DEPUTY COMMISSIONER OF INCOME TAX (EXEMPTION)-1(1), MUMBAI, MUMBAI vs. ALL INDIA GEM AND JEWELLERY DOMESTIC COUNCIL, MUMBAI

PER OM PRAKASH KANT, AM

This appeal by the Revenue is directed against order dated
29.05.2025 passed by the Ld. Commissioner of Income-tax
(Appeals) – National Faceless Appeal Centre, Delhi [in short ‘the Ld.
CIT(A)’] for assessment year 2015-16, raising following grounds:
1. On the facts and circumstances of the case and in law, the learned Commissioner of Income Tax (Appeals) has erred in deleting the addition of Rs 1,74,27,134/-made by the Assessing

Officer by ho deposits is ex
2. On the fac learned Com appreciate th advancement envisaged un proviso to s allowable.
3. On the fac learned Com relying upon the Assessin specified mem not of charitab
4. On the fac learned Com relying on the in the case of 235 of 2017
applicable to 5. On the fac learned Com appreciate th from surplus character of v heid under tru
6. On the fac learned Com appreciate tha in terms of se provisions of exemption u/
7. On the fac learnind Com deleting the a Officer on acc as the assess letters of dono specific direc
11(1)(d) of the All India Gem An olding that the interest income earned xempt u/s 11 of the Income Tax Act, 1961
cts and circumstances of the case and in missioner of Income Tax (Appeals) has at the assessee does not satisfy the con t of any other object of general public nder section 2(15) of the Act and is hit b ection 2(15); hence, exemption u/s 1
cts and circumstances of the case and in missioner of Income Tax (Appeals) has the principle of mutuality despite clear f ng Officer that the assessee's activitie mbers and big business houses/jeweller ble nature.
cts and circumstances of the case and in missioner of Income Tax (Appeals) has e ratio of the Hon'ble Bombay High Court f CIT us Bombay Presidency Golf Club L
7) which is distinguishable on facts the present case.
cts and circumstances of the case and in missioner of Income Tax (Appeals) has at the interest income earned by the as funds placed in banks and de not pa voluntary contributions or income derived ust wholly for charitable or religious purp cts and circumstances of the case and in missioner of Income Tax (Appeals) has at the memb of assessee's trust are relat ection 13(3) of the Act and the assessee f section 13(1)(c)(ii) of the Act whic s 11 of the Act cts and circumstances of the case and in mmissioner of Income Tax (Appeals) has addition of H 1,60,30,000/- made by the A count of corpus donation claimed by the see could not furnish satisfactory enden ors to prove that the donations received w ction towards corpus as mandated und e Act nd Jewellery Domestic Council
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d on fixed
.
n law, the s failed to nditions of utility as y the first
11 is not n law, the s erred in findings of es benefit rs and are n law, the s erred in 's decision td (ITA No and not n law, the s failed to ssessee is artake the d property poses.
n law, the s failed to ted parties e is hit by ch denies n law, the s erred in Assessing e assessee or specific were witho der section 8. On the fac learnert Com appreciate tha of proviso t cannot be ex
2. Briefly stated, company registered u engaged in the pro
Jewellery industry in of the Income-tax A within the scope of “
of the Act.
2.1 During the yea exemption under se corpus donations. Th the grounds that the did not constitute “
that it was hit by s interest income as bu ordinary revenue rece
3. On appeal, th including the assess earlier years’ assessm the Co-ordinate Benc has since been affirm
CIT(A) held that:
All India Gem An cts and circumstances of the case and in mmissioner of Income Tax (Appeals) has at if the tru leses exemption u/s 11 due to to section 2(15), then ever corpus xcluded.
facts of the case are that the under section 25 of the Compa omotion and development of n India. It holds registration un
Act (“the Act”) and claims that charitable purpose” as defined ar under consideration, the as ection 11 in respect of intere he Assessing Officer denied th e assessee was a mutual conce charitable purpose” under sec section 13(1)(c). The AO accor usiness income and taxed corpu eipts.
he Ld. CIT(A) examined the see’s submissions, financial s ments. Relying substantially on ch in Bombay Presidency Golf C med by the Hon’ble Bombay High nd Jewellery Domestic Council
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n law, the s failed to to violation donations e assessee is a anies Act, 1956, the Gems and nder section 12A its objects fall in section 2(15) ssessee claimed est income and he exemption on rn, its activities ction 2(15), and dingly assessed us donations as entire record, statements, and n the decision of Club Ltd.—which h Court—the Ld.

