ACIT (E), NEW DELHI vs. SERVANTS OF THE PEOPLE SOCIETY, NEW DELHI

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: ‘A’, NEW DELHI

BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI ANADEE NATH MISSHRA, ACCOUNTANT MEMBER ITA Nos. 3081 & 3082/Del/2017 AYRS. : 2010-11 & 2012-13 SERVANTS OF PEOPLE SOCIETY, VS. ADDL. CIT(E), LAJPAT BHAWAN, RANGE-II, LAJPAT NAGAR-4, CIVIC CENTRE, NEW DELHI NEW DELHI – 110 024 (PAN: AAATS1730M) (Appellant) (Respondent)

ITA Nos. 3648 & 3649/Del/2017 AYRS. : 2010-11 & 2012-13 ADDL. CIT(E), VS. SERVANTS OF PEOPLE SOCIETY, RANGE-II, LAJPAT BHAWAN, CIVIC CENTRE, LAJPAT NAGAR-4, NEW DELHI NEW DELHI – 110 024 (PAN: AAATS1730M) (Appellant) (Respondent)

ITA Nos. 3658 & 3659/Del/2018 AYRS. : 2013-14 & 2014-15 SERVANTS OF PEOPLE SOCIETY, VS. ADDL. CIT(E), LAJPAT BHAWAN, RANGE-II, LAJPAT NAGAR-4, CIVIC CENTRE, NEW DELHI NEW DELHI – 110 024 (PAN: AAATS1730M) (Appellant) (Respondent)

ITA Nos. 4207 & 4049/Del/2018 AYRS. : 2013-14 & 2014-15 ADDL. CIT(E), VS. SERVANTS OF PEOPLE SOCIETY, RANGE-II, LAJPAT BHAWAN, CIVIC CENTRE, LAJPAT NAGAR-4, NEW DELHI NEW DELHI – 110 024 (PAN: AAATS1730M) (Appellant) (Respondent)

Assessee by Shri Aseem Chawla, Adv. & Sh. Ashish Dhunna, CA Department by Ms. Ekta Vishnoi, Sr. DR.

ORDER PER H.S. SIDHU, JM: These are 08 cross appeals by the Assessee as well as Revenue are directed against the respective orders passed by the Ld. CIT(A)-36, New Delhi in relation to assessments years 2010-11, 2012-13 to 2014-15. Since the common and identical issues are involved in these appeals, except the difference in figures, hence, the appeals were heard together and are being disposed of by this common order for the sake of convenience, by first dealing with the facts of Assessee’s Appeal No. 3081/Del/2017 (AY 2010-11) and also dealing with ITA No. 3082/Del/2017 and in Revenue’s Appeal Nos. 3648 & 3649/Del/2017 wherein identical issues are involved which are relating to assessment years 2010-11 & 2012-13. 2. The Grounds raised in Assessee’s ITA No. 3081/Del/2017 (AY 2010-11) read as under:- 1. That in view of the facts and circumstances of the case the order passed by the CIT(A) and the assessment order is illegal, bad in law and without jurisdiction. 2. That the order of the CIT (A) is being assailed of being perverse, as the same is passed without considering the submissions of the Appellant, taking a holistic view of the matter and the ratio's of various case laws which have been relied by the Appellant. 3. That the CIT(A) has erred in law and in facts confirming the order of the AO wherein he has denied the exemption U/s 11 of the Act to the Appellant. 4. That the CIT (A) has erred in law in holding that the activities conducted by the Appellant are not in accordance with the objects of the Appellant society. 5. That the CIT (A) has erred in law and in facts in confirming the order of the AO wherein the AO has not allowed the accumulation of income of Rs. 2,25,84,589/- U/s 11(3) of the Act to the Appellant. 6. The Appellant craves leaves to add, alter or modify the aforesaid ground and craves leaves to file additional rounds. 7. The aforesaid grounds are taken without prejudice to each other.

2.1 The Grounds raised in Assessee’s ITA No. 3082/Del/2017 (AY 2012-13) read as under:- 1. That in view of the facts and circumstances of the case the order passed by the CIT (A) and the assessment order is illegal, bad in law and without jurisdiction. 2. That the order of the CIT (A) is being assailed of being perverse, as the same is passed without considering the submissions of the Appellant, taking a holistic view of the matter and the ratio's of various case laws which have been relied by the Appellant. 3. That the CIT(A) has erred in law and in facts confirming the order of the AO wherein he has denied the exemption U/s 11 of the Act to the Appellant. 4. That the CIT (A) has erred in law in holding that the activities conducted by the Appellant are not in accordance with the objects of the Appellant society. 5. That the CIT (A) has erred in law and in facts in confirming the order of the AO wherein the AO has not allowed the accumulation of income of Rs. 47,11,596/- U/s 11(3) of the Act to the Appellant. 6. The Appellant craves leaves to add, alter or modify the aforesaid ground and craves leaves to file additional rounds. 7. The aforesaid grounds are taken without prejudice to each other.

