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2020 (9) TMI 626 - AT - Income TaxExemption u/s 11 - Charitable u/s 2(15) - activities of the assessee trust, viz. holding conventions, exhibitions etc. were to be construed as being in the nature of trade, commerce or business - main objects of the assessee trust after vetting of which it was registered as a ‘charitable trust’ by the DIT(Exemption), Mumbai, u/s 12A, vide his order dated 25.11.1999 - HELD THAT:- As pointed out by the A.R, and rightly so, the term deposits of ₹ 13.65 crores referred to by the A.O were the term deposits accumulated by the assessee trust over a period of 15 years i.e since the year 1999, and therefore, merely on the ground of having such huge term deposits the assessee’s entitlement towards claim of deduction u/s 11 could not have been denied. We are in agreement with the claim of the ld. A.R, that as per clause (iii) of Sec. 11(5) of the Act, deposit of money in any account with a scheduled bank is one of the prescribed form and mode of depositing the money referred to in clause (b) of sub-section (2) to Sec. 11. Accordingly, not being able to persuade ourselves to subscribe to the view taken by the A.O that as the assessee over the years had invested surplus aggregating in term deposits with the banks, it was thus be concluded that it was working with a profit motive, we vacate the said observation. We may herein observe that the narrowing of the definition of “charitable purpose” as contemplated in Sec. 2(15) insofar the same is related to “advancement of any other object of general public utility”, was carried out by the legislature by way of an insertion of a ‘proviso’, vide the Finance Act, 2009 w.e.f 01.04.2009. Assessments in the case of the assessee trust for A.Ys 2010-11 to A.Y 2013-14 were framed u/s 143(3), and its claim for deduction u/s 11 after being tested in the backdrop of the amended definition of “charitable purpose”, and also, the ‘proviso’ that supplemented the said definition, were in both the years found by the revenue to be in order. Revenue while framing the assessment for the aforementioned preceding years had not held the activities of the assessee trust as being in the nature of trade, commerce or business, or those of rendering of any services in relation to any trade, commerce or business. Nothing is either discernible from the records which would reveal that the activities of the assessee trust had witnessed any change during the year in question as in comparison to those for the aforementioned preceding years, nor any contention to the said effect had been advanced by the ld. D.R before us. Accordingly consistent view taken by the revenue in the case of the assessee for the preceding years, we are of a strong conviction that the lower authorities had erred in concluding that as the activities of the assessee trust being in the nature of trade, business or commerce were thus not carried out for a “charitable purpose” within the meaning of Sec. 2(15) of the Act, it was therefore disentitled for claim of deduction u/s 11. As such, we vacate the order of the CIT(A), and therein direct the A.O to allow the assessee’s claim for deduction u/s 11. - Decided in favour of assessee.
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