INTERNET AND MOBILE ASSOCIATION OF INDIA, MUMBAI v. ASST CIT (E) II(1), MUMBAI

ITA 6801/MUM/2016 | 2009-2010
Pronouncement Date: 12-03-2021 | Result: Allowed

Appeal Details

RSA Number 680119914 RSA 2016
Assessee PAN AAAAI1013Q
Bench Mumbai
Appeal Number ITA 6801/MUM/2016
Duration Of Justice 4 year(s) 3 month(s) 21 day(s)
Appellant INTERNET AND MOBILE ASSOCIATION OF INDIA, MUMBAI
Respondent ASST CIT (E) II(1), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 12-03-2021
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted I
Tribunal Order Date 12-03-2021
Last Hearing Date 27-03-2018
First Hearing Date 27-03-2018
Assessment Year 2009-2010
Appeal Filed On 21-11-2016
Judgment Text
IN THE INC OME TAX APPELLATE TRIBUNAL C BENCH MUMBAI BEFORE SHRI S. RIFAUR RAHMAN AM & SHRI R. L. NEGI JM ./ I.T.A. NO . 6801/MUM/2016 ( / ASSESSMENT YEAR: 20 09 - 10 ) INTERNET & MOBILE ASSOCIATION OF INDIA 406 4 TH FLOOR READY MONEY TERRACE DR. A. B. ROAD MUMBAI - 400 018 / VS. A CIT (E) II(1) PIRAMAL CHAMBERS LALBAUG MUMBAI - 400 012 ./ ./ PAN NO. A A A AI1013Q ( / APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : SHRI SANJAY PARIKH AR / RESPONDENTBY : MS. SHRRKALA PARDESHI DR / DATE OF HEARING : 07.01 .202 1 / DATE OF PRONOUNCEMENT : 12.03.2021 / O R D E R PER S. RIFAUR RAHMAN (ACCOUNTANT MEMBER) : THE PRESENT A PPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. COMMIS S IONER OF INCOME TAX (APPEALS) - 1 IN SHORT LD. CIT(A) MUMBAI D ATED 23.08.2016 FOR AY 20 09 - 10 . 2 I.T.A. NO. 6801 /MUM/201 6 INTERNET & MOBILE ASSOCIATION OF INDIA 2 . THE BRIEF FACTS OF THE CASE ARE A SSESSING OFFICER ON VERIFICATION OF INCOME AND EXPENDITURE ACCOUNT FOR THE FY 2008 - 09 RELEVANT TO AY. 200 9 - 10 NOTED THAT THE ASSESSEE HAS EARNED INCOME FROM SEMINAR OF RS. 3 04 88 920/ - . IT W AS OBSERVED THAT RECEIPTS AS SHOWN BY THE ASSESSEE IN THE INCOME AND EXPENDITURE ACCOUNT FROM ARRANGING SEMINARS AT RS 3 04 88 920/ - MAKES IT AMPLY CLEAR THAT THE ASSESSEE IS DOING REGULAR ACTIVITIES WHICH ARE IN THE NATURE OF BUSINESS BY WAY OF ARRANGING SEMINARS COLLECTING PARTICIPATION FEES FRO M THE PARTICIPANTS. B Y COLLECT ING MONEY IN THE NAME OF AWAREN ESS PROGRAMS THROUGH SEM INARS ETC. WILL NO T MAKE IT IN THE FI ELD OF EDUCATION. T HE ASSESSEE IS SYSTEMATICALLY GE NERATING ITS INCOME THROUGH ITS ACTIVITIES WHICH IS PURELY AS IN THE FIELD OF BUSIN ESS AND SAME WAY BE INCIDENTAL I N ACHIEVEMENTS OF ITS OBJECTS BUT IT HAS NO REL EVA NCE ONCE THE PROVISO TO SECTION 2(15) GETS ATTRACTED THEREFORE THE ASSESSEE TRUST I S DIRECTLY HIT BY THE PROVISO TO SECTION 2(15) WHICH HAS BE EN INTRODUCED FROM A.Y; 2009 - 10. ONCE A CHARITABL E TRUST/INSTITUTION HIT BY AFORESAID PROVISO THEN THERE I S DEEMING PROVISION THAT SUCH ENTITY SHALL NOT BE FOR A CHARITABLE P URPOSE. HENCE ONCE THE ASSESSES TRUST /INSTITUTION L OSES ITS CHARITABLE CHARACTER THEN 3 I.T.A. NO. 6801 /MUM/201 6 INTERNET & MOBILE ASSOCIATION OF INDIA OBVIOUSLY THERE IS CHANGE IN THE STATUS OF A SSESSEE AND IT CAN NO LONGER BE HELD TO BE FOR CHARITABLE PURPOSE. 3. SINCE THESE ACTIVITIES OF THE ASSESSEE WERE ORGANIZED REGULAR ACTIVITIES THE ASSESSEE WAS ASKED BY AO TO EXPLAIN AS TO WHY THEY MAY NOT BE TREATED AS BUSIN ESS ACTIVITIES AND INCOME FROM THEM MAY NOT BE TREATED AS BUSINESS INCO ME U/S. 2(15) OF THE I.T. ACT . IT WAS A LSO ASKED TO WHY THE EXEMPTION U /S. 11(4A). OF THE I. T. ACT MAY NOT BE DENIE D IN RESPECT OF THIS BUSINESS INCOME BECAUSE THE CONDITIONS| MENTIONED IN THAT SUBSECTION ARE NOT S ATISFIED BY THE ASSESSEE. REPLY OF THE ASSESSEE HAS BEEN REPRODUCED IN PARA 6 OF ASSESSMENT ORDER. 4. AO AFTER CONSID ERING EXPLANATION GIVEN BY THE ASSESSEE OBSERVED T HAT THE ACTIVITIES OF ASSESSEE A RE IN NATURE OF BUSINESS BY WAY OF ARRANGING SEMINARS COLLECTIVE PARTICIPATION FEES FROM THE PAR TICIPANTS BY COLLECTING MONEY IN THE NAME OF A WARENESS PROGRAMS THR OUGH SEMINARS WILL TO MAKE ON FI ELD OF EDUCA TION PRIVATE COMMERCIAL COURSES WHICH IS RELATED TO TRADE AND COMMERCE INDUSTRY AND CONDUCT EXAMINATIO N AND COLLECT FEES FROM STUDENT AND ARRANGE EXHIBITION. THE ASSESSEE HAS ALSO 4 I.T.A. NO. 6801 /MUM/201 6 INTERNET & MOBILE ASSOCIATION OF INDIA ARRANGED PROGRAMMES AND DISCOURSE LECTURES AND SEMINARS ON TRADE AND COMMERCE AND CHARGES FEES ON THE SAME AND SUPPLY STUDY MATERIAL ALSO. THE ASSESSEE TRUST WAS HOLDING EXHIBIT ION TRADE COMMERCE CLASSES AND THEREFORE BUSINESS AND TRADE AS PER THE INTERPRETATION P LACE ON THE WORD EDUCATION USED IN SECTION 2(15) OF THE I.T. ACT. RELIANCE WAS PLACED ON S OLE TRUSTEES. LOKA SKIKSHAN TRUST VERSUS COMMISSIONER INCOME TAX (1975) 101 1 TR 234 (SC) AND BIHAR INSTITUTE OF MINING AND MINE SURVEYING VERSUS C IT {1994} 2008 1 TR 604 (PATNA) . 