2.2 The grounds raised in Revenue’s Cross ITA No. 3648/Del/2017 (AY 2010- 11) read as under:- 1. On the facts and in the circumstances of the case and in law, Ld. CIT(A) has erred in allowing expenditure as provisions for doubtful debts and provision for arrear of salary. 2. On the facts and in the circumstances of the case and in law, Ld. CIT(A) has erred in allowing utilization of income u/s. 11(2) expenditure as this account has already been allowed on deemed basis earlier years.

expenses was furnished during the assessment proceedings. 5. The appellant craves leave to add, to alter or amend any ground of appeal raised above at the time of hearing. 2.4 The Grounds raised in Assessee’s ITA No. 3658/Del/2018 (AY 2013-14) read as under:- 1. That on the facts and circumstances of the case and in law, the Hon'ble CIT(A) has erred in upholding that the activities of the Appellant do not fall within the definition of charitable purpose, as defined under Section 2(15) of the Income- tax Act, 1961 ('the Act'). 1.1. That on the facts and circumstances of the case and in law the Hon'ble CIT(A) has erred in disregarding the order passed by the Hon'ble IT AT for Assessment Year 1973-74, violating the settled principles of judicial discipline and judicial decorum. 1.2. That on the facts and circumstances of the case and in law the Hon'ble CIT(A) has erred by in wrongly relying upon the ratio decidendi of the Apex Court in Lok Shikshan Trust v. CIT (SC) 101 ITR 23A.by conveniently extracting the phrase, 'publishing newspaper and magazines is not education' from the said judgement. 2. The on the facts and circumstances of the case and in law the Hon'ble CIT(A) has erred in upholding the denial of exemption under section 11 of the Act on the premise that the activity of publishing newspaper by the constitutes carried on by or on behalf of the Trust being commercial in nature without appreciating that these activities were considered as charitable activities for Assessment Year 2011- 12. 2.1. That on the facts of the case and in law, the Hon'ble CIT(A) has erred in sustaining that "running of newspaper activity constitutes business carried on by or behalf of the appellant. In such a case Section 11 (4A) will apply only if the activities are incidental and nothing has been brought on

record to show how the activity of running the newspaper business is incidental to the main objectives of the trust." 2.2. That the Hon'ble CIT(A) has erred on facts and in law in denying exemption in terms of Section 11 of the Act basis irrelevant consideration that the activities carried on by the appellant did not aid and assist in accomplishing the main object, to enlist and train national missionaries for the service of motherland. 2.3. That on the facts and circumstances of the case and in law, the Hon'ble ClT(A) has erred in stating, "nothing has been brought on record to show how the activity of running the newspaper business is incidental to the main objective of the Trust." 2.4. That the Hon'ble CIT(A) has erred 00 facts and in law by invoking Section 13(8) of the Act and thereby, sustaining an addition amounting to Rs. 7,62,81,269 on account of surplus generated from publication of newspapers. 3. That on the facts and circumstances of the case the Hon'ble CIT(A) has erred in not adjudicating with regard to surplus amounting to Rs. 2,73,83,417; interest and other income of Rs. 3,36,37,911 and agricultural expenses of Rs. 20,22,411. 4. That having regard to the facts and circumstances of the case and in law the Hon'ble CIT(A) has erred in affirming the impugned assessment order wherein it has been wrongly held that, "running of newspaper is not incidental to the objects of the appellant and that it is in the nature of business since the assessee itself has submitted audit reports in From 3CB and 3CD and resultantly, on the Hon'ble High Court of Delhi decision on Mehta Charitable Prajnalaya Trust." 5. That having regard to the facts of the case and in law, the Hon'ble CIT(A) has without an independent reasoning of the nature of the activities, placed reliance on earlier ClT(A) 's orders for Assessment Years 2010-11 and 12-13 confirming the impugned addition.

newspaper activity constitutes business carried on by or behalf of the appellant. In such a case Section 11 (4A) will apply only if the activities are incidental and nothing has been brought on record to show how the activity of running the newspaper business is incidental to the main objectives of the trust. 2.2 That the Hon'ble CIT(A) has erred on facts and in law in denying exemption in terms of Section 11 of the Act basis irrelevant consideration that the activities carried on by the appellant did not aid and assist in accomplishing the main object, to enlist and train national missionaries for the service of motherland. 2.3 That on the facts and circumstances of the case and in law, the Hon'ble CIT(A) has erred in stating, nothing has been brought on record to show how the activity of running the newspaper business is incidental to the main objective of the Trust. 2.4 That on the facts and circumstances of the case and in law, the Hon'ble ClT(A) in complete disregard of the fact that the printing press was instrumental in achieving the objectives of the Trust and keeping alive the motto of Pandit Gopal Banhu Das, has erroneously concluded that the printing press is a business activity not quantifying as a charitable activity. 3. The Hon'ble CIT(A) has erred on facts and in law invoking Section 13(8) of the Act and thereby, sustaining an addition amounting to Rs 24,586,358 on account if surplus earned from publication of newspapers. 4. That having regard to the facts and circumstances of the case and in law the Hon'ble CIT(A) has erred in affirming the impugned assessment order wherein it has been wrongly held that. "running of newspaper is not incidental to the objects of the appellant and that it is in the nature of business since the assessee itself has submitted audit reports in From 3CB and 3CD and resultantly, on the Hon'ble High

Court of Delhi decision on Mehta Charitable Prajnalaya Trust." 5. That having regard to the facts of the case and in law, the Hon'ble ClT(A) has without an independent reasoning of the nature of the activities, placed reliance on earlier ClT(A)'s orders for Assessment Years 2010-11 and 12-13 confirming the impugned addition. 6. That the order passed by the Hon'ble CIT(A) is nonspeaking, cryptic and laconic in nature and violates the principles of natural justice, fair play and equity. 7. The Hon'ble CIT(A) has erred in upholding the addition of Rs.2,16,04,434 with regard to surplus shown from activities rendered at Delhi and of RS.2,50,79,967 pertaining to interest income reported at Delhi. 8. The Hon'ble CIT(A) has erred in upholding the disallowance of RS.2,830,527 on account of farm expenses. 9. All of the above grounds of appeal are without prejudice and notwithstanding each other. 2.6 The grounds raised in Revenue’s Cross ITA No. 4207/Del/2018 (AY 2013- 14) read as under:- 1. Whether on the facts and circumstances of the case and in law, Ld. CIT(A) has erred in deleting the disallowance of Rs. 2,04,38,830/- as provision for doubtful debt holding that the assessee itself added the same in computation of income, without appreciating that the AO made the computation of taxable income afresh starting from the surplus shown in income and expenditure account. 2. Whether on the facts and circumstances of the case and in law, Ld. CIT(A) has erred in deleting the disallowance of Rs. 6,51,049/- as provision for arrear of salary holding that the assessee itself added the same in computation of income, without appreciating that the AO made the computation of taxable income afresh starting

