2018 (1) TMI 1757 - AT - Income Tax

Tribunal Upholds Tax Exemption for Christian Society Under Section 11, Citing Precedent and Lack of New Evidence

ADIT (E), Trust Circle-II, New Delhi Versus Indian Evangelical Team

ADIT (E), Trust Circle-II, New Delhi Versus Indian Evangelical Team - TMI The appeal before the Appellate Tribunal concerned the denial of exemption under section 11 of the Income Tax Act, 1961 to the assessee, a society involved in the promotion of religious activities of the Christian community. The key issues presented and considered in the judgment are as follows:**Issues Presented and Considered:**1. Whether the assessee is entitled to exemption under section 11 of the Income Tax Act, 1961 despite being involved in the promotion of religious activities of a specific community, i.e., Christianity.2. Whether the assessee trust qualifies as a religious trust and is exempt from the provisions of section 13(1)(b) of the Income Tax Act, 1961.**Issue-Wise Detailed Analysis:****Issue 1: Exemption under section 11**The Assessing Officer had previously denied the exemption to the assessee in several assessment years based on the violation of section 13(1)(b). However, the CIT(A) allowed the appeal in the present assessment year, 2011-12. The Revenue contended that the CIT(A) erred in allowing the exemption, arguing that the assessee's activities were not covered under section 13(1)(b). In response, the assessee's representative highlighted that the Tribunal had consistently ruled in favor of the assessee in previous years. The Tribunal referred to its earlier decision in the case of ADIT (E) Vs. Indian Evangelical Team, where it upheld the assessee's claim for exemption under section 11 based on past precedents. The Tribunal noted that the Revenue failed to present any new material to challenge the previous findings, leading to the dismissal of the Revenue's appeal.**Issue 2: Religious Trust Status**The second issue revolved around whether the assessee trust qualified as a religious trust exempt from section 13(1)(b) of the Income Tax Act, 1961. The CIT(A) had held that the assessee trust was indeed a religious trust and therefore not subject to the provisions of section 13(1)(b). The Revenue argued that the CIT(A) failed to consider the religious nature of the activities undertaken by the assessee. However, the Tribunal, relying on its previous decisions and the lack of new evidence presented by the Revenue, upheld the CIT(A)'s decision and dismissed the Revenue's appeal.**Significant Holdings:**The Tribunal's significant holdings include:- Upholding the CIT(A)'s decision to allow the assessee's exemption under section 11 based on past precedents and lack of new evidence presented by the Revenue.- Affirming the status of the assessee trust as a religious trust exempt from section 13(1)(b) of the Income Tax Act, 1961, due to the consistent rulings in favor of the assessee in previous years.In conclusion, the Tribunal dismissed the appeal of the Revenue, maintaining the exemption granted to the assessee under section 11 for the assessment year 2011-12. The judgment emphasized the importance of consistency in decisions and the need for presenting new evidence to challenge established precedents.