Gujarat Safety Council,, Vadodara v. The Income Tax Officer, Exemption Ward,, Vadodara

ITA 485/AHD/2018 | 2012-2013
Pronouncement Date: 29-11-2019 | Result: Allowed

Appeal Details

RSA Number 48520514 RSA 2018
Assessee PAN AAATG0943L
Bench Ahmedabad
Appeal Number ITA 485/AHD/2018
Duration Of Justice 1 year(s) 8 month(s) 29 day(s)
Appellant Gujarat Safety Council,, Vadodara
Respondent The Income Tax Officer, Exemption Ward,, Vadodara
Appeal Type Income Tax Appeal
Pronouncement Date 29-11-2019
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted SMC
Tribunal Order Date 29-11-2019
Date Of Final Hearing 05-09-2019
Next Hearing Date 05-09-2019
Last Hearing Date 31-07-2019
First Hearing Date 31-07-2019
Assessment Year 2012-2013
Appeal Filed On 01-03-2018
Judgment Text
SMC IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH AHMEDABAD BEFORE SHRI PRADIP KUMAR KEDIA ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD JUDICIAL MEMBER ./ I.T.A. NO. 485/AHD/2018 & 712/AHD/2017 ( ASSESSMENT YEARS : 2012-13 & 2011-12) GUJARAT SAFETY COUNCIL 4 TH FLOOR MID WAY HEIGHT B/S. HANUMAN TEMPLE NR. KIRTI MANDIR KALAGHODA VADODARA 390001 / VS. INCOME TAX OFFICER EXEMPTION WARD INCOME TAX OFFICE VADODARA ./ ./ PAN/GIR NO. : AAATG0943L ( APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI S. N. SOPARKAR & SHRI PARIN SHAH A.RS. / RESPONDENT BY: SHRI VINOD TANWANI SR. D.R. DATE OF HEARING 05/09/2019 !'# / DATE OF PRONOUNCEMENT 29/11/2019 / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEALS HAVE BEEN FILED AT THE INSTAN CE OF THE ASSESSEE AGAINST THE RESPECTIVE ORDERS OF THE COMMI SSIONER OF INCOME TAX (APPEALS)-1 VADODARA (CIT(A) IN SHORT) DATE D 05.04.2017 & 08.12.2016 ARISING IN THE ASSESSMENT ORDERS BOTH DA TED 23.03.2015 PASSED BY THE ASSESSING OFFICER (AO) UNDER S. 143(3 ) AND 143(3) ITA NOS. 485/AHD/18 & 712/AHD/17 (GUJARAT SAFETY COUNCIL VS. ITO) A.YS. 2012-13 & 2011-12 - 2 - R.W.S. 147 OF THE INCOME TAX ACT 1961 (THE ACT) CO NCERNING AYS. 2012-13 & 2011-12. 2. BOTH THE CAPTIONED APPEALS RELATES TO IDENTICAL CONTROVERSY NAMELY ELIGIBILITY OF EXEMPTION UNDER S.11 OF INCOM E TAX ACT. ACCORDINGLY BOTH THE MATTERS WERE HEARD TOGETHER A ND DISPOSED OF BY THIS COMMON ORDER. 3. THE APPEAL FILED BY THE ASSESSEE WAS FOUND TO BE BELATED BY 238 DAYS IN PREFERRING THE APPEAL BEFORE THE TRIBUNAL. THE ASSESSEE HAS FILED AFFIDAVIT GIVING EXPLANATION FOR DELAY AND SE EKING CONDONATION THEREOF. THE ASSESSEE HAS EXPLAINED THE INADVERTEN T LAPSE ON THE PART OF THE TAX CONSULTANT AND THEREBY THE ORDER OF THE CIT(A) COULD NOT BE COMMUNICATED PROPERLY. A READING OF THE CONSEQUENC E OF THE EVENT IS POINTED OUT IN THE AFFIDAVIT GIVES AN IMPRESSION OF BONAFIDE LAPSE. THE DELAY IN FILING THE APPEAL IS THUS CONDONED. 