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| The Tax Publishers2019 TaxPub(DT) 1909 (Bang-Trib) INCOME TAX ACT, 1961
Section 2(15), Proviso Section 11
Only activity undertaken by assessee to take a hall on rent and realize huge amount towards stall space charges could not be said to be charitable particularly in the absence of its correlation with stated main objects to promote training and diffusion of knowledge relating to standards in manufacture of Tools and gauges, therefore, denial of exemption under section 11 was justified in view of proviso to section 2(15).
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Charitable trust - Exemption under section 11 - Assessee not carrying out activities stated in its object clause -
Assessee was an association registered under section 12A. Its main object was stated to promote training and diffusion of knowledge relating to standards in the manufacture of Tools and gauges to improve the standards or the connected trade therewith or with allied industries and to impart relevant and appropriate training to all those engaged in manufacture of tools and gauges. Assessee claimed exemption under section 11. AO noticed that assessee had taken a hall on rent and was earning huge amount of income on account of Stall Space Charges. Neither assessee was in receipt of any amount for carrying out activities as per its objects nor any expenditure is incurred for carrying out the said activities, therefore, AO held that assessee was not eligible for exemption under section 11.Held: If actual activities are not found to be charitable, exemption under section 11 is not allowable although registration under section 12A was granted on the basis of stated objects. Only activity undertaken by assessee to take a hall on rent and realize huge amount towards stall space charges could not be said to be charitable particularly in the absence of its correlation with stated main objects to promote training and diffusion of knowledge relating to standards in manufacture of tools and gauges, therefore, denial of exemption under section 11 was justified in view of proviso to section 2(15).
Distinguished:DIT(E) v. Shree Nashik Panchvati Panjrapole (2017) 397 ITR 501 (Bombay) : 2017 TaxPub(DT) 1508 (Bom-HC), DIT v. Women's India Trust (2015) 379 ITR 506 (Bombay) : 2015 TaxPub(DT) 2094 (Bom-HC), India Trade Promotion Organization v. DGIT(E) (2015) 371 ITR 333 (Delhi) : 2015 TaxPub(DT) 0623 (Del-HC)., Indian Chamber of Commerce v. ITO(E) (2014) 52 Taxmann.com 52 (Kol-Trib) : 2015 TaxPub(DT) 0326 (Kol-Trib) and Society of Indian Automobile Manufacturers v. ITO (E) (2016) 159 ITD 659 (Del-Trib) : 2016 TaxPub(DT) 3298 (Del-Trib).
REFERRED :
FAVOUR : Against the assessee.
A.Y. : 2012-13
IN THE ITAT, BANGALORE BENCH
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