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2017 (8) TMI 849 - AT - Income TaxEligibility to claim u/s. 10(26B) - proof of promoting the interest of the members of the scheduled tribes - Held that:- Section 10(26B) was inserted by the Finance Act, 1980 as provides for exemption from income tax to any body, institution or association wholly financed by the Central or a State Government, or to a statutory corporation, established for promoting the interests of the members of the Scheduled Castes and/or the Scheduled Tribes. A close reading of the Section 10(26B) also makes it clear that the object for which a statutory corporation, or any other body, association or institution is created is the crucial aspect for determining the eligibility for availing benefit u/s. 10(26B). AO and the CIT(A) wrongly assumed that the activities carried on by the assessee-company are not for the benefit of the scheduled tribes inhabiting the Lakshadweep Islands. According to us, the paramount consideration for eligibility u/s. 10(26B) is to examine the primary objective for establishment of assessee whether it is for promoting the interest of the scheduled tribes or not. If the Government undertaking is established for promoting the interest of scheduled tribes, it would be entitled to the benefit of Section 10(26B) of the Act. In the instant case, apart from the object of creation of the assessee company, being for development and upliftment of the scheduled tribes inhabiting the Lakshadweep Islands, it activities are also directly and indirectly, promoting the interest of the members of the scheduled tribes. The assessee which is financed and established by the Government for promoting the interest of the members of the scheduled tribes living in the Lakshadweep Islands, is entitled to the benefit of section 10(26B) of the I.T. Act. - Decided in favour of assessee.
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