TMI Blog2018 (7) TMI 2043X X X X Extracts X X X X X X X X Extracts X X X X ..... character of the institutions. It is not necessary that it should provide something for nothing or for less than it costs or for less than the ordinary price. It is not necessary that the Trust should provide something for nothing or for less than it cause or for less than the ordinary Trust. Accordingly the orders of the authorities below are set aside. Accordingly, hold that the assessee trust should not be visited with denial of exemption. Hence, the orders of the authorities below is set aside and issue decided in favour of the assessee. - ITA No. 511/Mum/2017 - - - Dated:- 30-7-2018 - SHRI R.C. SHARMA, AM AND SHRI SANDEEP GOSAIN, JM For the Appellant : Shri Nishant Thakkar For the Respondent : Shri V. Justin ORDER PER R.C. SHARMA (A.M): This is an appeal filed by the assessee against the order of CIT(A)- 1, Mumbai dated 02/11/2016 for A.Y.2012-13 in the matter of order passed u/s.143(3) of the IT Act. 2. Grievance of the assessee relates to confirming the action of the AO to the effect that proviso to Section 2(15) of the Act is applicable, accordingly declining benefit of exemption u/s.11 of the IT Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mming Bath Boat Club Trust assessee has relied upon the decision of ITAT, Mumbai Bench in the case of Chembur Gymkhana (supra). We find that the co-ordinate bench of ITAT, under similar set of facts has held that in order to invoke First Proviso to section 2(15), it is necessary and incumbent on the part of the AO to give a factual finding that assessee has derived income by engaging itself in trade, business or commercial activity. The relevant portion of the order is extracted below:- Undisputedly, the assessee has been registered as a charitable trust not only with the Charity Commissioner but also under section 12A. Though, the registration granted under section 12A was subsequently cancelled by the DIT(E) under section 12AA(3), however, the Tribunal, while setting aside the order of the DIT(E) restored the registration granted under section 12A. 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 assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... intercourse or athletic sports and cultural and educational activities for its members constitute object of general public utility. Hence, the trust is charitable organisation. The Tribunal further observed, the members of the trust represent a cross section of public at large and it is not for group of private families or private members alone. Hence, the principle of - mutuality will not apply to the assessee's case. With the aforesaid observation, the Tribunal allowed assessee's claim of exemption under section 11. The aforesaid decision of the Tribunal was upheld by the High Court. [Para 7] The Assessing Officer in the assessment order nor has not 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, consistent with the view of the Tribunal and the High Court in assessee's own case it has to be held that the assessee is entitled to exemption under section 11 as a charitable trust. [Para 8] At this stage, it is necessary to deal with the submiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... haritable. The relevant portion of the order is extracted below:- Upon careful consideration I find that the main object of the Trust is to promote the sports and games. The authorities below have drawn adverse inference and invoked the amended provisions of section 2(15) by holding that by engaging into coaching camps and obtaining receipts therefrom, the assessee is engaging into activities of commercial nature. I find that this proposition is not at all sustainable. In the case of Tamil Nadu Cricket Association (Supra) in a case where the assessee is a Cricket Association was receiving income from holding of matches and was receiving sums therefrom was denied exemption on the ground that it was engaged in the activities in the nature of trade or commerce or business. The Hon'ble High Court reversed the order holding that substantial/regular surplus cannot taint receipts as arising from business/commerce. By the volume of receipt one cannot draw inference that the acivity is commercial. 1 find that this case law applies to all fours to the present case. Here also the authorities below have drawn adverse inference on the ground that amount received from the coaching ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for less than the ordinary Trust. Accordingly, in my considered opinion, in the background of the aforesaid discussion and precedent, the orders of the authorities below are set aside. Accordingly, I hold that the assessee trust should not be visited with denial of exemption. Hence, the orders of the authorities below is set aside and issue decided in favour of the assessee. 14. The Hon'ble Bombay High Court in the case of DIT vs Goregaon Sports Club (2012) 347 ITR 338 (Bom) held that providing sports facilities to general public without restriction to any caste, creed, religion or profession is eligible for exemption u/s 11 of Income-tax Act, 1961. 15. In this view of the matter and respectfully following the ratios of the case laws discussed above, we are of the considered view that the assessee is eligible for exemption u/s 11 of the Income-tax Act, 1961. Therefore, we direct the AO to allow exemption u/s 11 of the Act. 16. In the result, appeal filed by the assessee is allowed. 7. The facts and circumstances during the year under consideration are same. Respectfully following the order of the Tribunal in assessee s own case, we do not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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