5. AO FURTHER OBSERVED THAT THE ASSESSEE TRUST WAS COVE RED UNDER THE LAST L IMB OF CHARITABLE PURPOSE IE. ADVANCEM ENT OF ANY OTHER O BJECT OF GENERAL PUBLIC UTILITY. IN VIEW OF AMENDMENT MADE IN SECTION 2 (15) OF THE IT ACT W.E.F. 1 ST APRIL 2009 FOR THE AY. 2009 - 10 ONWARDS THE ASSESSEE TRUST WAS NOT E NTITLED TO E XE MPTION AS IT IS AN INSTITUTION WHICH CONDUCTS ACTIVITY IN NATURE OF B USINESS AND ALSO CHARGE FEE OR COORDINATION. IT WAS EARNING HUGE PROFITS ON A SYSTEMATIC AND ORGANIZED MANNERS AND THEREFORE IT WAS NOT AN INSTITUTE EXISTING FOR CHARITABLE PURPOSE UNDER THE LAST LIMB OF THE SECTION 2(15) OF THE I. T. ACT. ALSO THE 5 I.T.A. NO. 6801 /MUM/201 6 INTERNET & MOBILE ASSOCIATION OF INDIA ASSESSEE TRUST INSTITUTE HAS BEEN EARNING HUGE INCOME FROM SEMINARS TRAINING AND PROGRAM FEES ETC . 6. AO MENTIONED THAT TO DECIDE TH E CONTE NTIONS RAISED BY THE ASS ESSEE IT IS NECESSARY TO EXAMINE SECTION 2(15) AFTER ITS AMENDMENT WITH EFFECT FROM 1 ST APRIL 2009. A S CRUTINY OF SECTION 2( 15) OF THE ACT ELUCIDATES THAT CHARITABLE PURPOSE FOR THE PURPOSE OF THE ACT HAS BEEN DIVIDED INTO SIX CATEGORIES 1 ) RELI EF TO THE POOR 2) EDUCATION 3) MEDICAL RELIEF 4 ) PRESERVATION OF ENVIRONMENT (INC LUDING WA TERSHEDS FORESTS AND WILDLIFE) 5) PRES ERVATION OF MONUMENTS OR PLACES OR OBJECTS OF ARTISTIC OR HISTORICAL I MPORTANCE AND 6) ADVANCEMENT OF ANY OTHER O BJECT OF GENERAL PUBLIC UTILITY. THE ASSESSEE TRUST INSTITUTION WILL FALL UNDER THE SIXTH CATEGORY I.E ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY. THE ASSESSEE TRUST INSTITUTE CANNOT BE REGARDED AS AN EDUCATIONAL IN STITUTIONS AS THE MAIN OBJECT IS TO REGULATE THE PROFESSION OF THE ASSESSEE TRUST INSTITUTE IS NOT A STATUTORY AUTHORITY OF P ROFESSIONAL BODY. THE ASSESSEE TRUST CA NNOT AWARD ANY DEGREE OR ENROLL MEMBER AS ANY STATUTORY UNIVERSITY. THESE ACTIVITIES UNDERTAKEN BY THE ASSESSEE - I NSTITUTE WILL NOT FALL UNDER THE TERM EDUCATION AS DEFINED BY THE SUPREME COURT IN SOLE 6 I.T.A. NO. 6801 /MUM/201 6 INTERNET & MOBILE ASSOCIATION OF INDIA TRUSTEE LOKA SHIKSHANA TRUST. IN THIS REGARD REFER ENCE CAN BE MADE TO THE DECISION OF GUJARAT HIGH COURT IN SAURAS HTRA EDUCATION FOUNDATION VERSUS CIT ( 2005) 273 TTR 139 (GU J ). THE AFORESAID RATIO WAS EXPOUNDED IN THE SOLE TRUSTEE LOKA SHIKSHANA TRUST (SUPRA) HAS BEEN RIGHTLY I NTERPRETED BY THE GUJARAT H IGH C OURT IN GUJARAT STATE CO - OPERATIVE U NION VERSU S CIT (1992) 195 ITR 279 (GUJ). 7. THE ASSESSING OFFICER OBSERVED THAT ASSESSEE INSTITUTION IS PREDOMINANTLY A MUTUAL ASSOCIATION AND CHARITABLE OBJECTS AND MUTUA L BENEFITS ARE CONTRADICTORY TO EACH OTHE R. IT MUST BE APPRECIATED THAT EXEMPTION U/S. 11 AS A CHARITABLE TRUST AND PRINCIPLES OF MUTUALITY ARE M UTUALLY EXCLUSIVE OF EACH OTHER. IN THE MUTUAL ASSOCIATION THE MEMBERS SUBSCRIBE FOR THE PRIMARY PURPOSE OF BENEFITING THEMSELVES WHILE IN A CHARITABL E INSTITUTION PEOPLE SUBSCRIBE FOR CHARITABLE OBJECT WITHOUT ANY EXPECTATION I N RETURN. IN THE CASE OF THE ASSESSEE THE MEMBERS HAVE CONTRIBUTED ONLY FOR THE PURPOSE OF THEIR OWN BENEFIT AND FOR ACQUIRING CERTAIN AMENITIES. THE REFORE THE ASSESSEE IS TREA TED AS MUTUAL ASSO CIATION AND NOT AS CHARITABLE IN STITUTION. 7 I.T.A. NO. 6801 /MUM/201 6 INTERNET & MOBILE ASSOCIATION OF INDIA 8. AO FURTHER OBSERV ED THAT THE CONCEPT OF CHARITY I S NECESSARILY ALTRUISTIC IN NATURE AND INVOLVED THE IDEA OF BENEFIT TO OTHERS . THE ESSENCE OF CHARITY IS THAT THE PERSON(S) DOING CHARITY EXC LUDE THEMSELVES FROM THE BENEFITS OF THE CHARITY. NON EXCLUSION OF CONTRIBUTORS TO CHARITY FUND FROM TH E BENEFITS ARISING OUT OF THAT I S NOTHING BUT SERVING THE INTEREST OF SELF IN AN ORGANIZED MANNER. IN FACT THE ENTIRE SCHEME OF SEC 11 TO 13 AND PARTIC UL ARLY SEE. 13(1)(C) AND 13(3) IS BASED ON THIS BASIC PRINCIPLE OR ESSENCE OF CHARITY . THUS I N A CASE OF EVEN CHARITABLE INSTITUTION IF BENEFIT IS PROVED TO CERTAIN CATEGORIES OF PEO PLE REFERRED TO IN SEC 1 3(3) THE EXEMPTION U/S. 11 12 I S NOT ADMISSIB LE . THEREFORE THE QUESTION OF GRANTING BENEFIT TO ANY INSTITUTION O R CLUB WHERE THE OBJECTS THEMSELVES ARE NOT CHARITABLE AND ARE FOR BENEFIT OF MEMBERS AND WHERE CERTAIN FACILITIES AND CONVENIENCES A RE PROVIDED TO MEMBERS ON PAYMENT CANNOT BE CONSIDERED AS CHARITABLE OBJECTS A ND ACTIVITIES. THE CONCEPT OF CHARITY AND MUTUALITY ARE MUTUALLY EXCLUSIVE OF EACH OTHER. A CHARITABLE INSTITUTION IS FOR THE BENEFIT OF THE P UBLIC AND NOT FOR THE MUTUAL BENEFIT OF THE CONTRIBUTORS TO THE CO MMON FUND. 8 I.T.A. NO. 6801 /MUM/201 6 INTERNET & MOBILE ASSOCIATION OF INDIA 9. AS PER THE ABOVE OBSERVATION OF AO EXEMPTION CLAIM U/S. 11 OF THE I. T. ACT WAS REJECTED BY THE AO. THEREFORE IN VIEW OF THE ABOVE DISCUSSI ON AND VARIOUS COURT JUDGMENT /DECISION AS DISCUSSED ABOVE THE ASSESSEES RECEIPTS / INCOME FROM ACTIVITIES AND INTEREST INCO ME WAS TREATED AS INCOME OF THE ASSESSEE A ND TAXED ACCORDINGLY. FURTHER AO MENTIONED THAT IN THIS CAS E REGISTRATION UNDER SECTION 12A WAS CANCELLED BY DIT (EXEMPTIONS) AS ASSESSEE HAS ENGAGED ITSE LF IN COMMERCIAL ACTIVITIES. 