2011 (6) TMI 1023 - AT - Income Tax

Trust entitled to deductions under Income Tax Act; ITAT upholds CIT(A) decision citing Chandra Charitable Trust case.

The ITAT upheld the decision of the ld. CIT(A) to allow deduction under section 11 of the Income Tax Act for the appellant trust, based on the precedent ... - Issues involved:The judgment involves issues related to the allowance of deduction under section 11 of the Income Tax Act, specifically focusing on the applicability of the decision in the case of Chandra Charitable Trust 294 ITR 86, the amount of deduction allowed, and the specific provisions under sections 11(1)(d) and 11(1)(a) of the Act.Deduction u/s 11 - Applicability of Chandra Charitable Trust case:The Revenue appealed against the direction of the ld. CIT(A) to allow deduction u/s 11 of the I.T. Act based on the decision of Gujarat High Court in the case of Chandra Charitable Trust 294 ITR 86. The Revenue argued that the decision had not become final and an SLP had been filed against it, further contending that the facts of the case at hand were not identical to that of Chandra Charitable Trust. However, the ITAT, in its order, referenced the decision in the Chandra Charitable Trust case and held that the appellant's case was covered by it. The ITAT confirmed the ld. CIT(A)'s decision to allow the exemption u/s 11, modifying the earlier appellate order accordingly.Amount of deduction allowed u/s 11:The ld. CIT(A) directed to allow deduction u/s 11 of the Income-tax Act on specific amounts, including 12,53,31,138/-, Rs. 11,87,900/- u/s 11(1)(d), and Rs. 1,89,78,382/- u/s 11(1)(a). The ITAT upheld these directions, citing previous appellate orders where the claim of exemption was accepted for the appellant trust.Background and Decision of the Case:The appellant, a trust engaged in religious activities, was initially denied the claim of exemption u/s 11 by the AO on the grounds that it was for private religious purposes and did not benefit the public at large, invoking sections 13(1)(a) & 13(1)(b) of the I.T. Act. The ld. CIT(A) dismissed the appeal, but upon the appellant's submission of appellate orders for previous years where exemption was allowed, the ld. CIT(A) reconsidered the case and allowed the claim of exemption u/s 11. The ITAT, in line with the previous appellate orders, affirmed the ld. CIT(A)'s decision, stating that there was no reason to interfere as the facts remained the same as in previous years.Conclusion:After hearing the parties, the ITAT found no grounds for interference in the ld. CIT(A)'s order, as it followed the Tribunal's previous decision to allow exemption. The appeal filed by the Revenue was dismissed, upholding the allowance of deduction u/s 11 for the appellant trust.