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2016 (1) TMI 1024 - AT - Income TaxEligibility for exemption under S.11 - CIT(A) allowed the claim - Held that:- As decided in assessee's own case for earlier years there being no dispute to the fact that dominant object of assessee is charitable in nature, proviso to section 2(15) cannot be applied to deny exemption to assessee u/s 11 of the Act. In our view, AO without examining the issue in proper perspective has abruptly concluded that assessee is not entitled to exemption u/s 11 of the Act only because proviso to section 2(15) was introduced w.e.f. 01/04/09. In our view, proviso to section 2(15) of the Act will not apply automatically to every trust or institution irrespective of the fact, whether the dominant object of the trust or institution is charitable purpose or earning profit. When in the present case assessee is registered as charitable institution and there is no change in the aims and objects of assessee in the impugned AY and the activities of assessee over the years remains the same, the proviso to section 2(15) cannot be applied to assessee to deny exemption u/s 11 of the Act. In view of the aforesaid, we do not find any merit in the submissions of the ld. DR so as to disturb the finding of the ld. CIT(A) on this issue - Decided in favour of assessee Disallowance u/s 40A(3) - Held that:- Once the claim of the assessee for exemption under S.11 has been accepted, the disallowance made by the Assessing Officer under S.40A(3) has no legs to stand, and the ground of the assessee before the learned CIT(A) becomes infructuous. - Decided in favour of assessee
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