10 . AGGRIEVED BY THE ABOVE ORDER OF AO ASSESSEE PREFERRED APPEAL BEFORE LD. CIT(A) AND BEFORE HIM ASSESSEE SUBMITTED AS BELOW: - I) ASSESSEE SUBMITTED THAT PRIOR TO THE COMPLETION OF THE ASSESSMENT THE DIT(E) HAD VIDE ORDER DATED 8 TH DECEMBER 2011 WITHDRAWN THE REGISTRATION U/S 12A GRANTED TO THE ASSESSEE. THE A.O . TREATED THE GROSS RECEIPTS OF RS.1 13 89 299/ - (RS. 3 04 88 921 BEING GROSS RECEIPT ( - ) RS 1 90 99 690 BEING MEMBERSHIP FEES) AS TAXABLE RECEIPTS IN THE HANDS O F T HE ASSESSEE TRUST. THE ASSESSEE F URTHER SUBMITTED THAT THE HON. TRIBUNAL MUMBAI BENCH VIDE THE ORDER DATED 28 MAY 2014 AL LOWED THE APPEAL OF THE ASSESSEE FOR A.Y 2009 - 9 I.T.A. NO. 6801 /MUM/201 6 INTERNET & MOBILE ASSOCIATION OF INDIA 10 AND RESTORED THE REGISTRATION GRANTED TO THE ASSESSEE. IN THE SAID ORDER THE HON'BLE TRIBUNAL OBSERVED AS UNDER: .H OLDING OF SEMINARS CANNOT BE TERMED A COMIMERCIAL OR BUSINESS ACTIVITY IN THE CASE UNDER APPEAL AS THE TRUST WAS ESTABLISHED FOR THIS SPECIFIC PURPOSE. DIT( E) HAS IGNORED TH E FACT THE TRUST HAD SUFFERED LOSS BY ARRANGING SEMINARS. II) ASSESSEE FURTHER SUBMITTED THAT IT HAD RECEIVED DELEGATE FEES IN R ESPECT OF CONDUCTING THE SEMINAR S AGGREGATING TO RS.17 07 548/ - . IN ADDITION THERETO THE ASSESSEE HAD RECEIVED SPONSORSH IP CONTRIBUTIONS AGGREGATING TO RS.78 50 000/ - . AS AGAINST THE AFORESAID RECEIPTS TH E ASSESSEE HAD INCURRED EXPENDITURE OF RS.1 24 18 501/ - IN CONDUCTING THE SEMINARS WHICH WERE MUCH MORE TH AN THE FEES COLLECTED FROM THE DELEGATES. IN OTHER WORDS 2/3 RD OF THE EXPENSES ON CONDUCTING SEMINARS WERE MET OUT OF THE SPO NSORS HIP CONTRIBUTIONS RECEIVED BY THE ASSESSEE. AS THE EXPENDITURE INCURRED ON THE SEMINARS CONDUCTED WERE LARGER THAN THE SP ONSORSHIP CONTRIBUTIONS THERE WAS A DEFICIT OF RS.28 60 952/ - FROM CONDUCTING THE SEMINARS. IN OTHER WORDS THE: ASSESS E E HAD INC U R R ED A LOSS ON CONDUCT ING SEMINARS. SECONDLY ON PERUSAL OF THE INCOME AND EXPENDITURE ACCOUNT IT WILL BE SEEN THAT INTEREST INCOME IS GENERATED BY THE ASSESSEE FOR 10 I.T.A. NO. 6801 /MUM/201 6 INTERNET & MOBILE ASSOCIATION OF INDIA MEETING ITS ADMINISTRATIVE EXPENSES. THIRDLY IT IS NOT NECESSARY THAT EVERY TIME THE ASSESSEE GETS SUBSTANTIAL SPONSORSHIP DONATIONS TO MEET ITS SEMINAR EXPENSES. III) ASSESSEE ALSO SUBMITTED THAT IT WAS HOLDIN G SEMINARS SOLELY FOR ACHIEVING AND FULFILLING THE OBJECT S OF THE TRUST OF PARTING WITH INFORMATION AND KNOWLEDGE IN RES PECT OF INTERNET AND ITS USAGE. IT I S THEREFORE SUBMITTED THAT THE ACTIVITY OF HOLDING SEMINAR I S NOT IN THE NATURE OF TRADE COMMERCE OR BUSINESS BUT THE SE MINARS ARE HELD FOR ATTAINMENT OF THE MAIN OBJECTS OF THE ASSESSEE TRUST. ASSESSEE IS NOT GENERATING INCOME THROUGH ITS ACTIVITY AND THEREFORE IT IS NOT CARRYING ON ANY ACTIVITY IN THE NATURE OF TRADE COMMERCE OF BUSINESS OR ANY ACTIVITY OF RENDERING ANY SERVICES IN RELATION TO ANY TRADE COMMER C E OR BUSINESS FOR A CESS OR A FEE OR ANY OTHER CONSIDERATION. I N SUPPORT OF ITS CONTENTION OF ASSESSEE RELIED UPON A PLETHORA OF JUDGMENTS. IV) IN VIEW OF THE AFORESAID IT WAS SUBMITTED THAT THE ASSESSEE TRUST IS NOT INVOL VED IN CARRYING ON ANY A CTIVITY IN THE NATURE OF TRADE COMMERCE OR BUSINESS OR ANY ACTIVITY OF REND ERING ANY SERVICE IN RELATION TO ANY TRADE COMMERCE OR BUS INESS FOR A CESS OR FEE OR ANY OTHER CONSIDERATION. THE M AIN ACTIVITY OF THE ASSESSEE TRUST IS TO PROMOTE THE USE OF INTERNET BY DIFFERENT WAYS AND MEANS AND THEREFORE THE GRO SS RECEIPT OF THE 11 I.T.A. NO. 6801 /MUM/201 6 INTERNET & MOBILE ASSOCIATION OF INDIA ASSESSEE FOR THE YEAR E NDED 31 ST MARCH 200 9 ARE EXEMPT AND NOT TAXABLE R ECEIPTS. IN VIEW OF SUBMISSIONS ASSESSEE REQUESTED THAT THE APPEAL OF THE ASSESSEE MAY BE ALLOWED. 11. AFTER CONSIDERING THE SUBMISSION OF ASSESSEE LD. CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE WITH TH E FOLLOWING OBSERVATIONS: - I) IN THIS CASE THE AO HAS DENIED EXEMPTION U/S. 11 RELYING U PON THE PROVISIONS OF SECTION 1 1(4A) AND PROVISO TO SECTION 2(15). ALSO THE OTHER GROUND FOR DENYING EXEMPTION WAS THAT DIT(E) HAS CANCELLED ITS REGISTRATION U/S. 12A. THE ASSESSEE SUBMITTED THAT THE REGISTRATION HAS BEEN RESTORED BY THE HONBLE ITAT VIDE ORDER DATED 28.5.2014. COPY OF THIS ORDER HAS BEEN FILED ON PERUSAL OF WHICH IT IS NOTED THAT THE HON'BLE ITAT HAVE RESTORED THE REGISTRATION U/S.12 A . HENCE THIS GROUND FOR DENYING EXEMPTION U/S. 11 IS NO MORE RELEVANT. II) AS MENTIONED ABOVE THE AO HAS ALSO DENIED EXEMPTION RELYING UPON THE PROVISIONS OF SECTION 11(4A) AND PROVISO TO SECTION 2(15) AS MENTIONED IN PARAGRAPH 5 OF THE ASSESSMENT ORDERS. THE ASSESSEE HAS NOT MADE ANY SUBMISSION WITH REFERENCE TO THE APPLICABILITY OF PROVISIONS OF SECTION 11(4A) EITHER 12 I.T.A. NO. 6801 /MUM/201 6 INTERNET & MOBILE ASSOCIATION OF INDIA DURING ASSESSMENT OR DURING PRESENT APPELLATE PROCEEDINGS. III) WITH REGARD TO THE APPLICABILITY OF PROVISO TO SECTION 2(15) ASSESSEE SUBMITTED THAT HO N'BLE ITAT IN ITS OWN CASE HAVE OBSERVED THAT HOLDING OF SEMINAR IS NOT A COMMERCIAL OR BUSINESS ACTI VITY. IN THIS REGARD IT WOULD B E RELEVANT TO MENTION THAT THE ASSESSEE HAS SELECTIVELY QUOTED THE OBSERVATIONS OF HONBLE ITAT. ACCORDINGLY COMPLETE OBSER VATIONS