Case Law Details
Amateur Riders’ Club Vs ACIT (ITAT Mumbai)
Conclusion: Once the cancellation of registration had been set aside and registration granted under section 12A had been restored by the Tribunal, CIT(Appeals)’s decision for disallowance of exemption under section 11 became redundant, hence, had to be set aside.
Held: Assessee had come into existence in the year 1974 and was also granted registration under section 12A by recognizing it as a charitable institution. Till assessment year 2008–09, assessee’s claim of exemption under section 11 had been allowed by AO. However, in the impugned assessment year, AO disallowed assessee’s claim of exemption under section 11 on the reasoning that some of the income credited to the Income & Expenditure Account was earned from trading/commercial activities, hence, assessee did not qualify the test of charitable purpose as per section 2(15). Therefore, AO denying assessee’s claim of exemption under section 11 had computed the income of the assessee on commercial principles. It was held that Tribunal set aside the order of DIT (Exemp.) and restored the registration granted under section 12A. Tribunal while deciding the issue had categorically held that nothing had been brought on record to show or to prove that the activities carried out by the assessee were in violation of its objects. Thus, once the cancellation of registration had been set aside and registration granted under section 12A had been restored by the Tribunal, CIT (Appeals)’s decision for disallowance of exemption under section 11 became redundant, hence, had to be set aside. Accordingly, assessee’s claim of exemption under section 11 was allowable.
FULL TEXT OF THE ITAT JUDGEMENT
The aforesaid appeals relating to the same assessee consist of a set of cross appeals and an appeal by the assessee challenging two separate orders dated 15th October 2012 for the assessment year 2009–10 and dated 14th October 2015 for the assessment year 2011– 12, passed by the learned Commissioner of Income Tax (Appeals)–1, Mumbai.
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