ACIT (Exemption) Vs Rajasthan State Road Transport Corporation (ITAT Jaipur)
ITAT Jaipur held that as the assessee is not driven primarily by desire or motive to earn profits but to do charity through advancement of an object of general public utility hence proviso to Sec.2(15) of the Act is therefore not applicable and accordingly assessee is entitled to benefits of section 11 of the Income Tax Act.
Facts-
The case was selected for complete scrutiny through CASS and e-notice u/s 143(2) of the IT Act, 1961 was issued on 08.07.2017 which was duly served upon the assessee in time. The assessee is registered under section 12AA of the Act. The objection of the assessee corporation is to provide road transportation in the State of Rajasthan and in other states as well. During the year its total revenue receipts were Rs. 17,07,56,24,135/-. After claiming various expenditure of Rs. 21,99,97,55,976/- and adjustment of disallowable expenditure it has shown net loss of Rs. 4,92,41,31,841/-. The corporation is registered as a charitable institution u/s 12A(a) of the IT Act dated 08.03.1989. The objects fall in the last limb of the definition of section 2(15) i.e. advancement of any other object of general public utility.
Aggrieved by the order of the AO, the assessee preferred in appeal before the NFAC who has deleted the addition made by the AO.
Conclusion-
Keeping in mind the above factual aspects and the provisions of the RTC, Act, 1950 and principle laid down in the aforesaid decision of the Hon’ble Delhi High Court in the case of India Promotion Organization, in our view, will clearly show that the assessee does not driven primarily by desire or motive to earn profits but to do charity through advancement of an object of general public utility. The proviso to Sec.2(15) of the Act is therefore not applicable to the case of the assessee.
We therefore concur with the view of the CIT(A) and hold that the Assessee is entitled to the benefits of Sec.11 of the Income Tax Act. Accordingly, the A.O. is directed to grant benefit of exemption u/s 11 of the Income Tax Act for the relevant assessment year. And taking into consideration the facts and circumstances of the case, we hold that the ld. CIT(E) has rightly and fairly allowed of the assesse.
FULL TEXT OF THE ORDER OF ITAT JAIPUR
These are four appeals filed by the Department arising out of the order of the National Faceless Appeal Centre, Delhi [hereinafter referred to as (NFAC)], ld. CIT(A) passed on dates as mentioned here in below for the assessment year mentioned as tabulated here in below which in turn arises from the order passed by the DCIT(Exemption), Circle, Jaipur under the provisions of Income Tax Act, 1961 (in short ‘the Act’) and dated referred here in below:
