2021 (10) TMI 101 - AT - Income Tax

Exemption u/s 11 - charitable activity u/s 2(15) - Whether activity of the assessee falls under the clause education and not the last limb of advancement of general public utility ? - claim of accumulation under section 11(2) - HELD THAT - While dealing with the identical issues the Coordinate Bench has been pleased to observe as follows for A.Y. 2014-15 2019 (6) TMI 1637 - ITAT AHMEDABAD - We find the order impugned passed by the Ld. CIT(A) granting relief in regard to the claim made by the assessee under Section 11(2) and Section 11(1)(a) of the Act is just and proper, without any ambiguity so as to warrant interference. Hence, the Revenue s appeal found to be devoid of any merit, hence, dismissed.

Summary

Issues:
1. Interpretation of Section 2(15) of the Income Tax Act, 1961 regarding the nature of the assessee's activities.
2. Allowance of accumulation under Section 11(2) and Section 11(1)(a) of the Act.
3. Impact of Section 13(8) of the Act on exemptions claimed under Section 11 & 12.

Analysis:

1. The appeal involved a dispute regarding the interpretation of Section 2(15) of the Income Tax Act, 1961, specifically whether the assessee's activities fell under the category of 'education' or 'advancement of general public utility.' The Revenue contended that the activities exceeded the limits specified in the proviso (i) and (ii) of Section 2(15), thereby disallowing the exemptions claimed by the assessee. However, the CIT(A) granted relief to the assessee based on previous orders and upheld that the activities were charitable in nature.

2. The assessee, a Charitable Trust engaged in vocational education, claimed deductions for accumulation under Section 11(2) and Section 11(1)(a) of the Act. The Assessing Officer initially denied these deductions, citing the activities as not charitable due to receiving fees. However, the CIT(A) allowed the deductions, considering the charitable purpose of the activities and previous favorable decisions.

3. The Revenue argued that the assessee's excess income over expenditure, coupled with the provisions of Section 13(8) of the Act, rendered the assessee ineligible for exemptions under Section 11 & 12. Nevertheless, the CIT(A) relied on past decisions and granted relief to the assessee, emphasizing consistency in treatment and the absence of changed circumstances. The Tribunal dismissed the Revenue's appeal, affirming the CIT(A)'s order and finding no grounds for interference.

In conclusion, the Tribunal upheld the CIT(A)'s decision, emphasizing consistency in treatment and the charitable nature of the assessee's activities. The appeal by the Revenue was dismissed, and the order granting relief to the assessee in regard to deductions under Section 11(2) and Section 11(1)(a) of the Act was upheld.