The impugned judgment upheld the decision of the Income Tax Appellate Tribunal (“ITAT”) which affirmed the views expressed by the Commissioner of Income Tax (Appeals) (hereafter called “Appellate Commissioner”).
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The Assessee Officer denied the exemption invoking the proviso to Section 2(15) on the ground that the assessee is involved in trade, commerce or business as it manages and runs a printing press and a newspaper.
It is urged on behalf of the revenue that the Appellate Commissioner and the Tribunal fell into error in granting the exemption to the assessee. Learned counsel for the assessee urges that this court should not intervene given that the Appellate Commissioner as well as the ITAT and the High Court have concurrently upheld its claim for exemption on the ground that it is a charitable trust entitled to be treated as such thereby eligible for exemption. The court then recorded its findings, regarding the true interpretation of “charitable objects” under Section 2 (15) and summarized the findings as follows: “IV.
However, in the course of achieving the object of general public utility, the concerned trust, society, or other such organization, can carry on trade, commerce or business or provide services in relation thereto for consideration, provided that (i) the activities of trade, commerce or business are connected (“actual carrying out…” inserted w.e.f. Section 11(4A) must be interpreted harmoniously with Section 2(15), with which there is no conflict. This court had also considered the nature of income derived by a trust, which was managing a newspaper.
The question then is whether the nature of receipts and income garnered by the Trust, in the course of actually carrying out its activity of publishing newspaper, can be characterized as “in the nature of trade, commerce or business” or “service in relation to trade, commerce or business”, for any consideration.
It was highlighted that the object of maintaining the activity of publishing and distribution of newspaper remains the advancement of general public utility, as it has the effect of both notifying and educating the general public about the current affairs and developments.
While the assessee’s contention that publication of advertisement is intrinsically linked with newspaper activity (thereby fulfilling sub-clause (i) of the proviso to Section 2(15), i.e. As a result, the matter requires to be re-examined, and the question as to whether the amounts received by the assessee qualify for exemption, under Section 2 (15) or Section 11 needs to be gone into afresh.
The appeal is allowed to the above extent.
Case Title: PR. COMMISSIONER OF INCOME TAX (EXEMPTIONS) DELHI Vs. SERVANTS OF PEOPLE SOCIETY (2023 INSC 88)
Case Number: C.A. No.-000614-000614 / 2023
