Income Tax Appellate Tribunal - Delhi
Dcit (E), New Delhi vs M/S. National Internet Exchange Of ... on 6 June, 2018
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH: 'A' NEW DELHI
BEFORE SHRI N.K.BILLAIYA, ACCOUNTANT MEMBER
&
SHRI N.K. CHOUDHARY, JUDICIAL MEMBER
ITA No. 2676/Del/2015
(Assessment Year: 2011-12)
DCIT (E), vs National Internet Exchange of
Circle 2(1), Room No. 2408, India,
24th Floor, E-2, Block, Praxix Institute for Participatory
Dr. S.P. Mukherjee Civic Practices, B-5, IInd Floor,
Centre, New Delhi. G.K.Enclave, New Delhi.
AABCN9308A
Revenue by Sh. Ravi Kant Gupta, Sr. DR
Assessee by None
Date of Hearing 05.06.2018
Date of Pronouncement 06.06.2018
ORDER
PER SHRI N.K. CHOUDHARY, J.M.
The instant appeal has been preferred by the Revenue- Department on feeling aggrieved against the order dated 24.03.2014, impugned hearing passed by the Ld. CIT (A)-40, New Delhi u/s 250(6) of the Income Tax Act, 1961 (hereinafter called as the 'Act').
2. The Revenue-Department has raised the following grounds of appeal:
2 ITA No. 2676/Del/20151. "On the facts and in the circumstances of the case and in law, the Ld.CIT (A) has erred in allowing exemption/s 11(1) of the Act disregarding the fact that the activities of the assessee are in the nature of business and cannot be incidental to the objects as provided in Section 2(15) of the Act since assessee is hit by the proviso to Section 2(15) of the Act.
2. On the facts & in the circumstances of the case and in law, the Ld. CIT (A) has erred in upholding that the assessee is not involved in any business or commercial activity by ignoring the fact that the members are telecom service providers promoting their own business through assessee and are doing their business to earn on commercial lines and for earning profit.
3. On the facts and in the circumstances of the case and in law, the Ld. CIT (A) has erred in upholding that the assessee is a charitable organization by ignoring the fact that assessee is totally engaged in generating profit/surplus by charging various fees for services provided by it.
4. That the appellant craves to be allowed to add any fresh grounds of appeal and/or deleted or amend any of the grounds of appeal."
3. Brief facts of the case are as under:
The assessee company is registered u/s 25 of the Companies Act, 1956 as well as u/s 12AA of the Act and claimed exemption u/s 11(1) of the Act, which was denied by the AO on the ground that the assessee is involved in commercial activities by charging registration fees, membership fees and connectivity charges from the members. The assessment order was challenged before the Ld. CIT (A) who while holding that the assessee company is not involved in any trade, commercial commerce or business activities, in view of the Hon'ble Tribunal's order dated 29th August, 2008 passed in the assessee's own case i.e. ITA No. 3033/Del/2005, allowed the exemption u/s 11(1) of the Act with all consequential benefits to the assessee company.3 ITA No. 2676/Del/2015
3. On aggrieved against the impugned order, the Revenue-
Department preferred the instant appeal and in support of its case the Ld. DR mainly focused and relied upon the assessment order and submitted that the order under challenge is liable to be reversed.
4. None appeared on behalf of the Respondent, however, this Bench felt that the appeal pertains to the Revenue Department, therefore the same can be disposed off in the absence of Respondent.
5. We have perused the orders passed by the authorities below and observe that the assessee company is registered u/s 25 of the Company's Act as well as section 12AA of the Act. The assessee company was formed in 2003 by the Government of India under the Ministry of Communication & Information Technology for the purpose of promotion and growth of internet services for the public. The internet service providers (ISP) are the members of exchange and the fees like registration, membership and connectivity charges etc. are collected from the members for the running of the company and these charges are only incidental to the main objects of the assessee company which is to promote the internet services for the general public. The Hon'ble Delhi High Court while deciding the case of ITPO vs. DGIT(E) 53 Taxmann.com 404 (Delhi), vide its order dated 22.01.2015, considered the proviso to section 2(15) of the Act and held that mere receipt of fee or charge cannot be said that the assessee is 4 ITA No. 2676/Del/2015 involved in any trade, commerce or business. The Ld. CIT (A) while passing the impugned order, not only followed the dictum of order passed by the Hon'ble Delhi High Court in the case of ITPO vs. DGIT (E) (supra) but also followed the order dated 29th August, 2008 passed by the co-ordinate bench in the assessee's own case i.e. ITA No. 303/Del/2005, and allowed the exemption u/s 11 of the Act with all the consequential benefits.
5.1 The Ld. DR failed to demonstrate as to how the order passed by the Ld. CIT (A) is perverse, infirm and improper and even we do not find any substance in the appeal of the Revenue Department to interfere with the same and consequentially the order passed by the Ld. CIT (A) is upheld.
6. In the result, the appeal of the Revenue is dismissed.
Order pronounced in the open court on 06.06.2018 Sd/- Sd/-
(N.K. BILLAIYA) (N.K. CHOUDHARY)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Dated: 06.06.2018
*Kavita Arora
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(Appeals)
5. DR: ITAT
TRUE COPY
ASSISTANT REGISTRAR
ITAT NEW DELHI
5
ITA No. 2676/Del/2015
Draft dictated on 05.06.2018
Draft placed before author 05.06.2018
Draft proposed & placed before the
second member
Draft discussed/approved by Second
Member.
Approved Draft comes to the Sr.PS/PS 06.06.2018 Kept for pronouncement on 06.06.2018 File sent to the Bench Clerk 07.06.2018 Date on which file goes to the AR Date on which file goes to the Head Clerk.
Date of dispatch of Order.