 the assessee is a  earning of inter
11(5) cannot b business,
 the proviso to se
 corpus donatio capital receipts
3.1 The Ld. CIT(A) a been granted exempt
AO had accepted su assessee as a mutu finding of the Ld. CIT
5. Decision
I have carefully p assessment order, details/evidences on 5.1 The Appellant ha appeal:
i. The AO has erred business activities s is covered by the 1st ii. The AO erred in taxing the corpus do ordinary donations.
iii. The AO has e organization
In this regard, the A u/s 12AA of the Act.
All India Gem An a registered charitable institutio rest on bank deposits mandate be regarded as an activity in ection 2(15) has no application, ons, duly supported by con exempt under section 11(1)(d).
also noted that in earlier years th tion under section 11 in assessm ubstantial interest income witho ual concern or business entity
T(A) is reproduced as under:
perused grounds of appeal, statemen submissions made by the Appellant n records.
as raised the following two vide various d in concluding that the Appellant is in since it has earned interest income and, t proviso to section 2(15).
denying the claim u/s 11(1)(d) of the onation of Rs.1.60,30,000/- by treating th rred in holding that the Appellant is Appellant has submitted that Appellant is . This presupposes that the Appellant is a nd Jewellery Domestic Council
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on, d under section the nature of and nfirmations, are he assessee had ments where the out treating the y. The relevant nt of facts, and other grounds of ndulging in therefore, it Act and he same as a mutual s registered a charitable trust and its activiti been allowed exemp substantial interest i as mutual concern n there is receipt of in that placement of su in terms of section Appellant is mutual and , thus, hit by th case laws relied upo same are misplaced profits and is a char the Appellant being for its members like the cost involved are been conveniently ig on the decision of Ho
13. The Appellant h assessment order b strictly go by sectio without invoking pri trust covered u/s 2( various case laws some facilities were prevent the institutio to be applied is whe the primary object dominant object whi d. DIT vs Bharat Dia e. CIT vs Madras Je
214
[Appellant has place
All India Gem An ies are covered u/s 2(15) of the Act. App ption u/s 11 in AYs 2009-10 and 2010-1
income was reported. The Appellant was nor held to be indulging in business acti nterest income. The Appellant has further urplus funds with banks is a statutory r n 11(5) of the Act. This does not impl organization or it is engaged in busines he 1st proviso to section 2(15) of the Act.
on by the AO, the Appellant has submitt d. This is because the Appellant does no ritable trust registered u/s 12AA of the A a trade association, it carried out variou exhibitions, award functions, legal proce e recovered from members of the trade. Th gnored by the AO. The Appellant has plac on’ble ITAT in its own case in AYs. 2011- has submitted that Hon’ble ITAT has se back to the AO with a direction that the on 11 to 13 r.w.s. 2(15) and come to a inciples of mutuality. The Appellant is a (15) of the Act. The Appellant has placed in support of the contention that mere e outside the main charitable purpose, on from being a valid charitable institutio ether the object which is said to be non-c of the trust or is ancillary or inciden ich is charitable:
amond Bourse 126 taxman 365 (SC) ewelers & Diamond Merchants Associatio ambers of Commerce 55 ITR 722 (SC) ed reliance on several other case laws as the Appellant has submitted that ev al organization, the interest from ban support the same, the Appellant has plac s:
khana
Conference of public Enterprise 319 ITR 17
nd Jewellery Domestic Council
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pellant had 1, wherein, not treated ivities since r submitted requirement ly that the ss activities
As regards ted that the ot distribute
Act. Further, us activities eedings etc.
his fact has ced reliance
12 & 2012- et aside the AO should conclusion a charitable reliance on ely because would not on. The test charitable is ntal to the ons 129 ITR well]
ven if it is nk deposits ced reliance
79 (Del) f. Canara Bank Go
202(Kar)
[Appellant has place
The Appellant has a by it. Accordingly, covered by the deci
Bombay Presidency
The Appellant has f donation were sub cannot be taxed. Ap law:
Appellant is also hit denies exemption u/
further submitted that complete details mitted before the AO. This being capi ppellant has placed reliance on the follo asanti Devi and Chakkhanlal Garg Educat er, submitted vide letter dated 11/06/20
order in AY 2011-12, dated 13/02/202
en adjudicated in favour of the Appellant ered the submissions made by the Appel sessment order. I find that the Appellant ons before the AO in response to the sho e not be considered to be hit by the new
13(8) of the Act, since it has carried out b and also provides services in relation rce. The Appellant has made a detailed s uced at para 5 of the assessment order.
