The Income Tax Appellate Tribunal (ITAT), Delhi bench has recently granted relief to ERNET India by holding that the organization is eligible for tax benefits under section 11 of the Income Tax Act, 1961.
The assesseeruns a nation-wide academic and research network, to undertake and promote R & D in the area of communication, develop policy options in the country fordevelopment of network infrastructure and to act as a research centre for technological and managerial resources in the area of computer network.
While concluding the assessment proceedings, the Assessing Officer held that the appellant’s transactions are in the nature of business or commerce similar to private players.
However, the first appellate authority granted relief to the assessee by holding that assessee is not involved in any trade or business and, therefore, proviso to Section 2(15) of the Act is not attracted.
While dismissing the appeal filed by the Revenue, Accountant Member Mr. N K Billaiyaand Judicial Member Mr. Amit Shukla found that this issue was discussed thread-bare by the Tribunal in the case for assessment years 2009-10 and 2010-11 in ITA. Nos. 2873 and 2874/Del/2014 vide order dated 27.12.2017 and held that no part of the function carried out by the assessee is in the nature of trade / business.
“The said order of the Tribunal has also been affirmed by the Hon’ble Delhi High Court in ITA. Nos. 642 / 637 of 2018 vide separate order dated 25.09.2018 and 28.05.2018 respectively. Respectfully following the order of the Hon’ble High Court, who has upheld the order of the Tribunal holding that the same has to be laid down by the Hon’ble Delhi High Court in the case of M/s. GSI India Vs. Director General of Income Tax (Exemption) reported in (2014) 360 ITR 138. Not only that again in the appeal for the assessment year 2011-12 passed by the Tribunal vide their order dated 8.11.2018 for assessment year 2011-12 the Hon’ble High court has again confirmed the said order. It has been brought on record that for the assessment year 2012-13 also and again for the assessment year 2015-16 same orders have been followed. Accordingly, we hold that the issues raised by the Revenue are squarely covered by the decision of the Hon’ble Delhi High Court in the case of the assessee as well as by the Tribunal and, therefore, the appeals filed by the Revenue are dismissed,” the Tribunal said.
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