4. FOR THE SAKE OF CONVENIENCE THE RELEVANT GROUND S OF APPEAL RAISED BY THE ASSESSEE IN RELATION TO AY 2011-12 IN ITA NO. 712/AHD/2017 IS REPRODUCED HEREUNDER: 1. THE L'D CIT(A)-2 HAS ERRED IN SUSTAINING / UPHO LDING THE ACTION OF L'D AO TO WITHDRAW EXEMPTION U/S 11 OF TH E IT ACT CLAIMED BY THE APPELLANT TRUST AND THEREBY TREATING SURPLUS OF RS. 19 86 737/- GENERATED FROM CONDUCTING SAFETY TR AINING PROGRAMME AND ACTIVITIES AS INCOME FROM ACTIVITIES IN THE NATURE OF TRADE / COMMERCE OR BUSINESS BY INCORRECT LY INTERPRETING PROVISIONS OF SECTION 2(15) OF THE INC OME TAX ACT 1961. IT IS PRAYED THAT THE EXEMPTION U/S 1 1 OF RS. 19 8 6 737/- BE ALLOWED. 2. THE L'D CIT(A)-2 HAS WRONGLY CONFIRMED DISALLOWA NCE OF PRIOR PERIOD EXPENSES OF RS. 4 905/-. IT IS PRAYED THAT THE DISALLOWANCE OF RS. 4 905/- B E DELETED. ITA NOS. 485/AHD/18 & 712/AHD/17 (GUJARAT SAFETY COUNCIL VS. ITO) A.YS. 2012-13 & 2011-12 - 3 - 5. GROUND NO.1 CONCERNS ELIGIBILITY OF EXEMPTION UN DER S.11 OF THE ACT. 6. BRIEFLY STATED THE ASSESSEE IS A PUBLIC CHARITA BLE TRUST STATED TO BE REGISTERED UNDER THE BOMBAY PUBLIC TRUST ACT 1950 AND IS ALSO REGISTERED UNDER S.12(A)(A) OF THE INCOME TAX ACT 1961. CONSEQUENTLY THE ASSESSEE TRUST IS ELIGIBLE FOR EXEMPTION OF ITS INCOME IN TERMS OF SECTION 11 OF THE ACT. THE ASSESSEE TRUST FILED IT S RETURN OF INCOME CLAIMING EXEMPTION UNDER S.11 OF THE ACT. THE RETU RN OF INCOME SO FILED WAS SELECTED FOR SCRUTINY IN THE COURSE OF THE SCRU TINY ASSESSMENT. THE AO RAISED QUESTION OF ELIGIBILITY OF EXEMPTION CLAI MED UNDER S.11 (1) OF THE ACT R.W. PROVISION OF SECTION 2(15) OF THE ACT. THE AO EVENTUALLY HELD THE SURPLUS OF RS.19 86 737/- TO BE NON-CHARIT ABLE IN NATURE AND CONSEQUENTLY TAXABLE UNDER THE NORMAL PROVISIONS O F THE ACT. 7. AGGRIEVED BY THE DENIAL OF EXEMPTION CLAIMED UND ER S.11 OF THE ACT THE ASSESSEE TRUST PREFERRED APPEAL BEFORE THE CIT(A) WITHOUT ANY SUCCESS. THE RELEVANT OPERATIVE PARA OF THE ORDER OF THE CIT(A) DENYING EXEMPTION TO THE ASSESSEE IS REPRODUCED HEREUNDER: 4. I HAVE CAREFULLY CONSIDERED THE FACTS ON RECORD S AND SUBMISSION OF THE LD. AUTHORIZED REPRESENTATIVE. GROUND NO. 1 PERTAINS TO DISALLOWANCE OF EXEMPTION CLAIMED U/S 11 AMOUNTING TO RS.19 86 737/-. UNDISPUTEDLY THE APPELLANT IS ENGA GED IN THE ACTIVITIES OF CONDUCTING SAFETY TRAINING PROGRAMMES WORKSHOPS SEMINARS CONFERENCES AND CREATING SAFETY AWARENESS AMONG WORKERS/STAFF/EXECUTIVES WORKING IN INDUSTRIES AND ALSO FOR PEOPLE COMMUTING ON ROADS. ACCORDINGLY IT WAS CLAIMED BY T HE APPELLANT THAT SUCH ACTIVITIES ARE IN THE NATURE OF EDUCATION WITHIN THE MEANING OF SECTION 2(15). TO SUPPORT ITS CONTENTION THE AP PELLANT HAS RELIED