during present proceedings have also bee
AO, however, did not accept the same. T ts of the Appellant society is limited to it affect the public at large. As per the AO, benefit its members. Its object is not to be lant does not carry out any charitable a thus, held that the Appellant is not c
The AO, further, observed that memb related parties in terms of section 13(3) ntribution from each of them is huge. Dai xclusively for the benefits for members y benefitted the related parties as well.
t by provision of section 13(1 )(c)(ii) of the /s 11. Hence, AO has denied the claim m eeded to compute income on the basis of has held the Appellant to be a mutual o to promote, manage or assist in the pr velopment of trade and commerce for it held that the concept of charity and mu nd Jewellery Domestic Council
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CIT 308 ITR well]
s carried on is squarely e of CIT vs
2/04/2019. s of Corpus ital receipt, owing case tional Trust
024 that Ld
4, wherein,
.
lant; I have t had made w cause as w proviso to business of n to trade, submissions
I find that n furnished
The AO has ts members
Appellant’s enefit public activities for covered u/s bers of the ) of the Act ily activities which has Hence, the e Act, which made u/s 11
principle of organization romotion or ts members utuality are mutually exclusive o
Appellant is a mu
Accordingly, the AO and has denied exe donation and denied
5.1.2 On considerati findings of the AO, I denying exemption established to serve large. Thus, it is no the nature of busines the Act. In this regar
ITAT Mumbai in the ITA No.4843/Mum/2
be charitable in nat
Relevant part of the 3. Facts in brief are of providing a Golf C of Golf. The assesse
DIT (E), Mumbai, un dated 6th June, 200
the grounds of mutu exists for charitable for AY 200910 dec income filed by the declared for the purp to Rs.2,17,92,167. F claimed. A deductio having regard to the promotion of Golf, th
4. On scrutiny of th has received intere shown under the h received by the asse non members. In vie in the case of CIT
Belapur) Association the non members w principle of mutual juri ictional High C the AO. The AO took assessee was not an the conditions presc
All India Gem An of each other. The AO has, thus, conclud utual organization and, therefore, not has treated the interest income as busin emption u/s 11. The AO has, further, ad d exemption u/s 11 (1)(d) of the Act.
ion of above facts, submissions of the App
I am of the considered vide that the AO h to the Appellant ^u/s 11 on the groun e the interest of members only and no ot a charitable organization and its activ ss activities, hit by the 1st proviso to sect rd, I find that on similar facts, Hon’ble Ju case of Bombay Presidency Golf Club Ltd
2012, dated 29/02/2016, has held the ture and has allowed exemption u/s11
decision is reproduced below:
that the assessee is a Club with the prin
Course and allied facilities for the promot ee was registered as a charitable organi nder Section 12A under Registration No.
02. The assessee has been claiming exe ality as well as under Section 11 on the b e purposes. The assessee filed its Return laring an income of NIL. The computat assessee indicates that the only source poses of Section 11 was interest on bank
From this various expenditure and depre on under Section 11(1)(a) of 15% was cl e amounts spent on the objects of the Tr e income declared was NIL.
he heads of income, AO observed that th est income of Rs.2,17,92,167/- which head 'Other Income'. As per AO, the s essee is not in the nature of mutuality a ew of the decision of the Hon'ble Bombay
T V/s. Common Effluent Treatment Pla n (2010) 328 ITR 362, the interest so rec was held to be taxable and there is no ap lity for such earnings. Following the Court, the said interest income was broug k up the assessment and was of the vie n entity set up for charitable purposes' as cribed in the proviso to Section 2(15) of nd Jewellery Domestic Council
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ncipal object tion of sport isation with INS/36487
emptions on basis that it n of income ion of total e of income k amounting ecation was laimed and rust viz. the he assessee had been aid income and is from High Court ant (Thane ceived from pplication of decision of ht to tax by ew that the s it violated the Income

Tax Income Act, 196
The said proviso rea
'Provided that the a utility shall not be a any activity in the na of rendering any ser for a cess or fee or a use or application, o
According to the As effect from AY 2009- proviso, then it wou
'charitable purpose.
was computed as un
……………
5. By the impugned which the assessee following grounds:-
"1. The learned CIT case in sustaining t assessee company i meaning of the provi
2. The learned CIT(A case in sustaining th of section 11(1)(a) an ……………
12. We found that t three reasonings:-
(i) the proviso to Sect
(ii) the registration u
(E), and (iii) the decision of Treatment Plant (20
non members is not First we take the firs
2(15) applies to the proviso denies an en
All India Gem An 61 ('the Act') as it stood in Assessment Yea ads as follows.
advancement of any other object of gen a charitable purpose, if it involves the car ature of trade, commerce or business, or a rvice in relation to any trade, commerce o any other consideration, irrespective of th r retention, of the income from such activi ssessing Officer, the proviso was appl
-10 and once an institution was hit by th uld follow that such an entity does not In view of the above, the income of th nder:
order CIT(A) confirmed the action of the A e is in further appeal before us and has T(Appeals) has erred in law and on the f the order of the assessing officer holdin is not carrying on any charitable purpose iso to section 2(15) of the Income Tax Act.
