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The Tax Publishers DDIT v. Quality Council of India [ITA No. 2754/Del/2013, dt. 26-4-2016] : 2016 TaxPub(DT) 2113 (Del-Trib) Charitable activity section 2(15) explained *Facts:* Assessee was formed arising out of the constitution under aegis of Ministry of industry to offer accreditation services. It was tie up with other divisions of the govt. The assessing officer held that the assessees activity was any other object of general public utility under section 2(15) since was collecting fee for accreditation and doing it as a business the officer read the proviso to the assessee and denied exemption to the registered society under the Societies Registration Act, 1860. On appeal Commissioner (Appeals) allowed exemption to the society. Department went in further appeal: Held in favour of the assessee that they were entitled to exemption and they were not hit by the proviso to section 2(15). Applied: (i) Bureau of Indian Standards v. DGIT (E), in W.P.(C) No.1755 of 2012, dated 27-9-2012 (Del HC) (ii) ICAI Accounting Research Foundation and Ors v. DGIT (E) reported in 321 ITR 73 (Del HC) (iii) ICAI v. DGIT(E) 245 CTR 541 Delhi HC. (iv) M/s GSI India v. DIT, Delhi reported in 360 ITR 138 (Del HC) Tests to not to fall in the proviso to section 2(15): the activity should be for advancement of general public utility; the activity should not involve any activity in the nature of trade, commerce and business; the activity should not involve rendering any service in relation to any trade, commerce, or business; and the activities in clauses (ii) and (iii) should not be for fee, cess or other consideration and if for fee, cess or consideration the aggregate value of the receipts from the activities under (ii) and (iii) should not exceed the amount specified in the second proviso. The earlier test of business feeding or application of income earned towards charity because of the statutory amendment is no longer relevant and apposite.

The Tax Publishers

DDIT v. Quality Council of India [ITA No. 2754/Del/2013, dt. 26-4-2016] : 2016 TaxPub(DT) 2113 (Del-Trib)

Charitable activity section 2(15) explained

Facts:

Assessee was formed arising out of the constitution under aegis of Ministry of industry to offer accreditation services. It was tie up with other divisions of the govt. The assessing officer held that the assessees activity was any other object of general public utility under section 2(15) since was collecting fee for accreditation and doing it as a business the officer read the proviso to the assessee and denied exemption to the registered society under the Societies Registration Act, 1860. On appeal Commissioner (Appeals) allowed exemption to the society. Department went in further appeal:

Held in favour of the assessee that they were entitled to exemption and they were not hit by the proviso to section 2(15).

Applied: (i) Bureau of Indian Standards v. DGIT (E), in W.P.(C) No.1755 of 2012, dated 27-9-2012 (Del HC)

(ii) ICAI Accounting Research Foundation and Ors v. DGIT (E) reported in 321 ITR 73 (Del HC)

(iii) ICAI v. DGIT(E) 245 CTR 541 Delhi HC.

(iv) M/s GSI India v. DIT, Delhi reported in 360 ITR 138 (Del HC)

Tests to not to fall in the proviso to section 2(15):

the activity should be for advancement of general public utility;

the activity should not involve any activity in the nature of trade, commerce and business;

the activity should not involve rendering any service in relation to any trade, commerce, or business; and

the activities in clauses (ii) and (iii) should not be for fee, cess or other consideration and if for fee, cess or consideration the aggregate value of the receipts from the activities under (ii) and (iii) should not exceed the amount specified in the second proviso.

The earlier test of business feeding or application of income earned towards charity because of the statutory amendment is no longer relevant and apposite.