UPON TWO DECISIONS. IN THE FIRST DECISION IN THE CA SE OF SABARMATI GAUSHALA TRUST (SUPRA) I FIND THAT ISSUE WAS NOT RELATING TO EDUCATIONAL ACTIVITIES AND HENCE THE SAME IS DISTIN GUISHABLE ON FACTS. THE SECOND DECISION RELIED UPON BY THE APPELLANT IS OF THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA (SUPRA) WHEREIN HON'BLE DELHI HIGH COURT HAS VERY CLEARLY HELD THAT ACTIVITIES OF INSTITUTE OF CHARTERED ACCOUNTANT OF INDIA WERE NOT IN THE NATUR E OF EDUCATION AS DEFINED IN SECTION 2(15) OF THE ACT. THEREFORE THE RATIO LAID DOWN IN THIS DECISION IS ALSO OF NO HELP TO THE APPELLANT. ITA NOS. 485/AHD/18 & 712/AHD/17 (GUJARAT SAFETY COUNCIL VS. ITO) A.YS. 2012-13 & 2011-12 - 4 - 4.1. THE ASSESSING OFFICER HAS DISALLOWED THE CLAIM OF EXEMPTION MADE U/S. 11 BY HOLDING THAT THE ACTIVITIES OF THE APPELLANT WERE NOT IN THE NATURE OF EDUCATION AS DEFINED IN SECTION 2( 15) OF THE ACT. THE ASSESSING OFFICER HAS MAINLY RELIED UPON THE DECISI ON OF HON'BLE SUPREME COURT IN THE CASE OF SOLE TRUSTEE LOK SHIKSHNA TRUST VS. CIT (1975) 101 ITR 234 . I HAVE ALSO GONE THROUGH THE DECISION OF HON'BLE SUPREME COURT AND FIND THAT THE EDUCATION A S MENTIONED 2(15) CONNOTES THE PROCESS OF TRAINING AND DEVELOPI NG THE KNOWLEDGE SKILL MIND AND CHARACTER OF STUDENTS BY NORMAL SCH OOLING. UNDISPUTEDLY THE APPELLANT WAS NOT ENGAGED IN THE ACTIVITY OF NORMAL SCHOOLING EDUCATION. THIS DECISION OF HON'BL E SUPREME COURT HAS BEEN RELIED UPON BY VARIOUS JUDICIAL AUTHORITIE S AND A FEW OF SUCH DECISIONS ARE AS UNDER:- (I) NEW ELIM CHARITABLE & EDUCATIONAL TRUST VS. CIT (2013) 40 TAXMANN.COM 373 (COCHIN-TRIB.) - RELYING UPON THE DECISION OF HON'BLE SUPREME COURT IN THE C ASE OF SOLE TRUSTEE LOK SHIKSHNA TRUST VS. CIT (1975) 101 ITR 234 IT IS HELD THAT ALL MODES OF ACQUIRING KNOWLEDGE CANNOT BE CONSIDERED TO BE EDUCATIONAL ACTIVITY. ONLY 'EDUCATION' ACQUIRED IN THE COURSE O F NORMAL SCHOOLING HAS TO BE CONSIDERED AS 'EDUCATION ' WITHIN THE MEANING OF SECTION 2(15). (II) INFORMATION SYSTEMS AUDIT & CONTROL ASSOCIATION VS. DY. CIT (EXEMPTION) (2016) 157 ITD 815 (CHENNAI) THE ASSESSEE WAS CONDUCTING REVIEW AND-COURS.ES FOR HELPING ASPIRING MEMBERS IN PREPARING FOR CISA & CISMA CERTIFICATION CONDUCTED BY PARENT BODY. FOR T HIS PURPOSE IT WAS CONDUCTING MEETING/CONFERENCES FOR SHARING KNOWLEDGE AND EXPERIENCE ON METHODOLOGIES EMERGING CONCEPTS AND SKILL UPDATION. IT WAS HELD T HAT SUCH ACTIVITY DOES NOT FALL WITHIN THE MEANING OF 'EDUCATION' AS GIVEN IN SECTION 2(15); BUT WILL FAL L IN THE CATEGORY OF ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY INVOLVING TRADE COMMERCE OR BUSINESS AND HENCE NOT ENTITLED TO EXEMPTION U/S. 1 1. (III) IMPRESSARIO EDUCATION TRUST VS. CIT (2014) 