PR. COMMISSIONER OF INCOME TAX (EXEMPTIONS) DELHI versus SERVANTS OF PEOPLE SOCIETY

Citation: [2023] 1 S.C.R. 865 · Decided: 31-01-2023 · Supreme Court of India · Bench: S. RAVINDRA BHAT · Disposal: Case Partly allowed

Judgment (excerpt)

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865
PR. COMMISSIONER OF INCOME TAX (EXEMPTIONS)
DELHI
v.
SERVANTS OF PEOPLE SOCIETY
(Civil Appeal No(S). 614 of 2023)
JANUARY 31, 2023
[S. RAVINDRA BHAT AND DIPANKAR DATTA, JJ.]
Income Tax Act, 1961: ss. 2(15) and 11(1) – Charitable trust – Benefit
of exemption – Entitlement to – On facts, assessee-registered society
founded in 1921 for nation building, general awareness and welfare
of the people – Assessee society also managing and running a
printing press and a newspaper – Claim of benefit of exemption –
Denial by the assessing officer invoking the proviso to s. 2(15) on
the ground that the assessee is involved in trade, commerce or
business – However, the Appellate Commissioner allowed the plea
of the assessee – Said order upheld by the tribunal and the High
Court – On appeal, held: Appellate Commissioner, the ITAT and the
High Court merely followed the judgment of the High Court in India
Trade Promotion Organisation case – However, the law with regard
to interpretation of s. 2 (15) has undergone a change, due to the
decision in Ahmedabad Urban Development Authority Case – Matter
to be re-examined, and the question as to whether the amounts
received by the assessee qualify for exemption, u/s. 2 (15) or s. 11
to be gone into afresh – Assessing Officer to examine the documents
and relevant papers and render fresh findings on the issue.
India Trade Promotion Organisation v. Director General
of Income Tax (Exemption) 371 ITR (Del) 333 –
referred to.
CIT v. Ahmedabad Urban Development Authority 2022
SCC Online SC 1461 – relied on.
CIVIL APPELLATE JURISDICTION : Civil Appeal No.614 of
2023.
   [2023] 1 S.C.R. 865
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SUPREME COURT REPORTS
[2023] 1 S.C.R.
From the Judgment and Order dated 16.11.2021 of the High Court
of Delhi at New Delhi in ITA No.161 of 2021.
Balbir Singh, A.S.G., J. K. Mishra, Sr. Adv., Jogy Scaria, Pradeep
Kumar Gupta, Ms. Beena Victor,  Ms. Priya M., Ravi Lamod, Raj
Bahadur Yadav, Ashok Panigrahi, Chinmayee Chandra, Prashant Singh,
Mrs. Monica Benjamin, Ms. Meena Devi, Prasenjit Sarkar, D. Mahesh
Babu, Ganesan Subbian, Shishir Pinaki, Dhanaeswar Gudapalli, Kasoju
Mahesh Chary, Ms. Mallika Das, Advs. for the appearing parties.
The Judgment of the Court was delivered by
S. RAVINDRA BHAT, J.
1. Special leave granted. Mr. D. Mahesh Babu waives notice of
appeal on behalf of the sole respondent [hereafter called “the assessee”].
The appeal is heard finally.
2. The Commissioner of Income Tax (hereafter referred to
“revenue”) is aggrieved by the impugned judgment and order of the
Delhi High court1. 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”). The Appellate Commissioner and
the ITAT were of the Opinion that the respondent organisation (a
registered society, hereafter also called “the assessee”) was a charitable
trust entitled to the benefit of exemption and that it is registered under
Section 12AA and 80G of the Income Tax Act (hereafter called the
“Act”) were valid.
3. The facts are that the assessee society was founded in the
year 1921 by the legendary freedom fighter Lala Lajpat Rai during the
freedom struggle for the nation building, general awareness and welfare
of the people. In 1928 the famous freedom fighter of Odhisha Shri Pt.
Gopa Bandhu Dass made a Will of his property and his printing press
which is managing the Oriya newspaper “Samaj”- for people’s welfare.
1 dated 16.11.2021 in ITA No. 161/2021
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The assessee was enjoying exemption under Section 11 of the Act but
the same was denied during the A.Y. 1973-74 and later allowed by the
ITAT and affirmed by the High Court. The assessee was also earlier
allowed exemption for three years i.e. 1990-91 to 1992-93 under Section
10(23C)(iv) of the Act. The assessee has established and is running
schools in the name of Balwant Rai Mehta Vidya Bhawan in Lajpat
Nagar and in Greater Kailash in New Delhi and one Medical Centre in
Lajpat Nagar and old age home in Dwarka in Delhi. The assessee is
also building a hospital in the name of Gopa Bandhu Medical Research
Centre in Odisha. The assessee was also allowed exemption under
Section 11(1) but the same has been denied during the A.Y. 2010-11 and
2011-12. The Assessee Officer denied the exemption invoking the proviso
to Section 2(15) on the ground that the assessee is involved in trade,
commerce 

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