2019 (5) TMI 1332 - HC - Income Tax

Exemption u/s 11 - ITAT held that the Assessee was involved in imparting education when it was engaged in activities of selling and publishing, which was in the nature of business and trade within the meaning of Section 2 (15) as amended? - Assessee is the Association of Indian Universities, a charitable trust registered under the societies Registration Act, 1860 and Section 12A since 28th January 1981 - Assessee has got an approval under Section 80G (5) (vi) with effect from AY 2010-11 - HELD THAT - CIT (A) holding that the Assessee was a charitable association. AO was directed to allow the exemption u/s 11 (1) as it was found as a matter of fact that the Assessee was not involved in any trade, commerce or business activities, so as to be denied the exemption. ITAT has in the impugned order taken note of the fact that in the case of the Assessee itself for AY 2010-11, a co-ordinate bench of ITAT had decided the issue in favour of the Assessee and against the Revenue. Adopting the rule of consistency, the ITAT dismissed the appeal of the Revenue. Having heard learned counsel for the Revenue and having perused the impugned orders of the CIT (A) and the ITAT, the Court is not persuaded that any substantial question of law arises for determination. No substantial question of law arises for determination.

Summary

Issues:
1. Appeal by Revenue against ITAT order for AY 2011-12.
2. Whether Assessee involved in imparting education or engaged in business activities.
3. Exemption under Section 11 (1) of the Income Tax Act.
4. Consistency in ITAT decisions.

Analysis:

1. The appeal before the Delhi High Court stemmed from the Revenue challenging the ITAT order for the Assessment Year 2011-12. The main contention raised was regarding the nature of activities carried out by the Assessee.

2. The core issue revolved around determining whether the Assessee, the Association of Indian Universities, was involved in imparting education or engaged in activities of selling and publishing, which could be classified as business and trade under Section 2 (15) of the Income Tax Act, 1961.

3. The Assessee, being a charitable trust registered under relevant acts, sought exemption under Section 11 (1) of the Act. The Assessing Officer initially denied the exemption, citing non-charitable activities, leading to a substantial amount being added to the Assessee's income. However, the Commissioner of Income Tax (A) reversed this decision, emphasizing the charitable nature of the Assessee's association.

4. Notably, the ITAT's decision was influenced by a previous ruling in favor of the Assessee for AY 2010-11. The ITAT, following the principle of consistency, dismissed the Revenue's appeal based on the precedent set by the earlier decision, highlighting the importance of maintaining uniformity in judgments.

5. After considering the arguments presented by the Revenue and reviewing the orders of the CIT (A) and the ITAT, the High Court concluded that no substantial question of law necessitated further examination. Consequently, the appeal by the Revenue was dismissed, affirming the decision of the ITAT and upholding the exemption granted to the Assessee under Section 11 (1) of the Income Tax Act.