47 TAXMANN.COM 259 (COCHIN-TRIB.) - IN THIS CASE THE ASSESSEE WAS CONDUCTING CLASSES OF EVENT MANAGEMENT WHICH WERE NOT RECOGNIZED BY GOVERNMENT BODIES AND AS A CONSEQUENCE IT DID NOT RESULT IN CONFERMENT OF AN Y DEGREE OR DIPLOMA AND HENCE IT WAS HELD THAT THE ASSESSEE'S ACTIVITY DID NOT FALL WITHIN THE MEANING OF 'EDUCATION' AS GIVEN IN SECTION 2(15} AND THUS CLAI M OF REGISTRATION U/S. 12AA WAS TO BE REJECTED. THEREFORE IN VIEW OF THE ABOVE FACTS AND LEGAL POS ITION IT EMERGES THAT THE APPELLANT WAS NOT ENGAGED IN ANY ACTIVITY OF NORMAL EDUCATION WITHIN THE MEANING OF SECTION 2(15) SINCE IT WAS ONLY PROVIDING SOME SHORT OF TRAINING THROUGH WORKSHOP/S EMINAR ETC. ITA NOS. 485/AHD/18 & 712/AHD/17 (GUJARAT SAFETY COUNCIL VS. ITO) A.YS. 2012-13 & 2011-12 - 5 - WITHOUT CONFERMENT OF ANY DEGREE OR DIPLOMA THROUGH GOVERNMENT RECOGNIZED AUTHORITIES. IN FACT THE ACTIVITIES OF THE APPELLANT FALL IN THE CATEGORY OF ADVANCING OF ANY OTHER OBJECT OF GE NERAL PUBLIC UTILITY INVOLVING TRADE COMMERCE OR BUSINESS AND H ENCE THE INCOME EARNED FROM SUCH ACTIVITY WAS NOT ENTITLED TO EXEMP TION U/S. 11. ACCORDINGLY THE ACTION OF THE ASSESSING OFFICER IN REJECTING THE CLAIM OF APPELLANT U/S. 11 IS SUSTAINED AND ADDITIO N MADE IS CONFIRMED. THUS APPELLANT FAILS IN RESPECT OF GROUND NO. 1. 8. FURTHER AGGRIEVED THE ASSESSEE PREFERRED APPEAL BEFORE THE TRIBUNAL. 9. THE LEARNED SENIOR COUNSEL FOR THE ASSESSEE AT T HE OUTSET REFERRED TO THE OBJECTS OF THE ASSESSEE AND SUBMITTED THAT A S PER MEMORANDUM OF ASSOCIATION OF THE TRUST KEY OBJECTS OF THE TRU ST ARE CONDUCTING SAFETY TRAINING PROGRAMMES TRAINING SEMINARS WORK SHOP CONFERENCES ETC. FOR PERSONNEL WORKING IN INDUSTRIES (INDUSTRIA L SAFETY) FOR PEOPLE COMMUTING ON ROADS (ROAD SAFETY) AND FOR THE PERSON S WORKING AT HOMES (HOME SAFETY) ETC. 9.1 HAVING REGARDS TO THE OBJECTS THE LEARNED SENI OR COUNSEL MADE TWO FOLD SUBMISSIONS; FIRSTLY OBJECTS OF THE TRUST ARE EDUCATIONAL IN NATURE AND THEREFORE SQUARELY COVERED BY THE MAIN P ROVISION OF SECTION 2(15) OF THE ACT AND THEREFORE THE ACTIVIT Y IS TO BE REGARDED TO BE FOR CHARITABLE PURPOSE WITHOUT ANY FURTHER ENC UMBRANCE. SECONDLY AND WITHOUT PREJUDICE THE OBJECTS OF THE ASSESSEE WOULD FALL IN THE CATEGORY OF ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY BUT WITHOUT ANY COMMERCIAL MOTIVE AND THER EFORE THE PROVISO TO SECTION 2(15) OF THE ACT HAS NO APPLICABILITY IN THE FACTS OF THE CASE. 9.2 TO BUTTRESS HIS ARGUMENTS ON FACTS THAT THE ASS ESSEE TRUST IS ENGAGED IN EDUCATIONAL ACTIVITIES CONTEMPLATED UNDE R S.2(15) OF THE ACT THE LEARNED SENIOR COUNSEL PLACED ON RECORD VA RIOUS MAGAZINES AND BOOKLETS PUBLISHED BY THE ASSESSEE TRUST FROM T IME TO TIME VIZ; ITA NOS. 