India Trade Promotion Organization v DGIT (E) 371 ITR 333 (Del-HC)•

The India Trade Promotion Organization (ITPO) was engaged in the promotion of Indian trade and was registered under section 10(23C)(iv) of the Income Tax Act, which pertains to tax exemptions for certain entities and their income.

• The Assessing Officer initially canceled the registration on the grounds that the activities of the ITPO related to trade, commerce, and business were not charitable and therefore did not meet the requirements under section 10(23C)(iv).
• However, the Delhi High Court ruled in favor of the ITPO, holding that the intention behind the amendment in section 2(15) was to remove entities that engage purely in trade, commerce, or business like activities, and to exclude those entities with intentions purely of profit from the tax exemptions provided to charitable institutions.
• The court found that the amendment did not aim to hurt genuine charitable organizations whose purpose is to advance an object of general public utility without a profit motive.
• Therefore, it was held that an organization like the ITPO, which contributes to the public utility through trade promotion and is not driven by a desire to generate profits, can be regarded as an institution established for "charitable purposes" within the meaning of section 2(15) of the Act.
• Consequently, the Delhi High Court determined that approval under section 10(23C)(iv) should be granted to the assessee trust, the ITPO, in this case.