ACHARYA JIYALAL VASANT SANGEET NIKETAN, MUMBAI v. ITO(EXEM.)-II(1), MUMBAI

ITA 4193/MUM/2019 | 2010-2011
Pronouncement Date: 30-03-2021 | Result: Allowed

Appeal Details

RSA Number 419319914 RSA 2019
Assessee PAN AAATA5005F
Bench Mumbai
Appeal Number ITA 4193/MUM/2019
Duration Of Justice 1 year(s) 9 month(s) 19 day(s)
Appellant ACHARYA JIYALAL VASANT SANGEET NIKETAN, MUMBAI
Respondent ITO(EXEM.)-II(1), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 30-03-2021
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted SMC
Tribunal Order Date 30-03-2021
Last Hearing Date 17-12-2020
First Hearing Date 16-02-2021
Assessment Year 2010-2011
Appeal Filed On 11-06-2019
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC MUMBAI BEFORE SHRI SAKTIJIT DEY (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) ITA NO. 4193/MUM/2019 ASSESSMENT YEAR: 2010-11 & ITA NO. 4194/MUM/2019 ASSESSMENT YEAR: 2012-13 ACHARYA JIYALAL VASANT SANGEET NIKETAN AJIVASAN BUILDING OFF. JUHU ROAD OPP. LIDO CINEMA SANTACRUZ (W) MUMBAI-400019 VS. ITO (EXEMPTION)-II(1) 5 TH FLOOR PIRAMAL CHAMBER LALBAUG LOWER PAREL MUMBAI-400013. PAN NO. AAATA 5005 F APPELLANT RESPONDENT ASSESSEE BY : MR. ANIL SATHE AR REVENUE BY : MS. SMITA VERMA DR DATE OF HEARING : 16/02/2021 DATE OF PRONOUNCEMENT : 30/03/2021 ORDER PER N.K. PRADHAN A.M. THE CAPTIONED APPEALS FILED BY THE ASSESSEE ARE DIR ECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-3 MUMBAI [IN SHORT CIT(A)] AND ARISE OUT OF THE ASSESSMENT COMPLETED U/S 143(3) OF THE INCOME TAX ACT 1961 (THE ACT). AS COMMON ISSUES ARE INV OLVED WE ARE PROCEEDING TO ACHARYA JIYALAL VASANT ITA NOS. 4193 & 4194/M/2019 2 DISPOSE OFF THESE APPEALS BY A CONSOLIDATED ORDER F OR THE SAKE OF CONVENIENCE. FACTS BEING IDENTICAL WE BEGIN WITH THE AY 2010-11 . 2. THE GROUNDS OF APPEAL FILED BY THE ASSESSEE READ AS UNDER : 1. THE LD.CIT(A) ERRED IN FACTS AND IN LAW IN DENYING THE CLAIM OF EXEMPTION UNDER SECTION 11 MADE BY THE APPELLANT BY TREATING THE I NCOME FROM RECORDING STUDIO AS BUSINESS INCOME UNDER SECTION 11(4A) OF THE ACT. 2. WITHOUT PREJUDICE TO THE ABOVE GROUND THE LD.CIT(A ) OUGHT TO HAVE ALLOWED THE EXPENDITURE OF RS.5 00 151/- LAKHS INCURRED ON THE OBJECTS OF THE TRUST. 3. THE LD.CIT(A) OUGHT TO HAVE HELD THAT THE OBJECTS A ND ACTIVITIES OF THE APPELLANT ARE 'EDUCATIONAL' AND THEREFORE PROVISO TO SECTION 2(15 ) IS NOT APPLICABLE. 4. WITHOUT PREJUDICE TO THE ABOVE GROUND THE LD.CIT(A ) OUGHT TO HAVE HELD THAT THE PERCENTAGE OF RECEIPTS FROM RECORDING STUDIO TO THE TOTAL RECEIPTS IS 10.10% AS AGAINST 28.86% AND IN ANY EVENT THE SAID RECEIPTS WERE LES S THAN 25 LAKHS WHICH WAS THE THRESHOLD TO ATTRACT THE PROVISO TO SECTION 2(15). 