from the surplus shown in income and expenditure income. It is also seen that the provision is in fact provision for leave encashment not allowable under the Income Tax Act. 3. Whether on the facts and circumstances of the case and in law, Ld. CIT(A) has erred in deleting the addition of Rs. 1,27,33,613/- on the ground that the assessee had itself disallowed the same in computation of income, ignoring the fact that unless the same is claimed as expenditure the assessee would not have disallowed it. 4. The appellant craves leave to add, to alter or amend any ground of appeal raised above at the time of hearing. 2.7 The grounds raised in Revenue’s Cross ITA No. 4049/Del/2018 (AY 2014- 15) read as under:- 1. Whether on the facts and circumstances of the case and in law, Ld. CIT(A) has erred in deleting Rs. 3,47,18,749/- even though the assessee has shown this amount of Rs. 3,47,18,749/- towards interest income from term deposit of Orissa Branch which has been credited directly in the earmarked and reserve fund and this amount has not been shown in the Income and Expenditure Account. 2. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs. 3,47,18,749/- by holding that the assessee has already disclosed this amount in computation of income ignoring the fact that the AO while computing taxable income has started afresh from receipt as per income expenditure account and has not considered the additions already made in

computation therefore there is no double addition in this case. 3. The appellant craves leave to add, to alter or amend any ground of appeal raised above at the time of hearing.

ASSESSEE’S ITA NOS. 3081 & 3082/DEL/2017 (AYRS. 2010-11 & 2012- 13) & REVENUE’S ITA NOS. 3648 & 3649/DEL/2017 (AYRS. 2010-11 & 2012-13).

10(23)(c)(iv) for the assessment years 1990-91 to 1992-93 vide notification dated 27.01.1995 and application for similar notification stated to have been made and approval awaited for subsequent years. 3.2 Assessee-society is engaged in printing and publication of newspaper and a show cause notice dated 25.02.2013 was issued fixing the case on 01.03.2013. In response to the show cause notice counsel of the assessee attended the proceedings on 15.03.2013. The assessee has taken plea that the earlier assessment years were made at NIL. Further the question of nature of activities of the society being commercial in nature was raised in AY 1973-74. The Ld. CIT(A) and Tribunal decided this issue in favour of the assessee. The Department filed reference applications in ITAT for filing appeals to the High Court. Later on reference applications were withdrawn. The assessee is also taken the plea that the CBDT has also treated its activities as charitable. After considering the submissions of the assessee as well as law applicable in the case of the assessee, the AO was of the view that assessee is required to keep separate books of accounts and business should be incidental to attainment of its objective to avail exemption u/s. 11(4A) of the Act and in view of Section 2(15) which has been amended w.e.f. 01.04.2009 to curb such practices. In view of the amended section 2(15) of the Act from the assessment year 2009-10 any activity in the nature of trade / commerce/ business or any activity of rendering any service in relation to any trade, commerce or business; for a cess or fee or any other consideration, irrespective of the nature of use or application, or retention of the income from such activity will not be entitled for exemption u/s. 11 or section 10(23)© of the I.T. Act if they carry on commercial activities. Whether such an entity is carrying on an activity in the nature of trade, commerce or business is a question of fact which will be decided based on the nature, scope, extent and frequency of the activity. The assessee who claim that their objet is ‘charitable purpose’ within the meaning of Section 2(15), would be well advised to eschew any activity which is in the nature of trade, commerce or business or the rendering of any service in relation to any trade, commerce or business. 3.3 After going through the evidences filed by the assessee and as per provisions of law, the AO was of the view that on the sequence of amendment in the Act in Section 2(15) w.e.f. 01.04.2009 which is applicable from Assessment year 2009-10. The charitable trust with general object of public utility are required to eschew any activity which is in the nature of trade, commerce or

business or the rendering of any service in relation to any trade, commerce or business to remain charitable to continue registration u/s. 12A of the Act. The effect of the amendment is that trusts having objects of the advancement of any other object of general public utility end use of business profit for charitable purposes is of no relevance due to amendment in section 2(15) of the Act. 3.4 Evidently the activities of the assessee of running newspaper printing has characteristics and the assessee is generating income from publishing advertisements in its newspapers. In view of the various judgments, the AO held that the assessee falls under the last limb of section 2(15), and hit by this section. Accordingly, provisions of section 13(8) of the Act is applicable and surplus generated of Rs. 6,00,34,647/- from newspaper business is taxed at maximum marginal rate and levy of penalty u/s. 271(1)© of the Act also alongwith various other additions mentioned in para no. 13 to 19 of the assessment order dated 15.3.2013 passed u/s.143(3) of the Act. Aggrieved with the assessment order dated 15.3.2013, assessee filed the appeal before the Ld. CIT(A), who vide his impugned order dated 01.3.2017 has partly allowed the appeal of the assessee against which the Assessee as well as Revenue are in cross appeals before the Tribunal. 4. At the time of hearing, Ld. Counsel for the assessee filed his Synopsis/Written Submissions in all the appeals filed by the Assessee as well as by the Department and the same are reproduced hereunder:- “Synopsis : 2010-11 : 3081/Del/2017 & 3648/ Del/2017 (Cross Appeals) Appellant Appeal: ITA No. 3081/ Del! 2017 Ground No.1 and 2: General in Nature Ground No.3 and 4: Addition of Rs. 6,00,34,647 /- on account of surplus generated from the activity of publishing of Newspaper. The said issue is covered in favour of the Appellant by the Hon'ble Tribunal Order dated September 17,2019 (copy enclosed and marked as Annexure 1- 9) passed in the Appellant own's case, ITA No. 4984/ Del/ 2015 for the Assessment Year ('AY') 2011-12.

