Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2016 (8) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (8) TMI 466 - AT - Income TaxRevision u/s 263 - Eligibility of exemption u/s.11 - Held that:- Income from earned from use of the club facilities by non members for purpose of playing cards and use of permit room, catering etc., was held to be hit by the proviso to Sec.2(15) of the Act. In the present case, we have already seen that use of club facility by non members is prohibited by the Rules of the Assessee. The use by outsiders of the facilities of the club is in connection with promotion of sports which is a charitable purpose and which is well within the main objects of the Assessee. Therefore the decision relied upon by the learned DR before us is not of any assistance to the case of the revenue. The principle of res judicata is no doubt not applicable in income tax proceedings, but the admitted position in the past assessments have not been shown by the CIT in the impugned order as unsustainable. The whole approach of the CIT in the impugned order has been on the basis of decision in the case of Bangalore Club (2013 (1) TMI 343 - SUPREME COURT ). As we have already explained, that decision is applicable only in respect of income earned by the Assessee from investments. We have already held that the income in respect of which principle of mutuality is not applicable, would nevertheless be entitled to exemption u/s.11 of the Act, subject to satisfaction of other conditions laid down in that section. We have also held that predominant purpose for which the Assessee exists is for charitable purpose and that the proviso to Sec.2(15) of the Act would not be applicable in the facts and circumstances of the present case, which we have discussed in the earlier paragraphs. Thus we hold that the order passed by the AO u/s.143(3) of the Act dated 25.3.2014 for AY 011-12, which was revised by the CIT u/s.263 of the Act by the impugned order was not erroneous and prejudicial to the interest of the revenue and therefore the exercise of jurisdiction by the CIT u/s.263 of the Act is held to be not sustainable. Consequently, the order u/s.263 of the Act is hereby quashed and the appeal of the Assessee is allowed.
|