Case Law Details
ITO Vs Pransukhlal Mafatlal Hindu (ITAT Mumbai)
ITAT held that providing sports facilities to general public without restriction to any caste, creed, religion or profession is squarely comes within the definition of charitable purpose as defined u/s 2(15) of the Income-tax Act, 1961 and hence, the assessee is eligible for exemption u/s 11 of the Act. In this case, on perusal of the facts, it is abundantly clear that the assessee is running its activities in accordance with its main object and continued to provide services to its members by collecting nominal fee. We further observe that the assessee has deficits from its core activity of promoting swimming for all the years. The assessee’s collections from its members is less than the amount spent for its objects. But for income from investments, the assessee is always incurring deficit for all the years. Therefore, we are of the considered view that there is no merit in the findings of the AO that the assessee is carrying out its activities on commercial lines with an intention to earn profit. Accordingly, assessee was not hit by proviso to section 2(15) and, therefore, assessee was entitled for exemption under section 11.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
The present appeal filed by the revenue is directed against the order passed by the CIT(A)-1, Mumbai dated 20.11.2018, which in turn arises from the order passed by the A.O under Sec. 143(3) of the Income Tax Act,1961 (for short „Act‟), dated 29.03.2016 for A.Y. 201314. The revenue has assailed the impugned order on the following grounds of appeal before us:
“1. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A), Mumbai was right in directing the AO to grant exemption u/s. 11 of the I.T. Act ignoring the detailed reasoning given by the AO.
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