5. THE LD.CIT(A) ERRED IN NOT APPRECIATING THAT THE ST UDIO FACILITY IS AN INTEGRAL PART OF THE TRAINING ACTIVITIES IN THE FIELD OF MUSIC AND M AKING IT AVAILABLE FOR RECORDING IS MERELY INCIDENTAL TO THE MAIN OBJECTS OF THE APPELL ANT AND THEREFORE CANNOT BE CONSIDERED AS BUSINESS. 6. THE LD.CIT(A) ERRED IN NOT APPRECIATING THAT THE SU RPLUS FROM RECORDING STUDIO IS MERELY INCIDENTAL TO THE ACTIVITIES CARRIED OUT IN PURSUANCE OF THE MAIN OBJECT OF THE TRUST AND THERE IS NO PROFIT MOTIVE. 7. WITHOUT PREJUDICE TO THE ABOVE GROUNDS AND ASSUMING WITHOUT CONCEDING THAT THE INCOME FROM RECORDING STUDIO AMOUNTS TO BUSINESS IN COME THE LD.CIT(A) ERRED IN NOT APPRECIATING THAT SECTION 11(4A) IS NOT ATTRACT ED SINCE THE SAID ACTIVITY IS INCIDENTAL TO THE MAIN OBJECTS AND IN EFFECT THERE IS A SUFFICIENT COMPLIANCE OF THE REQUIREMENT TO MAINTAIN SEPARATE BOOKS OF ACCOUNTS. 3. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT T HE ASSESSEE FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR (AY) 2010-11 ON 28.0 9.2010 ALONG WITH ACHARYA JIYALAL VASANT ITA NOS. 4193 & 4194/M/2019 3 INCOME AND EXPENDITURE ACCOUNT BALANCE SHEET AND A UDIT REPORT IN FORM NO. 10B DECLARING TOTAL INCOME AT RS. NIL. THE ASSESSEE IS REGISTERED U/S 12A AND 80G OF THE ACT. IT RECEIVED STUDIO CHARGES OF RS.16 72 197/- FROM VARIOUS ARTISTS (73 PARTIES) IN THE YEAR UNDER CONSIDERATION. THE A SSESSING OFFICER (AO) OBSERVED THAT THE ACTIVITY OF MAKING AVAILABLE THE STUDIO TO THE ARTISTS WAS CONDUCTED WITH AN INTENTION TO MAKE PROFITS IN THE SHIELD OF CHARITABLE ACTIVITIES. THE AO ARRIVED AT THE ABOVE FINDING ON THE BASIS OF HIS OBSERVATION ON THE CONTINUITY MAGNITUDE QUANTUM AND FREQUENCY OF THE ACTIVITIES. ACCORDINGLY THE AO BROUGHT TO TAX INCOME OF STUDIO CHARGES AS BUSINESS INCOME BY APPLYING PROVISIONS OF SECTION 11(4A) OF THE ACT AND FURTHER DISALLOWED EXPENDITURE OF RS.5 00 151/- INCURRED BY THE ASSESSEE TOWARDS THE AJIVASAN SOUNDS FROM THE ALLOWABLE EXPENDITURE ON THE OBJECT OF THE TRUST. 4. AGGRIEVED BY THE ORDER OF THE AO THE ASSESSEE F ILED AN APPEAL BEFORE THE LD. CIT(A). WE FIND THAT VIDE ORDER DATED 26.04.2019 THE LD. CIT(A) CONFIRMED THE DISALLOWANCE MADE BY THE AO BY OBSERVING THAT : 5. DECISION I HAVE CONSIDERED THE FACTS OF THE CASE CONTENTION S OF THE AO AND SUBMISSIONS OF THE APPELLANT. FROM THE DETAILS FURNISHED REGARDING THE STUDIO CHARGES RECEIVED THE AO OBSERVED THAT : I. THE ASSESSEE HAS RECEIVED STUDIO CHARGES FROM 73 PA RTIES THROUGHOUT THE WHOLE YEAR. II. NOWHERE IN THE OBJECTS