2015 (9) TMI 1736 - AT - Income Tax

Exemption u/s 11 - club is not a charitable organization within the meaning of section 2(15) - CIT-A held that assessee is a Charitable Institution and its income has to be computed u/s 11 to 13 -Whether assessee performs a charitable purposes within the meaning of section 2(15) ? - HELD THAT - Issue is covered by the decision of Hon ble Jurisdictional High Court in the assessee s own case 2012 (4) TMI 214 - BOMBAY HIGH COURT . Further the co-ordinate bench of Tribunal has also followed the said decision in order to decide an identical issue in favour of the assessee in assessment years 2007-08, 2009-10 2015 (3) TMI 1419 - ITAT MUMBAI 2008-09 2014 (11) TMI 379 - ITAT MUMBAI . We also notice that it is not the case of the AO that the assessee is hit by the proviso to sec. 2(15) of the Act. Hence, we do not find any infirmity in the order of ld. CIT(A) with regard to the first issue. Claim of the assessee for set off and carry forward of deficit of earlier years - CIT(A) has followed the decision rendered by the Hon ble Jurisdictional High Court in the case of CIT Vs. Institute of Banking Personnel Selection 2003 (7) TMI 52 - BOMBAY HIGH COURT . Hence, we do not find any reason to interfere with the order passed by the ld. CIT(A) on this issue also.

Summary

Issues:
1. Whether the assessee performs charitable purposes within the meaning of section 2(15) of the Income Tax Act, 1961.
2. Whether the assessee is entitled to set off and carry forward deficit of earlier years.

Analysis:

Issue 1:
The Revenue appealed against the order of the ld. CIT(A) challenging the classification of the assessee as a charitable institution for the assessment year 2010-11. The assessee, a trust promoting physical education through training in various sports disciplines, was registered under section 12A of the Act and with the Charity Commissioner, Mumbai. The AO treated the income derived from the trust's activities as business/professional income. However, the ld.CIT(A) referred to the decision of the Hon'ble Bombay High Court and Tribunal, which recognized the assessee as a Charitable Institution. The ld. CIT(A) held that the income should be computed under sections 11 to 13 of the Act and allowed the carry forward and set off of deficits from earlier years. The Tribunal, after considering the precedents and the absence of evidence to the contrary, upheld the order of the ld. CIT(A) regarding the charitable nature of the assessee's activities.

Issue 2:
Regarding the second issue raised by the Revenue, the Tribunal noted that the ld. CIT(A) relied on the decision of the Hon'ble Jurisdictional High Court in a similar case involving the Institute of Banking Personnel Selection. The Tribunal found no grounds to interfere with the ld. CIT(A)'s decision on this issue, as it was consistent with established legal precedents and the facts presented. Consequently, the Tribunal dismissed the Revenue's appeal, upholding the order of the ld. CIT(A) in favor of the assessee. The judgment was pronounced on 23rd September 2015, affirming the charitable status of the assessee and its entitlement to set off and carry forward deficits from previous years.