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(A) This appeal by Revenue is filed against the order of Commissioner of Income Tax (Appeal)-40, Delhi, dated 13.02.2018 for Assessment Year 2014-15. Grounds taken in this appeal of Revenue are as under:
“1. On the basis of facts and circumstances of the case and in law, the Ld. CIT(A) has erred in ignoring the fact that the assessee is not eligible for exemption u/s 11 of the I.T. Act, 1961.
On the basis of facts and circumstances of the case and in law, the Ld. CIT(A) has erred in ignoring the fact that the assessee’s activities falls within the sixth limb of charitable activity i.e. advancement of general public utility and Page 1 of 14 ITA No.- 3313/Del/2018. Professional Assistance for Development Action. in lieu of the services of consultancy and technical support assessee is receiving consultancy fee which is in nature of business income.
On the basis of facts and circumstances of the case and in law, the Ld. CIT(A) has erred in allowing the exemption u/s 11 with all consequential benefits even when the assessee society is hit by proviso to section 2(15) of the Act.
On the basis of facts and circumstances of the case and in law, the Ld. CIT(A) has erred in treating the assessee not involved in any trade, commerce or business and mischief of proviso of section 2(15) of the Act is not applicable to the assessee.
The appellant craves leave to add, to alter or amend any ground of appeal raised above at the time of hearing.”
(B) The only issue involved in the grounds of appeal is whether the assessee is eligible for exemption under Section 11 of Income Tax Act, 1961 (“I.T. Act”, for short), with all the consequential benefits. Vide Assessment Order dated 18-11-16 passed by the Assessing Officer under Section 143(3) of I.T. Act; the Assessing Officer denied exemption to the assessee under Section 11 of the I.T. Act. Aggrieved, the assessee filed appeal before the Ld. CIT(A). Vide impugned appellate order dated 13.02.2018, the Ld. CIT(A) directed the Assessing Officer to allowed exemption under Section 11 of I.T. Act with all the consequential benefits. The relevant portions of the impugned appellate order dated 13.02.2018 of Ld. CIT(A) is reproduced as under:
“4. Determination 4.1 The appellant has raised as many as 10 grounds of appeal in which ground Nos. 1 to 7 challenge the denial of exemption under section 11. Since these grounds are interlinked, these have been taken together. 4.1.1 The Assessing Officer has denied the exemption under section 11 since as per the Assessing Officer the assessee is only providing services for training, technical knowhow to various NGOs, it is building and conducting surveys which is not at all covered under medical relief, education and relief of poor. The activity of consultancy and training falls under the category of general public utility. The Assessing Officer further held that the activities of the assessee involve the rendering of services in relation to carrying on of commerce and business and hence the case is covered by ITA No.- 3313/Del/2018. Professional Assistance for Development Action. the proviso to section 2(15). Accordingly, benefit of exemption under sections 11/12 was denied and the assessee was assessed as normal AOP. 4.1.2 The appellant has submitted that the Assessing Officer is not justified to deny the exemption under section 11(1) as the assessee is not involved in any trade, commerce or business and the mischief of the proviso to section 2(15) is also not applicable as the assessee is actually a charitable society and is working for providing relief and livelihood to the poor and rural people. It is submitted that the assessee gets the grants from the Central and State Governments and works in coordination with the State Governments. It has also been submitted that the assessee is also receiving the donation from the various corporate entities and reputed trusts like TATA trusts and the donors keep a watch and monitor the working and the implementation of the projects funded by the donors. It is submitted that the mere receipt of fees or receipts does not mean that the assessee is involved in any trade, commerce or business to attract the mischief of the proviso to section 2(15) and the assessee also relied on the various case laws being- GS1 India vs. DGIT (Exemption), 360 ITR 138 (Delhi) (2014). i) Bureau of India Standards vs. DGIT (E), 358 ITR 78 (Delhi) (2013). ii) iii) Director of Income Tax (E) vs. ICAI, 347 ITR 86 (Delhi)(2012). iv) ICAI vs. DGIT(E) 347 ITR 99 (Delhi) (2012). 