Top Stories Printing, Publishing and Subscription of books of Vedas, Gita, Upanishads for imparting education is  not Commercial activity: ITAT allows exemption u/s 11 of Income Tax Act [Read Order] By Aparna. M – On April 8, 2024 7:33 pm – 3 mins read The Mumbai bench Income Tax Appellate Tribunal (ITAT)  while allowing the exemption under section 11 of the Income Tax Act, 1961 held that printing , publishing and subscription of books of vedas , gita,upanishads  for imparting education is  not commercial activity.

The Assessee Satvichar Darshan is a Trust registered with the Directorate of Income Tax (Exemption), Mumbai u/s. 12A of the Income Tax Act, 1961 and has also registered with the Charity Commissioner, Mumbai claiming exemption u/s. 11 of the Act. After filing the return of income, the assesse’s  case was selected for scrutiny. During the proceedings the AO observed that the assessee Trust is a proprietor of “Prabodhak Mudranalaya” and has generated income of Rs.2,82,28,399/- majorly from subscription of books, sales of books and sales of cards which according to the A.O. are in the nature of trade and commerce. further observed that the assessee is merely engaged in the activities of printing, publishing and distribution of journal and magazines and has received the impugned income which forms 63% of the assessee’s total receipts amounting to Rs.4,50,71,671/-.

Moreover the assessee has also claimed expenses under the head  which consists of the sales promotion circulations promotion expenses and exhibition and fair expenses. A.O. rejected the assessee’s contention and held that the assessee Trust is not eligible for exemption u/s. 11 of the Act where the assessee’s case is hit by proviso to section 2(15) of the Act, thereby holding that the assessee’s activities are not charitable in nature as per section 2(15) of the Act and proviso to section 13(8) of the Income Tax Act.

Aggrieved by the assessment order, the assessee filed an appeal before the CIT(A). The CIT(A) allowed the appeal of the assessee. Therefore the revenue filed a second appeal before the tribunal. During the adjudication Rajesh P. Shah   the counsel for assessee argued that the  assessee was engaged in imparting education through printing of books and various other publication on discourses (Pravachans) pertaining to Gita, Vedas and Upanishads from the Vyaspeet thereby educating the society at large. Further contended that the books or magazines printed by the assessee trust are on Dadaji’s Pravachans which no doubt is not in the nature of commercial activities. Further the counsel for assessee argued that before the CIT(A) also, the assessee could not represent his case properly as the assessee was not aware about the procedural part and the notices were not forwarded to the assessee by the professional and the matter remained un-contested.

Sujatha P Iyangar ,  Department Representatives argued that  the activities of the assessee trust is in the nature of trade, commerce or business and the income generated out of it was rightly taxed by the  A.O. in the hands of the assessee. The tribunal observed that the assessee trust is not merely engaged in the business of printing, publication and subscription of books, but rather incidental to the main activity of the trust which is nothing but the spreading the message of Rev Dada. After analyzing the submission of both parties, the  single bench of Suchitra Kamble (Judicial Member) held that assessee trust is not into the business of publishing, printing and subscription of the said books as the same is not the main object of the assessee trust. To Read the full text of the Order CLICK HERE