Tamil Nadu Trade Promotion Organization Vs CIT (Exemptions) (ITAT Chennai)
Trade Promotion is Public Utility, Not Profit-Motive – Surplus from Trade Fairs Not Commercial -Registration Restored
Assessee, a State Government undertaking & joint venture between ITPO (51%) & TIDCO (49%), was incorporated in 2000 as a non-profit company u/s 25 of Companies Act, 1956. Its main objective is to promote Indian industry & trade through organizing fairs & exhibitions.
Assessee earlier enjoyed registration u/s 10(23C)(iv) from AY 2007-08, but exemption was withdrawn from AY 2009-10 onwards after the proviso to Sec. 2(15) was introduced. CIT(E) rejected its fresh application for permanent registration u/s 10(23C)(iv) on 29.03.2025, relying on SC in Ahmedabad Urban Development Authority (449 ITR 1), holding that its activities were commercial in nature.
Before Tribunal, Assessee relied on Delhi High Court ruling in India Trade Promotion Organisation v. DGIT (Exemptions) [371 ITR 333] where identical activities of ITPO were held charitable as advancement of general public utility. SC later dismissed Revenue’s SLP & Review Petition against that ruling, making it binding. It was argued that merely charging fees or surplus generation does not negate charitable character if dominant purpose is trade promotion for public benefit.
Tribunal observed that Assessee’s case was squarely covered by ITPO’s case, where the Supreme Court upheld Delhi HC’s view in favour of charitable status. Until SC rules otherwise in pending appeals, that decision holds the field. Consequently, denial of registration was unsustainable.
