Case Law Details
DDIT Vs National Association of Software and Services Company (ITAT Delhi)
Briefly stated facts are that the assesse, National Association of Software and Service Companies (NASSCOM), is the premier trade body and the chamber of commerce of the IT-BPO industries in India; that the assessee was set up in 1988 is a non profit organisation registered under the Societies Registration Act, 1860 and also u/s 12A of the Income-tax Act, 1961; that it aims to drive the overall growth of the technology and service market and maintain India’s leadership position by taking up the role of a strategic advisor to the industry.
For the Asstt. Year 2009-10, they have filed their return of income on 25.9.2009 declaring nil income. Learned AO, however, during the course of assessment proceedings, observed that there is variance in the fee received from the members. Assessee had received fee from non- members also and has been dealing with both the members and non-member. He, therefore, denied exemption u/s 11 of the Act and assessed their income at Rs.9,04,40,180/-. Revenue, therefore, filed this appeal stating that the assessee has been rendering services in relation to trade, commerce or business in lieu of some fees from members as well as non members and has been involved in business and commercial activity to which provisions of Section 28(iii) of the Act are applicable.
It is not in dispute that the income of the assessee is received from members as well as non members. The income from the non members has been offered to tax by the assessee whereas membership fee from its own members is claimed as exempt on the principle of mutuality. Ld. CIT(A) held that the assessee being a trade association of software industries, it’s main object being to promote and protect the interest of its members, membership received from its own members comes within the principle of mutuality. To this extent, it does not admit any doubt and the catena of decisions relied upon by the assessee hold so.
In this case, as already stated, the assessee had offered to tax the income derived from the receipts from the non members. In so far as the members are concerned, there is no dispute as to the identity between the contributors and the participators.
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