The Delhi bench of the Income Tax Appellate Tribunal ( ITAT ) has reiterated that the National Accreditation Board for Testing and Calibration Laboratories ( NABL ), being a charitable entity, eligible for income tax exemption under section 11 of the Income Tax Act, 1961.
The assessee, NABL, granted registration under section 12A of the Income-tax Act, 1961. The main aims and objects of the assessee society are to promote, coordinates, guide, implement and maintain an accreditation system for laboratories suitable in the country in accordance with the relevant national and international standards and guides; to encourage proficiency tests inter-laboratory comparisons in order to ensure accuracy, reliability, and reproducibility of test results, to ensure that the accredited laboratories adhere to all the conditions of accreditation by periodic surveillance, etc.
During the relevant assessment year, the Assessing Officer held that the assessee society falls under the 6th limb of charitable activities i.e. advancement of any other objects of general public utility, and held that as per amended provisions, contained u/s 2(15) of the Act, the activities of the assessee society do not fall under the charitable purpose and “thereby denied the exemption u/s 11 & 12 of the Act. The controversy continued for several years where the Tribunal has granted tax relief to the assessee.
While disposing of a departmental appeal, the Tribunal bench comprising Accountant Member Prasanth Maharishi and Judicial Member Kuldip Singh held that the cases under consideration vis-à-vis earlier year are distinguishable nor has brought on record any other case law having a divergent view. “Since assessee, society has been held to be a charitable institution by the Hon’ble Delhi High Court in AY 2009-10 and since then there is no change in the aims and objects of the assessee society, finding no illegality or infirmity in the impugned orders, both the aforesaid appeals filed by the Revenue are hereby dismissed,” the Tribunal said.Subscribe Taxscan AdFree to view the Judgment