The ITAT Ahmedabad considered the eligibility of exemption u/s ...
ITAT Ahmedabad allowed the exemption u/s 11, stating activities like fee collection for statutory purposes are not commercial in nature.
Case Laws Income Tax
May 22, 2024
The ITAT Ahmedabad considered the eligibility of exemption u/s 11 for an assessee engaged in activities like development planning, town planning schemes, and fee collection. The AO argued the assessee's profit motive disqualifies it from claiming benefits u/s 11 & 12. However, the tribunal referenced the Supreme Court's decision in AUDA case, emphasizing that fees collected for statutory activities are not considered trade or business. Activities like housing development by statutory bodies are not commercial in nature. The nature of the service provided is crucial; essential public services like water or sewage cess are not deemed commercial. Non-statutory bodies engaging in trade promotion or business facilitation may not qualify for charitable status. The tribunal allowed the assessee's appeal based on these principles.
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