Case Law Details
Equitas Development Initiatives Trust Vs Deputy Director of Income-tax (Exemption) –III (ITAT Mumbai)
ITAT Mumbai held that activity of running tuition centres can be considered as undertaken for charitable purpose under relief of the poor only if the same is proved with necessary evidence.
Facts- The appellant trust is created by a deed of trust dated 04.02.2008 and as per objects of the trust, the assessee is into mixed objects which consists of education, relief of the poor, medical and also some objects are in the nature of any other objects of general public utility.
The assessee is running the tuition centres for all these assessment years. Before AO, the assessee claimed that its activities comes under the definition of education and relief to the poor as defined u/s. 2(15) of the Act, because it is providing tuition classes to poor students on concessional fees. The AO did not accept explanation furnished by the assessee and according to the AO, the objects of the assessee although is mixed in nature, but activities carried out by the assessee in the impugned assessment years are commercial in nature and thus, cannot be considered as charitable purpose as defined u/s. 2(15) of the Act. The AO further observed that, even assuming for a moment the activity carried out by the assessee comes under charitable purpose, the said activities can be considered as any object of general public utility as defined under last limb of charitable trust u/s. 2(15) of the Act and thus, by considering proviso to section 2(15) of the Act, rejected exemption claimed u/s. 11 & 12 of the Act and assessed total income as AOP and determined income of Rs. 21,13,615/-.
CIT(A) rejected the arguments of the assessee and sustained the addition. Being aggrieved, the present appeal is filed.
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