DCIT Vs National Payments Corporation of India (ITAT Mumbai)
Summary: The Mumbai ITAT dismissed the Revenue’s appeals for AYs 2013-14 and 2014-15 and upheld the CIT(A)’s decision granting National Payments Corporation of India (NPCI) exemption under Sections 11 and 12. The Revenue argued that NPCI’s transaction-based receipts of Rs.2,16,91,14,950 from ATM, IMPS, CTS, RuPay, NACH and AEPS services constituted systematic trade, commerce or business attracting the proviso to Section 2(15), and also alleged violation of Section 13(1)(c)(ii) read with Section 13(3). NPCI was incorporated as a Section 25 non-profit company pursuant to the initiative of RBI and the Indian Banks’ Association for operating nationwide payment and settlement infrastructure. The Tribunal noted that its earlier order in NPCI’s own case for AY 2010-11 had treated its predominant object as advancement of general public utility, holding that charging fees to fund technology-intensive infrastructure and earning surplus did not by themselves establish a commercial purpose. It had also found that services were uniformly available and promoter banks received no fee concession or preferential benefit. The Revenue relied upon the Supreme Court decision in ACIT (Exemption) Vs Ahmedabad Urban Development Authority, but the Tribunal found the facts admittedly identical to NPCI’s earlier case and, respectfully following that decision, found no infirmity in the CIT(A)’s view. The Revenue’s appeals for both assessment years were consequently dismissed.
