Tribunal recognizes assessee as charitable institution, dismisses Revenue's objection

The Tribunal dismissed the Cross Objection of the Revenue, recognizing the assessee as a charitable institution eligible for exemption under sections 11 and 12. The Tribunal directed the Assessing Officer to re-examine all issues in light of the charitable status determination under section 2(15) of the Act. The assessee's income was to be determined accordingly, rendering the issues raised in the cross objections irrelevant. The Tribunal emphasized that consequential matters should be addressed by the Assessing Officer in compliance with its order.

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Issues:
1. Appeal against order of ld.CIT(A) for Asstt.Year 2012-13
2. Cross objections filed by Revenue against the impugned order
3. Applicability of proviso to s.2(15) for charitable institution status

Analysis:

1. The assessee filed an appeal against the order of ld.CIT(A) for the Asstt.Year 2012-13. The Revenue also filed cross objections against the impugned order. The Tribunal decided both appeals and cross appeals of the parties for the Asstt.Year 2013-14. However, the cross objection of the Revenue filed in the Asstt.Year 2012-13 remained unadjudicated as it was not brought to the notice of the Tribunal.

2. The Revenue raised grounds in the cross objections related to the violation of provisions of Section 11(5) and Section 13(1)(d) of the Act by the assessee. The Tribunal found that the assessee is to be treated as a charitable institution eligible for exemption under sections 11 and 12. The Tribunal upheld the claim of the assessee that its activities were for charitable purposes. The Hon'ble Jurisdictional High Court also supported this view, stating that the assessee's activities were not commercial in nature.

3. The core issue in controversy was the applicability of the proviso to s.2(15) for determining the charitable status of the institution. The Tribunal found that the activities carried out by the assessee were for charitable purposes and fell within the definition of 'charitable purpose' under s.2(15) of the Act. The Tribunal endorsed that the activities of the assessee were of charitable nature and required re-examination of all other issues raised in the appeals of both the assessee and the Revenue.

4. The Tribunal directed the Assessing Officer to re-examine all other issues in the light of the conclusion drawn in favor of the assessee regarding the applicability of section 2(15) of the Act. The status of the assessee was changed to that of a charitable institution, and its income was to be determined accordingly. Therefore, the issues raised in the cross objections were deemed irrelevant, and no specific finding was required in the present proceedings. The Tribunal dismissed the Cross Objection of the Revenue.

5. In conclusion, the Tribunal dismissed the Cross Objection of the Revenue, stating that all consequential issues should be examined by the Assessing Officer while giving effect to the Tribunal's order. The assessee was recognized as a charitable institution eligible for exemption under sections 11 and 12, and its income was to be determined accordingly.

(Order pronounced on 9th January, 2019 at Ahmedabad)

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