Assessee-Society's Income Exceeds 85% for Tax Exemption: Court Upholds ITAT Decision

The court confirmed that the Assessee-Society's income application for the relevant year exceeded 85%, meeting the requirement of Section 11(1) of the Income Tax Act, 1961. Consequently, the Assessee was not denied exemption, and the court upheld the ITAT's order from 30th May, 2016. The appeal was dismissed, affirming the ITAT's decision.

---

---

Issues: Application of income exceeding 85% for Assessment Year 2012-13 under Section 11(1) of the Income Tax Act, 1961.

In this judgment, the court dealt with the issue of whether the application of income by the Assessee-Society for the Assessment Year 2012-13 exceeded 85% as required by Section 11(1) of the Income Tax Act, 1961. The Respondent's counsel presented a statement indicating that the total application of revenues of the Assessee-Society for the relevant year was 86.13% of its income, excluding expenditure on the Statue of Maharaja Surajmal. The Respondent argued that since the application of income was above 85%, the Assessee should not be denied exemption. The Senior Standing Counsel for the Revenue, representing the Appellant, acknowledged that the application of income exceeded 85%, as per Section 11(1) of the Income Tax Act, thus negating the need to deny the Assessee exemption based on this criterion.

The court noted that the Senior Standing Counsel for the Revenue confirmed that the application of income by the Assessee-Society for the relevant year was indeed more than 85%, in compliance with Section 11(1) of the Income Tax Act, 1961. Consequently, the court determined that there was no basis to deny the Assessee exemption as the threshold requirement was met. As a result, the court found that the question framed earlier was no longer necessary to be addressed, and the impugned order dated 30th May, 2016, issued by the ITAT, was upheld. Therefore, the court dismissed the appeal, affirming the maintenance of the ITAT's order.

---