TaxTMI 
TaxTMI 
2017 (5) TMI 295
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....Officer while examining assessee's claim of exemption under section 11 was of the view that though, the assessee had claimed exemption on the plea that it was engaged in charitable activity in the nature of general public utility, however, he noted that in assessment year 2007-08, the assessee was held as mutual concern in the assessment completed. He observed, from the details submitted by the assessee, it is to be found that members and non-members are not treated at par. He observed, assessee is predominantly an association where the members have contributed only for the purpose of their own benefit and for acquiring certain amenities. He opined, in case of a charitable institution people subscribe for charitable object without any expectation in return. The Assessing Officer observed that the facilities of the trust are made available to non-members to a limited extent, however, the non-members were treated differently. He, therefore, was of the view that the conditions imposed under section 13(1) of the Act have been violated as the members / contributors are directly or indirectly benefited. Thus, the Assessing Officer ultimately concluded that the assessee is a mutual undert....
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....g the order of the learned Commissioner (Appeals) submitted, the issue has been decided squarely in favour of the assessee not only by the Hon'ble Jurisdictional High Court but by the decisions of the Tribunal in assessee's own case for the preceding assessment years right from the assessment year 1996-97 to assessment year 2009-10. In support of such contention, the learned Authorised Representative also placed before the Bench the orders passed by the Hon'ble Jurisdictional High Court and the Tribunal in the preceding assessment years. 7. We have considered the submissions of the parties and perused the material available on record in the light of the decisions relied upon. Undisputedly, the assessee has been registered as a charitable trust not only with the Charity Commissioner but also under section 12A of the Act. Though, the registration granted under section 12A, was subsequently cancelled by the DIT(E) under section 12AA(3) of the Act, however, the Tribunal in order dated 29th September 2014, in ITA no.1193/Mum./2012, while setting aside the order of the DIT(E) restored the registration granted under section 12A of the Act. Thus, the grant of registration under se....
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....nterfere with the object of public utility. The Tribunal, while dealing with the allegation of the Department that the assessee is a mutual concern, concluded that the object of the trust of providing for land and building as well as for promotion or management of social. intercourse or athletic sports and cultural and educational activities for its members constitute object of general public utility. Hence, the trust is charitable organisation. The Tribunal further observed, the members of the trust represent a cross section of public at large and it is not for group of private families or private members alone. Hence, the principle of mutuality will not apply to the assessee's case. With the aforesaid observation, the Tribunal allowed assessee's claim of exemption under section 11. The aforesaid decision of the Tribunal was challenged by the Revenue before the Hon'ble Jurisdictional High Court. However, the Hon'ble Jurisdictional High Court while dismissing the appeal of the Revenue upheld the view of the Tribunal. For better appreciation, the observations of the Hon'ble Jurisdictional High Court is reproduced herein below:- "7. In the present case, it is evident fro....
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....s of section 11 were fulfilled in view of the fact that he came to the conclusion that the assessee would be governed by the principle of mutuality and is not a charitable organization. The same finding was affirmed by the Commissioner (Appeals). In the view which we have taken, we have confirmed the finding of the Tribunal that the assessee for the relevant assessment year fulfilled the requirements of section 2(15). The Assessing Officer would, however, have to determine whether the requirements of section 11 of the Income-tax Act, 1961, were duly fulfilled. In order to enable the Assessing Officer to do so, we remand the proceedings back to the Assessing Officer. The questions of law as framed shall stand answered accordingly. The appeal is accordingly disposed of. There shall be no order as to costs." 8. We have also noted that in assessment year 2007-08, 2008-09 and 2009-10, the Tribunal in ITA no.4964/Mum./2011, dated 23rd July 2012, ITA no.2527/Mum./2012, dated 7th August 2013, and ITA no.5915/Mum./2012 dated 12th March 201 respectively, has upheld the decision of the learned Commissioner (Appeals) in allowing assessee's claim of exemption under section 11 of the Act. Neit....