Issue before court:
- Whether the activities of the assessee fall within the purview of the proviso to section 2(15) of Income Tax Act, 1961 while activities of the assessee fall within the purview of ‘imparting education’ and ‘research’ in Banking Technology which is very much within the first three limbs of section 2(15) of the Income Tax Act, 1961.
- Whether assessee is ineligible for the claim of exemption u/s. 11 even though the activities of the society are charitable in nature and are in line with the objectives of the society having got registered u/s. 12AA of the I.T. Act, 1961.
Brief facts:
- Assessee was established by the Reserve Bank of India with the main object of providing Banking Technology Services to the Banks apart from carrying out research in the field of Banking Technology.
- For the AY 2011-12, the assessee filed the return of income declaring ‘NIL’ income after claiming exemption under the provisions of Section 11 of the Income Tax Act, 1961.
- AO denied exemption u/s 11 held that the aims and objects of the society are mostly in the nature of advancement of any other objects of General Public Utility Services and for this purpose.
- AO noted that the total receipts received by the Appellant society on account of rendering such services were Rs.48,06,14,013/-. Hence, he was of the opinion that the proviso to section 2 (15) is clearly applicable to the case of assessee.
- On appeal CIT (A) partly allowed appeal of the assessee. He admitted view of the AO that assessee was engaged partly in education and partly in activities aimed at advancement of any other object general public utility and held that the proviso to Section 2(15) of the Act is applicable and confirmed the additions made by the Assessing Officer.
Contention of the revenue:
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