485/AHD/18 & 712/AHD/17 (GUJARAT SAFETY COUNCIL VS. ITO) A.YS. 2012-13 & 2011-12 - 6 - HANDBOOK ON FIRST AID; DOS & DONTS OF INDUSTRIAL ACTIVITIES; OUR HEALTH; MONTHLY MAGAZINE PUBLISHED BY THE TRUST SU RAKSHA. THE LEARNED SENIOR COUNSEL ASSERTED THAT THE CONTENTS O F THE BOOKLETS AND MAGAZINES AS WELL AS TRAINING PROGRAMMES FOR THE EM PLOYEES WORKERS AND PUBLIC AT LARGE IN FACTORIES ON ROADS IN HOME S AND IN FARMS WOULD SHOW THAT THE ASSESSEE TRUST WAS ENGAGED TO DEVISE AND PROPAGATE EFFECTIVE METHOD OF SAFETY PROTECTIONS. THE LEARNE D SENIOR COUNSEL SUBMITTED THAT THE OBJECTS OF THE TRUST ARE SELF EX PLANATORY AND THE ASSESSEE HAS BEEN GRANTED REGISTRATION UNDER S.12A OF THE ACT HAVING REGARD TO THE CHARITABLE OBJECTS WHICH ARE ESSENTIA LLY EDUCATIONAL ACTIVITIES ON SAFETY MEASURES. THE LEARNED AR REFE RRED TO THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF DIRECTOR OF INCOME- TAX (EXEMPTION) VS. AHMEDABAD MANAGEMENT ASSOCIATIO N [2014] 366 ITR 85 (GUJ.) FOR THE PROPOSITION THAT EXPRESSION EDUCATION FO R THE PURPOSES OF SECTION 2(15) OF THE ACT SHOULD NOT BE CONSTRUED IN A NARROW OR PEDANTIC MANNER. THE LEARNED SENIOR COUNS EL SUBMITTED THAT EDUCATIONAL ACTIVITY DOES NOT MEAN AND CONFINE TO O NLY THEORETICAL TEACHING IN CLASSROOMS IN SCHOOLS & COLLEGES BUT A LSO INCLUDE ACTIVITIES WHICH PROVIDE EDUCATION AND CREATE AWARE NESS ABOUT SOCIAL SCIENCE AMONG PEOPLE ALL AROUND AND ACCORDINGLY THE ACTIVITIES OF THE TRUST ARE PURELY EDUCATIONAL IN NATURE. THE LEARNE D COUNSEL ACCORDINGLY SUBMITTED THAT ACT OF ASSESSEE BEING ED UCATIONAL THE ASSESSEE FALLS WITHIN THE SWEEP OF DEFINITION OF C HARITABLE PURPOSES UNDER S.2(15) OF THE ACT WHICH IS INCLUSIVE IN NATU RE. 9.3 THE LEARNED SENIOR COUNSEL THEREAFTER REFERRED TO THE DECISION OF HONBLE GUJARAT HIGH COURT IN CASE OF AHMEDABAD URBAN DEVELOPMENT AUTHORITY VS. ACIT(EXEMPTION) [2017] 396 ITR 323 (G UJ.) AND DIRECTOR OF INCOME-TAX (EXEMPTION) VS. SABARMATI AS HRAM GAUSHALA TRUST [2014] 362 ITR 539 (GUJ.) FOR THE PROPOSITION THAT EVEN IF OBJECTS OF THE TRUST WERE TO BE REGARDED AS ADVANC EMENT OF OBJECT OF GENERAL PUBLIC UTILITY THE PROVISO TO SECTION 2(1 5) OF THE ACT WOULD ITA NOS. 485/AHD/18 & 712/AHD/17 (GUJARAT SAFETY COUNCIL VS. ITO) A.YS. 2012-13 & 2011-12 - 7 - COME INTO PLAY ONLY WHERE THE COMMERCIAL SPIRIT IS THE PRIMARY AIM OR OBJECT OF THE TRUST. THE LEARNED SENIOR COUNSEL SU BMITTED THAT THE OVERRIDING AIM AND OBJECT OF THE TRUST IS NOT TO GE NERATE PROFITS BUT THE ACTIVITIES ARE BEING CARRIED OUT AS PART OF THE CHARITABLE OBJECT. THE PROFIT MAKING BY THE ASSESSEE IS MERE INCIDENTA L OR A BY-PRODUCT IN THE PROCESS OF CARRYING ON OF SUCH CHARITABLE OB JECT. THE LEARNED SENIOR COUNSEL ALSO