9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (9) TMI 1092 - AT - Income TaxExemption 11 - grant of registration under section 12AA rejected - charitable activity u/s 2(15) - per DIT assessee is only running hostel, which could not be construed as running an educational institution - HELD THAT - As decided in SHREE AHMEDABAD LOHANA VIDYARTHI BHAVAN 2018 (7) TMI 1084 - ITAT AHMEDABAD running a hostel is akin to a running educational institution which falls within the provision of section 2(15) of the Act - this activity is to be considered per se charitable as contemplated in section 2(15) of the Act. Therefore, the assessee is entitled for the registration under section 12AA - we reverse order of the ld.DIT(Exemption) and allow the application of the assessee for grant of registration under section 12AA - DIT is directed to issue registration certificate in favour of the assessee.
Issues Involved:
1. Rejection of the application for grant of registration under section 12AA of the Income Tax Act, 1961. 2. Denial of exemption claimed under sections 11 and 12 of the Income Tax Act. 3. Set-off and carry forward of earlier years' deficit. 4. Allowance of depreciation. Detailed Analysis: Issue 1: Rejection of the application for grant of registration under section 12AA of the Income Tax Act, 1961 The assessee-trust filed an application for registration under section 12AA, which was rejected by the DIT(Exemptions) on the grounds that the trust was primarily running a hostel, which could not be construed as running an educational institution. The DIT(Exemptions) concluded that the hostel was a business activity and not charitable since the educational activities were transferred to Indus University. The Tribunal, however, found that running a hostel is akin to running an educational institution, as it plays an essential role in the education and training of students. The Tribunal referenced several decisions, including those of the ITAT and various High Courts, which supported the view that hostel facilities are integral to educational activities. Consequently, the Tribunal reversed the order of the DIT(Exemptions) and directed the issuance of the registration certificate under section 12AA. Issue 2: Denial of exemption claimed under sections 11 and 12 of the Income Tax Act The AO denied the exemption under sections 11 and 12 based on the premise that the assessee was not engaged in charitable activities. The Tribunal, having allowed the registration under section 12AA, held that the assessee is entitled to claim exemptions under sections 11 and 12. The AO was directed to re-determine the taxable income of the assessee, giving the benefit of these sections. Issue 3: Set-off and carry forward of earlier years' deficit The assessee contended that the CIT(A) erred in not allowing the set-off and carry forward of earlier years' deficit under the head "Income from Business and Profession." The Tribunal did not provide a detailed discussion on this issue but implied that the AO should re-evaluate this aspect while re-determining the income, considering the benefits under sections 11 and 12. Issue 4: Allowance of depreciation The assessee argued that the CIT(A) did not properly allow the claim of depreciation. The Tribunal directed the AO to re-assess the income, which includes considering the claim for depreciation, in light of the exemptions under sections 11 and 12. Conclusion: The Tribunal allowed the appeal of the assessee for the grant of registration under section 12AA and directed the issuance of the registration certificate. Consequently, the AO was instructed to re-determine the income of the assessee, giving the benefit of sections 11 and 12, and to re-evaluate the issues related to the set-off of earlier years' deficit and allowance of depreciation. The appeal was allowed for statistical purposes, and the orders of the CIT(A) and AO were set aside.
|
