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ACIT (E), Circle 2(1) vs. National Accreditation Board for Testing and Calibration - (Income Tax Appellate Tribunal) (24 Sep 2021)

Exemption under Sections 11 and 12 of the IT Act is available as Assessee is not engaged in trade, commerce and business and its dominant and prime objective is charitable in nature


Direct Taxation

In present matter, Assessee being a society registered under Societies Registration Act is also granted registration under section 12A of the Income-tax Act, 1961 ( IT Act). The main aims and objects of the assessee society are to promote, coordinates, guide, implement and maintain accreditation system for laboratories suitable in the country in accordance with the relevant national and international standards and guides; to encourage proficiency tests inter-laboratory comparisons in order to ensure accuracy, reliability and reproducibility of test results, to ensure that the accredited laboratories adhere to all the conditions of accreditation by periodic surveillance, etc.

Assessing Officer (AO) during scrutiny proceedings noticed that the assessee society falls under the 6th limb of charitable activities i.e. advancement of any other objects of general public utility and proceeded to hold that as per amended provisions, contained under Section 2(15) of the IT Act, the activities of the assessee society do not fall under the charitable purpose and "thereby denied the exemption under Section 11 and 12 of the IT Act by assessing the total income at Rs.6,67,97,692 and Rs.7,48,30,568 for AYs 2013-14 & 2014-15 respectively." Assessee carried the matter before the learned CIT (A) by way of filing appeals who has partly allowed the same. Feeling aggrieved, the Revenue has come up before the Tribunal by way of filing the present appeals.

The Delhi High Court in Appellant's own case by the order have held that the Assessee is not engaged in trade, commerce and business and its dominant and prime objective is charitable in nature in accordance with Section 2(15) of the IT Act, 1961. Bare perusal of the impugned order passed by the learned CIT(A) goes to prove that, the issue as to the eligibility of assessee society to avail off the benefit under Sections 11 and 12 of the IT Act, raised and decided by AO against the assessee society, has already been settled at rest by the Tribunal and subsequently by Delhi High Court. Impugned order passed by the learned CIT (A) by following the decisions rendered by co-ordinate Bench of the Tribunal in assessee's own case for Assessment Year 2009-10.

The Revenue in order to challenge the impugned order passed by the learned CIT (A) has failed to bring on record any material if the facts qua the cases under consideration vis-à-vis earlier year are distinguishable nor has brought on record any other case law having divergent view. Since assessee society has been held to be a charitable institution by the Hon'ble Delhi High Court in AY 2009-10 and since then, there is no change in the aims and objects of the assessee society, finding no illegality or infirmity in the impugned orders, both the aforesaid appeals filed by the Revenue are dismissed.


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