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2021 (11) TMI 850 - AT - Income TaxExemption u/s 11 - claim denied relying on Principle of mutuality - AO considering the activities of the appellant trust as that of a "mutual association" - HELD THAT:- Authorities below have proceeded on the misconception that the assessee trust has claimed tax exemption on the basis of mutuality principle alone. Learned CIT(A) has rather summarily dismissed the contention of the assessee with respect of exemption under section 11 by the virtue of being a charitable institution, and simply observed that “all the case laws relied upon by the AR are distinguishable”. In our considered view quite clearly the object of the appellant trust is to promote education in the field of science of medicine and the profit on sale of books/journals is incidental thereto. In this view of the matter, proviso to Section 2(15) will have no application in the present case. It may be borne in mind that proviso to Section 2(15) comes into play only in respect of “any other object of general utility” and not in respect of relief to poor, education, medical relief etc. As long as object of the institution is charitable, as in our considered view, in this case, exemption cannot be declined merely on the ground that the assessee has received consideration for sale of training material or journal etc. incidental to furtherance of it’s objective of imparting education. Thus we uphold the plea of the assessee. The Assessing Officer is, accordingly, directed to allow exemption under section 11 in respect of income of the assessee.
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