Appeal allowed under section 11 after COVID-19 extension, assessing non-charitable activities.

The appeal, initially barred by 56 days, was filed within the extended time limit granted by the Central Government due to the COVID-19 pandemic. The delay was condoned, and the appeal was admitted for adjudication. The Assessing Officer had denied exemption under section 11 to the assessee society, alleging non-charitable activities and above-normal profits. However, the Ld. CIT(A) allowed the appeal, considering the society's deficit in total receipts and expenditures, capital expenditures for its objectives, and directed verification of depreciation deductions. The Tribunal upheld the decision, affirming the allowance of exemption under section 11 for the assessee society.

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Issues:
1. Extension of time for filing appeal due to COVID-19 outbreak.
2. Denial of exemption under section 11 of the Income-tax Act, 1961.
3. Admissibility of appeal after delay.
4. Allowance of exemption under section 11 for the assessee society.

Extension of Time for Filing Appeal Due to COVID-19 Outbreak:
The appeal filed by the Revenue was initially barred by 56 days. However, the Central Government issued notifications extending time limits for filing appeals due to the COVID-19 pandemic. The appeal, filed on 30.06.2020, was within the extended time limit, and the delay in filing the appeal was condoned. The appeal was admitted for adjudication based on the extended time limits set by the Central Government.

Denial of Exemption under Section 11 of the Income-tax Act, 1961:
The Assessing Officer (AO) denied the benefit of exemption under section 11 to the assessee society, stating that the society was not engaged in charitable activities and had earned above-normal profits. The AO disallowed depreciation claimed and assessed the income accordingly. The AO held that the society's surplus was not applied for charitable purposes but for other expenses and investments that did not align with charitable objectives. The AO concluded that the society was not engaged in charitable activities, thus denying the exemption under section 11.

Admissibility of Appeal After Delay:
The delay in filing the appeal was initially noted, but it was condoned due to the extension of time limits granted by the Central Government in response to the COVID-19 pandemic. The appeal was admitted for adjudication considering the circumstances and the extended time limit provided by the notifications issued during the pandemic.

Allowance of Exemption under Section 11 for the Assessee Society:
The assessee appealed the AO's decision before the Ld. CIT(A), who considered various factors, including the registration of the assessee under section 12AA, past assessments, and expenditure details. The Ld. CIT(A) allowed the appeal, noting that the assessee's total receipts and expenditures showed a deficit rather than a surplus. The Ld. CIT(A) also considered the capital expenditures made by the society for acquiring assets related to its objectives. The Ld. CIT(A) directed the AO to verify the double deduction on depreciation. The Ld. CIT(A) allowed the exemption claimed by the assessee under section 11, considering the overall facts and circumstances of the case. The Tribunal upheld the Ld. CIT(A)'s decision, dismissing the Revenue's appeal and affirming the allowance of exemption under section 11 for the assessee society.

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