Conducting International Conference by Indian Plastics Institute is not a ‘Commercial Activity’: ITAT [Read Order]

The Income Tax Appellate Tribunal ( ITAT ), Mumbai bench had allowed tax relief to the Indian Plastics Institute by holding the activity of organizing International Conference by the Institute would not constitute a ‘Commercial activity’ for denying tax benefit to them.

The assessee-trust is registered under the Bombay Public Trusts Act, 1950 and also registered under section 12A of the Income Tax Act, 1961. In the year 2011, the Income Tax registration was withdrawn. However, the same was restored by the Tribunal in the year 2014 with a specific finding that the receipt on account of the International conference and interest on deposit was in the nature of business income.

The activities of the assessee-trust are for advancement and development for the benefit of its members and public, the art, science, technology and engineering of plastics, natural and synthetic and other related materials which is achieved through regular technical lectures, seminars and workshop on topical interest, and international conference held in India by inviting foreign delegates and faculties, conducting one-year part-time Diploma Courses, conducting Plastics Processing Operators Training (PPOT) in 100 Govt. Industrial Training Institutes (ITI) all over India, conducting two-day short-term courses and publishing IPI Journals giving latest technological developments.

Overruling the order of the Tribunal, the bench held that “We observe that assessee trust it is not carrying on any activity which can be termed as “commercial activity” or an activity in the nature of trade, commerce or business by conducting an International Conference. The assessee is disseminating knowledge on the subject of plastics by different ways and means like holding courses, holding conferences, holding lectures, publishing literature on new subjects, publishing its journal, conducting diploma course, etc. Thus the activities of the assessee are purely of a general public utility inasmuch as it helps all those classes of persons connected with the plastics and its application with a useful knowledge and information from time to time.”