2021 (2) TMI 1205 - AT - Income Tax

Eligibility for exemption u/s 11 - charitable activity u/s 2(15) - whether the assessee s activities falls within the sixth limb of charitable activity i.e. advancement of general public utility and in lieu of the services of consultancy and technical support assessee is receiving consultancy fee which is in nature of business income? - HELD THAT - Both sides were in agreement that the issue in dispute is covered in favour of assessee and against Revenue as relying on own case 2019 (11) TMI 1036 - ITAT DELHI . - Decided in favour of assessee.

Summary

Issues involved:
Whether the assessee is eligible for exemption u/s 11 of the Income Tax Act read with Proviso to section 2(15) of the Act.

Detailed Analysis:

A. Grounds of Appeal:
1. The Revenue appealed against the order of the Learned Commissioner of Income Tax (Appeals) for Assessment Year 2013-14, challenging the eligibility of the assessee for exemption under section 11 of the Income Tax Act, 1961.
2. The Revenue contended that the activities of the assessee, falling within the sixth limb of charitable activity, were considered as the advancement of general public utility. The Revenue argued that the consultancy fee received by the assessee for services rendered should be treated as business income.
3. The Revenue further argued that the assessee society was not eligible for exemption under section 11 due to being hit by the proviso to section 2(15) of the Act.
4. It was contended that the assessee was not engaged in any trade, commerce, or business, and thus, the proviso of section 2(15) of the Act did not apply to the assessee.
5. The Revenue sought leave to add, alter, or amend any ground of appeal during the hearing.

B. Disputed Issue:
The primary issue in dispute was whether the assessee was eligible for exemption under section 11 of the Income Tax Act read with the Proviso to section 2(15) of the Act for the Assessment Year 2013-14. Both parties agreed that the issue was covered in favor of the assessee and against the Revenue based on previous orders by Co-ordinate Benches of ITAT, Delhi for the Assessment Years 2011-12 and 2012-13. The facts and circumstances of the case for AY 2013-14 were not distinguished from the previous years, and no material was presented to persuade a different view.

C. Judgment:
Respecting the previous orders of Co-ordinate Benches of ITAT, Delhi in the assessee's own case for the relevant assessment years, the Tribunal declined to interfere with the impugned order of the Ld. CIT(A) dated 22.06.2017. Consequently, the issue in dispute was decided in favor of the assessee, and the appeal filed by the Revenue was dismissed.

D. Conclusion:
The order was pronounced orally in Open Court on 22.02.2021, in the presence of both parties' representatives. The written order was passed on 23/02/2021, upholding the decision in favor of the assessee based on the previous rulings and lack of material to support a different outcome.