2012 (11) TMI 1144 - AT - Income Tax

Summary

Issues involved:
Three appeals filed by the revenue against the order of Ld CIT(A) dated 25.3.2011, 17.2.2010 & 17.2.2010 respectively regarding exemption u/s 11 r/w sec. 12 of the Income Tax Act, 1961.

Assessment Year 2007-08:
1. The Ld CIT(A) erred in allowing exemption u/s 11 r/w sec. 12 of the Income Tax Act, 1961.
2. The Ld CIT(A) erred in holding that the ratio laid down by Hon'ble ITAT, New Delhi in a previous case is not applicable to the assessee society.
3. The Ld CIT(A) erred in relying upon a previous ITAT order for different assessment years.
4. The Ld CIT(A) erred in holding that certain expenses claimed by the assessee are not allowable as revenue expenses.

Details:
The assessee society, registered u/s 12A, running a school, claimed exemption u/s 11. The Assessing Officer considered the school as a profit-making entity and rejected the exemption claim. The assessee argued that the school's surplus was for expansion and not profit-sharing. The ITAT held that imparting education is a charitable purpose, different from a profit-making business, and allowed the exemption u/s 11.

Key Points:
- The society's objective is to provide education without profit motive.
- Assessing Officer treated school income as business income.
- ITAT ruled that imparting education is a charitable purpose.
- Previous ITAT orders and circulars supported the assessee's case.
- The ITAT allowed the exemption u/s 11 for the assessee society.

This summary highlights the issues involved in the legal judgment and provides a detailed overview of the arguments and decisions made by the authorities involved.