2014 (1) TMI 1437 - AT - Income Tax

Exemption of income of society u/s 12(23BBA) of the Act Nature was not of charitable or public religious trust Held that - The decision in Sukhmani Society for Citizen Services Vs. Commissioner of Income Tax-I, Jalandhar 2014 (1) TMI 70 - ITAT AMRITSAR followed the assessee is claiming the exemption of income under Section 10(23BBA) of the Act - the society is formed for administrating integrated services under one roof to the public being provided by various departments of Punjab Government registered as per law for the time being in force and some of these departments such as Punjab Urban Development Authority/Bathinda Development Authority/Improvement Trust are charitable institutions registered for charitable purpose thus, income of the society is exempt under Section 10(23BBA) of the Ac - the assessee-society is formed under the State Act for providing services under one roof to the public pertaining to all the Government Departments and not for the purpose of administrating any charitable or public religious trust - the assessee-society is not performing charitable work for the society or general public Decided against Assessee. Denial of exemption u/s 11,12 and 10(23C)(iv) of the Act Non-filing of application within prescribed time Held that - The assessee has failed to fulfill the necessary requirement for claiming exemption under Section 10(23C)(iv) or 12AA of the Act - The assessee has also filed an application for condonation of delay to the Chairman of Central Board of Direct Taxes but no decision has been taken till the pendency of appeal thus, the First Appellate Authority has rightly denied the exemption to the assessee claimed under Section 11, 12 or 10(23C)(iv) of the Act Decided against Assessee.

Summary

Issues Involved:
The judgment involves issues related to the exemption of income under various sections of the Income Tax Act, 1961, specifically focusing on the applicability of Section 12(23BBA), Section 11, Section 12(23C)(iv), and Section 10(23BBA) to a society providing services under a State Act. The judgment also addresses the denial of exemption based on technical grounds of non-filing of applications within the prescribed time and the authority's discretion in granting such exemptions.

Analysis:

Issue 1: Exemption under Section 12(23BBA)
The assessee claimed exemption under Section 12(23BBA) of the Income Tax Act, stating that the society was formed for administering integrated services under one roof to the public, provided by various government departments. However, the First Appellate Authority rejected this claim, stating that the society was not formed for charitable purposes but to provide services pertaining to all government departments. The Tribunal upheld this decision, citing a similar case precedent where services provided for a fee were not considered charitable. The appeal on this ground was dismissed.

Issue 2: Exemption under Sections 11, 12, and 10(23C)(iv)
The assessee also sought exemption under Sections 11, 12, and 10(23C)(iv) of the Act. The First Appellate Authority rejected this claim due to non-filing of applications within the prescribed time. The Tribunal agreed with this decision, noting that the assessee failed to fulfill necessary requirements for claiming exemption. The Authority granted liberty to the assessee to seek condonation of delay from the Central Board of Direct Taxes. As no decision had been made on the delay condonation application, the Tribunal upheld the denial of exemption on technical grounds. The appeals on this issue were dismissed.

Conclusion:
The Tribunal found no merit in the appeals filed by the assessee, as the issues had been previously decided against the assessee in a similar case. The Tribunal upheld the decisions of the First Appellate Authority regarding the denial of exemptions under various sections of the Income Tax Act due to technical grounds and the nature of services provided by the society. Consequently, all four appeals were dismissed by the Tribunal on 28th October 2013.