OF THE INSTITUTE MENTION RE GARDING PROVIDING OF STUDIO FOR HIRE PURPOSE IS AN INCIDENTAL OBJECT TO THE MAIN OBJECTS OF THE TRUST. III. THE PERCENTAGE OF THE STUDIO CHARGES RECEIPTS TO TH E TOTAL RECEIPTS (LEAVING ASIDE THE PASSIVE INCOME OF RENT AND INTEREST) AMOU NTS TO 28.68%. ACHARYA JIYALAL VASANT ITA NOS. 4193 & 4194/M/2019 4 IV. CONSIDERING THE CONTINUITY MAGNITUDE QUANTUM AND FREQUENCIES OF THE ACTIVITIES WHICH IS READ IN CONJUNCTION WITH THE O RGANIZED MANNER IN WHICH THE SAME ARE BEING CONDUCTED IT IS THUS OBVIOUS TH AT THE SAME ARE BEING CONDUCTED WITH AN INTENTION TO MAKE PROFITS IN THE SHIELD OF CHARITABLE ACTIVITIES. V. THE INTENTIONS TO MAKE PROFIT IS FURTHER SUBSTANTIA TED BY THE FACT THAT IRRESPECTIVE OF THE CONTINUITY OF AN EXPLICIT MOTIV E THEREOF ASSESSEE HAS NOT MAINTAINED SEPARATE BOOKS OF ACCOUNT AS ENVISAGED B Y THE SPECIFIC PROVISIONS OF SECTION 11(4) AND (4A) OF THE INCOME TAX ACT 19 61. VI. SEPARATE BOOKS OF ACCOUNTS MEAN SEPARATE BANK ACCOU NT SEPARATE TRIAL BALANCE SEPARATE PROFIT AND LOSS ACCOUNT AND SEPAR ATE BALANCE SHEET. THE ASSESSEE TRUST HAS NOT MAINTAINED ANY SEPARATE BOOK S OF ACCOUNTS SO THAT SUCH ACTIVITIES ARE HINDERED UNDER THE BLANKET OF C HARITABLE ACTIVITIES. VII. THE ASSESSEE ALSO PAYS SERVICE TAX AND FILES ITS SE RVICE TAX RETURNS ON THE STUDIO CHARGES RECEIPTS. THUS IT IS ESTABLISHED TH AT THE ACTIVITIES OF GIVING THE STUDIO FOR HIRING ARE NOT A COINCIDENTAL ACTIVITY B UT A WELL-PLANNED ACTIVITY WITH AN INTENTION OF EARNING INCOME SIDE BY SIDE. IN VIEW OF THE ABOVE OBSERVATION OF THE AO I FIND NO MERIT IN THE ARGUMENT OF THE APPELLANT. ACCORDINGLY AO IS JUSTIFIED IN CONSIDER ING THE ACTIVITY OF MAKING AVAILABLE THIS STUDIO WITH AN INTENTION TO MAKE PROFITS IN TH E SHIELD OF CHARITABLE ACTIVITIES AND JUSTIFIED IN TAXING THE INCOME OF STUDIO CHARGES AS BUSINESS INCOME U/S 11(4A) OF THE ACT. THEREFORE AO IS JUSTIFIED IN TREATING THE INCO ME FOR STUDIO CHARGES AS BUSINESS INCOME. AO HAS ALREADY CONSIDERED THE ISSUE OF THE INAPPLICABILITY OF THE PROVISO TO SEC 2(15) AS THE SAME WAS RAISED BEFORE THE AO. THE RE IS NO INTERFERENCE REQUIRED IN THE ORDER OF THE AO IN THIS REGARD. 5. BEFORE US THE LD. COUNSEL FOR THE ASSESSEE SUBM ITS THAT : THE TRUST HAS A STUDIO NAMELY 'AJIVASAN SOUNDS' WH ICH HAS BEEN GIVEN TO VARIOUS WELL KNOWN ARTISTS FOR THE PURPOSES OF RECORDINGS. THE STUDIO HAS BEEN UTILIZED BY ACHARYA JIYALAL VASANT ITA NOS. 4193 & 4194/M/2019 5 THE TRUST FOR PROVIDING HANDS-ON TRAINING TO ITS ST UDENTS. ON ACCOUNT OF THE AVAILABILITY OF THE STUDIO THE STUDENTS HAVE BEEN ABLE TO WITNESS PERFORMANCES BY