IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, MUMBAI BEFORE SMT. BEENA PILLAI (JUDICIAL MEMBER)

AND SHRI OMKARESHWAR CHIDARA (ACCOUNTANT MEMBER)

I.T.A. No.1060/Mum/2025 Assessment Year: 2013-14 Powerloom Development Vs. Income Tax Officer, And Export Promotion (Exemption)

Council MTNL Telephone Ex. No. GC-2, Gundecha Building, Cumballa Onclave, Ground Floor, Hills, Peddar Road, Kherani Road, Sakinaka, Mumbai 400026.

Andheri (East), Mumbai

400072.

PAN: AAATP0271E (Appellant) (Respondent)

Appellant by Shri. S.L. Jain a/w Shri. Satish Jain Respondent by Shri. Mukesh Thakwani, SR. D.R.

Date of Hearing 24.03.2025 Date of Pronouncement 28.03.2025

ORDER

Per: Smt. Beena Pillai, J.M.:

The present appeal filed by the assessee arises out of order dated 23/01/2025 passed by NFAC, Delhi for Assessment Year

2013-14 on following grounds of appeal.

1. “Ld. CIT(A) erred in holding that Appellant is not entitled to claim

exemption u/s 11 as a Charitable /Non-Profit Organization as

Appellant is engaged in the activity in the nature of trade, commerce or

business or render services in relation to trade, commerce or business

disregarding the fact that Appellant is registered u/s 25 of Company

Act prohibiting any profit distribution.

Export Promotion Council

2. Ld. CIT(A) erred in not considering the fact that dominant object of the Appellant is Development of Power loom Industry and Export, development of Trade, Commerce and Industry being a charitable object, Appellant is entitled to exemption u/s 11 of the Act.

3. Ld. CIT(A) erred in confirming Assessing Officer's action to deny exemption by applying sec 2(15) without appreciating that appellant has not earned any profit in the Activity of Exhibitions. Ld. CIT(A) erred in not considering the fact that expenses incurred in holding Exhibitions, Buyer-Seller Meets is higher to contribution received from participants and such activities are intrinsic part of Objects of the Appellant.

4. Appellant pray that Appellant be granted exemption u/s 11.

5. Appellant crave your Honour's leave to add, alter or amend any ground of appeal at the time of hearing or before.”

Brief facts of the case are as under:

2. The assessee is Company Registered u/s. 25 of the Companies Act and obtained registration u/s.12 of the Act since, 21/10/1996, subsequently fresh registration was granted to assessee with effect from 28/05/2021 for Assessment Year 2022-23 to 2026-27. It is a fact that the assessee is prohibited from distributing any dividend/profit amongst its members being registered u/s. 25 of the Companies Act, 1956. It is submitted that, the assessee is engaged in the activity based on the principle of mutuality on following principal objects:

1. “To promote, support, develop, advance and increase powerlooms and export of powerloom fabrics and made-ups thereof and to carry out any such activity in such manner as may be necessary or expedient.

2. To undertake or assist in research in methods, designs, etc. and schemes of a technical nature intended to improve the efficiency of the powerloom sector.”

Export Promotion Council

2.1. It is also noted that, the assessee is a committee of administration consisting of Joint Secretary to Ministry of Textile, Textile Commissioner, Managing Director NABARD and SIDBI and two other cooperate members. Assessee for the year under consideration filed its return of income on 2/10/2013 along with income and expenditure account, balance sheet and auditor report in form 10B declaring total income to be NIL.

2.2. The case was selected for scrutiny and notice u/s. 143(2) along with142(1) was issued to the assessee on various dates. In response to the statutory notices, representative of assessee appear and filed requisite details as called for. On verification of the details filed by the assessee, the Ld. AO was of the opinion that, the assessee carries out activities in the nature of trade, commerce, business, etc. and earned receipts, details of which are as under:

2.3. The Ld. AO thus, issued show cause notice da