$ * IN HIGH COURT OF DELHI AT NEW DELHI 5 + ITA 113/2015 COMMISSIONER OF INCOME TAX (EXEMPTION) ..... Appellant Through: Mr. Raghvendra K Singh, Junior Standing counsel and Mr. Shikhar Garg, Advocate. versus POORVA SANSKRITIK KENDRA ..... Respondent Through: Ms. Sangeeta Chandra, Advocate. CORAM: HON'BLE DR. JUSTICE S.MURALIDHAR HON'BLE MR. JUSTICE VIBHU BAKHRU ORDER % 01.10.2015 1. This appeal by Revenue under Section 260A of Income Tax Act, 1961, ( Act ) is directed against order dated 4th August 2014 passed by Income Tax Appellate Tribunal ( ITAT ) in 3506/Del/2013 for Assessment Year ( AY ) 2009-10. 2. Respondent Assessee is society registered under Societies Registration Act, 1860. Its main aims and objects are as under: (i) To develop and maintain social-cultural centre at Laxmi Nagar, New Delhi and follow up of procedures such as inviting expressions of interest, for outsourcing various units of complex. ITA No. 113/2015 Page 1 of 6 (ii) To undertake, organize and facilitate study courses, conferences, seminars, lectures and research, in premises of centre. (iii) To establish and maintain libraries and information services to facilitate spread of information. (iv) To promote understanding and amity between different communities and classes by disseminating or exchanging knowledge and, by providing such facilities as would lead to encouraging community life and brotherhood. 3. Assessee was registered under Section 12A of Act by order dated 27th April 2004. 4. During course of assessment proceedings for AY 2009-10, Assessing Officer ( AO ) noted that Assessee had entered into lease agreement dated 17th December 2004 with G&S Sarovar Park Hospitality Pvt. Ltd. (hereafter 'the lessee') in terms of which Society's building premises at District Centre, Laxmi Nagar was let out. lessee was to provide facilities and services like club, pub, restaurant, bar, spa, gym, marriage functions etc. on paid basis. Assessee was entitled to receive ITA No. 113/2015 Page 2 of 6 14% of total sales as share of income from activities carried out by lessee. 5. In assessment order dated 9th December 2011 AO concluded that Society was totally engaged in commercial activities which were of non-charitable nature to which proviso under Section 2(15) of Act would apply. In meanwhile, by order 7th March 2011, Assessee s registration under Section 12AA of Act had been cancelled. AO treated income of Assessee as taxable income and also directed penalty proceedings for concealment of income. 6. Allowing Assessee s appeal by order dated 5th March 2013, Commissioner of Income Tax (Appeals) [CIT (A)] noted that ITAT had by its order dated 30th November 2011 in ITA No. 1786/Del/2011 set aside cancellation of Assessee s registration. CIT (A) also noted that Assessee society was constituted by Government of National Capital Territory of Delhi (GNCTD) and all members of its governing body were nominated by GNCTD. Chairman of Society is Chief Secretary, GNCTD. CIT (A) also noted that in Assessee s own case for AYs 2006-07, 2007-08, 2008-09, ITAT had allowed ITA No. 113/2015 Page 3 of 6 Assessee s appeal following order of ITAT restoring Assessee s registration. Since benefit under Section 11 and 12 of Act was granted to Assessee in those years, CIT (A) allowed appeal of Assessee. 7. Revenue s further appeal against order of CIT (A) has been dismissed by ITAT by impugned order dated 4 th August 2014. ITAT noted that while there is no dispute that proviso to Section 2(15) inserted from AY in question would be applicable. However ITAT noted that in earlier years, after examining all sundry activities of Assessee, ITAT had come to conclusion these activities of assessee society do not involve carrying of any activity in nature of trade, commerce or business or any activity of running any service in relation to any trade, commerce or business . 8. submission of Mr. Raghvendra Singh, learned counsel for Revenue, is that activity of letting out of premises to lessee which is carrying on purely commercial activities, is contrary to objects of Assessee society. While he did not dispute that order of AO does not reflect manner in which Assessee had applied its income and whether ITA No. 113/2015 Page 4 of 6 act of letting out was in fact dominant activity of Assessee, he urged that matter should be remanded to AO for fresh examination after giving opportunity to Assessee. In response to query as to whether previous orders of ITAT mentioned in order of CIT (A) have been challenged by Revenue, he states that he is unable to make any statement in that regard. 9. Ms. Sangeeta Chandra, learned counsel for Respondent Assessee, states that while appeal has probably been filed by Revenue for AY 2008-09, such appeal does not seem to have been numbered or listed before Court even once. She states that for subsequent AY 2011-12, AO has himself granted exemption under Sections 11 and 12 of Act. She pointed out that fact of building having been let out by Assessee was known to Revenue even at stage of grant of registration under Section 12 with effect from April, 2004. 10. With there being no proper enquiry conducted by AO into facts of case to determine if manner of application of income by Assessee would disentitle it to exemption under Sections 11 and 12 of Act, Court is unable to discern any legal infirmity in impugned ITA No. 113/2015 Page 5 of 6 orders of CIT (A) or ITAT. For same reason, Court is also not inclined to remand matter to AO to de novo start exercise afresh. 11. In facts and circumstances of case, no substantial question of law arises. appeal is dismissed. S.MURALIDHAR, J VIBHU BAKHRU, J OCTOBER 01, 2015 mg ITA No. 113/2015 Page 6 of 6 COMMISSIONER OF INCOME TAX (EXEMPTION) v. POORVA SANSKRITIK KENDRA