Delhi High Court
The Commissioner Of Income ... vs The Fertilizers Association Of ... on 13 November, 2017
$~
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of Decision: 13.11.2017
+ ITA 964/2017
THE COMMISSIONER OF INCOME TAX-EXEMPTION
..... Appellant
versus
THE FERTILIZERS ASSOCIATION OF INDIA
..... Respondent
+ ITA 966/2017
THE COMMISSIONER OF INCOME TAX-EXEMPTION
..... Appellant
versus
THE FERTILIZERS ASSOCIATION OF INDIA
..... Respondent
Present: Mr. Ruchir Bhatia with Mr. Puneet Rai &
Mr. Gaurav Khetarpal, Advs. for appellant.
Mr. Mayank Jain with Mr. Parmatma Singh &
Mr. Madhur Jain, Advs. for respondent.
CORAM:
HON'BLE MR. JUSTICE S. RAVINDRA BHAT
HON'BLE MR. JUSTICE SANJEEV SACHDEVA
S. RAVINDRA BHAT, J.(ORAL)
1. Revenue is in appeal - in these two proceedings against two
orders of the Income Tax Appellate Tribunal (ITAT) concerning the
assessee for A.Y. 2010-11 and 2011-12 by which the amounts
ITA Nos.964/2017 & 966/2017 Page 1
received by the assessee and utilized, were held to be for the purposes
of business and trade.
2. The assessee Association is a non-profit and non-trading
company representing the interests of fertilizer manufacturers,
distributors, importers, equipment manufacturers, research institutes
and suppliers of inputs, registered under Section 25 of the Companies
Act, 1956. In scrutiny assessment for A.Y. 2010-11, the AO was of
the opinion that the exemption under Section 2(15) of the Act by
virtue of the amendment of 2009 i.e. that the assessee was engaged in
the advancement of general public utility, disentitled it to claim
exemption in tax from payment of tax. One of the main grounds
which influenced the AO to hold as it did, were the sums of money
received by the assessee on account of registration charges, etc., for
seminars/workshops held to inform its members.
3. The AO's order was affirmed by the CIT(A); the assessee
therefore approached the ITAT. By the impugned order, the ITAT
upheld the assessee's contention after noticing the amendments to the
Income Tax Act, 1961 made in 2009. The ITAT also took note of
several decisions such as Commissioner of Sales Tax v. Sai
Publication Fund (2002) 258 ITR 70 (SC), Addl. Commissioner of
Income Tax v. Surat Art Silk Cloth Manufacturers Association (1980)
121 ITR 1 (SC) and more importantly the recent decision of this Court
in India Trade Promotion Organization v. Director General of Income
Tax (Exemptions) & Others 371 ITR 333.
ITA Nos.964/2017 & 966/2017 Page 2
4. The Tribunal held as follows:-
"7.7 We also agree with the submissions made by the
Ld. Counsel of the assessee that mere charging of fee
from members or non-members for rendering services
like training, conducting seminars would not ipso facto
lead to denial of exemption. The dominant object of the
assessee remains charitable and the aforesaid activities
are only incidental to the main activity of the assessee.
Also, the activities of the assessee are benefiting the
public at large at submitted by the Ld. Counsel for the
assessee. Furthermore, it is not the case of the
department that any change in objects had taken place in
the relevant year so as to take the assessee outside the
ambit of section 2(15). The effect of the amendment has
been discussed elaborately by the Hon'ble Delhi High
Court in ITPO Case (supra) as well as the judgment of
Apex Court in Andhra Pradesh Chamber of Commerce
(supra) and the test of dominant object has not been
altered even after the said amendment. We therefore
hold that the denial of exemption under section 11 and 12
in the case of the assessee is not in accordance with law
and accordingly the additions made by the AO and
confirmed by the CIT(A) are deleted."
5. Having regard to the entirety of circumstances, especially that
the ITAT took note of the relevant decisions such as Surat Art Silk
Cloth Manufacturers Association (supra), CIT v. Andhra Chamber of
Commerce 55 ITR 722 and India Trade Promotion Organization
(supra), the ratio of which were correctly applied, this Court is of the
opinion that no substantial question of law arises.
6. The other questions urged arise from the application of income
which was held not to be exempt under Section 11. Consequently,
ITA Nos.964/2017 & 966/2017 Page 3
those too do not arise for consideration in the present appeals.
7. The appeals are therefore dismissed.
S. RAVINDRA BHAT, J
SANJEEV SACHDEVA, J
NOVEMBER 13, 2017
kks
ITA Nos.964/2017 & 966/2017 Page 4
