2015 (1) TMI 1437 - AT - Income Tax

Tribunal grants appeal, restores tax exemption under Income Tax Act.

The Cotton Textiles Export Promotion Council Engineering Centre Versus The ITO (Exemption) 1 (1), Mumbai

The Tribunal allowed the appeal challenging the denial of exemption under section 11 of the Income Tax Act, 1961. The appellant's registration under ... Exemption u/s.11 - assessee claims that the activities carried on by it do not fall within the definition of the term ‘charitable purpose’ u/s. 2(15) - Registration u/s 12A - HELD THAT:- We find that the Tribunal in [2014 (5) TMI 733 - ITAT MUMBAI ] has set aside the order of the DIT (Exemption) and restored the registration to the assessee granted u/s. 12A of the Act. Since the registration has been restored by the Tribunal, we do not find any reason why exemption should not be allowed to the assessee. We, set aside the findings of the Ld. CIT(A) and direct the AO to allow the exemption to the assessee. Appeal filed by the assessee is allowed. Issues:Challenge to correctness of CIT(A) order denying exemption u/s.11 of IT Act, 1961 and falling outside definition of 'charitable purpose' u/s. 2(15).Analysis:1. Challenge to CIT(A) Order:The appellant challenged the correctness of the order of the Ld. CIT(A)-1, Mumbai dated 15.10.2012 for the assessment year 2009-10. The main grievance was regarding the denial of exemption u/s.11 of the IT Act, 1961 by the Assessing Officer. Additionally, the appellant claimed that the activities carried out did not meet the definition of 'charitable purpose' as per section 2(15) of the IT Act, 1961.2. Settlement in Favor of Assessee:The Ld. Counsel for the assessee highlighted that the issue had been settled in favor of the assessee by a previous decision of the Tribunal in the assessee's own case under ITA No. 325/M/2012. It was pointed out that the Tribunal had set aside the withdrawal of certificate u/s. 12A of the Act, which had led to the denial of exemption by the Ld. CIT(A). The Counsel argued that with the restoration of registration u/s. 12A by the Tribunal, there was no justification to deny exemption u/s. 11 & 12 of the Act to the assessee.3. Decision and Direction:Upon careful consideration of the assessment order and the CIT(A) order, the Tribunal noted the previous decision in ITA No. 325/M/2012 where the registration u/s. 12A was restored to the assessee. Consequently, the Tribunal found no valid reason to withhold exemption from the assessee. Therefore, the Tribunal set aside the CIT(A)'s findings and directed the Assessing Officer to allow the exemption to the assessee.4. Conclusion:As a result of the above analysis and considerations, the appeal filed by the assessee challenging the denial of exemption u/s.11 of the IT Act, 1961 was allowed by the Tribunal. The order pronouncement took place during the hearing on 28th January 2015, with the Tribunal ruling in favor of the assessee and directing the Assessing Officer to grant the exemption as per the provisions of the Act.