(Appeals) has erred in law and on the f he order of the assessing officer denying nd section 11(2) of the Income Tax Act."
the AO has taxed interest income on th tion 2( 15) applies, under Section 12A has been withdrawn of the Bombay High Court in Commo
10) 328ITR 362 hold that the interest rec exempt under the principle of mutuality.
st objection of AO to the effect that provis case of assessee. As per our considere ntity carrying on 'advancement of any ot nd Jewellery Domestic Council
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ar 2009-10. neral public rrying on of any activity or business, he nature of ity'.
icable with he aforesaid exist for a he assessee
AO, against s taken the facts of the ng that the e within the facts of the g the benefit he following by the OIT on Effluent ceived from o to Section d view, the ther objects of general public u
Sections 11 to 13
carrying on any acti any activity of rende or business for a ce nature of use or app
The activity which a application of the p assessment is the i view the investments trade, commerce or moneys mandated follows :-
"The forms and mod in clause (b) of sub-s
(i) investment in sav of the Government S other securities or ce the Small Savings Sc
(ii) deposit in any acc
(iii) deposit in any society engaged in society engaged in c operative land mortg
Thus, as per the pro deposit in any acco therein and hence it is in the nature of tra
13. The investment i compulsory in so f concerned and in fa or institutions is inve
11 (5), the exemption therefore not only i
Officer has taken the falls foul of the provi activities and income to be not taxable by dated 30th Decembe amount which has b income from interes
All India Gem An utility' the benefit of the regime prescr of the Act if the entity concerned is ivity in the nature of trade, commerce or b ering any service in relation to any trade ess or fee or any consideration irrespec lication or retention of the income from su according to the Assessing Officer has res proviso and which is the subject ma interest earned from banks. As per our s made with banks is not an activity in th business but is income earned on app under Section 11(5)(iii) of the Act which des of investing or depositing the money section (2) shall be the following, namely:- vings certificates as defined in clause(c) o
Savings Certificates Act, 1959 (46 of 1959
ertificates issued by the Central Governm cheme of the Government; count with the Post Office Savings Bank; account with a scheduled bank or a c carrying on the business of banking ( carrying on the business of banking (incl gage bank or a co-operative land developm ovisions ol section 11(5), the assessee is p ount with a scheduled bank on the dep t cannot be said that interest received fro ade, commerce or business.
in banks is not only authorised but mand far as an entity carrying on charitable act, under Section 13(1)( d)(ii), if the fund ested in assets other than those specified n under Sections 11 to 13 would be withd inexplicable, but absurd as to why the e stand that interest received from deposi iso to Section 2(15). It is to be noted that a e streams received by the assessee have y the Assessing Officer himself in makin er, 2012 on the grounds of mutuality an been assessed to tax as income of the a st of Rs.2,17,92,167. Thus according nd Jewellery Domestic Council
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ribed under involved in business or e, commerce ctive of the uch activity.
ulted in the atter of the considered he nature of plication of h reads as referred to - of section 2
9), and any ment under co operative
(including a luding a co- ment bank).
permitted to posits made m the bank dated and is e purposes ds of a trust d in Section drawn. it is e Assessing its in banks all the other e been held ng his order nd the only assessee is to the AO compliance by a ent of section 11 (5) of purposes' being den
Act. The direct conse otherwise 'charitable institution' if it comp comply with section the grounds that the Act.
14. Several decisio purpose and limits of 360 iTR 138 (Del) interpreted, and in t fee having regard to that it was necessa sustenance of charit case of the assessee in fact, it is passiv equence of such an interpretation would e institution' would lose its status as a plied with section 11 (5) of the Act and i
11 (5) of the Act it would be denied the e entity has not complied with section 1
Taxman 141 took the view that a Trust breeding cattle and cows and oxen canno ities of trade, commerce or business mere e was generated on account of productio iew was taken by the Tribunal in DD!T V on 62 Taxmann.com 362 (Del Trib) dea on having as its object the promoting of t tournaments, training players, coache he receipts by way of sponsorship do n ain objects and is not affected by the pr e engaged in any activity which is in th business.
ection of AO was that the registration u/
y the DIT(E). At the time at which the A viz. 30th December, 2011, that fact w nd Jewellery Domestic Council
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e provisions f 'charitable
2( 15) of the d be that an a 'charitable if it did not e benefit on 1 (5) of the the scope, dia Vs. DGiT siness was charging a it was held ses and the rged. In the tsoever and whatsoever.
sit of money n activity in was taken nts of India xed by the the institute h respect to ot be stated business at u of Indian mmerce 357
thi Ashram t registered ot be said to ely because on and sale
Vs. All india aling with a the game of es etc. The not alter the roviso as it he nature of /s.12A has Assessment was correct.

