2014 (3) TMI 1086 - AT - Income Tax

Benefit of exemption to the assessee u/s 11 - AO treating the assessee as mutual concern and not a trust - Held that - CIT(A) has held that the assessee is entitled for the benefit of exemption u/s 11 of the Act by relying on the decision of the Tribunal in the assessee s own case for the assessment year 1996-97 to 2000-01 wherein it has held that the assessee is a charitable club and it is entitled to claim exemption u/s 11 of the Income-tax Act in respect of the income under consideration. It is also noted that the said order of the Tribunal has been upheld by the Hon ble High Court of Bombay. In the absence of any distinguishing fact brought by the revenue during the year under consideration and also in view of the fact that the Tribunal order as upheld by the Hon ble Bombay High Court has not been reversed by the Hon ble Apex Court we do not find any justifiable reason to interfere with the of the Ld.CIT(A) and therefore the same is upheld. - Decided against revenue

Summary

Issues:
- Appeal against the order passed by Ld.CIT(A) directing AO to allow exemption u/s 11 of Income-tax Act.
- Denial of benefits to assessee's trust u/s 11 treating it as a mutual concern.
- Whether the assessee is entitled to exemption u/s 11 of the Act.
- Justifiability of interfering with Ld.CIT(A)'s order.

Analysis:
The judgment involves an appeal by the Revenue against the order passed by the Ld.CIT(A) directing the Assessing Officer (AO) to allow the benefit of exemption to the assessee under section 11 of the Income-tax Act for the Assessment Year 2009-10. The AO had initially denied the benefits to the assessee's trust under section 11, treating it as a mutual concern rather than a trust. However, on appeal, the Ld.CIT(A) held that the assessee was indeed entitled to the benefit of exemption under section 11. This decision was based on a previous Tribunal ruling in the assessee's own case for the assessment years 1996-97 to 2000-01, where it was established that the assessee was a charitable club eligible for exemption under section 11 of the Income-tax Act for the income in question.

The Ld.CIT(A) noted that the Tribunal's earlier order had been upheld by the Hon'ble High Court of Bombay, and since there were no distinguishing facts presented by the Revenue for the current assessment year, and the Tribunal's decision remained unchallenged by the Hon'ble Apex Court, there was no justifiable reason to interfere with the Ld.CIT(A)'s order. Consequently, the Tribunal upheld the decision of the Ld.CIT(A) and dismissed the appeal filed by the Revenue. The judgment was pronounced in open court on March 12th, 2014, by Dr. S.T.M. Pavalan, the Judicial Member of the Appellate Tribunal ITAT Mumbai.