Commissioner Of Income Tax-1, Patna v. Bihar Society For Computerization Of Registration Officers (Biscore), Patna

IN THE HIGH COURT OF JUDICATURE AT PATNAMiscellaneous Appeal No.264 of 2010 ====================================================== 1. Commissioner of Income Tax-1, Patna .... .... Appellant/s Versus 1. Bihar Society for Computerization of Registration Officers (BISCORE), Patna .... .... Respondent/s ====================================================== Appearance : For the Appellant/s : Mrs. Archana Sinha, advocate Mr. Harshwardhan Prasad, advocate For the Respondent/s : Mrs. Nilu Agrawal, advocate Mr. Zaki Haider, advocate ====================================================== CORAM: HONOURABLE MR. JUSTICE SHIVA KIRTI SINGH and HONOURABLE MR. JUSTICE VIKASH JAIN ORAL ORDER (Per: HONOURABLE MR. JUSTICE SHIVA KIRTI SINGH) 4 16-04-2012 Heard the parties. The sole respondent, Bihar Society for Computerization of Registration Officers (BISCORE), Patna applied for exemption u/s 12A read with Section 12AA of the Income Tax Act in the month of March, 2008. The claim was rejected by the Commissioner of Income Tax vide order dated 24-9-2008 but on appeal the Income Tax Appellate Tribunal, Patna Bench reversed the order of Commissioner, Income Tax by the order under appeal dated 30-10-2009 passed in I.T.A. No. 61/ PAT/2009. Learned counsel for the appellant submits that the only substantial question of law involved is- whether the Hon’ble Tribunal is correct in ignoring the fact that definition of “charitable purpose” u/s 2(15) has been modified w.e.f. assessment year 2009-2010 by adding a proviso which restricts the meaning of one of the charitable purposes -“advancement of general public utility”. As per the proviso the advancement of any other object of general public utility shall not be a charitable purpose if it involves carrying on of any activity of or in nature of trade, commerce or business. The order of learned Tribunal under appeal takes note of the amended provision of Section 2(15) of the Act and thereafter it proceeds to discuss as to whether activity of the Society created by the State of Bihar for a purpose which is covered by the clause- “advancement of any other object of general public utility” would amount to trade, commerce or business. On the basis of judgement of the Supreme Court in the case of CIT Vs. Andhra Pradesh State Road Transport Corporation, 159 ITR 1 (SC) and after noticing that for a trade, business or commerce there must be an element of profit as a purpose of the activity, on facts the Tribunal has held that the activity of the Society did not amount to carrying on any activity in the nature of trade, commerce or business. The memorandum of association of the Society has been considered by the Tribunal for coming to the conclusion that the Society is genuinely engaged in an activity of general public utility having no element of trade, industry, commerce or business. It was found that the surplus being generated by the operations of the Society is meant to be applied towards promotion of object of the Society. In our considered view, the relevant issue has been concluded by findings of facts against the appellant and no substantial question of law is involved in this appeal. Learned counsel for the appellant cited before us a judgement of the Supreme Court in the case of Delhi Stock Exchange Association Vs. Commissioner of Income Tax, 225 ITR 235 (SC). That judgement does not take a different view in holding that for exemption u/s 11 there must be an obligation upon the charitable trust for spending the income for charitable purpose. As noticed above, in the present case the Tribunal has come to a conclusion that surplus from the receipts, if any, is to be used only for advancement of object of the Society. In view of matter at issue being concluded by findings of fact, the appeal is dismissed. (Shiva Kirti Singh, J) BKS/- (Vikash Jain, J)