INCOME TAX ACT, 1961

Sections 11 and 12

Charitable trust - Exemption under sections 11 and 12 - Charitable object of taking up cause of Indian Automobile Manufacturers -

Assessee-trust was constituted with charitable object of taking up the cause of Indian Automobile Manufacturers, under which it received membership fee from its members and technical literature publication. It also charged participation fee from members for conducting seminars and conferences. Revenue denied assessee's claim of exemption under sections 11and 12 consequent to the insertion of proviso 2 under section 15. The case of the Revenue was that the assessee was not working for the benefit of publication at large. It was further held that the principle of mutuality would not apply as the income of the assessee was not exclusively from its own members only. Held: Although assessee generated some access of receipt over expenses in undertaking its activities, however, the same was normal incident of the activity of promotion of automobile industry and could not be characterized with business activities. Further, mere circumstance of collection of membership fees and participation fees from members would not result in the assessee losing its essential character of being established for charitable purposes. Accordingly, the assessee was held to be entitled to claim benefit under sections 11 and 12.

REFERRED : India Trade Promotion Organization v. Director General of Income Tax (Exemptions) & Ors. (2015) 371 ITR 333 (Del) : 2015 TaxPub(DT) 0623 (Del-HC), The Institute of Chartered Accountants of India & Anr. v. Director General of Income Tax (Exemptions) & Ors. (2013) 358 ITR 91 (Del) : 2013 TaxPub(DT) 2666 (Del-HC).

FAVOUR : In assessee's favour

A.Y. :

INCOME TAX ACT, 1961

Section 11

SUBSCRIBE FOR FULL CONTENT