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Issues involved: Appeal against Tribunal's judgment on exemption u/s 11 of Income Tax Act for micro finance activities.
Issue 1: Whether the Tribunal erred in granting exemption u/s 11 for micro finance activities deemed charitable. The High Court reviewed the Tribunal's decision and considered the appellant's arguments challenging the characterization of the assessee's activities as charitable. The Tribunal had determined that the micro finance activities were indeed charitable in nature, citing similar precedents and the collaboration with financial organizations to further the charitable purpose. The High Court found no legal errors in the Tribunal's decision, upholding the exemption granted u/s 11 of the Income Tax Act. Issue 2: Whether the Tribunal correctly granted exemption u/s 11 despite Revenue's contention of business nature and lack of proper registration. The High Court addressed the Revenue's argument that the micro finance activities should be considered business rather than charitable, emphasizing the absence of proper registration as per Section 12A of the Income Tax Act. However, the Tribunal's decision to grant exemption u/s 11 was upheld by the High Court based on the finding that the activities were indeed charitable in nature, aligned with the purpose of providing micro financing to the underprivileged. The collaboration with financial institutions was seen as a means to further the charitable objective, justifying the exemption. In conclusion, the High Court dismissed the appeal against the Tribunal's judgment, affirming the grant of exemption u/s 11 for the assessee's micro finance activities. No costs were awarded in this matter.
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