OF HON'BLE ITATARE REPRODUCED AS UNDER : - IN THE CASE OF SARVODAYS HAKKTYA PANNA (SUPRA) THE HONBLE MADRAS HIGH COURT TOOK A VIEW THAT ONCE A REGISTRATION U/S. 12A OF THE ACT WAS GRANTED THE SAME COULD BE CANCELLED ONLY ON SATISFACTION OF TWO CONDITIONS LAID DOWN IN SECTION 12AA(3) OF THE ACT VIZ (A)THAT THE ACTIVITIES OF THE TRUST OR INSTITUTION ARE NOT GENUINE; AND (B) THAT THE ACTIVITIES OF THE TRUST OR INSTITUTION ARE NOT BEING CARRIED OUT IN ACCORDANCE WITH THE OBJECTS OF THE TRUST OR INST ITUTION. THE HON'BLE HIGH COURT EXPRESSED THE VIEW THAT THERE MUST BE SPECIFIC FINDINGS WITH REGARD TO THE AFORESAID TWO CONDITIONS. WE FIND THAT THE DIT(E) HAS NOT GIVEN SPECIFIC FINDING AS REQUIRED BY THE HON'BLE MADRAS HIGH COURT. HOLDING OF SEMINARS C ANNOT BE TERMED A COMMERCIAL OR BUSINESS ACTIVITY IN THE 13 I.T.A. NO. 6801 /MUM/201 6 INTERNET & MOBILE ASSOCIATION OF INDIA CASE UNDER APPEAL AS THE TRUST WAS ESTABLISHED FOR THIS SPECIFIC PURPOSE. DIT(E) HAS IGNORED THE FACT THE TRUST HAD SUFFERED LOSS BY ARRANGING SEMINARS. CIRCULAR ISSUED BY CBDT ON 06.04.2011 CLEARLY MENTIONS THAT AN AMENDMENT WOULD BE APPLICABLE FROM THE ASSESSMENT YEAR 2011 - 12 AND SUBSEQUENT ASSESSMENT YEARS. IN CASE OF AGRA DEVELOPMANT AUTHORITY (SUPRA). IN THAT MATTER THE ASSESSES WAS GRANT ED REGISTRATION UNDR SECTION 12A OF THE ACT W.EF 01.04.2 003 AND VIDE ORDER DATED 24.09.2003 SAID REGISTRATION WAS CANCELLED BY CIT BY THE IMPUGNED ORDER DATED 04 . 04.2012 W.E.F 2009 - 10 . DECIDING THE APPEAL TRIBUNAL HEL D AS UNDER: . FACTS OF THE CASE UNDER CANSIDERATIAN ARE ALMOST SIMILAR TO THE FACTS OF T HE MATTER OF AGRA DEVELOPMENT AUTHORITY (SUPRA). AGRA DEVELOPMENT AUTHORITY (SUPRA). IN THIS CASE REGISTRATION WAS GRANTED IN 2004 AND WAS WITHDRAW N FOR THE AY 2009 - 10 BEFORE THE AY. 2011 - 12. AS THE CANCELLATION IS AGAINST THE PROVISIONS OF LAW SO SAME CA NNOT BE ENDORSE D. ALLOWING THE APPEAL OF THE ASSESSEE EFFECTIVE GROUND OF APPEAL RAISED BY IT IS DECIDED IN ITS FAVOUR. 14 I.T.A. NO. 6801 /MUM/201 6 INTERNET & MOBILE ASSOCIATION OF INDIA FROM ABOVE FINDINGS OF HONBLE ITAT IT MAY BE N OTED THAT WHAT HAS BEEN OBSERVED IS THAT DIT (E ) WHILE CANCELLING REGISTRATION U/S. 12 A HAS NOT GIVEN SPECIFIC FINDING AS REQUIRED BY HONBLE MADRAS HIGH COURT AND ALSO IGNORED THE FACT THAT ASSESSEE SUFFERED LOSSES IN SEMINAR ACTIVITY. (AS REGARDS TO LOSS FROM SEMINAR ACTIVITY IT WOULD BE RELEVANT TO MENTION THAT AS AGAINST TH E RECEIPT OF RS. 95.57 LACS FROM SEMINAR AND SPONSORSHIP EXPENDITURE IS RS. 73.12 LACS ONLY AND HENCE THIS ACTIVITY HAS EARNED PROFIT). FURTHER IT IS NOTED THAT THE DECISION OF HON'BLE ITAT I S BASED ON TH E FINDINGS OF HON'BLE ITAT AGRA IN THE CASE OF AGRA DEVELOPMENT AUTHORITY WHERE IT WAS OBSERVED THAT IN ABSENCE OF POWER VESTED WITH THE CI T REGISTRATION GRANTED UNDER SECTION 12 A CANNOT BE WITHDRAWN OR CANCELLED BEFORE 1.6.2010 WHICH WAS A TECHNICAL GROUND. ACCOR DINGLY RELIANCE BY THE ASSESSEE ON THE ORDER OF HON'BLE ITAT WHICH WAS FOR THE LIMITED PURPOSE OF DECIDING REGISTRA TION UNDER SECTION 12A AND WAS DECIDED IN ITS FAVOUR ON TECHNICAL GROUND IS MISPLACED SINCE THE I SSUE OF APPLICABILITY OF PROVISO TO SE CTION 2(15) ON MERIT HAS NOT BEE N DECIDED THEREIN. IV) FURTHE R IN THE CASE OF INDI AN PLASTIC INSTITUTE HON'BLE ITAT MUMBAI WHILE DECIDING THE SAME ISSUE ON SIMILAR FACTS IN A Y 2009 - 10 VIDE THEIR ORDER NO. ITA NO 308/MUM/2012 DATED 21. 2.201 4 HAVE OBSERVED AS UNDER : - 15 I.T.A. NO. 6801 /MUM/201 6 INTERNET & MOBILE ASSOCIATION OF INDIA AFTER PERUSAL OF THE SUBMISSIONS AS WELL OBJE CTS OF THE ASSESSE E TRUST AND ALSO AFTER GOING THROUGH THE DOCUMENTS ON RECORD WE MAY OBSERVE THAT THE OBJECTS AND THE ACTIVIT IES OF THE ASSESSEE TRUST DOES NOT STRICTLY FALL IN THE DEFINITION OF EDUCATION BEING CHARITABLE PURPOSE BUT F OR ADVANCEMENT O F ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY AS ALSO PLEADED BY THE ASSESSEE IN PARA ( 3 ) OF ITS SUBMISSIONS AS REPRODUCED ABOVE. THE ASSESSEE TRUST IS NOT ONLY OFFERING SERVICES IN RELATION TO THE TRADE AND BUSINESS OF PLASTIC INDUSTRY BUT IS ALSO ACCEPT ING FEES CESS O R OTHER CONSIDERATION FOR PROVIDI NG SUCH SERVICES. THE ASSESSEE TRUST IS ALSO ACCUMULATING THE INCOME AND AS SU CH IS ALSO GETTING A GOOD INTEREST INCOME ON IT. APART FROM THAT IT I S ALSO GETTING INCOME BY WAY OF OFFERING S PACE FOR ADVERTISEMENT ON ITS WEBSITE. THEREFORE THE LD. DIT(E) HAS RIGHTLY OBSERVED THAT IN THE ASSESSEES CASE TH ERE HAVE BEEN RECEIPTS OF HUGE AMOUNT ON ACCOUNT OF HOLD ING INTERNATIONAL CONFERENCES AT RS. 21 19 861/ - AND INTEREST ON DEPOSITS AT RS. 16 14 824/ - W HICH HAVE B EEN IN THE NATURE OF BUSINESS INCOME AND THESE RECEIPTS WHEREIN E XCESS OF MONITO RY LIMIT AS LAID DOWN I N THE. P ROVISO TO SECTION 1(15) OF THE ACT WHICH HAS COME INTO EFFECT FROM A.Y 2009 - 10 AND FURTHER 16 I.T.A. NO. 6801 /MUM/201 6 INTERNET & MOBILE ASSOCIATION OF INDIA THAT THE ASSESSEE HAS BEEN IN RECEIPT OF S UCH INCOME REGULARLY OVER THE YEARS. THE DECISION OF THE CO - ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF M/S BOMBAY PRESIDENCY GOLF CL U B LTD 1 49 T TJ 471 (MUM) RELIED UPON BY THE LD. AR IN THIS RESPECT IS QUITE DISTINGUISHABLE ON ITS OWN FACTS AND CIR CUMSTANCES AND IS NOT APPLICABLE T O THE FACTS AND CIRCUMSTANCES OF THE CASE IN HAND . BASED ON ABOVE OBSERVATIONS OF HONBLE ITAT I T IS NOTED THAT THE ACTIVITIES OF THE ASSESSEE DO NOT FALL UNDER THE DEFINITION OF EDUCATION BUT UNDER ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY. FURTHER THE RECEIPTS FROM THE ACTIVITIES OF THE ASSESSEE ARE IN THE NATURE OF BUSINESS INCOME . IN VIEW OF THE FACTS OF THE CASE AND LEGAL POSITION AS DISCUSSED ABOVE I HAVE NO REASON T O DEVIATE FROM T HE FINDINGS GIVEN BY THE A O WHICH ARE UPHELD. 12 . NOW BEFORE US THE ASSESSEE HAS PREFE RRED THE APPEAL BY RAISING THE FOLLOWING GROUNDS OF APPEAL AS UNDER: - A) DENIAL OF EXEMPTION U/S. 11 1) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 1 MUMBAI [CIT(A)] ERRED ON FACTS AND IN LAW IN CONFIRMING THE ORDER PASSED BY THE ASSISTANT DIRECTOR 17 I.T.A. NO. 6801 /MUM/201 6 INTERNET & MOBILE ASSOCIATION OF INDIA OF INCOME TAX (E) - II(1) MUMBAI (AO) REJECTING THE APPELLANTS CLAIM OF E XEMPTION US . 11. 2) THE LEAR NED CIT(A) ERRED ON FACTS AND IN LAW IN HOLDING THAT THE APPELLANT HAD NOT MADE ANY SUBMISSION WITH REFERENCE TO THE APPLICABILITY OF SECTION 11(4A) EITHER DURING THE ASSESSMENT PROCEEDINGS OR DURING THE APPELLATE PROCEEDINGS. 3) THE LEARNED CIT(A) ERRED IN HOLDING THAT THE RECEIPTS OF THE APPELLANT DO NOT FALL UNDER THE DEFINITION OF EDUCATION OR UNDER ANY OTHER OBJE CT OF GENERAL PUBLIC UTILITY. 4) THE LEARNED CIT(A) ERRED IN HOLDING THAT THE RECEIPTS OF THE APPELLANT WERE IN THE NATURE OF BUSINESS INCOM E. 5) THE APPELLANT PRAYS THAT YOUR HONOUR HOLD THAT THE APPELLANT HAS FULFILLED ALL THE CONDITIONS FOR BEING ELIGIBLE FOR EXEMPTION W/S. 11 AND DENIAL OF THE SAME BY AO AND BY THE CIT(A) IS NOT AS PER LAW. B) NOT DEALIN G WITH THE ISSUE RE GARDING MUTUALI TY. 6) WITHOUT PREJUDICE TO THE ABOVE THE LEARNED CIT(A) ERRED ON FACTS AND IN LAW IN NOT DEALING WITH THE ALTERNATIVE CONTENTION OF THE APPELLANT THAT IF EXEMPTION W/S. 11 IS NOT AVAILABLE TO THE APPELLANT THE 18 I.T.A. NO. 6801 /MUM/201 6 INTERNET & MOBILE ASSOCIATION OF INDIA INCOME OF THE APPELLANT IS EXEMPT ON THE PR INCIPLES OF MUTUALITY. C) GENERAL 7) THE ABOVE GROUNDS OF APPEAL ARE WITHOUT PREJUDICE TO ONE ANOTHER AND THE APPELLANT CRAVES LEAVE TO ADD ALTER AMEND DELETE OR MODIFY ANY OF THE ABOVE GROUNDS OF APPEAL. 13 . AT THE OUTSET LD. AR BROUGHT TO OUR NOTIC E FINDINGS AO IN PARA NO. 3 & 4 OF ASSESSMENT ORDER AND SUBMITTED THAT LD. CIT(E) HAS CANCELLED THE 12AA REGISTRATION AND SUBSEQUENTLY HONBLE ITAT HAS RESTORED REGISTRATION WITH FINDINGS THAT HOLDING OF SEMINARS CANNOT BE TERMED AS BUSINESS ACTIVITY. HE F URTHER BROUGHT TO OUR NOTICE PAGE - 8 OF THE LD. CIT(A)S ORDER IN WHICH LD. CIT(A) HAS REJECTED THE PLEA OF THE ASSESSEE. HE FURTHER BROUGHT TO OUR NOTICE PAGE 101 OF THE PAPER BOOK AND SUBMITTED THAT THE FACTS OF THE CASE OF M/S INDIAN PLASTICS INSTITUTE A RE SIMILAR TO THE FACTS OF THE CASE OF ASSESSEE. IN THAT CASE ASSESSEE WAS HOLDING INTERNATIONAL CONFERENCES AND INTEREST ON DEPOSITS AND THE HONBLE ITAT CAME TO THE CONCLUSION IN THAT CASE WITH THE OBSERVATION THAT ACTIVITY OF THE ASSESSEE ARE A GENER AL PUBLIC 19 I.T.A. NO. 6801 /MUM/201 6 INTERNET & MOBILE ASSOCIATION OF INDIA UTILITY INASMUCH AS IT HELPS ALL THOSE CLASSES OF PERSONS CONNECTED WITH THE PLASTICS AND ITS APPLICATION WITH A USEFUL KNOWLEDGE AND INFORMATION FROM TIME TO TIME. ACCORDINGLY HONBLE ITAT DO NOT FIND ANY MERIT IN THE ACTION OF THE LOWER AUTHOR ITIES FOR DECLINE OF CLAIM OF EXEMPTION IN RESPECT OF EXCESS OF INCOME OVER THE EXPENDITURE WHICH WAS TRANSFERRED TO THE EDUCATION FUND. HE FURTHER BROUGHT TO OUR NOTICE PAGE 108 OF THE PAPER BOOK WHEREIN HE RELIED ON THE DECISION OF HONBLE BOMBAY HIGH CO URT IN THE CASE OF DIT(E) VRS. SHRI VILE PARLE KELAVANI MANDAL (2015) 378 ITR 593 (BOM) WHEREIN THE HONBLE BOMBAY HIGH COURT HAS ACCEPTED THE FINDINGS OF THE TRIBUNAL WITH THE FOLLOWING OBSERVATIONS: - 5. THE TRIBUNAL HAS HELD THAT THE MANAGEMENT AND DEVELOPMENT PROGRAM & CONSULTANCY CHARGES IS PART AND PARCEL OF NARSEE MONJEE INSTITUTE OF MANAGEMENT STUDIES WHICH HAS BEEN SET UP BY THE RESPONDENT - ASSESSEE. THE RESPONDENT - ASSESSEE IS A TRUST AND HAS SET UP 30 SCHOOLS AND COLLEGES. THE COMMISSIONER AS ALSO THE TRIBUNAL HAS FOUND THAT THE ELEMENT BUSINESS IS MISSING IN CONDUCTING MANAGEMENT COURSES. THERE MAY BE SOME SURPLUS GENERATED WHICH ITSELF IS APPLIED TOWARDS THE ATTAINMENT OF THE OBJECT OF THE EDUCATIONAL INSTITUTE. THE SEPARATE BOOKS OF ACCOUNT CANNOT BE 20 I.T.A. NO. 6801 /MUM/201 6 INTERNET & MOBILE ASSOCIATION OF INDIA INSISTED UPON BECAUSE ONCE THIS PROGRAMME IS PART AND PARCEL OF THE ACTIVITIES UNDERTAKEN AND CARRIED OUT BY THE NARSEE MOONJEE INSTITUTE OF MANAGEMEN. STUDIES THEN THE CONDITION PRECEDENT SET OUT IN SUB - SECTION (4A) OF SECTION 11 OF THE I.T ACT IS COMPLETELY SATISFIED. SUCH FINDING OF FACT CANNOT BE TERMED AS PERVERSE AND IT IS IN CONSONANCE WITH THE FACTUAL ASPECT REGARDING ACTIVITIES OF THE TRUST AND THE OBJECT THAT IT IS SEEKING TO ACHIEVE. SIMILARLY IN REGARD TO INCOME FROM THE HIRING OF THE PREMISES AND ADVERTISEMENT RIGHTS THE SAID QUESTION IS ALSO NOT SUBSTANTIAL QUESTION OF LAW. LETTING OUT OF HALLS FOR MARRIAGES SALE AND ADVERTISEMENT RIGHTS HAS NOT BEEN FOUND TO BE A REGULAR ACTIVI TY UNDERTAKEN AS A PART OF BUSINESS. THE EDUCATIONAL INSTITUTIONS REQUIRE FUNDS. THE INCOME IS GENERATED FROM GIVING VARIOUS HALLS AND PROPERTIES OF THE INSTITUTION ON RENTALS ONLY ON SATURDAYS AND SUNDAYS AND ON PUBLIC HOLIDAYS WHEN THEY ARE NOT REQUIRED FOR EDUCATIONAL ACTIVITIES THEN THIS CANNOT BE SAID TO BE A BUSINESS WHICH IS NOT INCIDENTAL TO ATTAIN THE OBJECTS OF THE TRUST. THIS BEING MERELY AN INCIDENTAL ACTIVITY AND THE INCOME DERIVED FROM IT IS USED FOR THE EDUCATIONAL INSTITUTE AND NOT FOR ANY PARTICULAR. PERSON SEPARATE BOOKS OF ACCOUNT ARE ALSO MAINTAINED THEN THIS INCOME CANNOT BE BROUGHT TO TAX. THIS CONCLUSION IS ALSO NOT PERVERSE AND GIVEN THE FACTS AND CIRCUMSTANCES WHICH ARE UNDISPUTED. 21 I.T.A. NO. 6801 /MUM/201 6 INTERNET & MOBILE ASSOCIATION OF INDIA 14. HE FURTHER BROUGHT TO OUR NOTICE DECISION OF DIT(E) VRS. SHREE NASHIK PANCHVATI PANJRAPOLE AT PAGE NO. 25 OF THE PAPER BOOK WHEREIN THE HONBLE BOMBAY HIGH COURT OF JUDICATURE HELD AS UNDER: - 15. AS NOTED ABOVE WE FIND THAT IMPUGNED ORDER OF THE TRIBUNAL HAS RECORDED A FINDING OF FACT THAT THE DOMI NANT FUNCTION OF THE RESPONDENT TRUST IS TO PROVIDE AN ASYLUM TO OLD MAIMED SICK AND STRAY COWS. FURTHER ONLY 25% OF THE COWS BEING LOOKED AFTER YIELD MILK AND IF THE MILK IS NOT PROCURED IT WOULD BE DETRIMENTAL TO THE HEALTH OF THE COWS. THEREFORE TH E MILK WHICH IS OBTAINED AND SOLD BY THE RESPONDENT ASSESSEE IS AN ACTIVITY INCIDENTAL TO ITS PRIMARY / PRINCIPAL ACTIVITY OF PROVIDING ASYLUM TO OLD MAIMED SICK AND DISABLED COWS. IN THE PRESENT FACTS THE ACTIVITY OF MILKING THE COWS AND SELLING THE MI LK IS ALMOST COMPELLED UPON THE TRUST IN THE PROCESS OF GIVING ASYLUM TO THE COWS. IN OUR VIEW THE ACTIVITY TO BE CONSIDERED IN THE NATURE OF TRADE COMMERCE OR BUSINESS WOULD IN MOST CASES HAVE TO BE CARRIED OUT ON A REGULAR BASIS WITH A VIEW TO EARN TH E PROFIT. THE PRESENCE OF THE PROFIT INTENT (EVEN IF IT DOES NOT FRUCTIFY) WOULD NORMALLY BE A SINE QUA NON FOR THE ACTIVITY TO BE CONSIDERED AS TRADE COMMERCE OR BUSINESS. THEREFORE IN THE PRESENT FACTS IT IS NOT AS THOUGH THE KEEPING OF 22 I.T.A. NO. 6801 /MUM/201 6 INTERNET & MOBILE ASSOCIATION OF INDIA THE COWS AND M ILKING THEM WAS WITH A VIEW TO CARRY OUT ACTIVITY IN THE NATURE OF TRADE COMMERCE OR BUSINESS TO EARN PROFITS. THE REVENUE HAS NOT SHOWN HOW EVEN IN THE ABSENCE OF PROFIT MOTIVE THE ACTIVITY OF OBTAINING MILK AND SELLING THE SAME WOULD STILL BE AN ACTIVI TY OF TRADE COMMERCE OR BUSINESS. IN THE ALTERNATIVE MR. MALHOTRA SUBMITTED THAT THE PROVISO TO SECTION 2(15) OF THE ACT WOULD APPLY EVEN IF IT IS NOT TRADE COMMERCE OR BUSINESS BUT ONLY IN ITS NATURE. HOWEVER HOW AND WHY THE ACTIVITY OF SELLING MILK O BTAINED INCIDENTALLY WHILE TAKING CARE OF THE COWS IS IN THE NATURE OF TRADE BUSINESS OR COMMERCE IS NOT SHOWN. ADMITTEDLY IN THE PRESENT FACTS THE DOMINANT ACTIVITY CARRIED OUT BY THE RESPONDENT ASSESSEE'S TRUST FOR OVER 130 YEARS IS TO TAKE CARE OF O LD SICK AND DISABLED COWS. IN THESE CIRCUMSTANCES AN INCIDENTAL ACTIVITY OF SELLING MILK WHICH MAY RESULT IN RECEIPT OF MONEY BY ITSELF WOULD NOT MAKE IT TRADE COMMERCE OR BUSINESS NOR AN ACTIVITY IN THE NATURE OF TRADE COMMERCE OR BUSINESS TO BE HIT BY THE PROVISO TO SECTION 2(15) OF THE ACT. 15. HE FURTHER BROUGHT TO OUR NOTICE DECISION OF DIT VRS. WOMENS INDIA TRUST AT PAGE NO. 43 OF THE PAPER BOOK WHEREIN THE HONBLE BOMBAY HIGH COURT HELD AS UNDER: - 23 I.T.A. NO. 6801 /MUM/201 6 INTERNET & MOBILE ASSOCIATION OF INDIA 6. A PERUSAL OF THE SAME WILL INDICATE AS TO H OW IF THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY SHALL NOT BE CHARITABLE IF THE ASSESSEE IS INVOLVED IN CARRYING ON ANY ACTIVITY IN THE NATURE OF TRADE COMMERCE OR BUSINESS OR ANY ACTIVITY OF RENDERING ANY SERVICE IN RELATION TO ANY TR ADE COMMERCE OR BUSINESS FOR A CESS FEES OR ANY OTHER CONSIDERATION. IN THE PRESENT CASE THE UNDISPUTED FACTS ARE THAT THE ASSESSEE IS A TRUST FORMED TO CARRY OUT THE OBJECT OF EDUCATION AND DEVELOPMENT OF NATURAL TALENTS OF THE PEOPLE HAVING SPECIAL SK ILLS MORE PARTICULARLY THE WOMEN IN THE SOCIETY. THE ASSESSEE TRAINS THEM TO EARN WHILE LEARNING. IT EDUCATES THEM IN THE FIELD OF CATERING STITCHING TOY MAKING ETC. WHILE GIVING THEM TRAINING THE ASSESSEE USES RELATED MATERIAL WHICH IT BUYS FROM THE OPEN MARKET. THIS IS ESSENTIAL FOR CARRYING OUT THE ASSESSEE'S OBJECT. IN THE PROCESS SOME FINISHED PRODUCT SUCH AS PICKLES JAM ETC. ARE PRODUCED AND WHICH THE ASSESSEE SELLS THROUGH THE SHOPS EXHIBITIONS AND