VARIOUS SINGING MAESTROS WHICH ADDS TO THEIR EXPER IENCE. THE TRUST UNDER ITS 'GURUKUL PHILOSOPHY' HAS A BELIEF THAT A STUDENT MU ST UNDERSTAND HOW HIS VOICE NEEDS TO BE MODULATED THE CARE THAT HE NEEDS TO TA KE WHEN SINGING IN A CONTROLLED ATMOSPHERE HAS INCLUDED THE HANDS-ON TRAINING OF T HE STUDIO-RECORDING IN THE CURRICULUM OF STUDENT WHICH IN FACT HAS ENABLED THE TRUST TO ATTEND ITS MAIN OBJECT OF IMPARTING EDUCATION OF MUSIC IN TRUE SENSE. THE LD. COUNSEL FURTHER EXPLAINS THAT MAINTENANCE OF STUDIO IS INTRINSIC AND IN PURSUANCE OF THE OBJECT OF THE ASSESSEE WHIC H IS EDUCATION AND IT IS NOT TRADE COMMERCE OR BUSINESS. RELYING ON THE DECISIO N IN THE CASE OF SHRI THYAGA BRAHMA SANGEET SABHA 188 ITR 160 (MAD) AND SWAR SANGAM & ORS V. CCIT 368 ITR 395 (CAL) IT IS ARGUED THAT TEACHING OF INDIAN CLASSICAL MUSIC IS WITHIN THE REALM OF EDUCATION. FURTHER RELYING ON THE DECIS ION IN THE CASE OF ICAI ACCOUNTING RESEARCH FOUNDATION 321 ITR 73 (DEL) AND WOMENS INDIA TRUST 379 ITR 506 (BOM) IT IS STATED THAT THE ACTIVITIES OF THE TRUST ARE CARRIED ON IN ORDER TO ACHIEVE THE MAIN OBJECT OF THE TRUST AND C ANNOT BE CONSTRUED AS BUSINESS. EXPLAINING THE DETAILS IT IS ARGUED THAT THE GROSS RECEIPTS ARE ONLY RS.16.72 LAKHS WHICH SUBSIDIZE FEES OF RS.33.01 LAK HS FOR 785 STUDENTS WHICH WORKS OUT TO RS.4 206/- PER STUDENT PER YEAR. FINAL LY THE LD. COUNSEL EXPLAINS THAT SINCE THE TRUST IS ENGAGED IN EDUCATION THE P ROVISO TO SECTION 2(15) DOES NOT APPLY AS PER CBDT CIRCULAR NO. 11 DATED 19.12.2 008. 6. ON THE OTHER HAND THE LD. DEPARTMENTAL REPRESEN TATIVE (DR) SUBMITS THAT STUDIO CHARGES RECEIVED FROM VARIOUS ARTIST IS NOT AS PER THE TRUST DEED OF THE ASSESSEE. RELYING ON THE ORDER OF THE LD. CIT(A ) IT IS PLEADED BY HER THAT THE SAME MAY BE AFFIRMED. ACHARYA JIYALAL VASANT ITA NOS. 4193 & 4194/M/2019 6 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIALS ON RECORD. THE REASONS FOR OUR DECISIONS ARE GIVEN BELOW. IN SRI THYAGA BRAHMA GANA SABHA (SUPRA) THE ASSESSEE IS A REGISTERED TRUST AND IS THE OWNER OF THE HALL CALLED VANI MAH AL. FOR THE AY 1973-74 THE AO AFTER REFERRING TO THE OBJECTS OF THE ASSESSEE ADVERTED TO DIFFERENT TYPES OF MEMBERSHIP AND THEREAFTER PROCEEDED TO COMPUTE TH E TOTAL INCOME OF THE ASSESSEE. THE AO DENIED THE EXEMPTION CLAIMED BY TH E ASSESSEE U/S 2(15) OF THE ACT. THE ASSESSEE APPEALED TO THE FIRST APPELLA TE AUTHORITY (AAC) AND CLAIMED EXEMPTION U/S 11 R.W. SECTION 2(15) OF THE ACT. THE AAC HELD THAT BARRING THE ACTIVITY OF LETTING OUT THE HALL ON REN T THE REST OF THE INCOME OF THE ASSESSEE WOULD BE EXEMPT U/S 11 OF THE ACT PROVIDE D THE OTHER CONDITIONS WERE SATISFIED. IN THE MATTER OF LETTING OUT THE HA LL HE HELD THAT THERE WAS CLEARLY AN ACTIVITY WHICH RESULTED IN A PROFIT AND THEREFORE THE INCOME ATTRIBUTABLE TO SUCH ACTIVITY WOULD NOT BE EXEMPT U /S 11 OF THE ACT. ACCORDINGLY HE DIRECTED THE AO TO APPORTION FROM T HE INCOME AND EXPENDITURE ACCOUNT OF THE ASSESSEE THE PROPORTIONATE INCOME A TTRIBUTABLE TO THE ACTIVITY OF LETTING OUT THE HALL AND THEN SUBJECT IT TO TAX AFT ER SATISFYING HIMSELF THAT IN RESPECT OF OTHER ITEMS THE PRESCRIBED CONDITIONS A S VISUALIZED U/S 11 OF THE ACT WERE SATISFIED. AGAINST THIS ORDER THE ASSESSEE FI LED AN APPEAL BEFORE THE TRIBUNAL. IT IS SEEN THAT THE TRIBUNAL HELD THAT LO OKING TO THE OBJECT OF THE ASSESSEE THE HALL WAS UTILIZED ONLY FOR THE PURPOS E OF EDUCATION WITHIN THE MEANING OF SECTION 2(15). IT FURTHER HELD THAT EVEN IF ALL THE OBJECTS OF THE ASSESSEE WERE NOT FOR THE PURPOSE OF EDUCATION THE Y WERE CLEARLY ONES FOR GENERAL PUBLIC UTILITY. IT FURTHER HELD THAT THE AC TIVITY OF LETTING OUT THE HALL IS NOT FOR PROFIT AND HENCE THE OBJECT OF THE ASSESSE E WAS ONLY FOR CHARITABLE ACHARYA JIYALAL VASANT ITA NOS. 4193 & 4194/M/2019 7 PURPOSES WITHIN THE MEANING OF SECTION 2(15) AND T HEREFORE THE RENTAL INCOME FROM THE HALL IS EXEMPT U/S 11 OF THE ACT PROVIDED THE ASSESSEE SATISFIED THE OTHER CONDITIONS. THE REVENUE FILED AN APPEAL AGAINST THE ABOVE ORDE R OF THE TRIBUNAL BEFORE THE HIGH COURT. IT IS SEEN THAT THE FOLLOWIN G FACTS ARE NOTED BY THE HIGH COURT : 9. THE SABHA WAS ESTABLISHED TO PROMOTE THE ADVANC EMENT OF MUSIC AND OTHER FINE ARTS. IN PURSUANCE OF THE ABOVE OBJECTS THE A SSESSEE WAS HOLDING MUSICAL ENTERTAINMENTS DRAMAS KALAKSHEPAMS DANCE RECITA LS BHAJANS EXHIBITIONS AND LECTURES ETC. THE ASSESSEE IS ALSO MAKING ARRANGEM ENTS FOR THE EXPOSITION OF ART BY COMPETENT ARTISTES AND THEREBY ENCOURAGING DESERVIN G TALENTED PEOPLE. ONE OF THE OBJECTS OF THE ASSESSEE IS TO CONDUCT A SCHOOL CALL ED 'SRI THYAGA BRAHMA GANA SABHA MUSIC AND DANCE SCHOOL' FOR IMPARTING EDUCATION IN MUSIC AND DANCE ON TRADITIONAL LINES AND THUS OFFERING FACILITIES FOR SPREADING KN OWLEDGE IN MUSIC AND DANCE. THE ASSESSEE IS ALSO ORGANIZING SOCIAL GATHERINGS TO PR OMOTE COMRADESHIP AMONG MEMBERS. THE ASSESSEE STARTED A DRAMATIC WING CALLE D 'SRI THYAGA BRAHMA GANA SABHA AMATEURS' TO STAGE DRAMAS. THUS THE ASSESSEE IS ALSO DOING ALL OTHER THINGS WHICH ARE INCIDENTAL OR CONDUCIVE TO THE ATTAINMENT OF THE ABOVE OBJECTS. THEREFORE A PLAIN READING OF THE OBJECT CLAUSES CONTAINED IN TH E RULES AND REGULATIONS OF THE SABHA WOULD DEFINITELY GO TO SHOW THAT THE