ITO (E), NEW DELHI vs. M/S CONSULTANCY DEVELOPMENT CENTRE, NEW DELHI

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ITA 92/DEL/2016Status: DisposedITAT Delhi28 September 2017AY 2011-124 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the assessee's activities were educational in nature and did not fall under the amended provisions of Section 2(15) which applies to objects of general public utility. The Tribunal followed its own earlier decision in the assessee's own case.

What were the facts?

The assessee, a charitable society registered under Section 12AA, was denied exemption under Section 11 by the AO. The AO contended that the assessee's activities, promoting consultancy services, were in the nature of trade and commerce, falling under the proviso to Section 2(15).

What were the issues?

Whether the assessee's activities of promoting consultancy services are hit by the proviso to Section 2(15) of the Income Tax Act, thereby disentitling it from exemption under Sections 11 and 12.

Which sections of the Income-tax Act were involved?

Section 11,Section 12,Section 2(15),Section 12AA

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, DELHI BENCH ‘D’, NEW DELHI

Hearing: 28.09.2017Pronounced: 28.09.2017

ORDER

Per N. K. Saini, AM:

1.

This is an appeal by the department against the order dated 06.10.2015 of ld. CIT(A)-40, New Delhi.

2.

The only effective ground raised

in this appeal reads as under: “1. On the facts and circumstances of the case the Ld. CIT(A) has erred in allowing the benefit of section 11 & 12 of the Act, ignoring that activities of the trust were not within the purview of section 2(15) of the Act, 1961, during the year.”

3. The facts of the case in brief are that the assessee is a charitable society and registered under the Societies Registration Act, 1860 vide 2 Consultancy Development Centre order dated 15.01.1986 and is also registered u/s 12AA(1) of the Income Tax Act, 1961 (hereinafter referred to as the Act) vide order dated 12.03.1988. The assessee society is promoted by Ministry of Science and Technology for promoting the consultancy services for projects etc in the country, the clients of the assessee society are generally all the Government departments and the income is mostly from the Government. The AO denied the exemption u/s 11(1) of the Act to the assessee mainly on the ground that the assessee was engaged in trade & commerce and as such was hit by the mischief of proviso of Section 2(15) of the Act.

4.

Being aggrieved the assessee carried the matter to the ld. CIT(A) who allowed the claim of the assessee for the reason that his predecessor allowed the exemption u/s 11(1) of the Act vide order dated 24.01.2013 and 23.12.2014 for the assessment years 2009-10 and 2010-11 respectively.

5.

Now the department is in appeal. The ld. Counsel for the assessee at the very outset sated that this issue is squarely covered in favour of the assessee and against the department vide order dated 16.02.2017 of the ITAT Delhi Bench ‘B’, New Delhi in for the assessment year 2009-10 in assessee’s own case (copy of the said order was furnished which is placed on record). 3 Consultancy Development Centre 6. In his rival submissions the ld. DR although supported the order of the AO but could not controvert the aforesaid contention of the ld. Counsel for the assessee.

7.

We have considered the submissions of both the parties and perused the material available on the record, it is noticed that a similar issue have identical facts has been adjudicated by the ITAT Delhi Bench ‘B’, New Delhi in for the assessment year 2009- 10 in assessee’s own case vide order dated 16.02.2017. The relevant findings are given in para 5 of the said order which read as under: “5. We have carefully considered the rival contentions and also perused the order of lower authorities. The Id DR could not controvert the fact that the issue is not covered by the decision of Hon'ble Delhi High Court in case of Bureau of Indian Standards reported at 358 ITR 78 as well as the circular of the CBDT No. 11/2008. The Hon'ble Delhi High Court in GS1 India Vs. DGIT 360 ITR 138 has also explained the fact of amendment w.e.f. 01.04.2009 wherein it has been held that the amended provisions applies only in the case where the activities of the assessee falls in the category of "objects of general public utility". In the present case the assessee is carrying on education and training programme for the purposes of for consultancy development profession in the area specified by department of scientific and industrial research under the Ministry of Science and Technology. Therefore, the activity of the assessee is falling under the definition of educational activities to which the amended provisions do not apply. Even otherwise charging a nominal fees for the use of the appellant societies facilities. It does not reflect business attitude nor indicate profit oriented intent. In ITA No. 93/Del/2016 4 Consultancy Development Centre view of this we do not find any infirmity in the order of the Id CIT(A) and hence, dismiss the appeal of the revenue.

8.

So, respectfully following the aforesaid referred to order dated 16.02.2017, we do not see any merit in this appeal of the department.

9.

In the result, the appeal of the department is dismissed. (Order Pronounced in the Court on 28/09/2017)

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