SUBMITTED THAT NO MOTIVE TOWARD S TRADE COMMERCE OR BUSINESS SHOULD BE INFERRED IN THE INSTANT CASE AS THE ASSESSEE IS NOT ENGAGED IN SALE OR PURCHASE OF ANY COMMODITY BUT IS CARRYING ON SAFETY TRAINING PROGRAMMES SEMINARS CONFERENCES WORKSHOPS ON SAFETY AWARENESS. FOR CARRYING SUCH EDUCATIONAL PR OGRAMMES FEES ARE REQUIRED TO BE CHARGED FOR MEETING THE EXPENSES INC URRED AS CONDUCTING SUCH PROGRAMMES CANNOT BE POSSIBLY FREE. IT WAS THEREAFTER ASSERTED THAT WHAT IS RELEVANT IS THE UT ILIZATION OF TRUST FUNDS FOR DETERMINATION OF TRUE MOTIVE. THE ASSESSEE TRU ST HAS UTILIZED THE FUNDS FOR ACQUIRING CAPITAL ASSETS FOR MEETING EXP ENSES FOR PURSUING OBJECTS OF THE TRUST ETC. AND DID NOT DIVERT THE SU RPLUS FUNDS FOR ANY PERSONAL USE OR FOR ANY INDIVIDUAL BENEFIT. ELABOR ATING FURTHER THE LEARNED SENIOR COUNSEL SUBMITTED THAT THE GOVERNMEN T OF GUJARAT ALSO RECOGNIZED THE ACTIVITY OF THE TRUST AND HAS PROVID ED GRANTS ON REGULAR BASIS. THE MANAGING COMMITTEE OF VARIOUS SAFETY TR AINING ACTIVITIES COMPRISES OF GOVERNMENT NOMINEES TOO. UNDER THESE CIRCUMSTANCES THE LEARNED SENIOR COUNSEL SUBMITTED THAT SEEN FROM ANY ANGLE THERE WAS NO JUSTIFICATION ON THE PART OF THE REVENUE TO DENY EXEMPTION CLAIMED ON SURPLUS RECEIVED FROM SUCH CHARITABLE AC TIVITIES CARRIED OUT BY THE TRUST. 10. THE LEARNED DR FOR THE REVENUE RELIED UPON THE ORDERS OF THE LOWER AUTHORITIES. THE LEARNED DR POINTED OUT THAT THE AO HAS SUCCESSFULLY ESTABLISHED THAT ACTIVITIES OF THE ASS ESSEE AS MENTIONED AS FOR EARNING HEFTY PROFITS AND ACTIVITIES ARE CLEARL Y IN THE NATURE OF TRADE COMMERCE OR BUSINESS AND THEREFORE WOULD FAL L WITHIN THE ITA NOS. 485/AHD/18 & 712/AHD/17 (GUJARAT SAFETY COUNCIL VS. ITO) A.YS. 2012-13 & 2011-12 - 8 - EXCLUSION PROVIDED BY THE PROVISO OF SECTION 2(15) OF THE ACT. THE LEARNED DR THUS SUBMITTED THAT OBJECT BEING COMMERC IAL EXPLOITATION OF SERVICES RENDERED THERE IS NO JUSTIFIABLE REASO N TO INTERFERE. 11. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES. THE CONTROVER SY PLACED BEFORE US IS WHETHER THE ASSESSEE TRUST IS ENTITLED TO EXEMPT ION UNDER S.11 OF THE ACT ON SURPLUS ARISING FROM CARRYING ON OF ACTIVITI ES IN THE NATURE OF SAFETY TRAINING PROGRAMME ETC. IT IS THE CASE OF T HE ASSESSEE THAT THE TRUST IS A PUBLIC CHARITABLE TRUST AND REGISTERED U NDER BOMBAY PUBLIC TRUST ACT 1950 AS WELL AS UNDER S.12(A)(A) OF THE ACT. THE OBJECTS OF THE TRUST ARE CLAIMED TO BE EDUCATIONAL IN NATURE A ND HENCE EXEMPT UNDER S.11 OF THE ACT. 11.1 THE MAIN THRUST BEING ON THE OBJECTS OF TRUST WILL BE APPOSITE TO REPRODUCE THE STATED OBJECTS OF THE TRUST: THE OBJECTS OF THE GUJARAT SAFETY COUNCIL IS IN GE NERAL TO PROMOTE THE MESSAGE OF SAFETY AND TO ENGAGE ITSELF IN SAFET Y ACTIVITIES AS MENTIONED BELOW WITHIN GUJARAT STATE. 