Case Law Details
DCIT Vs. Association of State Road Transport Undertaking (ITAT Delhi)
Conclusion: Since assessee association was providing laboratory test services and consultancy services in accordance with its charitable objects, therefore, activities could not be held to be rendered in relation to any “trade”, “commerce” or “business” as such activities were undertaken by assessee association in furtherance of its main objects which were undisputedly of charitable nature and which was not an activity of “trade”, “commerce” or “business” with main object of earning profit. AO was directed to allow exemption under section 11 and 12 with consequent benefits to assessee.
Held: Assessee was an apex coordinating body of all Nationalized State Road Transport Corporation working under the Ministry of Road Transport and Highways and it was established with the main object of improving Public transport system in the country and to assist its members STUs by providing automobile parts at the most economical and competitive rates so that the members STUs could run its passenger buses at economical cost. AO was of the view that assessee had carried out its activities in the nature of trade, commerce or business and therefore, the activities of assessee could not be considered to be education activity as it did not come under the category of systematic regular mythological imparting of lessons for the overall development of the students and further assessee’s case also could not considered under the concept of mutuality. He, therefore, completed the assessment by invoking the proviso to section 2(15) and the total income of the assessee was determined at Rs.5,11,38,830/-. It was held that the Hon’ble Tribunal in assessee’s own case on identical facts held that the activities of the laboratory testing and consultancy to be in furtherance of main and charitable object of assessee association and it was also held that the activities undertaken by assessee could not be termed as activities with the main object of profit earning motive. AO was directed to allow exemption under section 11 and 12 with consequent benefits to assessee.
FULL TEXT OF THE ITAT JUDGEMENT
These two appeals filed by the Revenue are directed against the consolidated order dated 24.05.2017 of the Commissioner of Income Tax (Appeals) – 40, Delhi [CIT(A)] relating to Assessment Years 2013-14 & 2014-15.
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