2016 (7) TMI 521

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....ls together and disposing of the same by this common order. 2. Shri S. Sridhar, the Ld.counsel for the assessee, submitted that the assessee-society is registered under Section 12AA of the Income-tax Act, 1961 (in short 'the Act') as charitable institution. The assessee claimed deduction under Section 11 of the Act in respect of its income generated out of the property held under Trust. According to the Ld. counsel, the assessee has received rental income to the extent of Rs. 33,14,700/- from auditorium. According to the Ld. counsel, the assessee-society is using the auditorium for the object of the society and it was not let out for any commercial purpose. However, the Assessing Officer found that letting out the auditorium is in ....

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....vities other than the objects of the society. In the absence of any such allegations, according to the Ld. counsel, the CIT(Appeals) is not justified in confirming the orders of the Assessing Officer. 4. On the contrary, Shri M. Murugaboopathy, the Ld. Departmental Representative, submitted that the assessee's letting out auditorium and receiving rental income cannot be considered to be charitable activity. Referring to the coaching classes conducted by the assessee, the Ld. D.R. submitted that the assessee was charging heavy fees from medical students for conducting coaching classes, therefore, it is obvious that the assessee was letting out the auditorium on commercial line and there was no traces of objects of the assessee in conducting....

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....g an auditorium and letting out the same, whether that would amount to carrying on trade or commerce? As seen from the objects of the society, maintaining the auditorium is not the object of the society. The main objects of the society are reproduced by the CIT(Appeals) at para 3.4 of the impugned order. Under Section 11 of the Act, the income of the Trust / society derived from property held under trust is exempted from taxation on application. Therefore, for the purpose of exemption, the income has to be necessarily generated from the property held under the trust. It is not in dispute that the auditorium can also be held as property under trust. When the auditorium was held under trust, the income generated out of that auditorium is exem....