Ground No.5: Addition of Rs. 2,25,84,589/- on account of income deemed under the provisions of Section 11 (3) of the Act. The Appellant suo-moto has already increased its assessable income by Rs. Rs. 2,25,85,589/- for the relevant previous year ended on March 31, 2010. (refer computation of income for the Assessment Year 2010-11 placed as Annexure 10) Further, the said addition made by the Learned AO ('Ld. AO') tantamount to double addition. Ground 6 and 7 : General in Nature Departmental Appeal: ITA No. 3648/ Del/ 2017 Ground No.1: Disallowance of Rs. 4,50,000/- on account of Provision for Bad and Doubtful Debts and Rs. 5,00,000/- on account of provision for Arrears of Salary. The Appellant suo-moto has already increased its assessable income by reducing its expenditure by an amount of Rs. 4,50,000/- and Rs. 5,OO,OOO/- for the relevant previous year ended on March 31, 2010. (refer computation of income for the Assessment Year 2010-11 placed as Annexure 10). Further, the said disallowance(s) made by the Ld. AO tantamount to double disallowance. Ground No.2: Addition of Rs. 64,64,637/- on account of Accumulation of income under section 11(2) of the Act. The Appellant suo-moto has already increased its assessable income by Rs. 64,64,637/- for the relevant previous year ended on March 31, 2010. (refer computation of income for the Assessment Year 2010- 11 placed as Annexure 10) Further, the said addition made by the Ld. AO tantamount to double addition.

Ground No.3: Addition of Rs. 2,18,37,525/- on account of interest and other income credited in reserve fund for activities centered at Delhi. The Appellant suo-moto has already increased its assessable income by Rs. 2,18,37,525/- for the relevant previous year ended on March 31, 2010. (refer computation of income for the Assessment Year 2010-11 placed as Annexure 10) Further, the said addition made by the Ld. AO tantamount to double addition. Ground No.4: General in Nature A detailed chart summarizing all the Grounds of Appeal for AY 2010-11 is also enclosed and marked as Annexure 14-16. Assessment Year 2012-13 ITA No. : 3082/ Del/2017 & 3649/ Del/ 2017 Appellant Appeal: ITA No. 30821 Dell 2017 Ground No.1 and 2: General in Nature Ground No.3 and 4: Addition of Rs. 9,66,08,554 /- on account of surplus generated from the activity of publishing of Newspaper and Rs. 2,63,41,112/- on account of surplus generated from activities of the Appellant centered at Delhi. The said issue is covered in favour of the Appellant by the Hon'ble Tribunal Order dated September 17,2019 (copy enclosed and marked as Annexure 1- 9) passed in the Appellant own's case, ITA No. 4984/ Del! 2015 for the Assessment Year ('AY') 2011-12. Ground No.5: Addition of Rs. 47,11,596/- on account of income deemed under the provisions of Section 11(3) of the Act. The Appellant suo-moto has already increased its assessable income by Rs. 47,11,596/- for the relevant previous year ended on March 31, 2012. (refer computation of income for the Assessment Year 2012- 13 placed at Annexure 11)

Further, the said addition made by the Ld. AO tantamount to double addition. Ground No.6 and 7: General in nature. Departmental Appeal: ITA No. 3649/ Del/2017 Ground No.1: Disallowance ofRs. 59,32,500/- on account of Provision for Bad and Doubtful Debts and Rs. 1,00,00,000/- on account of provision for Arrears of Salary. The Appellant suo-moto has already increased its assessable income by reducing its expenditure by an amount of Rs. 59,32,500/- and Rs. 1,00,00,000/- for the relevant previous year ended on March 31, 2012. (refer computation of income for the Assessment Year 2012-13 placed at Annexure 11) Further, the said disallowance(s) made by the Ld. AO tantamount to double disallowance. Ground No.2: Addition of 1,42,65,366/- on account of Accumulation of income under section 11(2) of the Act. The Appellant suo-moto has already increased its assessable income by Rs. 1,42,65,366/- for the relevant previous year ended on March 31, 2012. (refer computation of income for the Assessment Year 2012-13 placed at Annexure 11) Further, the said addition made by the Ld. AO tantamount to double addition. Ground No.3: Addition of Rs. 1,61,09,159/- on account oflnterest and other income credited in reserve fund for activities centered at Delhi. The Appellant suo-moto has already increased its assessable income by Rs. 1,61,09,159/- for the relevant previous year ended on March 31, 2012. (refer computation of income for the Assessment Year 2012-13 placed at Annexure 11) Further, the said addition made by the Ld. AO tantamount to double addition.

