2018 (3) TMI 1977 - AT - Income Tax

Exemption u/s 11 - whether assessee performs a charitable purposes within the meaning of proviso to section 2(15) of the Income Tax Act? - HELD THAT - Respectfully following the order of the Tribunal in assessee s own case 2015 (9) TMI 1736 - ITAT MUMBAI we do not find any infirmity in the order of CIT(A) for allowing assessee s claim of exemption u/s.11 r.w.s. 2(15) - Decided against revenue.

Summary

Issues:
- Appeal by Revenue against CIT(A) order for A.Y. 2011-12 under section 143(3) of IT Act.
- Dispute regarding assessee's eligibility for exemption under proviso to section 2(15) of the Income Tax Act, 1961.

Analysis:
1. The Revenue filed an appeal against the CIT(A) order for the assessment year 2011-12 under section 143(3) of the IT Act. The main contention was related to the CIT(A) holding that the assessee was engaged in charitable activities falling within the proviso to section 2(15) of the Income Tax Act, 1961.

2. The Assessing Officer (AO) completed the assessment, determining a taxable income for the assessee despite the assessee being registered as a trust with DIT (E), Mumbai under section 12A and with the Charity Commissioner, Mumbai. The AO raised concerns about the nature of the assessee's activities and questioned the eligibility for exemption under section 11 of the IT Act based on section 2(15) definitions. The AO also raised issues regarding the treatment of income from operations, interest, and deposits from decorators as business income under section 2(15) and the principle of mutuality for interest income.

3. The AO concluded that the activities conducted by the assessee should be treated as business or professional income, leading to the dispute between the Revenue and the assessee.

4. The CIT(A) allowed the assessee's claim for exemption under section 11 after considering the facts, assessment order, and submissions. The CIT(A) referred to past orders and decisions in favor of the assessee, highlighting that the nature of activities remained consistent over the years and that the assessee was entitled to exemption under section 11 based on previous rulings and the charitable nature of the institution.

5. The CIT(A) upheld the assessee's claim for exemption by relying on previous decisions and orders of the ITAT and the High Court, emphasizing the continuity of the assessee's charitable activities and entitlement to exemption under section 11 of the IT Act.

6. The Tribunal dismissed the Revenue's appeal, citing the consistency of decisions in favor of the assessee across previous assessment years and the entitlement to exemption under section 11 based on the charitable nature of the institution. The Tribunal's decision aligned with past rulings and upheld the CIT(A)'s order, ultimately leading to the dismissal of the Revenue's appeal.

7. The Tribunal's decision was based on the continuity of the assessee's charitable activities, consistent with past rulings and orders, resulting in the dismissal of the Revenue's appeal and upholding the CIT(A)'s order granting exemption under section 11 of the IT Act.

In conclusion, the judgment focused on the consistent nature of the assessee's charitable activities and the entitlement to exemption under section 11 of the IT Act, leading to the dismissal of the Revenue's appeal and upholding the CIT(A)'s decision.