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2022 (11) TMI 6 - AT - Income TaxExemption u/s. 11 and 12 - assessee society is a case of general public utilities and, therefore, no longer enjoys charitable status - AO assessed the assessee as normal AOP - contention of the assessee did not find any favour with the AO who was of the firm belief that as per the amended provision of section 2 (15) - HELD THAT - As mentioned elsewhere the impugned additions/ disallowances have been decided by this Tribunal in favour of the assessee in earlier assessment years. In so far as the applicability of section 2(15) of the Act is concerned this Tribunal in for A.Y.2009-10 2019 (10) TMI 123 - ITAT DELHI as decided AR supports the view taken by the Ld. CIT(A) on the aspect of principle of mutuality and the entitlement of the assessee to claim the benefit of Section 11 of the Act. We, therefore, uphold the same and find the grounds of appeal as devoid of merits. Quarrel relating to the decision of Global Development Activities expenses is concerned we find that the CIT(A) upheld the partial disallowance reducing the disallowance on the grounds that donations given by Government of India ought not to be disallowed - we decline to interfere with the findings of the CIT(A) the appeal filed by the revenue is accordingly dismissed.
Issues:
1. Whether the assessee qualifies as a general public utility body under section 2(15) of the Act. 2. Treatment of surplus income generated by the assessee. 3. Allowability of expenditure on global trade development activities. Analysis: 1. The appeal by the revenue challenges the order of the CIT(A) for A.Y. 2011-12 regarding the assessee's classification as a general public utility body under section 2(15) of the Act. The AO contended that the assessee's society falls under general public utilities, thus losing charitable status. The AO denied exemption under sections 11 and 12 of the Act, assessing the assessee as a normal AOP. However, the Tribunal referred to previous judgments in A.Y. 2009-10, 2010-11, and 2012-13 where it was held that the assessee is entitled to claim benefits under section 11 of the Act due to the principle of mutuality. The Tribunal upheld the CIT(A)'s decision, dismissing the revenue's appeal. 2. The AO observed that the surplus income generated by the assessee, amounting to Rs. 134,681,039, was invested in FDR and Savings Bank accounts. Despite the revenue's contention, the Tribunal found in favor of the assessee in previous assessment years. The Tribunal upheld the CIT(A)'s decision to reduce the disallowance of global trade development activities expenses from Rs. 41,345,917 to Rs. 20,808,291. The Tribunal held that donations from the Government of India should not be disallowed. The Tribunal declined to interfere with the CIT(A)'s findings, dismissing the revenue's appeal. 3. The assessee, a premier trade body in the IT-BPO industries, was established in 1988 under the Indian Societies Act 1860. It aims to drive growth in the technology and service market and maintain India's leadership position. The AO raised concerns about the nature of the assessee's income sources and expenditure on global trade development activities. Despite the AO's observations, the Tribunal relied on past judgments to support the assessee's position. The Tribunal emphasized the importance of donations from the Government of India and upheld the CIT(A)'s decision to reduce the disallowance of expenses. The Tribunal dismissed the revenue's appeal, affirming the CIT(A)'s findings. In conclusion, the Tribunal's judgment in favor of the assessee was based on past decisions supporting the assessee's entitlement to benefits under section 11 of the Act and the principle of mutuality. The Tribunal also upheld the CIT(A)'s decision regarding the treatment of surplus income and the allowability of expenditure on global trade development activities, emphasizing the significance of donations from the Government of India.
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