INCOME TAX ACT, 1961

Section 11

Charitable trust - Exemption under section 11 - Charitable activity under section 2(15) -

Assessee's objectives was to promote and protect the general mercantile and industrial interest of India acting as arbitrator in the settlement of disputes, organizing periodicals, seminars, meetings and symposia with government. The income and expenditure account of the assessee showed receipts from membership fee, specialized services, services and facilities, meeting, seminars and training programmes, sale of publication and miscellaneous income. AO observed that assessee had included all the incomes, i.e., income from both members and non-members and issued a show cause notice to assessee to explain as to why the receipts and charges received by the chamber be not considered as commercial in nature. AO observed that all the activities of assessee were in the nature of trade, commerce and business and exemption under sections 11 and 12 was denied by invoking the amended provisions of section 2(15).Held: The income of assessee is from membership fees from its members, specialized services, services and facilities, meetings, seminars and training programmes, sale of publication, etc. It was also noted that the income of the assessee from other nonmembers of the institution are more and as such the principle of mutuality was apparently not applicable in the case of the assessee. CIT(A) has rightly observed that there was no sufficient reason to deviate from the appellate orders of CIT(A) of the earlier years allowing the exemption under section 11(1). As decided in assessee's own case [2020 TaxPub(DT) 2932 (Del-Trib)], there was no infirmity in the order of the CIT(A) in holding that the activities of the assessee were charitable in nature and assessee was entitled to the claim of exemption under section 11.