2019 (2) TMI 1616 - HC - Income Tax

Exemption u/s 11/12 denied - charitable activity or not? - objects of the appellant within the purview of providing medical relief imparting education or relief to the poor - CIT-A upholding the action of the assessing officer in denying exemption under Sections 11/12 of the Income Tax Act 1961 after holding that the appellant s activities were not charitable in nature - Tribunal allowed exemption - HELD THAT - Tribunal has rightly arrived at its conclusions after having considered all the contentions urged both by the assessee and the revenue both on facts and law. The Tribunal has also agreed with the assessee s contentions that the revenue had consistently accepted that the objects of the assessee for the previous years (as in the nature of providing medical relief etc) fell within the definition of charitable purpose under Section 2(15) of the Act. It has therefore held in our opinion rightly so that the assessing officer was not justified in denying the assessee exemption under Sections 11/12 of the Act. - Decided in favour of assessee

Summary

Issues:
- Appeal under Section 260A of Income Tax Act, 1961 against the order passed by the Income Tax Appellate Tribunal in ITA No. 387/Del/2013 dated 27.08.2013 for the assessment year 2009-10.
- Denial of exemption under Sections 11/12 of the Income Tax Act, 1961 based on the nature of charitable activities.
- Interpretation of the definition of "charitable purpose" under Section 2(15) of the Act.
- Examination of substantial questions of law framed by the revenue in challenge to the Tribunal's order.
- Determination of whether the Tribunal's findings of fact and law are legally sound and warrant interference.

Analysis:

1. The appeal before the High Court was made under Section 260A of the Income Tax Act, 1961, challenging the order of the Income Tax Appellate Tribunal for the assessment year 2009-10. The primary contention revolved around the denial of exemption under Sections 11/12 of the Act. The appellant argued that the assessing officer erred in deeming the appellant's activities as not charitable in nature, particularly in providing medical relief, education, and aid to the poor. The Commissioner of Income Tax (Appeals) upheld this denial, leading to the appeal to the Tribunal.

2. The Tribunal, in its detailed order, thoroughly examined the facts and legal aspects presented by both parties. It considered the appellant's activities in providing medical relief through various alternative therapies as falling within the definition of "charitable purpose" under Section 2(15) of the Act. The Tribunal also noted the revenue's consistent acceptance in previous years that the appellant's objectives aligned with charitable purposes. Based on these considerations, the Tribunal concluded that the assessing officer's denial of exemption was unjustified.

3. The High Court, after hearing arguments from the Senior Standing Counsel for the appellant, assessed whether the Tribunal's order raised any substantial questions of law. It emphasized that a finding of fact by the Tribunal could only lead to a substantial question of law if it was deemed perverse or lacked evidence. The Court found that the Tribunal's order was well-considered, and the findings of fact were not flawed. The Court agreed with the Tribunal's conclusions, highlighting the consistent acceptance of the appellant's activities as charitable in nature.

4. Ultimately, the High Court determined that the Tribunal's order did not give rise to any substantial question of law that warranted intervention under Section 260A of the Income Tax Act, 1961. The Court dismissed the appeal, affirming the Tribunal's decision to grant the appellant exemption under Sections 11 and 12 of the Act. The judgment highlighted the importance of factual findings and the Tribunal's thorough consideration of all contentions before arriving at a legally sound conclusion.