MAIN PURPOSE A ND OBJECT OF THE ASSESSEE IS TO IMPART EDUCATION IN SEVERAL BRANCHES OF FINE ARTS. FURTHER OBSERVING THAT ACCORDING TO SECTION 2(15) OF THE ACT CHARITABLE PURPOSE INCLUDES RELIEF OF THE POOR EDUCATION ME DICAL RELIEF AND THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC U TILITY NOT INVOLVING THE CARRYING ON OF ANY ACTIVITY FOR PROFIT THE HONBLE HIGH COURT CONCLUDED THAT : ACHARYA JIYALAL VASANT ITA NOS. 4193 & 4194/M/2019 8 25. AS ALREADY POINTED OUT IN THE PRESENT CASE V ANI MAHAL WAS LET OUT TO OTHERS WHENEVER THE ASSESSEE WAS NOT UTILIZING IT. EVEN AS SUMING THAT THE NET INCOME OF THE SABHA IS FROM AN ACTIVITY THE QUESTION IS WHETHER IT IS FOR PROFIT. IN THE OBJECTS OF THE SOCIETY NOWHERE IT IS STATED THAT EARNING OF PROFI T IS ITS OBJECT. THEREFORE THERE IS NO PROFIT MOTIVE IN RUNNING THE SABHA. IT WOULD APPEAR THAT NO SPECIFIC RATE WAS FIXED BY THE SABHA FOR LETTING OUT THE HALL AND ON SEVERAL OCCASIONS THE HALL WAS LET OUT ON CONCESSIONAL RATES TO VARIOUS PARTIES. THE RATES CH ARGED ARE MORE OR LESS AD HOC AND IN LATER STAGES IT WAS SHOWN AS 'DONATIONS'. THE RA TE WAS USUALLY IN THE ROUTINE OF RS. 100 PER DAY. AFTER EXAMINING THE INCOME AND EXPENDI TURE STATEMENT FOR THE PAST 25 YEARS AND THE REPORT OF THE GOVERNING BODY OF THE S ABHA THE TRIBUNAL ON FACTS CAME TO THE CONCLUSION THAT THE SABHA WAS RUNNING AT A L OSS ALL THESE YEARS. THEREFORE THE TRIBUNAL CAME TO THE CONCLUSION THAT EVEN ASSUMING THAT THERE WAS AN ACTIVITY ON THE PART OF THE ASSESSEE IN LETTING OUT THE HALL IT WA S NOT AN ACTIVITY FOR PROFIT WITHIN THE MEANING OF S. 2(15) OF THE IT ACT 1961. THUS CONS IDERING THE FACTS APPEARING ON THIS ASPECT IN THE LIGHT OF THE DECISIONS CITED SUPRA WE ARE OF THE OPINION THAT THE TRIBUNAL WAS CORRECT IN HOLDING THAT THE ASSESSEE I S ENTITLED TO THE EXEMPTION UNDER S. 11 R/W SECTION 2(15) OF THE ACT IN RESPECT OF THE R ENTAL INCOME DERIVED FROM LETTING OUT THE VANI MAHAL. IN THAT VIEW OF THE MATTER WE ANSWER THE QUESTIONS REFERRED TO US IN THE AFFIRMATIVE AND AGAINST THE REVENUE. 7.1 IT WOULD BE RELEVANT TO REFER TO SECTION 2(15) OF THE ACT WHICH DEFINES CHARITABLE PURPOSE TO INCLUDE INTER ALIA THE FOLLOWING : I. RELIEF OF THE POOR II. EDUCATION III. MEDICAL RELIEF AND IV. THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBL IC UTILITY. CIRCULAR NO. 11 OF 2008 DATED 19.12.2008 ISSUED BY CENTRAL BOARD OF DIRECT TAXES (CBDT) CLARIFIES THAT THE NEWLY INSERT ED PROVISO SECTION 2(15) WILL NOT APPLY IN RESPECT OF THE FIRST THREE LIMBS OF SE CTION 2(15) I.E. RELIEF OF THE ACHARYA JIYALAL VASANT ITA NOS. 4193 & 4194/M/2019 9 POOR EDUCATION OR MEDICAL RELIEF. CONSEQUENTLY WH ERE THE PURPOSE OF A TRUST OR INSTITUTION IS RELIEF OF THE POOR EDUCATION OR MED ICAL RELIEF IT WILL CONSTITUTE CHARITABLE PURPOSE EVEN IF IT INCIDENTALLY INVOLV ES THE CARRYING ON OF COMMERCIAL ACTIVITIES. 