mentioned in the proviso to section 2(15) of the Act? It is observed that the assessee Trust was established on 24.09.1962 on the object of educating to the followers of Rev. Pandurang Shastri Athavle (Popularly known as Rev Dada) where he conducted discourses containing his teachings on Bhagwad Gita, Upanishads, etc. in various parts of India and outside the country. The assessee contends that it is educating the humanity based on social, moral and spiritual upliftment of people at large. The publication activity carried on by the assessee is only on the teachings of Rev Dada which it claims it to be without profit motive and not a commercial activity in any manner whatsoever may be. The assessee has stated that the ld. A.O. for A.Y. 1990- 91 has held that the activities of the assessee would fall within the definition of clause 2(15) of the Act and the ld.A.O. in A.Y. 19992000 and A.Y. 2006-07 has not made any addition u/s. 143(3) of the Ac. It is also pertinent to point out that the assessee trust has stated that the assessee had never advertised for sale of books or subscription of magazines and that it was not even supplying the demanded quantity of books and that it was neither carrying out any job work where it can earn profit. The assessee has also reiterated that the profit earned out of the said activity is due to the reason that the activities are carried out voluntarily by swadhyayees themselves without any profit motive. It is also to be noted that neither Shri Pandurang Shastriji nor their family members from the Trust have charged any ‘royalty’ from the trust to print the pravachans. The assessee has placed reliance on various decisions supporting the claim of the assessee.

In the above factual matrix, it is also pertinent to rely on the decision of the Hon'ble Apex Court in the case of Sai Publication Fund (supra) where the Hon'ble Apex Court has elaborated whether the assessee was carrying on business or charitable activity as per the provisions of the Act. This decision has also been relied upon by the ld. CIT(A) in deleting the impugned addition made by the ld. A.O. The said decision has considered various other decisions which has reiterated that the publication and distribution of books which contained the preaching’s of Shirdi Sai Baba was held to be incidental or ancillary to the main object of the Trust without any profit motive and the same would not be termed as ‘business’ where the assessee trust does not fall within the meaning of ‘dealer’ u/s. 2(11) of the Act. This view according to us on identical facts would be applicable for the present case in hand where the assessee trust is not merely engaged in the business of printing, publication and subscription of books, but rather incidental to the main activity of the trust which is nothing but the spreading the message of Rev Dada. The relevant extract of the said decision is cited hereunder for ease of reference: 11. No doubt, the definition of "business" given in Section 2(5A) of the Act even without profit motive is wide enough to include any trade, commerce or manufacture or any adventure or concern in the nature of trade, commerce or manufacture and any transaction in connection with or incidental or ancillary to the commencement or closure of such trade, commerce, 3029 & 3030/Mum/2024 4 manufacture, adventure or concern. If the main activity is not business, then any transaction incidental or ancillary would not normally amount to "business" unless an independent intention to carry on "business" in the incidental or ancillary activity is established. In such cases, the onus of proof of an independent intention to carry on "business" connected with or incidental or ancillary sales will rest on the Department. Thus, if the main activity of a person is not trade, commerce etc., ordinarily incidental or ancillary activity may not come within the meaning of "business". To put it differently, the inclusion of incidental or ancillary activity in the definition of "business" pre-supposes the existence of trade, commerce etc. The definition of "dealer" contained in Section 2(11) of the Act clearly indicates that in order to hold a person to be a "dealer", he must `carry on business' and then only he may also be deemed to be carrying on business in respect of transaction incidental or ancillary thereto. We have stated above that the main and dominant activity of the Trust in furtherance of its object is to spread message. Hence, such activity does not amount to "business". Publication for the purpose of spreading message is incidental to the main activity which the Trust does not carry as business. In this view, the activity of the Trust in bringing out publications and selling them at cost price to spread message of Saibaba does not make it a dealer under Section 2(11) of the Act. …… …….

This decision is directly on the point supporting the case of the respondent after noticing number of decisions on the point including the decisions cited by the learned counsel before us. It may be stated that the question of profit motive or no profit move would be relevant only where person carries on trade, commerce, manufacture or adventure in the nature of trade, commerce etc. On the facts and in the circumstances of the present case irrespective of the profit motive, it could not be said that the Trust either was "dealer" or was carrying on trade, commerce etc. The Trust is not carrying on trade, commerce etc., in the sense of occupation to be a "dealer" as its main object is to spread message of Saibaba of Shridi as already noticed above. Having regard to all aspects of the matter, the High Court was right in answering the question referred by the Tribunal in the affirmative and in favour of the respondent-assessee. We must however add here that whether a particular person is a "dealer" and whether he carries on "business", are the matters to be decided on facts and in the circumstances of each case.

For what is stated above, we answer the question set out in the beginning in the negative and in favour of the respondent- assessee and dismiss the appeal finding no merit in it but with no order as to costs. 13. As per the proposition laid down by the Hon'ble Apex Court in the above said decision, the onus of proof lies on the Revenue to prove that the assessee was “carrying on business” in respect of the impugned receipt. Even in the case of the present assessee, the dominant purpose was to spread the message based on preaching’s which the above decision has held to be not a business activity. It is also observed that in the said decision the term “business” and “carrying on business” has been widely 3029 & 3030/Mum/2024 5