2018 (6) TMI 1708 - AT - Income Tax

ITAT Upholds Decision: Assessee's Activities Deemed Charitable u/s 11 of Income Tax Act.

The ITAT dismissed the Revenue Department's appeal, upholding the Ld. CIT (A)'s decision that the assessee's activities qualify as charitable under ... Exemption u/s 11 - specific services to member as well as non-members by charging fees - HELD THAT:- Rendering specific services to member as well as non-members by charging fees and applicability of exemption u/s 11 of the Act has already been decided by the Hon’ble Delhi High Court [2012 (11) TMI 429 - DELHI HIGH COURT] by holding that the assessee society is entitled to get benefit u/s 11. DR also raised an issue that post amendment to the proviso to Section 2(15) of the Act , the situation has become altogether different from the AY 2009-10 onwards and the activities of the Assessee are liable to be treated as business activities, however, we realized that co-ordinate bench of ITAT at Delhi in the assessee’s own case for the AYs 2008-09 & 2009-10 duly considered and adjudicated the said issue and nothing is brought on record by Ld. DR, contrary to the said judgments and/or filing of any appeal against the same. - Decided against revenue. Issues:1. Whether the assessee's activities are charitable in nature and eligible for exemption u/s 11 of the Income Tax Act, 1961.2. Whether the Revenue Department's appeal against the order of the Ld. CIT (A) has merit.Analysis:Issue 1:The appeal by the Revenue Department challenges the order of the Ld. CIT (A) denying the benefit of Section 11 of the Income Tax Act to the assessee, who claimed to be a charitable company registered under Section 25 of the Companies Act and Section 12AA of the Act. The Revenue Department argued that the assessee was providing specific services to members and non-members, charging fees that should be taxed under 'Profits & Gains of Business & Profession,' thus not qualifying as charitable. However, the Ld. CIT (A) allowed the appeal based on judgments from ITAT and the Hon'ble Delhi High Court in the assessee's favor for previous assessment years. The Ld. AR supported the Ld. CIT (A)'s decision, citing consistency with past judgments and no need for interference.Issue 2:The ITAT Delhi reviewed the orders and relevant judgments, noting that the Hon'ble Delhi High Court had previously ruled in favor of the assessee's entitlement to Section 11 benefits. The ITAT highlighted that the Ld. CIT (A) had already determined that the assessee's case aligned with previous orders for various assessment years and the Hon'ble Delhi High Court's decisions. The ITAT also addressed the Ld. DR's argument regarding the amendment to the proviso to Section 2(15) of the Act, emphasizing that previous ITAT decisions had already considered and adjudicated on this issue for the relevant assessment years. As no new evidence or appeals were presented against these judgments, the ITAT found no grounds for interference with the Ld. CIT (A)'s order, ultimately dismissing the Revenue Department's appeal.In conclusion, the ITAT upheld the Ld. CIT (A)'s decision, emphasizing consistency with past judgments and lack of legal basis for the Revenue Department's appeal. The order was pronounced in open court on 04.06.2018.