7.2 IN THE INSTANT CASE AS MENTIONED EARLIER THE ASSESSEE IS A CHARITABLE TRUST ENGAGED IN IMPARTING EDUCATION IN THE FIELD OF CLAS SICAL MUSIC AND LIGHT MUSIC BASED ON THE GURUKUL PHILOSOPHY WHERE THE STUDENT LEARNS BY VIRTUALLY STAYING WITH THE GURU. THE INSTITUTION WAS FOUNDED IN 1932 BY ACHARYA JIALAL VASANT AND HAS 84 YEARS OF RICH HERITAGE. THE INSTITUTION HAS A REPUTE FOR PROVIDING SCIENTIFIC TRAINING IN HINDUSTANI CLASSICAL MUSIC A ND LIGHT MUSIC. THE TRUST HAS A STUDIO NAMELY AJIVASAN SOUNDS WHICH IS USED FOR T HE PURPOSE OF TRAINING STUDENTS IN PROFESSIONAL SINGING AND ALSO THE SAME IS MADE AVAILABLE TO VARIOUS ARTISTS FOR THE PURPOSE OF RECORDING. WE FIND THAT THE GROSS RECEIPTS ARE ONLY RS.16.72 LAKHS WHICH SUBSIDIZE THE FEES FOR RS.33.0 1 LAKHS FOR 785 STUDENTS WHICH WORKS OUT TO RS.4206/- PER STUDENT PER YEAR. IN THE INSTANT CASE THE MAINTENANCE OF STUDIO IS INTRINSIC AND IN PURSUANCE OF THE OBJECTS OF THE ASSESSEE WHICH IS EDUCATION. IT IS WELL UNDERSTOOD THAT TEACHING OF INDIAN CLASSICAL MUSIC IS WITHIN THE FIELD OF EDUCATION. THE ACTIVITIES OF THE STUDIO ARE CARRIED ON IN ORDER TO ACHIEVE THE MAIN OBJECT OF T HE TRUST AND CANNOT BE CONSTRUED AS BUSINESS. AS MENTIONED EARLIER SINCE THE TRUST IS ENGAGED IN EDUCATION THE PROVISO TO SECTION 2(15) DOES NOT AP PLY AS CLARIFIED BY CBDT CIRCULAR NO. 11 DATED 19.12.2008. AS MENTIONED EARLIER IN THE CASE OF SRI THYAGA BRAHMA GANA SABHA (SUPRA) THE HONBLE MADRAS HIGH COURT AFFIRMED THE ORDER OF THE TRIBUNAL IN HOLDING THAT LETTING OUT OF BUILDING DID NOT INVOLV E PROFIT-EARNING ACTIVITY EVEN ACHARYA JIYALAL VASANT ITA NOS. 4193 & 4194/M/2019 10 ASSUMING IT TO BE AN ACTIVITY. THE TRUST DEED IS TO BE READ AS A WHOLE. SIMILAR ARE THE FACTS IN THE INSTANT CASE. THEREFORE FOLLOWING THE ABOVE DECISION OF THE HONBLE MADRAS HIGH COURT WE SET ASIDE THE ORDER O F THE LD. CIT(A). FACTS BEING IDENTICAL OUR DECISION FOR THE AY 2010-11 AP PLIES MUTATIS MUTANDIS TO AY 2012-13. 8. IN THE RESULT THE APPEALS ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30/03/2021. SD/- SD/- (SAKTIJIT DEY) (N.K. PRADHAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; DATED: 30/03/2021 RAHUL SHARMA SR. P.S. COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A)- 4. CIT 5. DR ITAT MUMBAI 6. GUARD FILE. BY ORDER //TRUE COPY// (DY./ASSISTANT REGISTRAR) ITAT MUMBAI