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2018 (9) TMI 602 - AT - Income TaxClaim of exemption u/s 11 - activities of NDDB (i.e. the assessee) involved the rendering of services in relation to carrying on commercial or business activities and is clearly covered by the new proviso to section 2(15) therefore, the assessee cannot be treated to be engaged in charitable activities - Held that - We find the CIT(A) allowed the claim of exemption u/s 11 and 12 on the ground that in the immediately preceding assessment year, CIT(A) has allowed the claim of exemption u/s 11 and the Revenue has not challenged the same. In the immediately succeeding assessment year the AO himself has allowed the claim of exemption u/s 11 by treating the activities of the assessee as charitable in nature. No infirmity in the order of the CIT(A) since in the immediately preceding assessment year the CIT(A) has allowed the claim of exemption u/s 11 which has attained finality and the AO himself in the subsequent assessment year has treated the activities of the assessee as charitable in nature and has allowed the claim of exemption u/s 11 therefore, the order of the CIT(A) is upheld and the grounds raised by the Revenue are dismissed. Short computation of interest u/s 244A by computing interest for the period till issuance of refund instead of the period till receipt of refund - Held that - We, therefore, restore this issue to the file of the AO with a direction to compute correct interest u/s 244A as per law. AO shall give due opportunity of being heard to the assessee while calculating such interest. The ground raised by the assessee in the Cross Objection is accordingly allowed for statistical purposes.
Issues:
1. Exemption under section 11 and 12 of the Income Tax Act, 1961. 2. Denial of exemption by Assessing Officer. 3. Appeal against CIT(A)'s order. 4. Assessment year 2012-13. 5. Computation of interest under section 244A. Analysis: Issue 1: Exemption under section 11 and 12 of the Income Tax Act, 1961 The case involved the question of whether the assessee, a company registered under section 12A of the Income Tax Act, was entitled to exemption under section 11 and 12. The activities of the assessee were scrutinized to determine if they fell under the proviso to section 2(15) of the Act, which would disqualify the assessee from claiming the benefit of exemption. Issue 2: Denial of exemption by Assessing Officer The Assessing Officer rejected the claim of exemption under sections 11 and 12 by observing that the activities of the assessee involved commercial elements and were covered by the new proviso to section 2(15) of the Act. The Assessing Officer contended that the assessee was not engaged in charitable activities and therefore not eligible for the exemption. Issue 3: Appeal against CIT(A)'s order The Revenue appealed against the order of the Commissioner of Income Tax (Appeals) (CIT(A)) before the Tribunal. The Revenue challenged the decision of the CIT(A) to allow the claim of exemption under sections 11 and 12, arguing that the activities of the assessee were commercial in nature and did not qualify as charitable. Issue 4: Assessment year 2012-13 The assessment year in question was 2012-13, and the dispute primarily revolved around the interpretation of the provisions of the Income Tax Act for that particular year. The Tribunal considered the arguments presented by both the Revenue and the assessee in light of the relevant provisions applicable for the assessment year 2012-13. Issue 5: Computation of interest under section 244A In the Cross Objection filed by the assessee, the only effective ground raised pertained to the computation of interest under section 244A. The Tribunal directed the Assessing Officer to recalculate the interest correctly, considering the period until the receipt of refund, and granted the assessee an opportunity to be heard during the recalculations. In summary, the Tribunal upheld the CIT(A)'s decision to allow the claim of exemption under sections 11 and 12 for the assessee, based on the precedents set in the immediately preceding and succeeding assessment years. The Revenue's appeal was dismissed, and the assessee's Cross Objection regarding the computation of interest under section 244A was allowed for statistical purposes, with directions for the Assessing Officer to recalculate the interest appropriately.
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