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2022 (8) TMI 348 - AT - Income TaxExemption u/s 11 - Charitable activity u/s 2(15) - Scope of principle of consistency - As per CIT-A assessee is not carrying on activity for charitable purposes instead its purpose involves carrying on activity in the nature of business and is thus covered by proviso to section 2(15) read with section 13(8) - HELD THAT:- Where there are no material changes in the facts and circumstances of the case and same nature of activities have been carried on in the past years and in the year under consideration and there is no change in law, a view once taken by the Revenue authorities in the past years should not ordinarily be disturbed or varied in the year under consideration. In other words, the principle of consistency has been well enshrined in tax jurisprudence which should be respected and adhered to by the authorities. Therefore, the contention of the assessee regarding consistency in approach by the Revenue authorities need to be appropriately addressed and for that reasons, we believe that the matter deserve to be said set-aside to the file of the Assessing office for examination a fresh and to record a specific finding in this regard as to why he believes that a position accepted by the Revenue in the earlier years should not be followed and the reasons for arriving at such a finding. Objects fall under the category of medical relief, relief of the poor and yoga and doesn't fall under the category of "advancement of any other object of general public utility" - If we look at the definition of the charitable purpose as defined in section 2(15) of the Act, it defines "charitable purpose" to include relief of the poor, education, yoga, medical relief, preservation of environment (including watersheds, forests and wildlife) and preservation of monuments or places or objects of artistic or historic interest, and the advancement of any other object of general public utility. In our understanding, prima facie reading of the aforesaid provisions require to identify objects which are falling under individual category of "relief to the poor", "education", "yoga", "medical relief", etc and in cases, where it is falling under more than one category, then apply the dominant purpose test to identify a suitable category rather than clubbing all the objects as falling under the category of "general public utility" as the language used is "any other object of general public utility" and therefore, the significance and import of "any other object" need to be appreciated and which means that an object which doesn't fall specifically under any of the earlier categories. In this regard, we find that firstly, the Assessing officer has summarily decided this issue and thereafter, the ld. CIT(A) has merely confirmed the findings of the Assessing officer without addressing the matter and the contentions so raised by the assessee and for this reason as well, the matter deserve to be set-aside. In this regard, it is also noted that a fresh registration has been granted by the ld. PCIT vide order dated 15.10.2021 u/s. 12AA of the Act, for A.Y. 2022-23 to A.Y. 2026-2027 with the objects of relief of the poor, education, medical relief and yoga to the assessee society. The AO is therefore directed to take the same into consideration and decide the matter afresh and record his specific finding and the basis of arriving at such finding. Application of dominant purpose test - Where there are activities which are undertaken by the assessee society free of any charges, one needs to examine what the nature of these activities and how the same have been carried on by the assessee society and what are the cost implications thereof. The reflection of such activities in the income and expenditure will be more on the expense side rather than on the revenue side which apparently has escaped the attention of the Assessing officer. For this reason as well, we believe that it would be in fitment of things that the matter is set-aside to the file of the Assessing officer who shall examine the same afresh as per law taking into consideration aforesaid discussions after providing reasonable opportunity to the assessee. Needless to say, the Assessing officer is free to call for any information/documentation and the assessee is also at liberty to raise its contentions and file any information/documentation before the Assessing officer. Appeal of the assessee is allowed for statistical purposes.
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