Case Law Details
CIT Vs A Y Broadcast Foundation (Kerala High Court) – Generally, the activities refereed to therein i.e. production of television and radio programmes and telecasting and broadcasting of the same are commercial activities. Further the object clause provided for the assessee to act as an agent, broker, liasioner, introducer etc., which are purely commercial activities intended to make profit. Since the assessee is not holding any business in charity or distributing any surplus for charitable purposes, the question to be considered is whether the carrying on of the activities referred to in the object clause by itself constitute advancement of any object of general public utility within the meaning of Section 2 (15) of the Act.
Learned counsel appearing for the assessee specifically referred to the purpose of the telecasting and broadcasting of the programmes as stated in the Memorandum and Articles of Association i.e. social and spiritual upliftment of general public. In our view, every television or radio programme to some extent promotes social, spiritual and intellectual upliftment of the people in as much as it imparts knowledge and helps to develop one’s personality. In fact, it is not uncommon that several television channels and radio stations are occasionally telecasting and broadcasting religious, spiritual and other programmes as well. If the assessee’s contention that telecasting and broadcasting of various television and radio programmes will help spiritual and social development is accepted, then probably every television company and radio company whether it is engaged in business or not is entitled to registration as a charitable institution because every programme has some value for human development either social or spiritual. While learned counsel for the Revenue has relied on the decisions of the Supreme Court in East India Industries (Madras) Private Limited v. Commissioner of Income Tax, Madras, reported in 1967 (Vol.LXV) ITR 611, and in U.P.Forest Corporation and Another v.Deputy Commissioner of Income Tax, reported in 2008 (297) ITR 1 (SC), the assessee’s counsel has relied on the decision of the Supreme Court in Director of Income Tax v. Bharat Diamond Bourse, reported in 2003 (179) CTR (SC) 225 and the decision of the Privy Council in the case of The Trustees of the Tribune, In Re, reported in 1939 (7) ITR 415 (PC) and the decision of the Rajasthan High Court in Umaid Charitable Trust v. Commissioner of Income Tax, reported in 1980 (15) CTR (Raj) 217. Other decisions cited by the assessee’s counsel are in Dharmoposhanam Co. v. CIT reported in 1978 114 ITR 463(SC), and in Sole Trustee Loka Shikishna Trust v. CIT, reported in 101 ITR 234 and the decision of the Supreme Court in Umaid Charitable Trust v. CIT, reported in 125 ITR 55.
After hearing both sides and after going through the object clause we are not persuaded to uphold the order of the Tribunal because in our view, the activities of the assessee stated above i.e. undertaking to telecast and broadcast programmes and to act as an agent, broker, liasioner etc. will not make the object clause charitable. These are purely commercial activities not exclusively intended for advancement of any object of general public utility, no matter as already held by us every publication, telecasting or broadcasting may lead to imparting some knowledge helping human development.
THE COMMISSIONER OF INCOME TAX Vs A.Y.BROADCAST FOUNDATION,
IN THE HIGH COURT OF KERALA AT ERNAKULAM
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