Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2022 (10) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (10) TMI 79 - AT - Income TaxDenial of exemption u/s 11 r.w.s. 2 (15) - CIT(A) held that the assessee earns revenue from activities, which are in the nature of trade, commerce or business and therefore proviso to section 2(15) of the Act is applicable to the assessee’s case - HELD THAT:- In the present case, there is no dispute regarding the object of the assessee club, as noted above from the Memorandum of Association. Only basis on which exemption under section 11 of the Act has been denied is that assessee has undertaken certain activities, different from its object, which are in nature of trade, commerce or business. Further, in the present case, assessee has also agreed to the fact that certain income has been earned by it from non-sporting activities. All the details pertaining to same are not available on record. It is also not evident that whether the receipts which are held to be eligible for exemption under section 11 of the Act, in assessee’s own case for preceding assessment years, are similar to the receipts earned by the assessee in the assessment years under consideration and whether those receipts were also from non-sporting activities. It is no doubt true that the receipts from non-sporting activities earned by the assessee are covered under the proviso to section 2(15) of the Act and the same are also not covered under its objects as mentioned in the Memorandum of Association. Therefore, in view of the above, we deem it appropriate to remand the issue of determination of income eligible for exemption under section 11 of the Act to the file of AO for de novo adjudication. We also direct the assessee to provide the clear breakup of the revenue which it has earned in relation to sporting activities and the revenue which has no relation whatsoever to the sporting activities undertaken at assessee’s premises. Since, in preceding assessment years, assessee was held to be eligible for exemption under section 11, therefore, the aforesaid adjudication be made in light of decisions in the case of the assessee, after determining which receipts are similar in nature to the receipts held to be eligible for exemption under section 11 of the Act in preceding years and relief be granted to the assessee to that extent. With the above directions, we remand the issue to the file of AO for consideration afresh. Needless to mention that no order shall be passed without affording opportunity of hearing to the assessee. Accordingly, grounds no. 1 and 2 raised in assessee’s appeal are allowed for statistical purpose. Carry forward and set off of deficit of earlier years - We find that Hon'ble Supreme Court in CIT v/s Subros Educational Society, [2018 (4) TMI 1622 - SC ORDER] held that any excess expenditure incurred by the trust / charitable institution in earlier assessment year would be allowed to be set–off against income of the subsequent years by invoking the provisions of section 11 of the Act. Since, the issue of exemption under section 11 of the Act has been remanded to the AO for de novo adjudication, therefore, we direct the AO to allow carry forward and set off of deficit of earlier years after determination of income eligible for exemption under section 11 of the Act. Accordingly, ground No. 3 raised in assessee’s appeal is allowed for statistical purpose.
|