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TMI Blog2012 (8) TMI 611X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 were fulfilled - matter remanded back to the Assessing Officer - 5568 of 2010 - - - Dated:- 13-2-2012 - CHANDRACHUD D. Y. DR., SANKLECHA M. S., JJ. JUDGMENT This appeal by the Revenue arises out of an order of the Income-tax Appellate Tribunal dated August 24, 2009, for the assessment year 1996-97. Though three questions of law have been framed in the appeal by the Revenue, the following substantial questions of law arise in this appeal : "(1) Whether, in the facts and in the circumstances of the case and in law, the Tribunal was right in holding that the assessee performs a charitable purpose within the meaning of section 2(15) of the Income-tax Act, 1961 ? and (2) In the event that the answer to the first question is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or cultural and educational activities for its members." In the light of these objects, the Assessing Officer held that the dominant object of the assessee is to provide amenities and facilities to the members of the club. Consequently, the assessee was held to be a mutual organization. The income of the assessee was computed at Rs. 13.64 lakhs. In appeal, the Commissioner (Appeals) held that the promotion of sports is a charitable activity, but in order to avail of the exemption under section 11, the promotion of such a charitable object should be directed by an association or trust towards the general public and not towards itself. The Commissioner (Appeals) held that all the activities of the assessee are con- trolled by its members ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judgment of the Madras High Court in CIT v. OotacamundGymkhanaClub [1977] 110 ITR 392 (Mad). The activities of the assessee, the Tribunal held, are to encourage or promote and to advance games, sports, athletic activities and cultural activities which are of a general public utility. Activities engaged in for the benefit of a section of the public at large were held to meet the requirement of section 2(15). The Tribunal held that the club has a variety of members drawn from a diverse cross-section of the public at large and is not meant for a group or a private family. This was held to meet the test spelt out by the Andhra Pradesh High Court in the case of CIT v. AndhraPradeshRidingClub [1987] 168 ITR 393 (AP) since it was open to every mem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) : "From the said decisions it emerges that the said expression is of the widest connotation. The word 'general' in the said expression means pertaining to a whole class. Therefore, advancement of any object of benefit to the public or a section of the public as distinguished from benefit to an individual or a group of individuals would be a charitable purpose (CIT v. Ahmedabad Rana Caste Association [1983] 140 ITR 1 (SC) ; [1982]2SCC542). The said expression would prima facie include all objects which promote the welfare of the general public. It cannot be said that a purpose would cease to be charitable even if public welfare is intended to be served. If the primary purpose and the predominant object are to promote the welfare of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the assessee provides service to its members does not detract from the position that it advances a general public utility. The advancement of any object of benefit to the public or a section of the public as distinguished from a benefit to an individual or a group of individuals would be a charitable purpose (CITv.GujaratMaritimeBoard [2007] 295 ITR 561 (SC) ; [2007] 14 SCC 704). As the Tribunal noted, the membership of the society is drawn from a diverse cross-section of the society. The assessee does not exist only for an individual or a group of individuals. On these facts, the primary issue which has been decided by the Tribunal must be answered by holding that the assessee for the assessment year 1996-97 fulfilled the definition of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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