2011 (11) TMI 859 - AT - Income Tax

Summary

Issues Involved: The judgment involves the interpretation of sec. 2(15) of the I.T. Act regarding the charitable status of the assessee and the alleged violations of sec. 13 of the I.T. Act related to investments and dividend declarations.

Interpretation of Charitable Status (sec. 2(15)):
The Revenue contended that the assessee, engaged in the business of developing industrial estates and infrastructure for sale or lease, did not qualify as a charitable institution u/s 2(15) of the I.T. Act. However, the Tribunal referred to previous decisions in the assessee's favor for A.Y. 2005-06 and A.Y. 2006-07, where it was held that the assessee was entitled to exemption u/s 11 of the Act. Citing these precedents, the Tribunal dismissed the Revenue's grounds and upheld the charitable status of the assessee.

Alleged Violations of sec. 13:
The Revenue alleged that the assessee had violated sec. 13 of the I.T. Act by investing income in non-statutory or non-Govt. companies and having a clause in the Memorandum of Articles of Association related to dividend declarations. However, the Tribunal, considering the consistent decisions in the assessee's favor in previous years, dismissed the Revenue's grounds based on sec. 13 as well. The Tribunal decided both appeals in favor of the assessee, following the precedent set by earlier orders.

Conclusion:
The Tribunal, comprising SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER, and SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER, dismissed both appeals by the Revenue against the orders of the CIT(A)-IV, Hyderabad. The Tribunal upheld the charitable status of the assessee under sec. 2(15) of the I.T. Act and rejected the allegations of violations of sec. 13, based on precedents from earlier cases. The orders were pronounced in open court on 22nd November, 2011.