INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “B”: NEW DELHI BEFORE SHRI M. BALAGANESH, ACCOUNTANT MEMBER AND SHRI YOGESH KUMAR U.S., JUDICIAL MEMBER (Assessment Year:2020-21)

DCIT, Vs. GR Goenka Education Society Central Circle, Sector-B, Pocket 8&9, Vasant Kunj, Delhi New Delhi-110070 (Appellant) (Respondent)

PAN:AAATG0617M Assessee by : Shri Amit Goel, CA Shri Pranav Yadav, Adv Revenue by: Shri Rajesh Kumar Dhanesta, Sr. DR Date of Hearing 13/01/2025 Date of pronouncement 29/01/2025

O R D E R

PER M. BALAGANESH, A. M.:

1. The appeal in ITA No.387/Del/2021 for AY 2015-16, arise out of the order of the Commissioner of Income Tax (Appeals)-37, New Delhi [hereinafter referred to as „ld. CIT(A)‟, in short] in Appeal No. 37/10221/2018-19, A.Y. 2015-16 dated 22.09.2020 against the order of assessment passed u/s 143(3) of the Income-tax Act, 1961 (hereinafter referred to as „the Act‟) dated 28.12.2017 by the Assessing Officer, DCIT, Circle-16 (2), New Delhi (hereinafter referred to as „ld. AO‟).

2. The revenue has raised the following grounds of appeal before us:-

“1. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) was justified in deleting the addition of Rs. 3.66.31,108/- made by AO on account of dental of exemption u/s 11 of the Income Tax Act, 1961?

2. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) was right in extending the benefit of exemption to the respondent society under section 11 of the Income Tax, 1961 even though the respondent has violated of the provisions of section 13(1)(c) read with section 13(3) of the Act, by registering the trademark in the name of Shri Anjanı Kumar Goenka- the chairman of the Society and not in the name of the Society itself thereby indulging in diversion of the franchise income/royalty to the other company?

3. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) was justified in not taking into consideration the fact that the respondent does not qualify as a charitable institution under section 11 of the Act as it was engaged in activities which were commercial in nature?

4 Whether on the facts and in the circumstances of the case and in law, the order of the Ld. CIT(A) 15 erroneous and not tenable in law and on facts

5. The appellant craves leave to add, amend any/all the grounds of appeal before or during the course of hearing of the appeal.”

3. We have heard the rival submissions and perused the materials available on record. The assessee is a charitable society engaged in the charitable activity of running a school. The assessee society started a school under the name G.D. Goenka Public School in Vasant Kunj on 5- 10-1994. Shri Anjani Kumar Goenka has been the Chairman of G.R. Goenka Education Society since its inception. He has business interest in other fields also, but his only association with the field of education is in his capacity as Chairman of G.R. Goenka Education Society. G.D. Goenka Public School has carved out a niche for itself in the city because of its certain unique features, such as provision of air-conditioned buses and classrooms, bottled mineral water for children, presence of nanny and guards armed with mobile phones in all school buses. As a result of which, in the year 2000, Shri Anjani Kumar Goenka thought of exploiting the Goodwill of G.D. Goenka Public School by registering the trade name „G.D. Goenka‟ in the field of education (Class 41) in his own name. He therefore applied to this effect before the Registrar of Trademarks.

Besides, he also registered some more resembling trademarks either in Class 41 (educational field) or other classes (other than educational fields). However, the fact remains that only the trademark „G.D. Goenka‟ in Class 41 has market value and capable of being exploited commercially by issuing franchisee to public schools. After registration of trademark „G.D. Goenka‟, Shri Anjani Kumar Goenka has signed franchisee agreement through his company G.