Ground No.4: Disallowance of Rs. 18,31,216/- on account of Gratuity expense. The details of the payment of gratuity were submitted before the Ld. AO during the assessment proceedings and the said fact has also been accepted by the Hon'ble CIT(A) at Para l1(v), Page 6 of her order. Ground No.5: General in Nature. A detailed chart summarizing all the Grounds of Appeal for AY 2012-13 is also enclosed and marked as Annexure 17 -20. Assessment Year : 2013-14 ITA No. : 3658/ Del/ 2018 & 4207/ Del/ 2018 (Cross Appeals) Appellant's Appeal: ITA No. 3658/Del/2018 Ground No.1, 2, 4 and 5: Addition of Rs. 7,62,81,269/- on account of surplus generated from the activity of publishing of Newspaper. The said issue is covered in favour of the Appellant by the Hon'ble Tribunal Order dated September 17,2019 (copy enclosed and marked as Annexure 1- 9) passed in the Appellant own's case, ITA No. 4984/ Del! 2015 for the Assessment Year ('AY') 2011-12. Ground No.3: Addition of Rs. 2,73,83,417/- on account of surplus generated from activities centered at Delhi & Rs. 3,36,37,911/- on account of Interest and other income credited in reserve fund for activities centered at Delhi and disallowance of arm expenses of Rs. 20,22,411/-. In regard to the addition of Rs. 2,73,83,417/- on account of surplus generated from activities centered at Delhi, the Appellant submits that the said issue is covered in favour of the Appellant by the Hon'ble Tribunal Order dated September 17, 2019 (copy enclosed and marked as Annexure 1 - 9) passed in the Appellant own's case, ITA No. 4984/ Del/ 2015 for the Assessment Year ('AY') 2011-12.

Further, as regards the addition of Rs. 3,36,37,911/- on account of Interest and other income credited in reserve fund for activities centered at Delhi, the Appellant submits that it suo-moto has already increased its assessable income by Rs. 3,36,37,911/- for the relevant previous year ended on March 31,2013. (refer computation of income for the Assessment Year 2013-14 placed at Annexure 12) Also, the Appellant submits that it has duly considered the farm expenses of Rs. 20,22,411/- while suo-moto disallowing the agriculture income in its computation of income. (refer computation of income for the Assessment Year 2013-14 placed at Annexure 12) Further, the addition/ disallowance made by the Ld. AO of the above-mentioned amount(s) of Rs.3,36,37,911/- and Rs. 20,22,411/- tantamount to double addition/ disallowance. Ground No.6 and 7: General in nature. Departmental Appeal: ITA No. 4207/ Del/2018 Ground No.1: Disallowance of Rs. 2,04,38,830/- on account of Provision of Bad and Doubtful Debts and Rs. 6,51,049/- on account of Provision for Arrears of Salary. The Appellant suo-mota has already increased its assessable income by reducing its expenditure by an amount of Rs. 2,04,38,830/- and Rs. 6,51,049/- for the relevant previous year ended on March 31, 2013. (refer computation of income for the Assessment Year 2013-14 placed at Annexure 12) Further, the said disallowance(s) made by the Ld. AO tantamount to double disallowance. Ground No.2: Addition of Rs. 1,27,33,613/- on account of Accumulation of income under section 11(2) of the Act. The Appellant suo-mota has already increased its assessable income by Rs. 1,27,33,613/- for the

relevant previous year ended on March 31, 2013. (refer computation of income for the Assessment Year 2013-14 placed at Annexure 12) Further, the said addition made by the Ld. AO tantamount to double addition. A detailed chart summarizing all the Grounds of Appeal for AY 2013-14 is also enclosed and marked as Annexure 21 - 23.

Assessment Year : : 2014-15 ITA No. : 3658/ Del/ 2018 & 4049/ Del/ 2018 (Cross Appeals) Appellant's Appeal: ITA No. 3658/ Del/ 2018 Ground no. 1 to 6: Addition of Rs. 2,45,86,358/- on account of surplus generated from the activity of publishing of Newspaper. The said issue is covered in favour of the Appellant by the Hon'ble Tribunal Order dated September 17,2019 (copy enclosed and marked as Annexure 1 - 9) passed in the Appellant own's case, ITA No. 4984/ Del/ 2015 for the Assessment Year (AY') 2011-12. Ground No.7: Addition of Rs. 2,16,04,434/- on account of surplus generated from activities centered at Delhi and Rs. 2,50,79,967/- on account of Interest and other income credited in reserve fund for activities centered at Delhi. In regard to the addition of Rs. 2,16,04,434/- on account of surplus generated from activities centered at Delhi, the Appellant submits that the said issue is covered in favour of the Appellant by the Hon'ble Tribunal Order dated September 17,2019 (copy enclosed and marked as Annexure 1 - 9) passed in the Appellant own's case, ITA No. 4984/ Del/ 2015 for the Assessment Year (lAY') 2011-12. Further, as regards the addition of Rs. 2,50,79,967/- on account of Interest and other income credited in reserve fund for activities centered at Delhi, the Appellant submits that it suo-moto has already

increased its assessable income by Rs. 1,27,33,613/- for the relevant previous year ended on March 31,2014. (refer computation of income for the Assessment Year 2014-15 placed at Annexure 13) Further, the said addition made by the Ld. AO tantamount to double addition. Ground No.8: Disallowance ofRs. 28,30,527/- on account off arm expenses. The Appellant submits that it has duly considered the farm expenses of Rs. 28,30,527/- while suo-moto disallowing the agriculture income in its computation of income. (refer computation of income for the Assessment Year 2014-15 placed at Annexure 13) Further, the said disallowance made by the Ld. AO tantamount to double disallowance. Ground No.9: General in Nature Departmental Appeal: ITA No. 4049/ Del/ 2018 Ground No.1 and 2: Addition on account of Interest and Other Income amounting to Rs. 3,47,18,749/- credited in reserve fund. The Appellant suo-moto has already increased its assessable income by Rs. 3,47,18,749/- for the relevant previous year ended on March 31, 2014. (refer computation of income for the Assessment Year 2014-15 placed at Annexure 13) Further, the said addition made by the Ld. AO tantamount to double addition. Ground No.3: General in Nature A detailed chart summarizing all the Grounds of Appeal for AY 2013-14 is also enclosed and marked as Annexure 24 -25. Kindly take the above on record. Prayed Accordingly” 4.1 In addition to aforesaid Written Submissions, Ld. Counsel for the assessee submitted that as regards the activity of publishing of news paper has been declared as Charitable vide ITAT, Delhi ‘A’ Bench vide order dated

