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2021 (11) TMI 876 - ITAT AHMEDABADExemption u/s 11 - activity of renting out the hostel facilities to the students - HELD THAT:- There was no change in the aims and objects of the trust. Accordingly in view of the above, we hold that the assessee was entitled to claim exemption under section 11 of the Act with respect to its activity of renting out the hostel facilities to the students being in the nature of education. Once the activity of the assessee has been held as educational in nature, then the proviso to section 2(15) shall not be applicable. The proviso restricts the exemption to the trust if it’s activities falls in the last limb i.e. advancement of any other object of general public utility. In other words, the restrictions imposed under the proviso to section 2(15) of the Act cannot be made applicable in the case on hand as the assessee is engaged in the activity of education. See circular issued by the CBDT bearing no. 11 of 2008 dated 9 December 2008. We also draw support and guidance from the judgement of Hon’ble Mumbai ITAT in case of All India Federation of Tax Practitioners case.[2021 (5) TMI 1002 - ITAT MUMBAI] Whether the income generated by the assessee from renting out the hall can be classified as educational activity in the manner provided under section 2(15) of the Act? - The activity of renting out the hall cannot be categorized as educational activity but the status of the assessee will not change being a charitable organization. It is for the reason that this activity is the ancillary activity which is supporting the assessee to achieve its goals of primary activities. Furthermore, there is no prohibition under the Act that the assessee being a charitable organization cannot carry on the business which is incidental to the attainment of the objective of the trust. Rather subsection (4A) to section 11 of the Act, authorizes the educational institution to carry on the business which is incidental to the attainment of the main objective of the trust. In this connection, we draw support and guidance from the judgement of Hon’ble Delhi High Court in case of DGIT (Exemption) vs. ICAI reported [2013 (7) TMI 205 - DELHI HIGH COURT] Deduction claimed by the assessee being corpus fund under the provisions of section 11(1)(d) - Deduction was denied by the authorities below on the reasoning that the assessee is not engaged in the educational activity and therefore no benefit can be extended under the provisions of section 11(1)(d) of the Act. However, we find that the tribunal has already held that the activity of the assessee is in the nature of educational activity vide paragraph No. 22-23 of this order. For detailed discussion, please refer the relevant paragraph. Accordingly, we hold that the assessee is eligible for deduction under the provisions of section 11(1)(d) of the Act.
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