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TMI Blog2017 (11) TMI 1986X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 11 of the Income-tax Act, 1961 (for short "the Act") as Charitable Institution is allowable or not. 3. The assessee a trust is registered with the Charity Commissioner, Mumbai, as well as with Director of Income Tax (Exemption), Mumbai, under section 12A of the Act. For the assessment year under dispute, the assessee filed its return of income on 30th September 2011, claiming exemption under section 11 of the Act. In the course of assessment proceedings, the Assessing Officer after verifying the claim of the assessee in the context of facts and material available before him took a view that the assessee being a mutual concern, only the income received from members would not be taxable by applying the principle of mutuality. He observe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able 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 c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the committee's discretion to restrict the membership does not interfere with the object of public utility. The Tribunal, while dealing with the allegation of the Department that the assessee is a mutual concern, concluded that the object of the trust of providing for land and building as well as for promotion or management of social. 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' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... blic as distinguished from a benefit to an individual or a group of individuals would be a charitable purpose Gujarat Maritime Board case (supra). As the Tribunal noted, the membership of the society is drawn from a diverse cross-section of the society. The assessee does not exist only for an individual or a group of individuals. On these facts, the primary issue which has been decided by the Tribunal must be answered by holding that the assessee for the assessment year 1996-97 fulfilled the definition of the expression "charitable organization" in section 2(15). The first question of law would, accordingly, have to be answered in the affirmative. 8. Section 11(1)(a) of the Act provides, inter alia, that income derived from property held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have also noted that in assessment year 2007-08, 2008-09 and 2009-10, the Tribunal in ITA no.4964/Mum./ 2011, dated 23rd July 2012, ITA no.2527/Mum./2012, dated 7th August 2013, and ITA no.5915/Mum./2012 dated 12th March 201 respectively, has upheld the decision 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 v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er by treating the assessee as a mutual concern, has brought to tax the receipt from non-members only. For invoking the first proviso to section 2(15), it is necessary and incumbent on the part of the Assessing Officer to give a factual finding that the assessee has derived income by engaging itself in trade, business or commercial activity. In the absence of any such finding the first proviso to section 2(15) cannot be attracted. More so, when the 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 M ..... X X X X Extracts X X X X X X X X Extracts X X X X
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