17.09.2019 passed in assessee’s own case for the assessment year 2011-12 in ITA No. 4984/Del/2015 – ACIT(E) vs. Servants of People Society, a copy thereof is filed by him before the Bench. Hence, he requested to respectfully follow the same precedent in all these appeals and similar addition may be deleted. As regards other additions mentioned in the Written Submissions of the Assessee, he stated that assessee has suo-moto has already increased its assessable income and inspite of that the AO has made the addition, which tantamount to double addition. Hence, he requested that this issue involved in the appeals may be set aside to the AO with the directions to verify the same whether the same amounts to double addition or not. 5. On the contrary, Ld. DR relied upon the orders of the AO and stated that AO has passed a well reasoned order on the basis of amendment in section 2(15) of the I.T. Act, 1961 which is effective from 01.04.2009 and is applicable from Assessment year 2009-10. On the issue of exemption u/s. 11 apart from relying on the decision of the AO and Ld. CIT(A), she placed reliance on the following cases. But she could not controvert the contention of the Ld. Counsel for the assessee that the issue of activity of publishing of news paper is squarely covered by the decision of the ITAT, Delhi ‘A’ Bench vide order dated 17.09.2019 passed in assessee’s own case for the assessment year 2011-12 in ITA No. 4984/Del/2015 – ACIT(E) vs. Servants of People Society wherein the said activity has been declared as charitable. As regards issues of double addition are concerned, she has no objection if the said issues be set aside to the AO for verification whether the said amount tantamount to double addition or not, as requested by the Ld. Counsel for the assessee, as aforesaid. - Information Systems Audit & Control Association vs. Deputy Director of Income Tax (Exemptions)-1, Chennai – passed in ITA No. 1693 (Mds.) of 2015 (2016) 67 taxmann.com 140 (Chennai- Trib). - Murasoli Trust vs. Assistant Director of Income Tax (Exemptions IV), Chennai (2016) 65 taxmann.com 186 (Chennai-Trib.) - Indian Tools Technology Centre vs. CIT-I, Jalandhar (2014) 42 taxmann.com 359 (Amritsar –Trib.)

- New Elim Charitable & Educational Trust. Vs. CIT-1, Cochin-1 (2013) 40 taxmann.com 373 (Cochin-Trib.) - Win Publication Trust vs. CIT, Kochi (2014) 41 taxmann.com 119 (Cochin Trib.) - Employers’ Federation of Southern India vs. ADIT(E)-III, Chennai (2017) 88 taxman.com 751 (Chennai-Trib.) - CIT vs. Sree Anjaneya Medical (2016) 74 taxamann.com 243 (SC). - ACIT vs. Grama Vidiyal Trust (2016) 71 taxamann.com 88 (Chennai –Trib.) - DCIT (Exemptions)-II, Chennai vs. Chennai Kammavar Trust (2017) 81 taxmann.com 365 (Chennai-Trib.) - ITO (E), Chennai vs. FRP Institute (2017) 88 taxamann.com 835 (Chennai-Trib.). 6. We have heard both the parties and carefully perused and considered the relevant records, the impugned orders, Paper Books filed by the assessee, Written Submissions filed from both the sides and the case laws relied therein. Assessee’s Appeal No. 3081/ Del/2017 (AY 2010-11) 6.1 We find that Ground No.1 and 2 in Assessee’s appeal are general in nature, hence, need not be adjudicated. 6.2 As regards Ground No.3 and 4 which is relating to Addition of Rs. 6,00,34,647 /- on account of surplus generated from the activity of publishing of Newspaper. We find that the said issue is squarely covered by the Order of this Bench dated 17.9.2019 passed in assessee’s own case for the assessment year 2011-12 in ITA No. 4984/Del/2015 – ACIT(E) vs. Servants of People Society wherein the Tribunal has held as under:- “5. We have heard both the parties and perused the records especially the impugned order, Paper Book filed by the Assessee and the case laws relied therein as well as the relevant provisions of the Act on the issue in dispute. We find considerable cogency in the contention of the Ld. Counsel for the assessee that the assesse is a charitable institution and mere receipt of fees and income etc. cannot

be said that the assessee is involved in any trade, commerce or business. The assessee is carrying the mandate of the Will of Late Shri Gopa Bandhu Dass in running the printing press and the newspaper and the income so generated is used for charitable purposes and apparently there is no profit motive in the activities of the assessee and as such it cannot be said that the assessee is involved in any trade, commerce or business and as such the mischief of the Proviso of section 2(15) is not apparently attracted. We further note that the Hon’ble Delhi High Court in the case of India Trade Promotion Organization vs. DGIT9E) 53 Taxmann.com 404 (Delhi) 2015 order dated 22.1.2015 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 setion 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 aforesaid case. After considering all the facts and circumstances of the case, we are of the considered view that the assessee is a charitable and non-profit institution and also found that assessee is not involved in any trade, commerce or business activity which attracts the mischief of the Proviso of section 2(15) of the Act and the assessee has been enjoying the exemption u/s. 11(1) and also u/s. 10(23C)(iv) in the past and accordingly following the principle of consistency the AO was rightly directed to allow the exemption to the assessee u/s. 11(1) of the Act with all the consequential benefits by the Ld. CIT(A). Hence, we do not find any infirmity in the order of the Ld. CIT(A), therefore, we uphold the same and reject the grounds raised by the Revenue and accordingly, dismiss the appeal filed by the Revenue.” 6.2.1 Respectfully following the precedent, as aforesaid, the additions in dispute are hereby deleted and accordingly, the ground no. 3 & 4 are allowed.