4.1.3 As per the contention of the appellant its activities fall under the category of relief of poor and, in support, the appellant has relied on the objects of the society as per the Memorandum of Association, details of which are at para5 of the appellant's submissions reproduced above. It is seen from the objects that the society has been established to provide professional, technical and management assistance to various agencies engaged in rural development and related action programmes. It is also providing technical guidance in the field of animal husbandry, water resources, rural industries etc. One of its objects is also assist development agencies at the grass root to effectively utilized physical assets required for the purpose of rural development and evolve systems to ensure equity and justice in their utilization. Copies of MoUs and the financial reports of some of the funding agencies which have been submitted have also been perused. 4.1.4 I have considered the assessment order and thee submissions of the appellant. I have also perused the assessment order for assessment year 2011-12 and the appeal order of my Id. predecessor for the assessment year 2011-12 in appeal No. 546/2013-14 and my own order for assessment year 2012-13 in Appeal No. 40/2015- 16 and 2013-14 in Appeal No.62/2016-17 wherein exemption had been allowed with all consequential benefits following the order of my Id. predecessor on similar facts. My learned predecessor for the assessment year 2011-12 had held has under: “4.41 have considered the order of the AO and the submissions of the Page 3 of 14 ITA No.- 3313/Del/2018. Professional Assistance for Development Action. assessee and I find considerable merit in the submissions of the assessee that the mischief of Proviso of section 2(15) is not apparently applicable as the assessee is not involved in any trade, commerce or business. The assessee is very much a charitable society and is working for the welfare of the poor and rural people and is very much eligible for exemption u/s 11(1) and the AO has not made out any specific case to show that the assessee is involved in any trade, commerce or business. 4.5 Recently the Hon'ble Delhi High Court in the case of India Trade Promotion Organisation vs. DGIT(E), 53 Taxmann.com 404 (Delhi) 2015 (order dated 22/01/2015) has upheld the constitution validity of the proviso of section 2(15) which was under challenge being discriminatory in view of the Article 14 (Equality before law) of the Constitution of India but the Hon'ble High Court has read down the strict and literal interpretation of the Proviso of section 2(15) and has held that mere receipt of fee or charge cannot be said that the assessee is involved in any trade, commerce or business and has accordingly allowed the relief to the 1TPO case vide Para 58 and 59 of the order. 4.6 After considering all the facts and circumstances of the case, 1 am of the view that apparently the assessee is not apparently involved in any trade, commerce or business and as such the mischief of Proviso of section 2(15) is not applicable and the assessee can be allowed the relief or exemption u/s 11(1) as a charitable society and accordingly the AO is directed to allow the exemption u/s 11(1) with all the consequential benefits." 4.1.6 It is seen from the assessment orders for the assessment years 2011-12, 2012- 13 and 2013-14 that the facts of the case are same as that for the assessment year under consideration, i.e., 2014-15, and that no new facts have been brought out in the assessment order for the year under consideration. Accordingly, the Assessing Officer is directed to allow exemption under section 11 with all the consequential benefits. Grounds of appeal nos. 1 to 7 of the appeal are allowed.”
(B.1) This present appeal has been filed by Revenue against the aforesaid impugned appellate order dated 13.02.2018 of the Ld. CIT(A). In the course of appellate proceedings in Income Tax Appellate Tribunal (“ITAT”, for short), copies of the ITA No.- 3313/Del/2018. Professional Assistance for Development Action. following orders in assessee’s own case passed by Co-ordinate Benches of ITAT, Delhi were filed from the assessee’s side:
(i) Copy of the ITAT order dated 3rd Sept. 2019 in ITA No.- 3662/Del/2015 for Assessment Year 2011-12 in the case of DCIT vs. M/s Professional Assistance for Development Action (PRADAN), (ii) Copy of ITAT order dated 8.12.2020 in for Assessment Year 2012-13 in the case of DCIT vs. Professional Assistance for Development Action (PRADAN) (iii) Copy of ITAT order dated 23.02.2021 in ITA No. 5805/Del/2017 for Assessment Year 2013-14 in the case of ACIT vs. Professional Assistance for Development Action.
