2015 (7) TMI 652 - AT - Income Tax

Entitlement for exemption U/s.11A - whether the assessee s activities were in the nature of advancement of general public utility being printing and sale of books, magazines, pictures, calendars, diaries and novelties wherein the second proviso to Section-2(15) of the Act is attracted? - Held that - The objects of the assessee s trust are only in support of the assessee s parent trust. Therefore, the scope of the assessee s trust cannot go outside the ambit of the objects of the parent trust but in parity with the assessee s parent Trust. Hence all the activities of the assessee s trust which are associated with the main objects of the assessee s Parent trust has to be recognized in consonant with the assessee s Parent Trust VK viz., education , relief to the poor , medical relief , preservation of monuments of places or objects of artistic or historical interest or advancement of any other general public utility . The issue is with respect of the sale of books, magazines, pictures, calendars, diaries and novelties etc., containing the preaching s of swami Vivekananda which is directly attributable to the upkeep of the Sami Vivekananda Rock Memorial because it will bring an awareness to the public at large and influence them to participate in the cause of the parent trust who s one of the objects is preservation of monuments of places or objects of artistic or historical interest . Therefore as per our discussions herein above considering the activities of the assessee Trust which is associated with the object of the assessee s parent trust viz., preservation of monuments of places or objects of artistic or historical interest , we hereby hold that proviso to Section-2(15) of the Act would not be applicable to the case of the assessee. Therefore, we hereby direct the Ld. Assessing Officer to allow the benefit of Section.11 to the assessee. - Decided in favour of assessee.

Summary

Issues:
1. Grant of exemption U/s.11A of the Act
2. Allowing the claim of depreciation amounting to Rs. 35,447/-

Grant of exemption U/s.11A of the Act:
The appeal involved the Revenue challenging the order of the Learned Commissioner of Income Tax(A)-VIII, Chennai regarding granting exemption U/s.11A of the Act to the Assessee. The Revenue contended that the activities of the Assessee were commercial in nature and fell under the second proviso to Section-2(15) of the Act, thereby denying the exemption. The Assessee, a trust, argued that its activities were in line with the parent trust's objectives, which included education and advancement of general public utility. The Learned CIT (A) held that the Assessee's activities promoting Swami Vivekananda's doctrine, while not strictly educational, qualified as advancement of general public utility, entitling the trust to exemption U/s.11A of the Act. The Tribunal concurred, emphasizing that the Assessee's activities aligned with the parent trust's objectives, such as preservation of monuments, and directed the Assessing Officer to allow the benefit of Section.11 to the Assessee.

Allowing the claim of depreciation amounting to Rs. 35,447/-:
The issue of allowing the claim of depreciation amounting to Rs. 35,447/- was not raised before the Learned CIT (A) and lacked discussion in the Assessing Officer's order. Consequently, the Tribunal remitted this issue back to the Assessing Officer for fresh consideration. The Cross Objection raised by the Assessee, contending that the activities were not education but advancement of general public utility, was disposed in favor of the Assessee based on the Tribunal's decision regarding the grant of exemption U/s.11 of the Act.

In conclusion, the Tribunal dismissed the Revenue's appeal and allowed the Cross objection of the Assessee, granting the Assessee the benefit of exemption U/s.11 of the Act. The judgment was pronounced on 15th July 2015 at Chennai.