ITA NO. 6032/Del/2012
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH "C", NEW DELHI
BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER
AND
SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER
I.T.A. No. 6032/Del/2012
A.Y. : 2009-10
Asstt. Director of Income Tax (E), vs. Indian National theatre Trust,
TC-II, New Delhi 4-Safdar Hashmi Margm,
New Delhi 110 001
(PAN/GIR NO. : AAATI1040E)
(Appellant ) (Respondent )
Assessee by : Sh. Pradeep Dinodia, CA
Department by : Sh. Satpal Singh, Sr. D.R.
ORDER
PER SHAMIM YAHYA: AM
This appeal by the Revenue is directed against the order of the
Ld. Commissioner of Income Tax (A)-XXI, New Delhi dated 21.9.2012
pertaining to assessment year 2009-10.
2. The grounds raised read as under:-
i) On the facts and in the circumstances of the case
and in law, the Ld. Commissioner of Income Tax (A)
has erred in allowing the exemption u/s. 11 & 12 of
the Income Tax Act, 1961.
ii) On the facts and in the circumstances of the case and
in law, the Ld. Commissioner of Income Tax (A) has
failed to appreciate the fact that assessee is engaged
in hiring of auditorium and providing space on rent on
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day to day basis and earning business income
therefrom and treating the same to be as charitable
activities.
iii) On the facts and in the circumstances of the case and
in law, the Ld. Commissioner of Income Tax (A) has
failed to appreciate the fact that assessee is neither
in the field of education, nor in the field of medical
relief of the poor and it can be considered after seeing
the activities carried out by the assessee, as falling
within scope of `general public utility' as per section
2(15) of the Income Tax Act, 1961.
iv) The Ld. Commissioner of Income Tax (A) has failed to
appreciate that the amended proviso to section 2(15)
of the I.T. Act, 1961 provides that the nature of use or
application of income in such cases is not relevant.
v) The appellant craves to leave to add, to alter or
amend any ground of appeal raised above at the time
of hearing.
3. Assessee society is registered u/s. 12A(a) of the I.T. Act. The
Assessing Officer noted that following are the main activities of the
trust.
"i) To promote Artistic & Cultural expression through
dramas, music, education etc.
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ii) The trust owes an auditorium, situated at 4, Safdar
Hashmi Marg, New Delhi 110 001, which was claimed
to have been used for purpose of promoting the
objects of the trust i.e. Artistic and cultural expression
through drama, music education and cognate
activities.
iii) The trust claimed to have supported activities of
another charitable organization Shri Ram Institute for
performing Arts (SRCPA) which has similar objects.
3.1 Assessing Officer observed that the assessee is neither in the
field of education, nor in the field of medical relief or relief of poor and
it can be considered after seeing the activities carried out by assessee
as falling within the scope of `general public utility' as per Sec. 2(15)
of I.T. Act.
3.2 Assessing Officer held that promotion on arts and culture was
not principal activity of the assessee. Assessing Officer concluded as
under:-
"i) The hiring of auditorium and letting of property were
the principal activity of the assessee, conducted with a
clear profit motive and not an incidental activity.
ii) The donation to SRCPA, an organization controlled by
main Trustees of Indian National Theatre Trust, is
nothing but an attempt to show case charity and thus
claim exemption. The assessee Trust never engaged
into any attempt to seek accountability of funds
donated by it, from the recipient organization.
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iii) Though the assessee was allowed benefit of section
80G(5)(vi), no donation was received by it during the
F.Y. 2008-09, which shows that its activities was not
considered worthy of donation by any donor.
iv) The surplus funds continues by utilize the same for
addition to fixed assets or actively promote objects as
per Trust deed.
Thus, in view of the above, assesee's submission is
rejected and assessee's claim of being a charitable
institution cannot be accepted. In view of the above, it is
inferred that assessee is covered by the proviso to
amended definition contained in section 2(15) of the Act.
Since the proviso is w.e.f. assessment year 2009-10, a
proposal for withdrawal of registration u/s. 12AA has already
been moved to Director of Income Tax (Exemptions) as the
organization can no longer be regarded as a charitable
organization within the provision of Section 2(15).
Hence, the income of the assessee in taxed as per
rates applicable to an AOP, as its claim of exemption for
being a charitable institution is denied due to reasons
already discussed."
