2026 (5) TMI 736

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....ct, 1961 ["the Act"] arising from the intimation order dated 31.08.2018 passed u/s 143(1) of the Act pertaining to assessment year 2016-17. 2. First and second grounds of appeal of the Revenue are with respect to action of the ld. CIT(A) in holding that the membership fees received from its own members under principle of mutuality and thus exempt from tax. Heard the parties and perused the material available on records. At the outset, it is observed that this is a legacy issue wherein for the first time in A.Y.2009-10, the subscription received from the members was held as non-taxable by ld. CIT(A) by observing as under: "16. Reference is made to AY 2009-10 wherein the Ld. CIT(A) upheld the applicability of the principle of mutu....

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.... of Income-tax- Exemptions, New Delhi v. National Association of Software and Service Companies, ITA 6521/Del/2013, the Hon'ble Delhi bench of ITAT has upheld the above order of the Ld. CIT(A) holding as below (Page 684 of Paperbook): "10. In so far as the objection of the Id. AO based on the variance in the subscription fee and variance in voting rights is concerned, in ITO vs Venkatesh Premises Cooperative Society Ltd., 402 ITR 670 (Sc), the Hon'ble Apex court held that so long as the membership forms a class, the identity of individual member is irrelevant and any difference in the contributions payable by the members cannot fall foul of the law as sufficient classification exists. In CIT vs Hindustan Sports Club (supra)....

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.... claim the benefit of section 11 of the Act." 4. Thereafter for subsequent years, AO treated the subscription from the members as taxable however, the same was held as non-taxable by ld. CIT(A) and such orders were confirmed by the Tribunal. In AY 2011-12, revenue has challenged the order of Tribunal before the Hon'ble jurisdictional High Court wherein ITA No. 22/2024,the hon'ble high court by referring the observations made by the Tribunal in ITA No. 6521/Del/2013 for Ay 2009-10 has confirmed the order of the Tribunal and held the membership fees received from the members as exempt/non-taxable. Further in subsequent assessment years, the co-ordinate bench of the Tribunal had confirmed the orders of the ld. CIT(A) and held the membership....

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....T(A)videletter dated 25.05.2025,has filed all the relevant interest certificates which were examined by ld. CIT(A) in terms of the power conferred upon him u/s 250(4) of the Act. Since the ld. CIT(A) has invoked the powers conferred by him by the statute and after examining the certificates filed with the respective notifications issued by the central Govt. held the interest income as exempt, under these circumstances, ld. CIT(A)was under no obligation to obtain the report from the AO in particularly when this issue has already been settled by the Hon'ble jurisdictional High Court in the case of CIT Vs. Manish BuildWell Pvt. Ltd.(2011) 16 taxmann.com 27 (Del.) wherein the Hon'ble jurisdictional High Court explained the difference between po....