INCOME TAX ACT, 1961

Section 11

Charitable trust - Exemption under section 11 - Applicability of proviso to section 2(15) - Fee collected by assessee being incidental to main object of advancement of any other object of general public utility

Assessee, Gujarat Maritime Board was constituted under provision of Gujarat Martime Board, 1981 and established under section 3 of the said act for administtering, controlling and managing minor ports in the State of Gujarat. It was also registered under section 12AA and accordingly claimed exemption under section 11. AO noticed that assessee was levying fees charges from the users of ports under various heads like Port Infrastructure facilities, Marine Services and Equipment and Harbor Craft Rental, etc. AO invoked proviso to section 2(15) and accordingly, denied exemption under section 11.Held: Fees collected by the assessee was incidental to attainment of main object of development of mining ports as enumerated in Gujarat Maritime Board Act, 1981 and assessee was under legal obligation to apply income which arose directly and substantially from the business held under trust for development of minor ports in the State of Gujarat predominant object of assessee. Advancement of any other object of general public utility and it could not, therefore, be said that activities carried out by assessee were in the nature of trade commerce or business. Accordingly, proviso to section 2(15) did not get attracted and AO was, therefore, not justified in denying exemption under section 11.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2009-10 to 2014-15

INCOME TAX ACT, 1961

Section 143(3)

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