Case Law Details
ITO Vs Satvichar Darshan (ITAT Mumbai)
Introduction: The case of ITO vs Satvichar Darshan, heard by the Mumbai ITAT, revolves around the denial of exemption under section 11 of the Income Tax Act, 1961, based on the income generated from the sale and subscription of journals. The appeal challenges the decision of the Commissioner of Income Tax (Appeals) and emphasizes the charitable nature of the trust’s activities.
Detailed Analysis:
1. Background: Satvichar Darshan, a trust registered under section 12A of the Income Tax Act, filed its return of income for the assessment year 2015-16, claiming exemption under section 11. However, the Assessing Officer denied the exemption, considering the income from the sale and subscription of journals as commercial activity.
2. Assessing Officer’s Observation: The Assessing Officer observed that a significant portion of the trust’s income was derived from the sale and subscription of journals, constituting 63% of its total receipts. This led the AO to conclude that the trust’s activities did not align with its charitable objects, as defined under section 2(15) of the Act.
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