TaxTMI 
TaxTMI 
2026 (8) TMI 1647
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.... appeals shall be dealt with in accordance with the findings recorded in the lead appeal. ITA No. 3386/Mum/2026 - Assessment Year 2010-11 2. The assessee is an incorporated Indian company established under Section 26 of the Indian Companies Act, 1913. Initially, the organisation was constituted as an association under the name "Indian Institute of Bankers" and subsequently its name was changed to "Indian Institute of Banking and Finance". The principal objects, as set out in its Memorandum of Association, include encouraging the study of the theory of banking and, for that purpose, instituting a scheme of examinations and awarding certificates, scholarships and prizes; promoting information on banking and allied subjects through lectures, discussions, books, correspondence with public bodies and individuals or otherwise; collecting and circulating statistics and other information relating to the business of banking in India; and acquiring, maintaining, extending and improving a library comprising works on banking, commerce, finance, political economy and allied subjects. 3. In the assessment proceedings, the Assessing Officer, on verification of the Income and Expenditure ....
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.... years. 6. For the earlier assessment years, 1996-97,1997-98 and 1998-99 the Tribunal had decided the issue of exemption u/s 10(22) in favour of the assessee. The Revenue preferred appeals under Section 260A before the Hon'ble Bombay High Court, which were pending. For the subsequent assessment years 1999-2000 to 2001-02, the assessee had applied to the Central Board of Direct Taxes for approval under Section 10(23C)(vi). No communication was received from the Board. However, a letter dated 28.05.2002 issued by the DGIT (Exemption), Calcutta, stated that the activities of the organisation were not solely for educational purposes and that the organisation did not serve the interests of the public at large. Consequently, the application was not considered fit for approval under Section 10(23C)(vi) of the Income-tax Act, 1961. 7. Subsequently, the assessee's application for exemption under Section 10(23C)(vi) for the period beyond Assessment Year 2009-10 was rejected by the Chief Commissioner of Income-tax, Mumbai, by order dated 28.09.2011. Against the said order, the assessee preferred an appeal before the Hon'ble Bombay High Court and is pending. On the basis of the aforesaid....
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....rinciple of mutuality. The ld.AR also submitted that, if the assessee were to be treated as a mutual concern, the computation of income in the assessment order ought to have been made on that basis. The manner in which the assessment had been framed, according to the ld.AR, did not indicate that the Assessing Officer had intended to treat the assessee as a mutual organisation. 12. The ld.AR also submitted that the observation of the learned CIT(A) regarding the decision of the Hon'ble Bombay High Court was factually and legally sustainable, notwithstanding the fact that the Department had challenged the said decision by filing a Special Leave Petition before the Hon'ble Supreme Court. The ld.DR on the other hand, pointed out that the Special Leave Petition filed by the Department had been dismissed on account of low tax effect and not on merits. The ld.DR also referred to the paper book and submitted that the receipts attributable to business activities exceeded 20 per cent of the total receipts. According to the ld.DR, the assessee fell within the ambit of the proviso to Section 2(15), since its objects were in the nature of advancement of any other object of general public uti....
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...., it is not necessary that the object should benefit the whole of mankind or all persons in a country or State; it is sufficient if the intention is to benefit a section of the public as distinguished from specified individuals. The ld.DR, in response, submitted that the assessee serves only a particular section of the population and therefore cannot be regarded as serving the public at large. 16. The ld.AR also relied upon the order of the Hon'ble Bombay High Court in Income-tax Appeal No. 1368 of 2015 dated 28.03.2018 for the assessment year 2008-09, wherein the question considered was whether, on the facts and in the circumstances of the case and in law, the Tribunal was justified in holding that the assessee was a charitable organisation and eligible for exemption under Section 11. The Hon'ble Bombay High Court, while answering the aforesaid question, observed that the fee structure of the Institute for the courses conducted by it was not on the higher side and the Tribunal had also followed the decision of this Court in Samudra Institute of Maritime Studies Trust, reported in 49 taxmann.com 510, to hold that the activity carried on by the assessee was educational in nature ....
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....e activities of the assessee Institute is not in the nature of running a coaching centre. Further, the Hon'ble Bombay High Court, while considering the distinction between Section 10(23C)(vi) and Section 11, has observed that grant or refusal to grant exemption u/s 10(22) or 10 (23) cannot govern the application of section 11 of the Act. In continuation of the observations made by the honourable high court, we may also point out that Section 10(23C)(vi) requires an educational institution to exist solely for educational purposes and not for purposes of profit, whereas the expression "solely" does not occur in Section 11. The interpretation of the term "education" as one of the limbs of "charitable purpose" under Section 2(15) is therefore not necessarily identical to the requirements applicable under Section 10(23C)(vi). In that view of the matter, the grant or rejection of approval under Section 10(23C)(vi) does not, by itself, determine the assessee's eligibility for exemption under Section 11. The fact that the Chief Commissioner of Income-tax had rejected the assessee's application under Section 10(23C)(vi), and that the matter was pending before the Hon'ble High Court, therefo....
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....e above ground raised by the revenue was examined with reference to the facts. The Commissioner (Appeals), NFAC Delhi, has mentioned in his order that one of the grounds raised before him is that the Assessing Officer has denied the exemption under Section 11, and therefore, the interest on tax-free bonds should be considered as exempt under Section 10(15). This ground was raised before the Commissioner (Appeals) as an alternative plea. With reference to this ground, the Commissioner (Appeals) held that once exemption under Section 11 of the Act is allowed, the income of the appellant, including such interest on tax free bonds, is required to be dealt with in accordance with the provisions governing charitable institutions. In view of the finding that the assessee is entitled to exemption under Section 11 of the Act, addition made on account of interest on tax-free bonds is also directed to be deleted as a consequential relief. 24. The above decision of the Commissioner of Income Tax (Appeals) is contrary to the ground raised by the revenue. Nowhere in the order the Commissioner (Appeals) has given a relief accepting the alternative plea of the assessee that the assessee is enti....
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....the allowance of depreciation in respect of assets where the cost of acquisition has been treated as application of income. However, in the present case, the assessee itself has not claimed any depreciation in the Income and Expenditure Account for Assessment Year 2017-18. Consequently, the question of disallowance of depreciation does not arise. The ground raised by the Revenue on this issue is accordingly dismissed. 28. Ground No. 7 relates to the assessee's claim of accumulation under Section 11(2). The Assessing Officer, as well as the learned DR, contended that Form No. 10 furnished by the assessee did not specify any definite or identifiable purpose for accumulation and was merely a repetition of the objects contained in the Memorandum of Association. Accordingly, the claim of accumulation was rejected. Reliance was placed by the Assessing Officer upon the judgment of the Hon'ble Calcutta High Court in the case of Trustees of Singhania Charitable Trust, 199 ITR 819, wherein it was held that where the purpose of accumulation is stated merely in general terms by referring to the charitable objects of the trust, the purpose cannot be regarded as sufficiently specific. The ld.....