IN THE INCOME TAX APPELLATE TRIBUNAL “I” BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI VIVEK VARMA, JUDICIAL MEMBER आयकर अपीऱ सं./I.T.A. No.1396/M/2012 (AY:2009-2010) International Copper फनाभ/ DIT (E), Promotion Council (India), 6 t h Floor, Piramal Chambers, Vs. 302, Alpha Hiranandani Business Parel, Mumbai – 400 012. Park, Powai, Mumbai – 400 076. स्थामी रेखा सं ./ PAN : AAAC19045G ..

(अऩीराथी /Appellant)

(प्रत्मथी / Respondent)

अऩीराथी की ओय से / Appellant by

:

Shri Ashok D. Mehta

प्रत्मथी की ओय से/ Respondent by

:

Shri P.K. Shukla, CIT-DR

सुनवाई की तायीख / Date of Hearing

:03 .2.2014

घोषणा की तायीख /Date of Pronouncement :19 .2.2014 आदे श / O R D E R PER D. KARUNAKARA RAO, AM: This appeal filed by the assessee on 29.2.2012 is against the order of the Director of Income Tax (Exemption), Mumbai dated 23.12.2011 for the assessment year 2009-2010. 2.

In this appeal, assessee raised the following grounds as well as additional

grounds which read as under: “1. On the facts and in the circumstances of the case and in law, the Ld DIT (E) erred in withdrawing / cancelling the registration granted under section 12AA of the Act in respect of exemption claimed under section 11 of the Act wrongly observing based on the receipts of the appellant as appearing in the income and expenditure account that the appellant is doing regular activities which are in the nature of business by way of arranging exhibition, conference, seminar, education programme, awareness progamme on trade and commerce and charging fees for the same. 2. The Ld DIT (E) wrongly made that above observation without considering the fact that trade, commerce and business denotes activities undertaken with the object of earning profit, however, the appellant does not at all have any profit motive, its sole existence is for advancement of objects of general public utility by carrying out projects and undertaking activities to promote the safe, efficient and sustainable use

2 of copper in India to improve the quality of life of people, reduce energy intensity for economic development and reduce the carbon-dioxide emissions. 3. The Ld DIT (E) failed to appreciate the expenditure for projects and activities undertaken by the appellant are reimbursed by its members, contributed by members / project partners and received as grants from organization like United Nations Development Programme – Global Environment Facility. 4. In reaching to the conclusion and making such addition, the Ld DIT (E) omitted to consider relevant factors, considerations, principles and evidences while he was influenced and prejudiced by irrelevant considerations and factors. 5. In view of the above, the appellant prays that the withdrawal / cancellation of registration granted under section 12AA of the Act, is unwarranted and be restored. Additional gronds 6. The Ld DIT (E) erred in not considering that the petitioner was carrying on activities in the nature of “Preservation of Environment” by propagating the safe, efficient and sustainable use of copper to improve the quality of life of people, reduce the energy intensity for economic development and reduce the carbon-dioxide emission of the country. 7. The Ld DIT (E) erred in not considering that the assessee was carrying on activities for the “relief of poor” through slum and village electrification projects. 8. The Ld DIT (E) erred in not considering the activities of training courses, seminars, workshops and conference carried out by the petitioner as “educational activity”. 9. The Ld DIT (E) erred in cancelling the registration granted to the petitioner under section 12AA without demonstrating as to how the activities of the petitioner; Either not genuine or The activities are not carried out in accordance with the objects of the trust, i.e., the petitioner; Which are the essential conditions for invoking subsection 3 of section 12AA for the purpose of cancellation of registration granted under section 12AA of the Act.”

3.

At the outset, Ld Counsel for the assessee mentioned that there is a delay of

one day in filing the appeal before the Tribunal. In this regard, he brought our attention to the letter dated 27th February, 2013 mentioning that there is a reasonable cause for not filing the appeal before the Tribunal and read out the relevant portions from the said letter, which is supported by an affidavit of Shri Sanjeev Ranja, and the same is as under: “3.

The appellant submits that it is a company registered under section 25 of the Companies Act, 1956. Its Board of Directors have appointed Mr. Sanjeev Ranjan as „Officer who is in default‟ under section 5(f) of the Companies Act, 1956 who is the Chief Executive Officer of the Company, managing the affairs of the company. 4. The appellant submits that there exists reasonable cause for a very small delay by 1 day in filing of the appeal as its Chief Executive Officer, Mr. Sanjeev Ranjan was out of India. He arrived in India on 29th February, 2012 and on the very same day the appeal was filed.”

4.

On perusal of the said letter and the affidavit filed by Shri Sanjeev Ranjan,

Chief Executive Officer of the assessee company, we find that there is a reasonable cause for not filing the appeal before the Tribunal within the stipulated time.

3

Therefore, considering the reasonable cause as well as the smallness of delay of one day, we condoned the delay and proceed to adjudicate the appeal on merits. 5.

