NATIONAL INTERNET EXCHANGE OF INDIA Vs. DIRECTOR OF INCOME TAX EXEMPTIONS
LAWS(IT)-2008-8-7
INCOME TAX APPELLATE TRIBUNAL
Decided on August 29,2008

Appellant
VERSUS
Respondents

JUDGEMENT

R.C. Sharma, A.M. - (1.) THIS is an appeal filed by the assessee directed against the order of Director of IT (Exemptions), dated 29-4-2005, wherein he has declined the assessees application for registration under Section 12A of the Income Tax Act, 1961.
(2.) The facts in brief are that assessee-company namely National Internet Exchange of India (in short NIXI), was formed on 19-6-2003, moved an application in Form No. 10A on 25-10-2004 for registration under Section 12A of the Income Tax Act, 1961. The application was accompanied by copies of MOA/RR and certificate of registration. The application and accompanying documents were examined and the assessee was called upon to file copies of certain documents. The Director of IT (Exemptions) after considering the objects of the assessee company found that its objects are apparently commercial in nature, therefore, registration under Section 12A cannot be granted. Against this order, the assessee is in further appeal before us. The learned Authorised Representative, Shri Ajay Vohra, drew our attention to the fact that the assessee-company was incorporated under Section 25 of the Companies Act as a non-profit organization promoted by Government of India. It was for the purpose of establishment of National Internets Exchange to be located at 4, Software Technology Parks of India (STPI). The Ministry of Information Technology, Government of India, department of Information Technology, Electronics Niketan, vide its letter dated 28-3-2003 approved and conveyed the administrative approval to the implementation of the project. The project expenditure envisaged a total outlay of Rs. 424.35 lacs for which the Ministry released a sum of Rs. 350 lacs as grant-in-aid to STPI, New Delhi, for the implementation of the project. With assistance being received from STPI, New Delhi, the organizational set up of NIXI was not considered and consequently, there were no employees. It had availed the services of an advisor who was there to act as a common link between NIXI, Government and STPI.
(3.) ON the other hand, learned departmental Representative relied on the order of Director of IT (Exemptions) and submitted that main objects of the assessee-company were commercial in nature, to which the provisions of Section 12AA are not applicable, no fault can be found in his order declining the registration sought for.;


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