The Tax Publishers2021 TaxPub(DT) 0327 (Mum-Trib)

INCOME TAX ACT, 1961

Section 11

Where Department disallowed assessee's claim of exemption under section 11 on the reasoning that it provides services only to its members and claim of assessee was not factually verified by the departmental authorities, therefore, assessee's claim of exemption under section 11 had to be considered properly having due regard to relevant facts, accordingly, matter was remanded back to AO for fresh adjudication after providing reasonable opportunity of being heard to the assessee.

Charitable trust - Exemption under section 11 - AO concluded that assessee merely was a mutual concern having no charitable object -

Assessee was granted registration under section 12A by Director of Income Tax (E) and claimed exemption under section 11. During assessment proceedings, AO called upon assessee to show cause as to why the assessee should not be treated as a mutual concern not having any charitable object and why proviso to section 2(15) should not apply to assessee. Though, the assessee objected to the proposed disallowance of exemption claimed under section 11, however, AO ultimately concluded that the assessee merely is a mutual concern having no charitable object. Held: If objects on the basis of which assessee was granted registration under section 12A by considering them to be of charitable nature, then, in absence of any change in such objects of the assessee, it is not understood as to how it can lose its identity of a charitable institution in the impugned assessment year and that too, when the registration granted under section 12A was still in vogue. Department disallowed assessee's claim of exemption under section 11 on the reasoning that it provides services only to its members. This claim was not factually verified by departmental authorities. Assessee's claim of exemption under section 11 has to be considered properly having due regard to relevant facts. Therefore, matter was remanded back to AO for fresh adjudication after providing reasonable opportunity of being heard to the assessee.

Relied:Asstt. CIT v. Surat City Gymkhana (2008) 170 Taxman 612 (SC) : 2008 TaxPub(DT) 1745 (SC), DIT (Exemption) v. Gemological Institute of India (2019) 105 Taxmann.com 179 (Bom-HC) : 2019 TaxPub(DT) 3762 (Bom-HC), Confederation of Real Estate Developers Association of India v. Asst. CIT (Exemption) (2020) 119 Taxmann.com 491 (Mum-Trib.) : 2020 TaxPub(DT) 3695 (Mum-Trib), Fragrance and Flavours Association of India v. DDIT (E) (2018) 92 Taxmann.com 325 (Mum-Trib) : 2018 TaxPub(DT) 2111 (Mum-Trib) and ITO v. Chembur Gymkhana (2017) 80 Taxmann.com 354 (Mum-Trib) : 2017 TaxPub(DT) 1032 (Mum-Trib).

REFERRED :

FAVOUR : Matter remanded.

A.Y. : 2013-14



IN THE ITAT, MUMBAI BENCH

SUBSCRIBE TaxPublishers.inSUBSCRIBE FOR FULL CONTENT

TaxPublishers.in

'Kedarnath', 7, Avadh Vihar, Near Nirali Dhani,

Chopasni Road

Jodhpur - 342 008 (Rajasthan) INDIA

Phones : 9785602619 (11 am - 5 pm)

E-Mail : mail@taxpublishers.in / mail.taxpublishers@gmail.com