Indian Institute of Packaging eligible for Tax Exemption: ITAT [Read Order]

In M/s. Indian Institute of Packaging vs. ACIT, Mumbai Bench of Income Tax Appellate Tribunal held that the Indian Institute of Packaging is eligible for Tax Exemption under Section 11 of the Income Tax Act, 1961.

The assessee is a non-profit making body working under the Ministry of Commerce & Industry. The institution is registered as a charitable organisation with CIT (Exemption). Exemptions claimed by the assessee under section 11 were denied by the Assessing Officer (A.O.) by invoking provisions of Section 2(15) on the ground that activities of the institution were in the nature of trade and commerce.  The CIT(A) also confirmed the action of the A.O. Aggrieved an appeal was preferred by the assessee before the ITAT.

The Authorised Representative (A.R) for the assessee contended that the assessee carried on its activities without any profit motive and for charitable purposes. A number of cases were cited to support his argument. The Departmental Representative reiterated the order of lower authorities.

The Bench comprising of Judicial Member Ram Lal Negi and Accountant Member R.C Sharma found that the assessee is an arm/wing/body of the Central Government functioning under the overall and administrative control of the Central Government. It was also noted that assessee institution carries on activities of education, research and development, consultancy, laboratory research including testing and certification in relation to packaging at concessional rates to cover its recurring costs and future costs.

“Keeping in view the activities already undertaken by the assessee vis-à-vis judicial pronouncements referred by the assessee as quoted above, it appears that both the lower authorities have not properly appreciated actual activity being undertaken by the assessee and invoked provisions u/s.2(15) for declining the claim of exemption u/s.11. In the interest of justice, we restore the matter back to the file of the AO for deciding afresh after considering observations. We direct accordingly.” observed the Bench.