INCOME TAX ACT, 1961

Section 2(15) proviso, 11

Charitable trust - Exemption under section 11 - Applicability of proviso to section 2(15) - Assessee earned surplus from activities incidental to main object being charitable in nature

Assessee -trust was having main objects to act as a group of associations/federations functioning at national and state level and with object to address national issues relating to real estate sector and better standard for its all member associations, etc. It claimed exemption under section 11. AO noticed that assessee earned income on account of membership fees, subscription fees, grant in aid from Government of India, income from publications, exhibitions, award functions, etc. Accordingly, AO held that proviso to section 2(15) got attracted to assessee's case and accordingly AO denied exemption. Held: Receipt of subscriptions from members, sale of publications, holding of exhibition and award functions, etc. were incidental to assessee's main object to address national issues relating to real estate sector and better standard for its all member associations. Further, assesse was not having any profit motive and, therefore, activities of assessee were not in the nature of trade, commerce or business and surplus arising to assessee was utilized only for the purpose of dominant object which were charitable in nature and, therefore, proviso to section 2(15) did not get attracted to assessee's case and assessee was entitled to exemption under section 11.

REFERRED :

FAVOUR : In assessee's favour

A.Y. : 2014-15 & 2016-17

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