TaxTMI 
TaxTMI 
2021 (5) TMI 1002
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....gistration Act, 1860 and Bombay Charitable Trust Act, 1950. Further, the assessee is also registered with the Charity Commissioner, Bombay and has also been granted registration under sections 12A as well as 80G of the Act. In the returns of income filed for the impugned assessment years, the assessee had claimed exemption under section 11 of the Act. In course of assessment proceedings, the assessing officer while verifying the claim of exemption under section 11 of the Act was not convinced with the same. He was of the view that the assessee's activities are mainly of providing benefits to its members. Hence, it has to be treated as a concern governed by the principles of mutuality. Having held so, he proceeded to treat the interest income earned on deposits as well as a part of the donation received as taxable, since, they were received from non-member; hence, outside the purview of mutuality. In the process, the Assessing Officer also disallowed assessee's claim of exemption under section 11 of the Act. The assessee contested the aforesaid decision of assessing officer by filing appeals before learned Commissioner of Income-tax (Appeals). However, by the impugned order,....
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....cepted by the department He submitted, the objects of the trust have remained same and the bona fide of its activities have never been doubted. Therefore, there is no valid reasons for holding that assessee does not fulfill the conditions of charitable purpose as per section 2(15) of the Act and disallowing the exemption claimed under section 11 of the Act. He submitted, only because, of amendment to section 2(15) of the Act by inserting a Proviso, the assessee would not lose its status as a charitable organization. He submitted, since the assessee is governed by a special law which overrides the general principles of law. He submitted, both the assessing officer and learned Commissioner of Income-tax (Appeals) have erred in not appreciating that principle of mutuality is not applicable to the assessee as it is a charitable trust and its income has to be computed as per sections 11, 12 and 13 of the Act. Refuting the claim of the departmental authorities that the assessee has not brought any evidence to demonstrate that it has rendered any direct services to the public at large, learned counsel submitted, number of documentary evidences was submitted before the departmental authori....
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....e [2012] 23 taxmann.com 444/347 ITR 321 (Mad.) (HC) 10. Radhasoami Satsang v. CIT [1992] 60 Taxman 248/193 ITR 321 (SC) 11. Tata Education and Development Trust v. Asstt. CIT [2020] 117 taxmann.com 946/184 ITD 234 (Mum. - Trib.) 12. Union of India v. India Fisheries (P.) Ltd. [1965] 57 ITR 331 (SC) 13. DIT (Exemptions) v. Chembur Gymkhana [2013] 33 taxmann.com 526/[2012] 346 ITR 86 (Bom.) (HC) 14. DIT (Exemption) v. Goregaon Sports Club [2012] 21 taxmann.com 479/207; Taxman 240/347 ITR 338 (Bom.) (HC) 15. CIT (Exemption) v. India Habitat Centre [2020] 114 taxmann.com 84/269 Taxman 401/424 ITR 325 (Delhi) (HC) 16. DIT (Exemption) v. Gemological Institute of India [2019] 105 taxmann.com 179/263 Taxman 348 (Bom.) (HC) SLP of revenue is dismissed on the ground of low tax effect in DIT (Exemption) v. Gemological Institute of India [2019] 105 taxmann.com 180/263 Taxman 348 (SC) 17. CIT v. Sun Engineering Works [1992] 64 Taxman 442/198 ITR 297 (SC) 18. ADIT (Exemption) v. Jeevan Vidya Mission [2015] 64 taxmann.com 62/155 ITD 1150 (Mum.) 19. CIT v. United Way of Baroda [2020] 121 taxmann.com ....
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....e Societies Registration Act, 1860, copy of which has been placed at page 38 of the paper book. Additionally, the assessee has also been registered as a trust under the Bombay Public Trust Act, 1950 in the year, 1997, a copy of such registration certificate has been placed at page 39 of the paper book. Thus, the aforesaid documentary evidences clearly establish that the assessee is not a company registered under section 25 of the Indian Companies Act as erroneously observed by the Assessing Officer. Therefore, prima facie, the Assessing Officer has not appreciated the facts correctly. Though, it can be said that registration granted under section 12A r.w.s. 12AA of the Act does not automatically entitle a trust/institution for availing exemption under section 11 of the Act, as such exemption is subject to sections 11, 12 & 13 of the Act, however, some sanctity has to be attached to the registration granted under section 12A of the Act. More so, if such registration granted to assessee still continues. This pre-supposes that the department continues to treat the assessee as an organization existing for charitable purpose. 8. In the facts of the present case, undisputedly, registr....
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....ity. However, the aforesaid allegation of the departmental authorities is without any basis. It is seen from material on record that assessee is continuously engaged in disseminating knowledge on commercial law, tax laws by holding seminars, conferences, workshops, etc. which are not confined to its members only. Anyone interested in the subject including professionals are free to participate and access the seminars, workshops, conference, etc. to gain knowledge in the field of taxation and accountancy. It is also a fact on record that the assessee has conducted more than hundred webinars on tax laws and accountancy during the lockdown period arising out of the pandemic which was freely accessible to all. Further, the material on record shows that the assessee regularly conducts moot court competition amongst law students at All India level. By holding such competition, assessee immensely helps in building the skill set of the students in the field of law in becoming legal professionals. Further, the assessee also maintains a free website accessible to all. All publications and periodicals are available in the website which can download free of cost. All these facts and evidence on....
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....e main object of the assessee. Whether to carry out the object of general public utility or earn profit by way of trade, commerce and business. In the facts of the present case, a reading of the objects of the assessee contained in memorandum of association vis-a-vis. the activities carried on by the assessee would certainly demonstrate that the dominant purpose of the assessee is to carry out its object of general public utility and not to earn profit by engaging itself in any trade, commerce or business. Therefore, while carrying out its charitable objects, if, the assessee incidentally earns some profit from any commercial activity to supplement its main object, certainly, it cannot be said that the assessee has engaged itself in trade, commerce and business so as to attract the proviso to section 2(15) of the Act. 13. In the facts of the present case, it is very much clear that the assessee has carried out activities in furtherance of its objects. In the process, the assessee might have earned some income by way of subscriptions, sale of publications, etc. However, this income earning activities of the assessee cannot be treated to be in the nature of trade, commerce or busi....