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Asstt. Director of Income Tax (E), TC-II, New Delhi vs. Indian National theatre Trust, 4-Safdar Hashmi Margm, New Delhi 110 001
February, 11th 2013
                                                              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


                                       1
                                                             ITA NO. 6032/Del/2012


                      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.




                                         2
                                                                     ITA NO. 6032/Del/2012


               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.

                                             3
                                                        ITA NO. 6032/Del/2012


          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




                                     4
                                                             ITA NO. 6032/Del/2012


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


                                     5
                                                       ITA NO. 6032/Del/2012


          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

                                   6
                                                        ITA NO. 6032/Del/2012


           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


                                    7
                                                        ITA NO. 6032/Del/2012


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




                                    8
    ITA NO. 6032/Del/2012




9
 
 
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