6.3 As regards ground no.5 which is relating to Addition of Rs. 2,25,84,589/- on account of income deemed under the provisions of Section 11 (3) of the Act is concerned, after perusing the computation of income for the Assessment Year 2010-11 placed in Paper Book, we find considerable cogency in the contention of the Ld. Counsel for the Assessee that the Assessee suo-moto has already increased its assessable income by Rs. 2,25,85,589/- for the relevant previous year ended on March 31, 2010 and further the said addition made by the AO tantamount to double addition, which in our opinion, needs to be verified at the level of the AO whether the same tantamount to double addition or not and then decide the same afresh, after giving adequate opportunity of being heard to the assessee. We hold and direct accordingly. In the result, the Assessee’s appeal is partly allowed for statistical purposes. Assessee’s Appeal No. 3082/ Del/2017 (AY 2012-13) 6.4 Following the consistent view as taken in ITA No. 3081/Del/2017 (AY 2010-11), as aforesaid, the ITA no. 3082/Del/2017 (AY 2012-13) is also partly allowed for statistical purposes, being the issues involved therein are exactly similar and common to the issues raised in ITA No. 3081/Del/2017 (AY 2010- 11). 6.5 In the result, both the Assessee’s appeals are partly allowed for statistical purposes. Revenue’s Cross Appeal : ITA No. 3648/Del/2017 (AY 2010-11) 7. We find that Ground No. 1 is relating to Disallowance of Rs. 4,50,000/- on account of Provision for Bad and Doubtful Debts and Rs. 5,00,000/- on account of provision for Arrears of Salary. After perusing the computation of income for the AY 2010-11), we note that Assessee suo-moto has already increased its assessable income by reducing its expenditure by an amount of Rs. 4,50,000/- and Rs. 5,00,000/- for the relevant previous year ended on March 31, 2010. Further, the said disallowance made by the AO tantamount to double disallowance, which in our opinion, needs to be verified at the level of the AO whether the same tantamounts to double addition or not and then decide the same afresh, after giving adequate opportunity of being heard to the assessee. We hold and direct accordingly. 7.1 As regards Ground No.2 relating to Addition of Rs. 64,64,637/- on account of Accumulation of income under section 11(2) of the Act. It is noted that the assessee suo-moto has already increased its assessable income by Rs. 64,64,637/- for the relevant previous year ended on March 31, 2010. Further,

the said addition made by the AO tantamount to double addition, which in our opinion, needs to be verified at the level of the AO whether the same tantamount to double addition or not and then decide the same afresh, after giving adequate opportunity of being heard to the assessee. We hold and direct accordingly. 7.2 As regards Ground No.3: Addition of Rs. 2,18,37,525/- on account of interest and other income credited in reserve fund for activities centered at Delhi. It is noted that Assessee suo-moto has already increased its assessable income by Rs. 2,18,37,525/- for the relevant previous year ended on March 31, 2010. Further, the said addition made by the AO tantamount to double addition, which in our opinion, needs to be verified at the level of the AO whether the same tantamount to double addition or not and then decide the same afresh, after giving adequate opportunity of being heard to the assessee. We hold and direct accordingly. In the result, the Revenue’s Appeal stands allowed for statistical purposes. Revenue’s Cross Appeal : ITA No. 3649/Del/2017 (AY 2012-13) 7.3 Following the consistent view as taken in ITA No. 3648/Del/2017 (AY 2010-11), as aforesaid, the ground no. 1, 2 & 3 raised in ITA no. 3649/Del/2017 (AY 2012-13) are also set aside to the AO with the similar directions, as aforesaid, being the ground no. 1, 2, & 3 are exactly similar and common to the ground no. 1, 2, & 3 raised in ITA No. 3648/Del/2017 (AY 2010- 11). 7.4 As regards, ground no. 4 relating to disallowance of Rs. 18,31,216/- on account of Gratuity expense is concerned, we find that the details of payment of gratuity were submitted before the AO during the assessment proceedings and the said fact has also been accepted by the Ld. CIT(A) at para 11(v) Page 6 of her order, which does not need any interference, on our part, hence, we uphold the same and reject the ground no. 4 of the Revenue. In the result, the Revenue’s Appeal is partly allowed for statistical purposes. Assessee’s ITA No. : 3658/Del/ 2018 (AY 2013-14) 8. As regards Ground No.1, 2, 4 and 5 relating to Addition of Rs. 7,62,81,269/- on account of surplus generated from the activity of publishing of Newspaper are concerned, we find that the said issues are squarely covered by the Order of this Bench dated 17.9.2019 passed in assessee’s own case for the assessment year 2011-12 in ITA No. 4984/Del/2015 – ACIT(E) vs. Servants of People Society, has held as under:-

“5. We have heard both the parties and perused the records especially the impugned order, Paper Book filed by the Assessee and the case laws relied therein as well as the relevant provisions of the Act on the issue in dispute. We find considerable cogency in the contention of the Ld. Counsel for the assessee that the assesse is a charitable institution and mere receipt of fees and income etc. cannot be said that the assessee is involved in any trade, commerce or business. The assessee is carrying the mandate of the Will of Late Shri Gopa Bandhu Dass in running the printing press and the newspaper and the income so generated is used for charitable purposes and apparently there is no profit motive in the activities of the assessee and as such it cannot be said that the assessee is involved in any trade, commerce or business and as such the mischief of the Proviso of section 2(15) is not apparently attracted. We further note that the Hon’ble Delhi High Court in the case of India Trade Promotion Organization vs. DGIT9E) 53 Taxmann.com 404 (Delhi) 2015 order dated 22.1.2015 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 setion 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 aforesaid case. After considering all the facts and circumstances of the case, we are of the considered view that the assessee is a charitable and non-profit institution and also found that assessee is not involved in any trade, commerce or business activity which attracts the mischief of the Proviso of section 2(15) of the Act and the assessee has been enjoying the exemption u/s. 11(1) and also u/s. 10(23C)(iv) in the past and accordingly following the principle of consistency the AO was rightly directed to allow the exemption to the assessee

u/s. 11(1) of the Act with all the consequential benefits by the Ld. CIT(A). Hence, we do not find any infirmity in the order of the Ld. CIT(A), therefore, we uphold the same and reject the grounds raised by the Revenue and accordingly, dismiss the appeal filed by the Revenue.” 8.1 Respectfully following the precedent, as aforesaid, the additions in dispute are hereby deleted and accordingly, the ground no. 1, 2, 4 & 5 are allowed. 8.2 As regards Ground No.3 relating to Addition of Rs. 2,73,83,417/- on account of surplus generated from activities centered at Delhi & Rs. 3,36,37,911/- on account of Interest and other income credited in reserve fund for activities centered at Delhi and disallowance of farm expenses of Rs. 20,22,411/- are concerned, we find that addition of Rs. 2,73,83,417/- on account of surplus generated from activities centered at Delhi, the this issue is squarely covered in favour of the Assessee by the decision of the Tribunal dated September 17, 2019 passed in the Appellant own's case, ITA No. 4984/ Del/ 2015 for the Assessment Year ('AY') 2011-12, as aforesaid. Hence, respectfully following the precedent, as aforesaid, this addition is deleted. 8.2.1 Further, as regards the addition of Rs. 3,36,37,911/- on account of Interest and other income credited in reserve fund for activities centered at Delhi, the Appellant submits that it suo-moto has already increased its assessable income by Rs. 3,36,37,911/- for the relevant previous year ended on March 31,2013. It is also noted that that Assessee has duly considered the farm expenses of Rs. 20,22,411/- while suo-moto disallowing the agriculture income in its computation of income. Further, the addition/ disallowance made by the AO of the above-mentioned amount(s) of Rs.3,36,37,911/- and Rs. 20,22,411/- tantamount to double addition/ disallowance, which in our opinion, needs to be verified at the level of the AO whether the same tantamount to double addition or not and then decide the same afresh, after giving adequate opportunity of being heard to the assessee. We hold and direct accordingly. In the result, the Assessee’s appeal is partly allowed for statistical purposes. Assessee’s Appeal No. 3659/ Del/2018 (AY 2014-15) 8.3 Following the consistent view as taken in ITA No. 3658/Del/2018 (AY 2013-14), as aforesaid, the ITA no. 3659/Del/2018 (AY 2014-15) is also partly allowed for statistical purposes, being the issues involved therein are exactly similar and common to the issues in ITA No. 3658/Del/2018 (AY 2013-14).

8.4 In the result, Assessee’s appeal partly allowed for statistical purposes.

Departmental Appeal: ITA No. 4207/ Del/2018 (AY 2013-14) 9. As regards Ground No.1 relating to disallowance of Rs. 2,04,38,830/- on account of Provision of Bad and Doubtful Debts and Rs. 6,51,049/- on account of Provision for Arrears of Salary. The assessee suo-moto has already increased its assessable income by reducing its expenditure by an amount of Rs. 2,04,38,830/- and Rs. 6,51,049/- for the relevant previous year ended on March 31, 2013. Further, the said disallowance made by the. AO tantamount to double disallowance, which in our opinion, needs to be verified at the level of the AO whether the same tantamount to double addition or not and then decide the same afresh, after giving adequate opportunity of being heard to the assessee. We hold and direct accordingly. 9.1 As regards ground 2 relating to Addition of Rs. 1,27,33,613/- on account of Accumulation of income under section 11(2) of the Act. The Assessee suo- moto has already increased its assessable income by Rs. 1,27,33,613/- for the relevant previous year ended on March 31, 2013. Further, the said addition made by the Ld. AO tantamount to double addition, which in our opinion, needs to be verified at the level of the AO whether the same tantamount to double addition or not and then decide the same afresh, after giving adequate opportunity of being heard to the assessee. We hold and direct accordingly. In the result, the Revenue’s appeal is allowed for statistical purposes. Departmental Appeal: ITA No. 4049/ Del/ 2018 (AY 2014-15) 10. As regards Ground No. 1 and 2 relating to Addition on account of Interest and Other Income amounting to Rs. 3,47,18,749/- credited in reserve fund. We note that the Assessee suo-moto has already increased its assessable income by Rs. 3,47,18,749/- for the relevant previous year ended on March 31, 2014. Further, the said addition made by the AO tantamount to double addition, which in our opinion, needs to be verified at the level of the AO whether the same tantamount to double addition or not and then decide the same afresh, after giving adequate opportunity of being heard to the assessee. We hold and direct accordingly. In the result, the Revenue’s appeal is allowed for statistical purposes. 10.1 The judicial decisions relied upon by the Ld. Sr. DR. have been duly considered. In our considered view, we do not find any parity in the facts of the decisions relied upon with the peculiar facts of the case in hand.

Sd/- Sd/- (ANADEE NATH MISSHRA) (H.S. SIDHU) ACCOUNTANT MEMBER JUDICIAL M EMBER

Dated: 01.11.2019

“SRB”