| The Tax Publishers2020 TaxPub(DT) 3864 (Mad-HC) INCOME TAX ACT, 1961
Section 11
Where issue arose as to whether income received from the properties of assessee namely, community hall, marriage hall (Kalyana Mandapam) and place to conduct funeral rites (Gnanavapi) to be classified as 'Income from House Property' or 'Business income' since the income there from is utilized for charitable purpose of the trust, matter was remitted to AO because facts in respect of the surplus income having been utilized for the objects of the trust were not examined.
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Charitable trust - Exemption under section 11 - Business of running community hall, marriage hall and place to conduct funeral rites, whether eligible for exemption -
Assessee-society was operating a community hall, a marriage function centre and a unit to facilitate performance of customary and traditional rites connected with funeral obsequies. It was registered under section 12AA. AO alleged that business of running community hall, marriage hall and place to conduct funeral rites could not be treated as an incidental business eligible for exemption under section 11(4A). Held: Both lower authorities, i.e., CIT(A) and Tribunal did not discuss about facts in respect of the surplus income having been utilized for the objects of the trust, viz., Running educational institution, providing medical relief to the poor, etc. Matter was remitted back to AO for de novo consideration as to whether the entire revenue derived from letting out of community hall, marriage hall and place to conduct funeral rites were utilized for charitable objects of the Trust and also to consider as to whether the income received from the properties of the Trust, namely, Community Hall, Kalyana Mandapam and Gnanavapi to be classified as 'Income from House Property' or 'Business income' since the income therefrom is utilized for charitable purpose of the trust.
REFERRED : Commr. of ST v. Sai Publication Fund (2002) 258 ITR 70 (SC) : 2002 TaxPub(DT) 1304 (SC), Asstt. CIT v. Thanthi Trust (2001) 247 ITR 785 (SC) : 2001 TaxPub(DT) 1078 (SC), Khoday Distilleries Ltd. v. State of Karnataka 1995 (1) SCC 574 (SC), Addl. CIT, Gujarat v. Surat Art Silk Cloth Manufacturers Association (1980) 121 ITR 1 (SC) : 1980 TaxPub(DT) 848 (SC), State of Andhra Pradesh v. Abdul Bakhi & Bros. 1964 (5) STC 644 (SC) and India Trade Promotion Organization v. Director General of Income Tax (Exemptions) & Ors. 2015 TaxPub(DT) 623 (Del-HC). Bureau of Indian Standards v. Director General of Income Tax (Exemptions) 2013 TaxPub(DT) 0323 (Del-HC) M/s. Ramalingam Charities, v. The CIT 2011 TaxPub(DT) 1749 (Mad-HC) CIT v. Chennai Properties and Investments Ltd. (2004) 136 Taxman 202 (MAD) : 2004 TaxPub(DT) 0537 (Mad-HC) M/s. Sri Ram Samaj v. The Joint Director of Income Tax (Exemptions) 2016 TaxPub(DT) 2277 (Chen-Trib)
FAVOUR : Matter remanded.
A.Y. : 2010-11 and 2011-12
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