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2015 (5) TMI 187 - ITAT DELHI

2015 (5) TMI 187 - ITAT DELHI - TMI - Exemption u/s 11 or 12 - whether income earned by the assessee from rendering legal consultancy is to be treated as exempt under section 11 or 12 of the Act - Held that:- assessee is carrying out an educational activity inasmuch as in the process of giving the legal advice to, and carrying out legal work for, the clients, the junior professionals are getting very useful legal education and hands on experience - In the view expressed by Supreme Court in [1975 .....

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refore, profits and gains of this business activity cannot be covered by the scope of section 11(4A) either. Just because the profits generated by a business activity are used also for charitable activities does not, by itself, entitle the business profits to be exempted from tax under section 11(4A). - Decided against Assessee. - ITA No.6501/Del./2012 - Dated:- 27-3-2015 - I C Sudhir And Pramod Kumar JJ For the Appellant : Shri Sanjay Jain, CA For the Respondent : Shri P Dam Kaunajma, Sr DR ORD .....

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the assessee. 2. That the ld. Assessing Officer has erred in not allowing exemption u/s. 11 and 12 of the Income Tax Act, 1961 even though the assessee is a Registered Charitable Trust u/s. 12A of the Income Tax Act, 1961. 3. That the ld. Assessing Officer has erred in not allowing the benefit of accumulation of income u/s. 11(1)(a) of the Income Tax Act, 1961. 4. That the activities of the assessee being in the nature of education, medical relief and relief to the poor are not covered by the pr .....

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essee from rendering legal consultancy is to be treated as exempt under section 11 or 12 of the Act. 4. To adjudicate on this issue only a few material facts are required to be taken note of. The assessee trust was created to assist, and provide donations and charity to, various kind of charitable activities. There is no dispute that the assessee has made contributions to these noble causes. During the course of scrutiny assessment proceedings, however, the Assessing Officer noticed that the ass .....

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f providing medical relief. It was in this backdrop that the exemption under section 11/12 was declined to the assessee, and the excess of income over expenditure was brought to tax. Aggrieved by the stand so taken by the Assessing officer, assessee carried the matter in appeal but without any success. While dismissing the grievances of the assessee, learned CIT(A), inter alia, observed as follows : "In the instant case activity as claimed by appellant in the nature of relief to the poor, e .....

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of medical relief. It is only a donation. So, appellant's contention that its activities are under first three limbs of section 2(15) which is object of general public utility and has been found to be in the nature of trade, commerce or business, as appellant is providing legal and technical services and charging fee from them. In view of the above discussion and after putting reliance on the CBDT Circular, as discussed above, all the grounds No. 1 to 7 are dismissed. In this regard it is a .....

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ssessee is not satisfied and is in further appeal before us. 6. We have heard the rival contentions, perused the material on record and duly considered facts of the case in the light of the applicable legal position. 7. The main thrust of learned counsel's submissions is that the assessee is carrying out an educational activity inasmuch as in the process of giving the legal advice to, and carrying out legal work for, the clients, the junior professionals are getting very useful legal educati .....

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otes the whole course of scholastic instruction which a person has received. The word "education" has not been used in that wide and extended sense, according to which every acquisition of further knowledge constitutes education. According to this wide and extended sense, travelling is education, because as a result of travelling you acquire fresh knowledge. Likewise, if you read newspapers and magazines, see pictures, visit art galleries, museums and zoos, you thereby add to your know .....

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