1. TO DEVISE EFFECTIVE METHOD OF SAFETY PROTECTION AND PROPAGATE THEM AMONG EMPLOYEES WORKERS AND PUBLIC AT LARGE I N FACTORIES ON ROADS IN HOMES AND IN FARMS. 2. TO ORGANISE SAFETY PROGRAMMES LECTURES CONFER ENCES AND OTHER ACTIVITIES. 3. TO CONDUCT EDUCATIONAL CAMPAIGNS TO AROUS E PUBLIC OPINION AND INTEREST OF THE EMPLOYERS AND WORKERS. 4. TO ENLIST THE CO-OPERATION OF PUBLIC AND PRIVAT E ORGANIZATIONS INTERESTED IN THE PROMOTION OF SAFETY. 5. TO SUGGEST IMPROVEMENTS IN THE CENTRAL AND S TATE LAWS TO PREVENT ACCIDENTS. 6. TO ORGANIZE LOCAL SAFETY CENTRES IN THE STATE O F GUJARAT AND TO PROVIDE THEM ORGANIZATIONAL HELP AND MATERIALS TO P ROMOTE THE OBJECTS OF THE SAFETY. ITA NOS. 485/AHD/18 & 712/AHD/17 (GUJARAT SAFETY COUNCIL VS. ITO) A.YS. 2012-13 & 2011-12 - 9 - 7. TO DO ALL SUCH WORK IN THE FIELD OF SAFETY. 11.2 SECTION 2(15) OF THE ACT WHICH DEFINES THE TER M CHARITABLE PURPOSE WAS SUBSTITUTED VIDE FINANCE ACT 2008 W.E .F. 2009-10 TO PROVIDE THAT ADVANCEMENT OF OBJECT OF GENERAL PUBLI C UTILITY SHALL NOT BE A CHARITABLE PURPOSE IF IT INVOLVES CARRYING ON OF ANY ACTIVITY IN THE NATURE OF TRADE COMMERCE OR BUSINESS. THIS AME NDMENT HAS GIVEN RISE TO THE PRESENT LITIGATION. IT IS THE CASE OF THE ASSESSEE THAT IN ORDER TO CARRY ON THE CHARITABLE OBJECT IT IS NECE SSARY TO CHARGE CERTAIN FEE OR CONSIDERATION FOR THE SERVICES RENDERED AND SUCH AN ACT OF TRUST CANNOT GIVE COLOUR OF TRADE COMMERCE OR BUSINESS T O THE SOLEMN OBJECTS CARRIED OUT JUST FOR THE REASON THAT FEE OR CHARGES ARE BEING RECOVERED. 11.3 THE COURTS HAVE STATED THAT IF THE ACTIVITIES ARE BEING CARRIED ON AS PART OF CHARITABLE OBJECT IT CANNOT BE SAID TO BE IN THE NATURE OF TRADE COMMERCE OR BUSINESS. THE HONBLE SUPREME C OURT IN THE CASE OF QUEENS EDUCATIONAL SOCIETY VS. CIT [2015] 372 ITR 699 (SC) HAS HELD THAT A SURPLUS ARISING FROM ACTIVITIES WOULD N OT NECESSARILY MEAN THAT INSTITUTION IS BEING CARRIED ON FOR PROFIT. THE HONBLE GUJARAT HIGH COURT IN THE CASE OF DIT(EXEMPTION) VS. GUJARAT CRICKET ASSOCIATION TAX APPEAL NO. 123 OF 2014 JUDGMENT DATED 27.09.2019 INTER ALIA OBSERVED THAT THE PROFITS IF ANY PLOUGHED BACK I NTO THE VERY ACTIVITIES OF PROMOTION AND DEVELOPMENT OF SPORT OF CRICKET AND THEREFORE THE ASSESSEE CANNOT BE TERMED TO BE CARR YING OUT COMMERCIAL ACTIVITIES IN THE NATURE OF TRADE COMMERCE OR BUSI NESS. DRAWING PARALLEL IN THE INSTANT CASE AS THE INCOME OF THE T RUST ARE BEING STATED TO BE PLOUGHED BACK FOR THE FURTHERANCE OF OBJECTS OF THE TRUST SUCH ACTIVITIES WOULD NOT PORTRAY THE CHARACTER OF COMME RCIAL NATURE. THEREFORE APPLYING THE PRINCIPLES THE ACTIVITIES OF THE TRUST CANNOT BE DEEMED TO BE A