(B.1.1) At the time of hearing before us, Ld. Counsel for the assessee submitted at the outset that issues in dispute in the present appeal are squarely covered in favour of the assessee by aforesaid orders dated 3.09.2019, 8.12.2020 and 23.02.2021 passed in assessee’s own case by Co-ordinate Benches of ITAT, Delhi. He further drew attention to paragraphs 4.1.6 of impugned appellate order dated 13.02.2018 of Ld. CIT(A), in which she has observed “…It is seen from the assessment orders for the assessment years 2011-12, 2012-13 and 2013-14 that the facts of the case are same as that for the assessment year under consideration i.e 2014-15, and that no new facts have been brought out in the assessment order for ITA No.- 3313/Del/2018. Professional Assistance for Development Action. the year under consideration.” The learned Senior Departmental Representative (“Ld. Sr. DR”, for short) for Revenue relied on the order of the Assessing Officer.
(C) We have heard both sides and perused the materials available on record. Both sides are in agreement that facts and circumstances for Assessment Year 2014- 15 (to which the present appeal pertains) are identical to facts and circumstances of Assessment Years 2011-12, 2012-13 and 2013-14. The Ld. CIT(A) has also made his observation in paragraph 4.1.6 of her aforesaid impugned appellate order dated 13.02.2018, the relevant portion of which has already been reproduced in foregoing paragraph No. (B) of this order. Neither side has brought any materials for our consideration to persuade us to take a view different from the view already taken by Co-ordinate Benches of ITAT, Delhi in assessee’s own case by aforesaid orders dated 3.09.2019, 8.12.2020 and 23.02.2021 of Co-ordinate Benches of ITAT, Delhi, wherein issues have been decided in favour of the assessee in identical facts. Neither side has brought to our attention any distinguishing facts and circumstances for Assessment Year 2014-15 (to which the present appeal pertains) from facts and circumstances of the aforesaid orders dated 3.09.2019, 8.12.2020 and 23.02.2021 of Coordinate Benches of ITAT, Delhi. The Co-ordinate Benches of ITAT, Delhi have already decided the issues in dispute in favour of the assessee vide aforesaid orders dated 3.09.2019, 8.12.2020 and 23.02.2021 listed in foregoing paragraph no. (B.1) of this order. For ease of reference, the relevant portion of the aforesaid order dated ITA No.- 3313/Del/2018. Professional Assistance for Development Action. 3.09.2019 passed by Co-ordinate Bench of ITAT, Delhi in assessee’s own case, for Assessment Year 2011-12 in are reproduced as under:
“ ITA No.- 3313/Del/2018. Professional Assistance for Development Action. ITA No.- 3313/Del/2018. Professional Assistance for Development Action. ITA No.- 3313/Del/2018. Professional Assistance for Development Action. ITA No.- 3313/Del/2018. Professional Assistance for Development Action. ITA No.- 3313/Del/2018. Professional Assistance for Development Action.
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(C.2) The aforesaid order dated 3.09.2019 of Co-ordinate Bench of ITAT, Delhi was followed by Co-ordinate Bench of ITAT, Delhi for Assessment Years 2012-13 and ITA No.- 3313/Del/2018. Professional Assistance for Development Action. 2013-14 in aforesaid orders dated 8.12.2020 and 23.02.2021 respectively. In identical facts and circumstances the issues in dispute were already been decided in favour of the assessee by aforesaid orders dated 03.09.2019, 8.12.2020 and 23.02.2021 of Co-ordinate Benches of ITAT, Delhi, for Assessment Years 2011-12, 2012-13 and 2013-14 respectively. In view of the foregoing, and respectfully following the aforesaid orders dated 03.09.2019, 8.12.2020 and 23.02.2021 of Co- ordinate Benches of ITAT, Delhi in assessee’s own case, in identical facts and circumstances, for Assessment Years 2011-12, 2012-13 and 2013-14 respectively, we decide the issues in dispute in the present appeal before us, too, in favour of the assessee. Accordingly, we decline to interfere with the impugned appellate order dated 13.02.2018 of the Ld. CIT(A) and dismiss this appeal filed by Revenue.
This order was orally pronounced on 21st September, 2021 in Open Court, in the presence of representatives of both sides, after conclusion of the hearing. Now this order in writing is signed today on 23/09/2021.