INCOME TAX ACT, 1961

Section 11

Charitable trust - Exemption under section 11 - Receipt of fees towards services incidental to main object being charity - Applicability of proviso to section 2(15)

Assessee-trust, a public charitable institution, with a main object to consider all questions concerning relations between employers and employees in Southern India and to protect their interests claimed exemption under section 11. AO denied exemption holding that income received by assessee such as advertisement income from the souvenir, seminar surplus, etc., were in the nature of commercial transaction and, therefore, proviso to section 2(15) got attracted to assessee's case. Held: Assessee-trust was not driven primarily by a desire or motive to earn profits but to do charity through advancement of object of general public utility and, therefore, merely because fees was collected from members or non-members for rendering services like training, conduction of seminars, etc., would not ispo facto lead to denial of exemption because, said services were incidental to its main objects, which was charity.

Supported by:India Trade Promotion Organization v. Director General of Income Tax (Exemptions) & Ors. ((2015) 371 ITR 33 (Del) : 2015 TaxPub(DT) 623 (Del-HC)), CIT v. Fertilizers Association of India ((2017) 399 ITR 209 (Del) : 2017 TaxPub(DT) 4886 (Del-HC)), PHD Chamber of Commerce & Industry v. Director of Income Tax (Exemptions) ((2013) 357 ITR 296 (Del) : 2013 TaxPub(DT) 453 (Del-HC)).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2009-10

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