PERSONAL CONTACTS. THE MOTIVE OF THE ASSESS EE IS NOT THE GENERATION OF PROFIT BUT TO PROVIDE TRAINING TO THE NEEDY WOMEN IN ORDER TO EQUIP OR TRAIN THEM IN THESE FIELDS AND MAKE THEM SELF CONFIDENT AND SELF RELIANT. THERE IS NURSING TRAINING WHICH IS ALSO BEING MANAGED AND ADMINISTERED BY THE ASSE SSEE. THE DETAILS OF INCOME AND EXPENDITURE ACCOUNTS SHOWS THAT THE ASSESSEE HAD RECEIVED 24 I.T.A. NO. 6801 /MUM/201 6 INTERNET & MOBILE ASSOCIATION OF INDIA DONATION OF RS. 36 88 634/ - AND NURSING SCHOOL FEES OF RS. 4 46 088/ - . THE ASSESSEE POINTED OUT THAT THIS NURSING TRAINING PROVIDED AT THE CENTRE OF THE ASSESSEE AT P ANVEL IS FREE OF COSTS. THE CHARGE IS LEVIED FOR THE MESS BUT THE ACCOMMODATION AND OTHER FACILITIES ARE FREE OF COSTS AND APART FROM THE COMMUNITY DEVELOPMENT PROGRAMMES WHICH ARE UNDERTAKEN TO EDUCATE THE RURAL WOMEN TEACH THEM VARIOUS SKILLS AND MAKE THEM AWARE OF HOW TO LIVE HONOURABLY. THUS ON THESE UNDISPUTED FACTS THE TRIBUNAL FOUND THAT THIS IS NOT AN ACTIVITY WHICH WOULD FALL WITHIN THE PROVISO. THE TRIBUNAL HAS RIGHTLY REFERRED TO THE TWO LETTERS WHICH HAVE BEEN ADDRESSED BY THE TRUSTEES OF T HE ASSESSEE TRUST. THEY CLARIFY THAT IN THE PAST SUCH ACTIVITIES HAVE BEEN FOUND TO BE INCIDENTAL TO THE OBJECT OF THE TRUST. SECONDLY THE DONATION RECEIVED DURING THE YEAR HAS BEEN UTILISED IN THE YEAR UNDER CONSIDERATION FOR ACHIEVING THE OBJECT OF THE TRUST. HOWEVER THE BANK INTEREST RECEIVED IS CONTINUED AND THEN THERE IS A DEFICIT. IT IS IN THESE CIRCUMSTANCES THAT THE ARGUMENT WAS CANVASSED THAT THE FEES COLLECTED FOR TRAINING WOMEN ARE ONLY TO MEET THE COST OF EXPENSES FOR PROVIDING THEM FOOD IT EMS. THEIR ACCOMMODATION AND OTHER FACILITIES ARE FREE OF COSTS. ONCE THE ESSENTIAL NATURE OF THE ACTIVITIES CARRIED ON BY TRUST IS CONSIDERED THEN THE LARGER QUESTION NEED NOT BE DECIDED. THE TRIBUNAL FOUND THAT THE TRUST MAY BE SET 25 I.T.A. NO. 6801 /MUM/201 6 INTERNET & MOBILE ASSOCIATION OF INDIA UP FOR ADVANCEMENT O F ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY BUT THAT WILL NOT CEASE TO BE CHARITABLE PURPOSES IN THIS CASE BECAUSE THE ACTIVITIES IN WHICH THE TRUST IS INVOLVED CANNOT BE TERMED AS CARRYING ON OF TRADE COMMERCE OR BUSINESS. THIS IS TO IMPRESS UPON THE WOMEN THE NEED TO BE SELF RELIANT AND SELF SUPPORTING AND TO INSTILL IN THEM THE CONFIDENCE THAT THEY CAN MAKE A LIVELIHOOD FOR THEMSELVES IF THEY RELY ON THE SKILLS AS AFORE - NOTED THAT THE ACTIVITY HAS BEEN UNDERTAKEN. IT DOES NOT PARTAKE THE CHARACTER OF TRADE COMMERCE OR BUSINESS NOR OF RENDERING OF ANY SERVICE IN RELATION THERETO. IT IS ONLY TO TEACH OR IMPART SKILLS AND TO INSTILL CONFIDENCE THAT THE PRODUCED GOODS OR ARTICLES ARE SOLD. TO THAT EXTENT ALSO DEFICIT HAS OCCURRED. IN THE CIRCUMSTANCES THE TRIBUNAL TOOK A VIEW THAT OCCASIONAL SALES OR THE TRUST'S OWN FUND GENERATION ARE FOR FURTHERING THE OBJECTS BUT NOT INDICATIVE OF TRADE COMMERCE OR BUSINESS. IN THE CIRCUMSTANCES THE PROVISO DOES NOT APPLY. 16. HE FURTHER BROUGHT TO OUR NOTICE IN COME AND EXPENDITURE ACCOUNT FOR THE YEAR ENDING 31 ST MARCH 2009 AND BROUGHT TO OUR NOTICE RECEIPT OF DONATION /SPONSORSHIP/ SUBSCRIPTION/ FEES FROM SEMINARS AT RS. 2 91 68 035/ - AND CORRESPONDING EXPENDITURE OF RS. 2 19 19 985/ - . HE SUBMITTED THAT THE OBS ERVATION OF LD. 26 I.T.A. NO. 6801 /MUM/201 6 INTERNET & MOBILE ASSOCIATION OF INDIA CIT(A) AT PAGE NO. 6 PARA NO. 5.1(II) OF ITS ORDER IS WRONG AND WE DO NOT KNOW FROM WHERE LD. CIT(A) HAS OBSERVED THOSE FIGURES WHICH IS NOT MATCHING TO THE ACTUAL INCOME AND EXPENDITURE DISCLOSED BY THE ASSESSEE. HE PRAYED THAT EXEMPTION CLAIMED BY THE ASSESSEE U/S 11 BE RESTORED. 1 7. ON THE OTHER HAND LD. DR SUBMITTED THAT EDUCATION AND AWARENESS CANNOT BE EQUATED. HE RELIED ON THE DECISION IN THE CASE OF INDIAN MACHINE TOOLS (SUPRA) AND FURTHER RELIED ON THE FINDINGS OF LD. CIT(A) IN PARA 5.2 OF THE ITS ORDER. HE BROUGHT TO OUR NOTICE THE FINDINGS OF LD. CIT(A) AT PAGE 9 OF THE ORDER IN WHICH LD. CIT(A) CLEARLY OBSERVED THAT ASSESSEE HAS IN FACT EARNED BUSINESS INCOME. ACCORDINGLY HE SUPPORTED THE FINDINGS OF LOWER AUTHORITIES. 1 8 . CONSIDERED THE RIVAL SUBMISSIONS AND MATERIAL PLACED ON RECORD. WE NOTICE FROM THE RECORD THAT THE ASSESSE E TRUST IS ESTABLISHED WITH THE OBJE CTIVE TO PROMOTE THE USE OF PUBLIC UTILITY ADVERTISING AND ELECTRONIC COMMERCE THROUGH INTERNET AND OTHER ONLINE CHAN NELS TO PROMOTE USE OF INTERNET AS A MEDIUM TO ENABLE THE GROWTH OF THE ELECTRONIC COMMERCE TO ACT A S A REPRESENTATIVE BODY OF INTERNET PORTALS TO PROMOTE THE EMERGING MEDIUM OF 27 I.T.A. NO. 6801 /MUM/201 6 INTERNET & MOBILE ASSOCIATION OF INDIA INTERNET AMONG ST THE MEMBERS OF THE ASSOCIATION AND TO REPRESENT THE ASSOCIA TION TO THE GOVERNMENT BODIES. B ASED ON THE ABOVE OBJECTS THE ASSESSEE HAS ORGANIZED SE VER A L SEM INAR S TO POPULARIZE THE INTERNET AND ELECTRONIC COMMERCE AMONG THE MEMBERS OF THE ASSOCIATION AND GENERAL PUBLIC . I N THIS PROCESS OF ADVANCING ITS OBJECTIVES ASSESSEE HAS ARRANGED THE SEMINAR