The Director Of Income Tax (Exemption v. The Indo Italian Chambers Of Commerce And Industry

IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO. 401 OF 2013 The Director of Income Tax (Exemption) ..Appellant Vs. The Indo Italian Chambers of Commerce and Industry..Respondent .... Mr. A.R. Malhotra a/w Mr. N.A. Kazi, Advocates i/b Padma Divakar for Appellant. Mr. Madhur Agarwal a/w Mr. Rajesh Poojary, Advocates i/b MINT & Confreres for Respondent. ....CORAM : M.S. SANKLECHA &G.S. KULKARNI, JJ.DATED : 03 MARCH 2015 P.C.: This appeal by the Revenue under Section 260A of the Income Tax Act, 1961 (the 'Act') challenges the order dated 10 August 2012 passed by the Income Tax Appellate Tribunal (the 'Tribunal') in respect of Assessment Year 2005-06. The impugned order dated 10 August 2012 dismiss the Revenue's appeal from order dated 17 November 2008 passed by the Commissioner of Income Tax (Appeals) (the 'CIT(A)') directing the Assessing Officer to allow the respondent-assessee exemption under Section 11 of the Act. 2.The following question of law has been formulated by the appellant-revenue for our consideration: S.S.DESHPANDE “Whether, on the facts and in the circumstances of the case and in law, the Tribunal was justified in confirming the order of the CIT(A) allowing exemption u/s. 11 of the I.T. Act, 1961, when the main activity of the assessee is to organize trade fair, which has to be treated as business activity as defined u/s 2(15) and is not leading to any advancement for benefit to the general public at large.” 3.The respondent-assessee is a company registered under Section 25 of the Companies Act, 1956. It also holds valid registration under Section 12A of the Act. During the course of assessment proceedings for Assessment Year 2005-06, the Assessing Officer observed that the respondent was organizing trade fairs and such activity being a business activity was not an activity for a charitable purpose. Consequently the Assessing Officer by his order dated 31 December 2007 denied the benefit of exemption under Section 11 of the Act. 4.On appeal, the CIT (A) on consideration of the facts concluded that the objects of the respondent-assessee are charitable in nature and covered within meaning of charitable purpose as defined in Section 2(15) of the Act. The CIT(A) held that the respondent-assessee was not organizing trade fairs but for only facilitating its members to participate in trade fair. Thus its activities not being in the nature of business activity the exemption under Section 11 of the Act was S.S.DESHPANDE 2 / 4 admissible. Accordingly the Assessing Officer was directed to extend the benefit to the respondent-assessee. 5.Being aggrieved the revenue appealed to the Tribunal. On consideration of all facts the Tribunal by impugned order concluded that the activity carried out by the respondent-assessee was not of organizing trade fair but only facilitating its members to participate in trade fairs. Therefore not being in the nature of business activity it held the respondent is entitled to benefit of Section 11 of the Act. The impugned order interalia also holds that for the subsequent assessment year a similar view has been taken by the CIT (A) and the revenue has not challenged the same even before the Tribunal. 6.The grievance of the revenue is that there is no difference in facilitating its members to participate in trade fairs and from one organizing trade fairs. Therefore it is submitted the conclusions arrived by the CIT (A) as well as the Tribunal cannot be countenanced. the activity carried out by the respondent-assessee was not of organizing trade fair but only facilitating its members to participate in trade fairs. Therefore not being in the nature of business activity it held the respondent is entitled to benefit of Section 11 of the Act. The impugned order interalia also holds that for the subsequent assessment year a similar view has been taken by the CIT (A) and the revenue has not challenged the same even before the Tribunal. 6.The grievance of the revenue is that there is no difference in facilitating its members to participate in trade fairs and from one organizing trade fairs. Therefore it is submitted the conclusions arrived by the CIT (A) as well as the Tribunal cannot be countenanced. 7.So far as the subsequent assessment year is considered, Mr. Malhotra, the learned Counsel for appellant states on instructions, that in fact no appeal was filed for the subsequent assessment year, on an identical issue from the CIT(A) order granting the benefit of Section 11 of the Act. However he orally states on instructions that this was in view of the fact that the papers which were put up for approval for filing the S.S.DESHPANDE3 / 4 appeal indicated that no appeal was filed for the preceding assessment year i.e. Assessment Year 2005-06. However there is nothing on record to indicate the same. 8.Be that as it may we find two authorities have come to a concurrent findings of fact that the respondent-assessee is not organizing trade fairs and therefore not engaged in business activity. We find that there is certainly a distinction/difference between organizing trade fairs and facilitating its members to participate in trade fairs. Consequently, once there are concurrent findings of fact that no trade fair is organized by the respondent-assessee which would amount to carrying the business, there is no occasion to us to interfere with the same. The finding recorded by the authorities of respondent-assessee not carrying on business is not shown to be perverse. Therefore there is no reason for us to entertain the proposed question of law as it does not give rise to any substantial question of law. 9.Accordingly, appeal is dismissed. No order as to costs. [G.S. KULKARNI, J] [M.S. SANKLECHA, J.] 4 / 4