4. Upon assessee's appeal, Ld. Commissioner of Income Tax (A)
noted that the Hon'ble Jurisdictional High Court in assessee's own case
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for A.Y. 2008-09 vide para 6 & 7 of the order dated 05.9.2012 has
upheld the activities as charitable in nature by observing as under:-
"Accordingly, the Auditorium is made available for
performance in nature of dance drama, music, education
etc. Auditorium is made available for normally to schools,
colleges, theatre groups etc. Our trust takes a nominal
charges for making the auditorium available for such
activity only with a view to meet partly running cost. It is
emphatically stated that activity of making available to
other institution for the purpose of promoting dance, drama
music etc. is in the nature of charitable activities and same
does not result in any earning to the trust. With a view to
earn income for the purpose of carrying on the charitable
activities, the trust had partly let out the premises so as to
earn regular income. The deficit of making available the
auditorium for promoting dance, drama, music, education
etc. is met out of the said rental income. Further, our trust
also supports charitable activities being carried by other on
charitable institutions having objects consistent with our
object by way of making donations to them.
The aforesaid position is being there for number of years
and charitable activities of our trust have always been
accepted in the past.
The Assessing Officer however rejected the contention
stating that the assessee used to charge market rates while
hiring or letting out auditorium. We discern no material to
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warrant that conclusion. Apart from hiring of the
auditorium, the assessee received rents on account of
letting out some portion of its premises to M/s Benett and
coleman. That cannot be termed as unreasonable. In view
of the fact that the previous orders in which the claim for
the assessee to be a charitable trust was upheld, we do not
see any reason to interfere with the impugned order in this
aspect."
4.1 Considering the above, Ld. Commissioner of Income Tax (A)
observed that activities of the assessee for the assessment year 2009-
10 are similar as in Assessment year 2008-09 and in preceding years
wherein it has been held by the Hon'ble Jurisdictional High court that
on performance in the nature of Dance, Drama, Music education and
making auditorium available for school and colleges, theatre groups
and taking nominal charges for making the auditorium available for
such activities cannot be termed as unreasonable and assessee's
status as charitable trust has been upheld. Ld. Commissioner of
Income Tax (A) further observed that the Assessing Officer's reliance
on the amendment of section 2(15) effective from asstt. year 2009-10
is attracted only in case if assessee trust would have been found to be
doing activity in the nature of trade, commerce or business which is
not a case in the present case as has been by the Hon'ble Delhi High
Court as discussed above. Ld. Commissioner of Income Tax (A)
concluded as under:-
"Furthermore, in Annexure II of the reply, full details of the
date-wise hiring has been made available, perusal of the
same reveals the fact that it has been made available
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mainly for music, drama, classical dance activities. In the
Annexure III head-wise allocation of the expenses has been
made available for three years which clearly chows that
there is no difference in the activities of the appellant from
earlier two years. So, finding of assessment year 2008-09
made by Hon'ble Delhi High Court in appellant's own case is
clearly attracted. In view of above discussion, grounds no.
1 to 11 of the appellant are allowed."
5. Against the above order the Revenue is in appeal before us.
6. Ld. Counsel of the assessee submitted that the issue is squarely
covered in assessee's own favour by the Hon'ble Jurisdictional High
Court decision in assessee's own case.
7. Ld. Departmental Representative could not controvert these
submissions of the assessee's counsel. He relied upon the order of the
Assessing Officer.
8. We have heard the rival contentions in light of the material
produced and precedent relied upon. We find that the issue involved
is squarely covered in assessee's favour by the Hon'ble Jurisdictional
High Court decision in assessee's own case vide order dated 5.9.2012
as quoted above. The Hon'ble Jurisdictional High Court has held that
the assessee's activities are charitable in nature. Hence, we do not find
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any infirmity in the order of the Ld. Commissioner of Income Tax (A).
Accordingly, we uphold the same.
9. In the result, the appeal filed by the Revenue stands dismissed.
Order pronounced in the open court on 08/2/2013.
Sd/- Sd/-
YADAV]
[RAJPAL YADAV] [SHAMIM YAHYA]
JUDICIAL MEMBER ACCOUNTANT MEMBER
Date 08/2/2013
"SRBHATNAGAR"
Copy forwarded to: -
1. Appellant 2. Respondent 3. CIT 4. CIT (A)
5. DR, ITAT
TRUE COPY
By Order,
Assistant Registrar,
ITAT, Delhi Benches
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