S WITH THE HELP OF SPONSORSHIP AND CHARGING FOR THE SEMINAR S BY COLL ECTING FEES FOR THE SAME . T HE AO ANALYZ ED THE FINANCIAL STATEMENT OF THE ASSESSEE AND CAME TO CONCLUSION THAT THE MAIN INCOME OF THE ASSESSEE GENERATED MAINLY OF ORGANIZING SEMINARS AND COLLECTING FEES FOR THE SAME. SINCE MAJORITY OF THE RECEI PT IS FROM TH E SEMINAR S AO INVOKED THE PROVISIONS OF SECTION 2(15) AND CAME TO THE CONCLUSION THAT THE TRUST FUNCTIONS CAN BE CLASSIFIED ONLY UNDER BUSINESS ACTIVITIES AND WILL NOT FALL UNDER EDUCATION BUT CAN BE CLASSIFIED UNDER OTHER OBJECTS OF GENERAL PUBLIC UTILIT Y. FURTHER HE OBSERVED THAT ASSESSEE OPERATION CAN ONLY BE CONSIDERED AS MUTUAL ENTITY NOT CHARITABLE. A CCORDINGLY AO COMPLETED THE ASSESSMENT BASED ON MUTUAL ITY CONCEPT. LD. CIT(A) ALSO AGREED WITH THE FINDINGS AND OBS ERVATION OF THE AO. 28 I.T.A. NO. 6801 /MUM/201 6 INTERNET & MOBILE ASSOCIATION OF INDIA 19. A FTER CONSIDERING THE FACTUAL MATRIX OF THE OPERATIONS OF THE ASSESSEE WE NOTICED THAT THE ASSESSEE TRUST WAS ESTABLISHED TO PROMOTE INTERNET AND E - COMMERCE. I N ORDER TO PROMOTE AND POPULARIZE THE OBJECTS ASSESSEE HAS TO ARRANGE AND ORGANIZE THE SEMINARS AND O THER MEDIUM OF PROMOTION. I N THAT PROCESS ASSESSEE HAS ORGANIZED SOME S PONSORSHIP AND COLLECTED FEES. T HE EXISTENCE OF THESE KIND OF TRUST DEPENDS UPON THE SYSTEMATIC PROGRAMS AND ORGANIZING SEMINAR S IN THAT PROCESS THEY HAVE TO CO LLECT FEES FOR THAT EFF ORT. I N THAT PROCESS WE WOULD NOT SAY PROFIT BUT S URPLUS IN ORDER TO SURVIVE SELF - RE LIANT AND MEET OUT THE ADMINISTRATION COST OF THE TRUST . IN OUR CONSIDERED VIEW THE H ON BLE BOMBAY HIGH C OURT ADJUDICATED IN THE CASE OF SHR EE NASHIK P ANCHVATI (SUPRA) TH AT THE PRESENCE OF THE TRADING ACTIVITY BY THE RESPONDENT ASSESSEE IS AN ACTIVITY INCIDENTAL TO ITS PRIMARY / PRINCIPAL ACTIVITY OF PROVIDING ASYLUM TO OLD MAI MED SICK AND DISABLED C OWS. T HE ACTIVITY IS ALMOST COMPELLED UPON THE TRUST IN THE PROCE SS OF G IVING ASYLUM TO THE COWS. S IMILARLY IN THE GIVEN CASE THE ACTIVITIES OF ORGANIZING SEMINAR IS INCIDENTAL TO PRIMARY OBJECTIVE OF PROMOTION OF INTERNET AND E - COMMERCE AMONG THE MEMBERS AND PUBLIC AT LARGE. W ITHOUT THESE ACTIVITIES OF 29 I.T.A. NO. 6801 /MUM/201 6 INTERNET & MOBILE ASSOCIATION OF INDIA ORGANIZING SEMINAR S T HE EXISTEN CE OF THE TRUST IS IMPOSSIBLE. T HEREFORE THE ACTIVITIES OF ORGANIZING SEMINARS ARE INTEGRAL PART OF OBJECTS OF THE TRUST. W E NOTICE THAT EVEN TAX AUTHORITIES AGREE THAT THE ACTIVITIES OF THE TRUST MAY FALL UNDER 4 TH LIMB OF SECTION 2 (15) OF THE A CT I.E. FOR GENERAL PUBLIC UTILITY. T HE AO TREATED THE ASSESSEE S ACTIVITIES UNDER MUTUAL ITY CONCEPT. W E ARE AWARE THAT IN ORDER TO CLAIM THE MUTUAL ITY ASSESSEE HAS TO MAINTAIN THE SEPARATE BOOKS FOR THE SERVICE RENDERED TO MEMBER S AND NON - MEMBER S. E VEN THE ASSESSEE HAS TO PROVE THAT THE IDENTITIES OF THE CONTRIBUTORS TO THE COMMON FUND MUST BE ENTITLED TO PARTICIPATE IN THE SURPLUS AND THE PARTICI PATORS TO THE SURPLUS MUST BE THE SAME PERSO NS WHO HAVE CON TRIBUTED TO THE COMMON FUND. UNLESS THESE CONDITIONS ARE SATISFIED THE ASSESSEE CANNOT BE TREATED AS MUTUAL ORGANIZATION . I N THE GIVEN CASE AO HAS NOT VERIFIED NOR ASSESSEE HAS CLAIMED ANY BENEFIT UNDER MUTUALITY . W E NOTICE THAT THE ASSESSEE HAS NOT MAINTAINED ANY SEPARATE REGISTER FOR THE SERVI CES RENDERED TO MEMBERS AND NON - MEMBERS. T HEREFORE IT CANNOT BE CLASSIFIED UNDER MUTUAL ITY. 20. WE ALSO NOTICED THAT THE REGISTRATION UNDER SECTION 12A A IS RESTORED AND THE CO - ORDINATE B ENCH HAS ALREADY ADJUD ICATED THAT 30 I.T.A. NO. 6801 /MUM/201 6 INTERNET & MOBILE ASSOCIATION OF INDIA MERE HOLDING SEMINARS CANNOT BE TERMED A CO MMERCIAL OR BUSINESS ACTIVITY. T HEREFORE THE REGISTRATION GRANTED AFTER EVALUATING THE OBJECTS OF THE TRUST AS CHARITABLE AND NOW MERELY BECAUSE OF ORGANIZING SEMINARS ITSELF CANNOT MAKE THE TRUST NON CH ARITABLE OR C OMMERCIAL. I N OUR CONSIDERED VIEW THE INVOKING OF SECTION 2(15) OF THE ACT MERELY BECAUSE OF REVENUE FROM ORGANIZING SEMINAR CANNOT MAKE THE TRUST LO O SES THE CHARACTER OF CHARITY. T HE AO HIMSELF CLASSIFIED THE ACTIVITIES UNDER OBJE CTS OF GENERAL PUBLIC UT ILITY. T HEREFORE THE ACTIVITIES CARRIED ON BY THE ASSESSEE IS ONLY INCIDENTAL TO THE MAIN OBJECT AND THE RAT IO LAID DOWN IN THE CASE OF SHREE NASHIK P ANCHVATI (SUPRA) IS APPLICABLE TO THIS CASE. T HEREFORE WE ARE INCLINED TO ACCEPT THE PLEA OF THE ASSESSE E AND ACCORDINGLY ALL THE GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED . 10 . IN THE NET RESULT THE APPEAL FILED BY THE ASSESSEE STA NDS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 12.03. 2021 . SD/ - SD/ - (R . L. NEGI ) (S. RIFAUR RAHMAN ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED : 12.03. 2021 SR.PS. DHANANJAY 31 I.T.A. NO. 6801 /MUM/201 6 INTERNET & MOBILE ASSOCIATION OF INDIA / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT - CONCERNED 5. / DR ITAT MUMBAI 6. / GUARD FILE / BY ORDER . / (DY./ASSTT.REGISTRAR) / ITAT MUMBAI