Section 11 Exemption Issue Restored – AO Failed to Examine Charitable Claim Beyond Mutuality – ITAT Mumbai

Powerloom Development & Export Promotion Council Vs ITO (Exemption) (ITAT Mumbai)

Assessee, a Sec.25 non-profit organisation promoting powerloom industry, claimed exemption u/s 11 which was denied by AO/CIT(A) by applying principle of mutuality and taxing interest income, office rent, prior period income & miscellaneous receipts as non-mutual income. ITAT observed that lower authorities examined issue only from mutuality angle without adjudicating assessee’s alternative claim that such receipts were income from property held under trust eligible for exemption u/s 11.

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