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2017 (5) TMI 295 - AT - Income TaxDenial of exemption under section 11 - AO treating the assessee as a mutual concern - proof of charitable purposes - Held that:- Neither the Assessing Officer in the assessment order nor the learned Departmental Representative at the time of hearing has brought any material to demonstrate that there is any change in the object of the trust in the impugned assessment year as compared to earlier assessment years, wherein, the issue has been decided in favour of the assessee. That being the case, in our view, consistent with the view of the Tribunal and the Hon'ble Jurisdictional High Court in assessee’s own case it has to be held that the assessee is entitled to exemption under section 11 of the Act as a charitable trust. For invoking the first proviso to section 2(15), it is necessary and incumbent on the part of the Assessing Officer to give a factual finding that the assessee has derived income by engaging itself in trade, business or commercial activity. In the absence of any such finding the first proviso to section 2(15) cannot be attracted. More so, when the Tribunal and the Hon'ble Jurisdictional High Court in the preceding assessment years have held that the objects of the assessee qualify the object of general public utility, hence, is existing for charitable purpose as per section 2(15) of the Act. As far as the decision in the case of Navi Mumbai Merchants Gymkhana (2014 (5) TMI 1115 - ITAT MUMBAI ) relied upon the by learned Departmental Representative, on a careful reading of the said order of the Tribunal, we have noticed that in the said case, though, the decision of the present assessee was cited, however, the bench after examining the facts has expressed that facts in both cases are distinguishable as in case of Navi Mumbai Merchants Gymkhana (supra), the Assessing Officer has held that the assessee derives income from trading and business and commercial activity as per first proviso to section 2(15) and further he has also given factual finding that entry into the club for membership is restricted to a group of individuals only. Thus, in case of Navi Mumbai Merchants Gymkhana when the bench itself has expressed that the facts are distinguishable from the facts of the present assessee, the decision rendered therein cannot be made applicable to the assessee. In view of the aforesaid, we hold that the learned Commissioner (Appeals) was justified in allowing assessee’s claim of exemption under section 11 of the Act. - Decided in favour of assessee.
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