COMMERCIAL VENTURE. THUS IN OUR CO NSIDERED VIEW THE ACTIVITIES OF THE ASSESSEE CANNOT BE EXCLUDED FROM THE AMBIT OF DEFINITION OF SECTION 2(15) OF THE ACT WHERE THE RE GISTRATION OF THE ITA NOS. 485/AHD/18 & 712/AHD/17 (GUJARAT SAFETY COUNCIL VS. ITO) A.YS. 2012-13 & 2011-12 - 10 - ASSESSEE IS IN FORCE. THE ASSESSEE IN OUR VIEW W OULD BE ENTITLED TO DEDUCTION UNDER S.11 OF THE ACT ON SURPLUS AS CLAIM ED. 11.4 VIEWED FROM A DIFFERENT ANGLE MULTIFACETED AC TIVITIES IN THE FORM OF HANDBOOK/LITERATURE PUBLISHED TOGETHER WITH STATED ACTIVITIES LIKE HOLDING CONFERENCES ON INDUSTRIAL SAFETY PROGR AMMES PUBLIC TALKS SEMINARS WORKSHOPS ETC. ON ONGOING BASIS TO INCULCATE SAFETY MEASURES WOULD ALSO BE BRACKETED IN THE LEAGUE OF EDUCATIONAL ACTIVITIES WHEN TESTED IN THE LIGHT OF THE DECISIO N OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF AHMEDABAD MANAGEMENT ASSOCIATION (SUPRA) . THE HONBLE GUJARAT HIGH COURT TOOK NOTE OF THE CHANGING TIMES AND EVER WIDENING OF HORIZON OF KNOWLEDGE RA PID CHANGES IN THE METHOD OF TEACHING FOR CONSTITUTING THE WORD EDUCA TION USED UNDER S.2(15) OF THE ACT. THUS ON A FAIR READING OF THE ACTIVITIES CARRIED OUT THE ASSESSEE IN OUR VIEW WOULD BE ENTITLED F OR EXEMPTION UNDER S.11 OF THE ACT WITHOUT ANY DEMUR. 12. IN THE RESULT GROUND NO.1 OF THE ASSESSEES AP PEAL IS ALLOWED. 13. GROUND NO.2 CONCERNING PRIOR PERIOD EXPENSES AS DISMISSED IN THE ABSENCE OF ANY EXPLANATION FURNISHED TO SUPPORT THE GRIEVANCE AND TO NEGATE THE FINDINGS OF LOWER AUTHORITIES. 14. IN THE RESULT APPEAL FILED BY THE ASSESSEE FOR AY 2011-12 IS PARTLY ALLOWED. ITA NO. 485/AHD/2018 AY 2012-13 15. THE SOLITARY ISSUE CONCERNS DENIAL OF DEDUCTION UNDER S.11 OF THE ACT. IN PARITY WITH THE VIEW EXPRESSED IN AY 2011- 12 WE FIND MERIT IN THE APPEAL OF THE ASSESSEE FOR ELIGIBILITY OF CL AIM OF DEDUCTION OF SURPLUS ARISING FROM OBJECTS CARRIED OUT BY THE ASS ESSEE. WE THUS ITA NOS. 485/AHD/18 & 712/AHD/17 (GUJARAT SAFETY COUNCIL VS. ITO) A.YS. 2012-13 & 2011-12 - 11 - REVERSE THE ACTION OF THE AO AND DIRECT HIM TO ALLO W THE RELIEF ON SURPLUS AS CLAIMED UNDER S.11 OF THE ACT. 16. IN THE RESULT APPEAL OF THE ASSESSE IN ITA NO. 485/AHD/2018 CONCERNING AY 2012-13 IS ALLOWED. 17. IN THE COMBINED RESULT ITA NO.712/AHD/017 CONC ERNING AY 2011-12 IS PARTLY ALLOWED WHEREAS ITA NO.485/AHD/ 2018 IS ALLOWED. SD/- SD/- (MAHAVIR PRASAD) (PRADIP KUMAR K EDIA) JUDICIAL MEMBER ACCOUNTANT ME MBER AHMEDABAD: DATED 29/11/2019 TRUE COPY S. K. SINHA !'#' / COPY OF ORDER FORWARDED TO:- &. / REVENUE 2. / ASSESSEE (. )*+ / CONCERNED CIT 4. - / CIT (A) /. 012 33*+4 *+#4 56) / DR ITAT AHMEDABAD 7. 289 : / GUARD FILE. BY ORDER / 4 /5 *+#4 56) THIS ORDER PRONOUNCED IN OPEN COURT ON 29/11/20 19