9911796707
TMI Blog2024 (11) TMI 597X X X X Extracts X X X X X X X X Extracts X X X X ..... ies doing. In order to do various charitable activities, the assessee is also doing small kuri and finance business and rightly spent the amount to achieve the objects mentioned in the byelaws. A.O. as well as the CIT(A) has misconstrued the provisions of sec.2(15) of the Act and denied the exemption claimed u/s.11 of the Act. Conducting of kuri and finance business itself came up for consideration before the case of Bharthashemam [ 2020 (11) TMI 1125 - KERALA HIGH COURT] considered kuri and finance business carried out by the trust and held that the trust is eligible for deduction u/s.11 of the Act since they are doing charitable activities out of the incomes received through kuri and finance business. The assessee is also entitled for exemption u/s.11 of the Act in respect of the incomes earned from the kuri and finance business. Further, all along the department had accepted the claim of the assessee and granted exemption but only for the above mentioned assessment years a different view has been taken which in our opinion is not correct. As decided in Navodaya Gramin Vikas Charitable Trust [ 2023 (9) TMI 256 - ITAT BANGALORE] the money lending business carried out by the trust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ), the present appeal has been filed by the assessee before this Tribunal, raising the following grounds:- 1. The orders of the authorities below in so far as they are against the appellant are opposed to law, equity, weight of evidence, probabilities, facts and circumstances of the case. 2. The learned commissioner of Income Tax (Appeals) NFAC is not justified in upholding the disallowance of the exemption claimed u/s.11 of the Act, on the ground that activities of the appellant is coming under residual entry of sec 2(15) are hit by the provisions of sec 13(8) ws the proviso to section 2(15) of the Act, under the facts and in the circumstances of the appellant's case. 3. The authorities below failed to consider that the matter is Res integra in so far as per the decision of the Jurisdictional High Court in ITA No:36/2020 dated 13.11..2020 of Bharthashemam Vs Principal Commissioner of Income Tax . 4. The learned commissioner of Income Tax (Appeals) NFAC has erred in holding that the Kuri Finance business activity carried on by the appellant would be in the nature of business and therefore, hit by the proviso to section 2(15) of the Act under the facts and in the circumstances o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... viso to section2(15) of the Act, vide which the benefit of exemption to trusts carrying on activities for the advancement of any other object of general public utility was taken away, without appreciating that the benefit of exemption u/s.11 of the Act was made available to the appellant even after the insertion of the proviso to section 2(15) of the Act, and thus the stand adopted by the authorities below by considering the appellant under residual entry of sec.2(15) goes against the principles of consistency under the facts and in the circumstances of the appellant's case. 10. For the above and other grounds that may be urged at the time of hearing of the appeal, your appellant humbly prays that the appeal may be allowed and justice rendered. 6. At the time of hearing, the learned AR brought to our notice that the issue is res integra as per the decision of the jurisdictional High Court in ITA No.36/2020 dated 13.11.2020 in the case of Bharthasheman v. Pr.CIT. The assessee also enclosed the financial statement of the assessee to show that the income received through kuri and finance business were utilized solely for the purpose of charitable activities as mentioned in the bye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e welfare of the trustees and infactthe amounts were spent towards achieving the objects mentioned in the byelaws of the trust. Further, by way of conducting kuri and finance business, the assessee is receiving a small amount and that amounts were utilized by the assessee for conducting various charitable activities. We find that the assessee is not doing the kuri and finance business solely for the purpose of earning income like various other corporate entities doing. In order to do various charitable activities, the assessee is also doing small kuri and finance business and rightly spent the amount to achieve the objects mentioned in the byelaws. Further, the A.O. as well as the ld.CIT(A) has misconstrued the provisions of sec.2(15) of the Act and denied the exemption claimed u/s.11 of the Act. 10. Conducting of kuri and finance business itself came up for consideration before the Jurisdictional High Court in the case of Bharthashemam, cited supra, in which the Hon ble High Court of Kerala had framed the following question of law:- Whether the Tribunal was correct in having denied exemption to the income generated by the assessee, who is registered under Section 12A of the Income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14. We have also perused the order of the Bangalore Bench of the Tribunal, cited supra, in which the facts are that the assessee was running various activities like animator activities, donations, health insurance premiums, santhwana, training, uniform, SHG formation, sahayadhana, insurance premium and scholarship for students in rural areas to make the poor ladies aware of the scheme and to encourage their participation as the principle objects of the trust, for which the trust incurred some expenditure. In this case, the assessee is running micro financing activities which is nothing but a money lending activity, and therefore, the department disallowed the claim of deduction u/s.11 of the Act, but the Tribunal had considered the issue in detail and gave a finding that the proviso to sec.2(15) of the Act shall not be applicable to the present facts of the case and held that the authorities are not justified in holding that the assessee is not engaged any charitable activities. 15. As seen from the above said judgments and the orders, the jurisdictional High Court had already considered kuri and finance business carried out by the trust and held that the trust is eligible for dedu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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