DIRECTOR OF INCOME TAX EXEMPTIONS vs. MAYO COLLEGE OLD BOYS ASSOCIATION

IN THE HIGH COURT OF DELHI AT NEW DELHI . 10.08.2011 Present: Mr. Abhishek Maratha, Sr. Standing Counsel for the appellant with Ms Teena Sharma, Advocate. . +ITA 945/2011 . The respondent who is an alumni of Mayo College, has been given registration under Section 12A read with Section 12AA (1) (b) of the Act with effect from 01.04.1999 and order to this effect was passed on 15.09.2000. Thus, it is registered as charitable institution. Likewise, the respondent has also been granted exemption under Section 80G of the Act from 27.03.2000. Such exemption is given for a particular period which is renewed from time to time. Last exemption was up to 31.03.2009. Thereafter, the respondent made an application for renewal of this exemption under Section 80G of the Act on 15.09.2009. This was, however, denied by the Director of Income Tax (Exemption) for the reason that it had received income under the head ?Advertisement and golf tournaments income? and it has also incurred substantial expenditure on this activity only. The respondent took the matter in appeal. The ITAT vide impugned order has set aside the order of the Director of Income Tax (Exemptions), Delhi, holding that the assessee is entitled to exemption. Two aspects are highlighted by the Tribunal in this behalf which are: (i) the main . . object of the respondent/assessee is to encourage education in broader sense and one of such activity was organizing golf tournament which resulted in some income from advertisement and also expenditure on the advertisement, would not alter the basic character of t he assessee as charitable organization as this was full of educational activities. Needless to mention, by the very nature of this association, holding of such advertisement tournament for the members i.e. ?Old Boys Association? would be permissible and that factor alone cannot become reason for holding that the respondent has incurred expenditure in the activities of commercial nature. The Tribunal relied upon the judgment of this Court in the case of ICAI Accounting Research Foundation Vs. Director General of Income Tax (Exemption), 321 ITR 73 and rightly so, (ii) the assessee/respondent continues to enjoy the registration under Section 12A of the Act which means that the Income Tax department itself holds respondent to be an institute of charitable nat ure so long as it can subsists. Exemption under Section 80G of the Act could not be enjoyed on the ground that the respondent did not carry on any charitable activity. No question of law arises. The appeal is hereby dismissed. A.K. SIKRI, J. . M.L.MEHTA, J. August 10, 2011 awanish . . #29-31 and 35, 36