The ITAT Bangalore considered whether an organization engaged in ...

Microfinancing Entity Denied Tax Exemption Due to Profit Motive and Lack of Charitable Activities Benefiting Low-Income Groups.

May 22, 2024

Case Laws Income Tax AT

The ITAT Bangalore considered whether an organization engaged in microfinancing activities qualified for exemption u/s 11 as a charitable entity or if its activities were commercial in nature. The tribunal emphasized that if an organization's primary activity is trade or business, it must not have a dominant profit motive and should not use charity as a cover for commercial activities. The tribunal noted that charging exorbitant interest rates akin to commercial banks indicated a profit-driven motive, making it ineligible for exemption. The organization's activities did not align with benefiting low-income groups as required for charitable status. The tribunal ruled in favor of the revenue authority, denying the organization's claim for exemption u/s 11.

View Source

← Previous Next →

The ITAT Bangalore considered whether an organization engaged in ...

Microfinancing Entity Denied Tax Exemption Due to Profit Motive and Lack of Charitable Activities Benefiting Low-Income Groups.

May 22, 2024

Case Laws Income Tax AT

You may also like:

The Appellate Tribunal considered whether the assessee, a trust registered u/s 12AA, qualified for exemption u/s 11 as a charitable entity. The AO argued the trust's...

Non-profit organization registered u/s 12AA of Income Tax Act, 1961 - alleged violation of Finance Act and Service Tax Rules - applicability of mega exemption...

Deduction u/s 10(23C) – activities of the Board for educational purposes - profit motive - huge profits and surplus income - benefit of exemption denied - AT

Exemption u/s.10(23)(vi) - The assessee-trust does not have profit motive, the small profit generated while carrying out charitable activities, does not mean that...

Charitable activities or not - GST on the amounts received in the form of Donation / Grants from various entities including Central Government and State Government - the...

Withdrawal of exemption granted u/s 10(23C)(iv) - DGIT(E) erroneously drew a distinction between corpus and non-corpus donations made by it to HNF - Hamdard’s is not...

The CBDT has issued a circular which addresses conditions under which income from specific funds, trusts, institutions, universities, educational, or medical...

Exemption u/s 11 - Profit motive - commercial activities as hit by the proviso to Sec. 2(15) - The majority of rent received by the assessee include rental from marriage...

Exemption u/s 11 - Grant of registration u/s 12AA - The provisions of section 11 (1)(c) comes into operation only once registration is granted u/s 12A of the Act and...

Entitlement for exemption u/s 10(23C)(vi) – Exemption u/s 11 – Deposits and donations added – Nature of the Institution – Educational OR profit motive - exemption allowed - AT

The HC quashed the order denying renewal of tax exemption u/s 80G to the petitioner-Trust. It held that the Trust's arrangement with doctors to use its premises for...

Exemption u/s 11 - On lifting the veil, it is clear as daylight that the modus operandi adopted by the Assessee Institutions and Trusts are with the twin objectives of...

The appellant trust claimed to be formed for public charitable activities and registered under the Rajasthan Public Trust Act 1959, regularly filing its income tax...

Exemption u/s 11 - Charitable activity u/s 2(15) - Commercial activity - Citing past decisions favorable to the trust under similar assessments, the Tribunal reiterated...

Exemption from tax under Section 115-O - Tax on distributed profit / Dividend Tax - Once it is held that the amount distributed or paid by Petitioner by way of dividend...

Quick Updates: