The Tax Publishers2021 TaxPub(DT) 0071 (Del-Trib)


Section 10(23C)(iv)

As decided in case of India International Centre v. Asstt. DIT 2015 TaxPub(DT) 2160 (Del-Trib), activities of the Trust of providing accommodation and food and beverages, etc., to members and non-members for a payment do not constitute commercial activities, therefore, exemption under section 10(23C)(iv) could not be denied to assessee.

Exemption under section 10(23C) - Eligibility - Trust providing accommodation and food and beverages to members and non-members and charging for it -

Assessee was engaged in cultural and intellectual activities, like conducting seminars, talks, discussions and cultural activities. During the scrutiny of returns, AO found that activities of assessee were hybrid, partly covered by provisions of section 10(23C)(iv) read with section 2(15) and partly by principle of mutuality. Therefore, the assessee cannot be allowed to compartmentalize its activities and income arising therefrom, under charitable activities and mutual activities, since all the activities have to be seen in the totality. AO further observed that while cultural and intellectual activities of assessee were open to general public, the accommodation and related activities are restricted only to its members as well as non-members specially invited to participate in the activities of the Society and, hence there was not complete identity between contributors and participators. AO held that the claim of the assessee that its activities are not on commercial lines was not tenable and denied the exemption under section 10(23C)(iv). Held: Record reveals that the main reasons of denying exemption under section 10(23C)(iv) by AO was that the activities of the assessee-trust were hit by proviso to section 2(15) and according to AO, assessee's activities of providing food and beverages, accommodation against which charges are made from the members and non-members constitute commercial activities. It was also not in dispute that order under section 263 for assessment year 2009-10 was quashed by a coordinate Bench of the Tribunal [2015 TaxPub(DT) 2160 (Del-Trib)] wherein it was held that activities of the Trust of providing accommodation and food and beverages, etc., do not constitute commercial activities. Therefore, exemption could not be denied to assessee.

Followed:CIT v. India International Centre [ITA 300/2018, dt. 14-3-2018] Dy. CIT (E) v. India International Centre [ITA No. 5228/Del/2015, dt. 9-10-2017] India International Centre v. Asstt. DIT 2015 TaxPub(DT) 2160 (Del-Trib) PCTI v. India International Centre [Civil Appeal No(s). 12034/2018, dt. 17-1-2020].


FAVOUR : In assessee's favour

A.Y. : 2013-14 & 2014-15