Briefly stated relevant facts of the case on merits of the issues raised in the

grounds are that it is proposed by the Revenue Authorities that registration of the assessee needs to be cancelled in view of the threshold limit of Rs. 10 lakhs provided under the proviso to section 2(15) of the Income Tax Act, 1961. During the proceedings before the DIT (E), he noticed from the income and expenditure statement of the assessee, the total receipts on account of exhibition and conference amounting to Rs. 4.64 Crs (rounded off), which is far exceeded the threshold limit of Rs. 10 lakhs. In this regard, assessee submitted by explaining and contending that the assessee has not violated the objects of the Trust. He also mentioned that the objects of the assessee are to benefit the public at large in relation to energy conservation, environment conservation, electrification, pollution, employment, poverty alleviation etc. However, DIT (E) did not accept the same and noticed that all actions of the Trust are resulted in earning of the said amount which falls in the scope of proviso to section 2(15) of the Act. DIT (E) is of the opinion that the said receipts of Rs. 4.64 Crs is a clear cut earning of the Trust and finally he revoked the registration granted earlier and deemed it as a non-genuine Trust for the purpose of section 11 of the Act, w.e.f AY 2009-2010 onwards. Accordingly, the assessee Trust is held as non-genuine charitable trust or institution.

Aggrieved with the same,

assessee filed the present appeal before us. 6.

During the proceedings before us, Shri Ashok d. Mehta, Ld Counsel for the

assessee brought our attention to the written note and Income and Expenditure statement of the assessee and demonstrated that the income earned from the conference & exhibition is only a small amount of Rs. 2.44 lakhs otherwise most of the receipts received as a funding from the parent body in different matters like China, UNDP India and other funding members to makeup the short fall in the projects. Such funds / donations works out to Rs. 4.64 Crs. As per the assessee, such funds / donations do not fall within the provisions of the proviso to section 2(15) of the Act. It is also argued that the DIT (E) did not make out the case that the objects / activities of the Trust are non-genuine, therefore, the provisions of

4

section 12AA(3) cannot be invoked. If necessary, the exemption may be deniable u/s 11 and 12 of the Act, if there is any violation of the proviso to section 2(15) of the Act. 7.

On the other hand, Ld DR relied heavily on the order of the DIT (E) and the

provisions of section 2(15) of the Act. 8.

We have heard both the parties and perused the orders of the Revenue

Authorities as well as the relevant material placed before us. On hearing both the parties on the limited issue whether the said sum of Rs. 4.64 Crs constitutes commercial receipts or other receipts specified in the proviso to section 2(15) of the Act, we find that the same has not been analysed by the lower authorities in correct perspective. There is no clarity in those orders, how the same contributes to the ingenuineness of the objects and activities of the Trust.

At best, these may

contribute to the withdrawal of exemption u/s 11 of the Act. There is no dispute on the assessee‟s contention that the registration only be cancelled or withdrawn only if the objects or the activities of the Trust are non-genuine. As discussed in the open Court, we are of the opinion that this matter should be remanded to the files of the DIT (E) for a specific adjudication if the said funds / donations received by the assessee fall within the scope of proviso 1 and 2 to section 2(15) of the Act. DIT (E) is directed to discuss in detail whether these amounts are “of any activity in the

nature of trade, commerce or business, or any activity of rendering any service in relation to any trade, commerce or business, for a cess or fee or any other consideration, irrespective of the nature of use or application, or retention of the income from such activity”. The DIT (E)‟s finding on the non-genuineness of the Trust is also found general in nature and it does not contain any evidence or reasons. He may examine the same in a fresh proceedings and decide the issue afresh after allowing a reasonable opportunity of being heard to the assessee. Accordingly, grounds raised by the assessee are allowed for statistical purposes. 9.

In the result, appeal of the assessee is allowed for statistical purposes.

5

Order pronounced in the open court on 19th day of February, 2014. Sd/-

Sd/-

(VIVEK VARMA) JUDICIAL MEMBER भंफ ददनांक 19.2.2014 ु ई Mumbai;

(D. KARUNAKARA RAO) ACCOUNTANT MEMBER

व.नन.स./ OKK , Sr. PS

आदे श की प्रतिलऱपि अग्रेपिि/Copy of the Order forwarded to : 1. अऩीराथी / The Appellant 2.

प्रत्मथी / The Respondent.

3.

आमकय आमक् ु त(अऩीर) / The CIT(A)-

4.

आमकय आमुक्त / CIT

5.

ववबागीम प्रनतननधध, आमकय अऩीरीम अधधकयण, भुंफई / DR, ITAT, Mumbai

6.

गार्ड पाईर / Guard file. सत्मावऩत प्रनत //True Copy//

आदे शानुसार/ BY ORDER,

उि/सहायक िंजीकार (Dy./Asstt. Registrar) आयकर अिीऱीय अधिकरण, भुंफई / ITAT, Mumbai