AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2026 (4) TMI 915
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.... 12.09.2025 2015-16 27.12.2017 12.09.2025 Facts of the Case 3. The assessee is a trust registered under the Bombay Public Trust Act and also registered under section 12A of the Act. The registration had earlier been cancelled by the DIT(E), Mumbai; however, the same was restored by the Hon'ble Tribunal vide order dated 26.02.2014. 4. For the years under consideration, the assessee filed its return of income declaring Nil income after claiming exemption under section 11 of the Act. The case was selected for scrutiny and assessment was completed under section 143(3) of the Act. During the course of assessment proceedings, the Assessing Officer examined the nature of activities carried on by the assessee and the claim of exemption under section 11. 5. The Assessing Officer observed that the assessee had generated substantial receipts from activities such as letting out of hall, royalty from decorators, operation of flour mill and other similar activities. According to the Assessing Officer, such activities were in the nature of trade, commerce or business carried out on a regular and organised basis. 6. Before the Assessing Officer, the assessee submitted that ....
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....the assessee preferred an appeal before the learned CIT(A). During the appellate proceedings, the learned CIT(A) granted multiple opportunities of being heard to the assessee. The assessee reiterated its submissions that it is a charitable trust and that the activities carried out are incidental to its objects. 10. The learned CIT(A), after considering the assessment order, submissions of the assessee and the material on record, recorded that the assessee had earned substantial receipts from activities such as hall rent, decorator charges, flour mill operations and other receipts, which were continuous and systematic in nature. The learned CIT(A) held that the assessee falls within the category of "advancement of any other object of general public utility" and that once such an entity carries on activities in the nature of trade, commerce or business for a consideration, the proviso to section 2(15) is attracted. It was further observed that the activities of the assessee were not incidental but constituted independent commercial operations generating significant revenue. The learned CIT(A) held that the element of profit-making was evident and that the activities lacked the nec....
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....11(1)(a) of the Act. 3. The learned Commissioner of Income Tax (Appeals) erred in confirming the order of the learned AO denying claim of the appellant that income to the extent of Rs. 8,72,500/- is exempt u/s 11(1)(d) of the Act. 4. The learned Commissioner of Income Tax (Appeals) erred in confirming the order of the learned AO denying claim of the appellant that income to the extent of Rs. 23,20,308/- is exempt u/s 11(2) of Act. 5. The learned Commissioner of Income Tax (Appeals) erred in confirming the order of the learned AO disallowing expenses on objects of the appellant of Rs. 11,22,863/-. 6. The learned Commissioner of Income Tax (Appeals) erred in confirming the order of the learned AO charging tax on total income at flat rate of 30 percent. 7. The appellant previously to add alter or amend any of the grounds of appeal prior to or at the time of hearing. 12. During the course of hearing before us, the learned Authorised Representative(AR) reiterated the factual background of the case and submitted that a perusal of the income components clearly demonstrates that the activities characterized by the Assessing Officer as being i....
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....Bench has been affirmed by the Hon'ble Bombay High Court in the case of CIT (Exemptions) v. Bombay Presidency Golf Club Ltd. [106 taxmann.com 58], wherein the Hon'ble High Court upheld the view of the Tribunal and held that where the dominant object of the assessee is charitable and there is no element of trade, commerce or business, the proviso to section 2(15) would not be attracted. 18. The learned AR further placed reliance on the decision of the Co-ordinate Bench of the Tribunal in assessee's own case in ITA Nos. 2252 & 2253/Mum/2017 and ITA No. 727/Mum/2019 for assessment years 2012-13, 2011-12 and 2009-10.The learned AR submitted that in the aforesaid decision, the Co-ordinate Bench had examined an identical issue relating to denial of exemption under section 11 by invoking the proviso to section 2(15) of the Act. It was submitted that the Co-ordinate Bench, after considering the facts and the manner in which the Assessing Officer had proceeded, found that the lower authorities had not properly examined the application of income and had focused only on the source of receipts. The learned AR further submitted that even in the earlier years, including the years which were t....
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....ual matrix. 24. In the present case, we find that the Assessing Officer has proceeded primarily on the basis of the nature of receipts, without examining the true character of the activities in the context of the objects of the trust and without appreciating the application of income. 25. The Assessing Officer has concluded that the assessee is engaged in commercial activities mainly on account of receipts from letting out of halls, royalty and other incidental income. However, from the material placed on record, it is evident that the major source of income of the assessee is rental income derived from immovable property owned by the trust, the said property constitutes property held under trust and is a permitted mode of investment under section 11(5)(x) of the Act and the incidental receipts, such as royalty and other surplus, are either ancillary to the main object or insignificant in comparison to the overall receipts. 26. In our considered view, merely because income is generated from letting out property or allied activities such as flour mill, the same cannot ipso facto be regarded as an activity in the nature of trade, commerce or business. The character of the ac....