TMI Blog2017 (5) TMI 295X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal and the Hon'ble Jurisdictional High Court in the preceding assessment years have held that the objects of the assessee qualify the object of general public utility, hence, is existing for charitable purpose as per section 2(15) of the Act. As far as the decision in the case of Navi Mumbai Merchants Gymkhana (2014 (5) TMI 1115 - ITAT MUMBAI ) relied upon the by learned Departmental Representative, on a careful reading of the said order of the Tribunal, we have noticed that in the said case, though, the decision of the present assessee was cited, however, the bench after examining the facts has expressed that facts in both cases are distinguishable as in case of Navi Mumbai Merchants Gymkhana (supra), the Assessing Officer has held that the assessee derives income from trading and business and commercial activity as per first proviso to section 2(15) and further he has also given factual finding that entry into the club for membership is restricted to a group of individuals only. Thus, in case of Navi Mumbai Merchants Gymkhana when the bench itself has expressed that the facts are distinguishable from the facts of the present assessee, the decision rendered therein cann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fited. Thus, the Assessing Officer ultimately concluded that the assessee is a mutual undertaking and, therefore, the principle of mutuality would apply. He opined, the assessee is more in the nature of a members club, hence, is assessable in respect of profit derived from affording its facilities to non members. Accordingly, he proceeded to tax the income received from non members at the hands of the assessee while disallowing assessee s claim of exemption under section 11. In this process, he brought to tax the income earned from canteen, coaching, guest entrance fee, interest, etc., insofar as it relates to non members. As a result, the assessment was completed determining the total income at ₹ 1,35,09,292. Assessee challenged the assessment so made by filing an appeal before the learned Commissioner (Appeals). 4. The learned Commissioner (Appeals) taking into consideration the fact that the issue was decided by the Tribunal in assessee s own case for assessment year 1996 97, 1997 98, 1998 99, 1999 2000, 2000 01 and 2009 10 and further the order of the Tribunal for assessment year 1996 97 was upheld by the Hon'ble Jurisdictional High Court, concluded that the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... restored the registration granted under section 12A of the Act. Thus, the grant of registration under section 12A to the assessee pre supposes that the objects of the assessee are for charitable purpose. In other words, the assessee is a charitable trust. The Assessing Officer at the time of completion of assessment has not pointed out any change in the object of the assessee trust. As it appears, relying upon the assessment order passed in case of assessee for the assessment year 2007 08, the Assessing Officer concluded that the assessee is mutual concern, as it does not treat the members and non members at par. He has also stated that since it extends benefit to the persons specified under section 13(1)(c) of the Act, the conditions of the said provisions have been violated, hence, the assessee is not eligible for exemption under section 11 of the Act. Thus, in sum and substance, the Assessing Officer has denied assessee s claim of exemption under section 11 by treating it as a mutual concern of the members. However, as noted by us, this is not the first time the Revenue has treated the assessee as a mutual concern while denying claim of exemption under section 11. The dispute ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9;ble Jurisdictional High Court is reproduced herein below: 7. In the present case, it is evident from the material before the Tribunal that the assessee under its memorandum as amended established that the aims and objects are to provide for general public utility, grounds and buildings, convenient, desirable or necessary for games and sports both indoor and outdoor and to promote, manage or assist in the promotion or management of all forms of social intercourse of athletic sports, pastimes and/or cultural and educational activities for its members. There is a finding of fact that the assessee is providing sports facilities as a part of its activities consisting of badminton, table tennis, billiards, cricket and skating among others. During the assessment year, the assessee had expended an amount of nearly ₹ 50 lakhs on constructing a swimming pool. The fact that the assessee provides service to its members does not detract from the position that it advances a general public utility. The advancement of any object of benefit to the public or a section of the public as distinguished from a benefit to an individual or a group of individuals would be a charitable purpose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the learned Commissioner (Appeals) in allowing assessee s claim of exemption under section 11 of the Act. Neither the Assessing Officer in the assessment order nor the learned Departmental Representative at the time of hearing has brought any material to demonstrate that there is any change in the object of the trust in the impugned assessment year as compared to earlier assessment years, wherein, the issue has been decided in favour of the assessee. That being the case, in our view, consistent with the view of the Tribunal and the Hon'ble Jurisdictional High Court in assessee s own case it has to be held that the assessee is entitled to exemption under section 11 of the Act as a charitable trust. 9. At this stage, it is necessary to deal with the submissions of the learned Departmental Representative that in view of the first proviso to section 2(15), as it existed in the statute book at the relevant time, the assessee cannot be considered to be existing for charitable purpose. We must observe that the Assessing Officer in the assessment order, has not recorded any factual finding that the assessee has derived income by engaging itself in any trade, business or commerci ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
