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2023 (7) TMI 404 - AT - Income TaxExemption u/s 11 / 12 - claim denied as activities were fees based and the activities were not charitable in nature - assessee is registered u/s 12AA of the Income Tax Act. Its main activity was to render services to the members in relation to the trade, commerce or business for fees / subscription from members - AO held that the activities of the assessee would fall under last limb of Sec. 2(15) i.e., advancement of object of general public utility and therefore, the proviso therein would apply to the case of the assessee - HELD THAT:- We find that the activities of the assessee are fees based activities. The objects of the assessee would fall under last limb i.e., advancement of objects of any other general public utility. We concur with the rival submissions that the cited case of Ahmedabad Urban Development Authority [2022 (10) TMI 948 - SUPREME COURT] as held noted that the conclusions arrived at by way of this judgment, neither precludes any of the assessees (whether statutory, or non-statutory) advancing objects of general public utility, from claiming exemption, nor the taxing authorities from denying exemption, in the future, if the receipts of the relevant year exceed the quantitative limit. The assessing authorities must on a yearly basis, scrutinize the record to discern whether the nature of the assessee's activities amount to "trade, commerce or business" based on its receipts and income (i.e., whether the amounts charged are on cost basis, or significantly higher). If it is found that they are in the nature of "trade, commerce or business", then it must be examined whether the quantified limit (as amended from time to time) in proviso to section 2(15), has been breached, thus disentitling them to exemption. Therefore, the case of the assessee has to be analyzed at the threshold of above adjudication of Hon’ble Supreme Court. For the said purpose, we set aside the impugned order and restore the assessment back to the file of Ld. AO for adjudication de novo in the light of above judgment. The assessee is directed to substantiate its stand. The appeal stand allowed for statistical purposes.
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