National Academy of Agricultural Sciences Vs ITO (ITAT Delhi)
ITAT Dismisses Assessee’s Appeals Because Auditorium Hiring Was Treated as Business Activity; Revenue Appeals Rejected Because Publication and Staff Expenses Were Incidental to Research Activities; ITAT Confirms Section 11 Relief Because Research Publications and Staff Costs Served Charitable Purpose.
The Delhi ITAT disposed of a batch of five interconnected appeals filed by both the assessee and the Revenue relating to Assessment Years (AYs) 2017-18, 2018-19, and 2020-21. The assessee, a charitable society registered under the Societies Registration Act, 1860 and registered under Section 12A of the Income Tax Act, is engaged in promoting agricultural sciences, including crop husbandry, animal husbandry, fisheries, forestry, natural resources, mechanization, agro-industries, agricultural education, environment, health, and allied sciences. Its income is derived from grants, investment interest, subscriptions, and other receipts.
For AY 2017-18, the assessee filed its return declaring nil income. During scrutiny assessment, the Assessing Officer made three additions: (i) ₹14,45,953 received from hiring conference facilities under Section 11(4A), treating it as business income; (ii) ₹72,81,214 under Section 11(3) for non-utilization of accumulated funds; and (iii) ₹2,29,28,414 by disallowing the claim of accumulation under Section 11(2). A demand of ₹1,11,71,925 was raised. On appeal, the National Faceless Appeal Centre (NFAC) deleted the additions under Sections 11(2) and 11(3) but upheld the addition under Section 11(4A) relating to receipts from hiring conference facilities. Similar issues arose in AYs 2018-19 and 2020-21, where additions of ₹19,35,253 and ₹22,25,520, respectively, were sustained under Section 11(4A).