However, the order been cancelled by th allowed by the Tribu the second reason g has been withdrawn by DIT(E) has been 2012. Thus, the obj for exemption has b decision of the No.311/Mum/2012,
DIT(E) u/s.12A(3) of was set aside and a 16. The last objectio
Court in the case of applicable and the under the principle assessee has in fac
High Court in Comm earned on fixed dep the grounds of mutu income of Rs.2,17,92
for Assessment Y deductions under s applied the propositi to the facts of the as 17. In view of the ab assessee depositing commerce or busine beyond and held t falling foul of the pro is correct, it will mili
Section 11 (5) of the require an entity see surplus funds in sp requirement and obj mechanism to regu overcome, overridde mandate ol Section being declared to be therefore must be rej on fixed deposit with (5) is exempt and th facts of the assessee
All India Gem An withdrawing the registration under sectio he Tribunal and the Appeal of the assesse unal vide its order dated 30th May, 2012
given by the Assessing Officer that the n is no longer valid as the registration, cancelled by the Tribunal vide its order d jection taken by the AO for declining of been withdrawn has no legs to stand in Tribunal in assessee's own case dated 30-5- 2012, wherein the order f the Act cancelling registration granted appeal of the assessee was allowed.
on of AO was that decision of Hon'ble Bo
Common Effluent Treatment Plant 328 iT interest received from non-members is of mutuality. From the record we foun ct complied and applied the decision of t mon Effluent in so far as in its return, t osit with banks has not been claimed as uality. That is the reason why the asses
2,167 as income in the computation of t
Year 2009-10 and thereafter claime section 11 of the Act. Thus, the AO ha ion of law laid down by Hon'ble Bombay ssessee which are quite distinguishable.
bove, we can safely conclude that the ac g money in the bank does not consti ess. The Assessing Officer has in fact that the interest itself constitutes taxa oviso to section 2(15). if the Assessing Off itate against the mandate requirement an Act read with Section 13 of the Act. The eking the shelter of Sections 11 to 13 to pecified assets and it cannot be that th ject of Section 11 (5) which serves to put ulate the funds of the charitable insti n and nullified by an interpretation so th
11 (5) if complied with results in the e non-charitable. This is a contradiction in jected. Accordingly, we hold that the inte h banks complying with the provisions of he proviso to Section 2( 15) has no applic e's case.
nd Jewellery Domestic Council
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on 12A has ee has been 2. Therefore, registration withdrawn dated 30-5- registration view of the e in ITA passed by d u/s.12AA ombay High
TR 362 was not exempt nd that the the Bombay the interest s exempt on ssee offered total income ed various as wrongly
High Court ctivity of the itute trade, gone much able income fficer's view nd object of ese Sections o deposit its he mandate t in place a tutions are hat the very institutions n terms and rest earned f Section 11
ation to the 18. In view of the authorities and direc which is exempt u/
has no application to 19. In the result, app
The above decision
Hon’ble High Court
Club, ITA No.235 of decision is reprocure
“2. Following questio
"Whether on the fact the Tribunal was j directing the Assess that the income is e has no application to ………………
4. Having heard the error in the view of "charitable purpose"
education, medical r of general public util the advancement of a charitable purpose nature of trade, com service in relation to or any other conside of clauses (i) and (ii) the present case, the to provide golf facili
Tribunal correctly h activity being in the applicability of the p question of the exem
5. Clause (a) of sub- provisions of Section held under trust who to which such incom in the total income o income. In the prese had invested its su which reduced the a All India Gem An above, we set aside the order of both ct the AO to delete the addition of intere
/s.11(5) of the Act and the proviso to Se o the facts of instant case.
peal of the assessee is allowed.”
n of Hon’ble ITAT Bombay has been of Bombay in CIT(E) vs Bombay Presi of 2017, dated 02/04/2019. Relevant p ed below:
on is presented for our consideration:- ts and in the circumstances of the case a justified in allowing the assessee's a sing Officer to delete the addition of inter exempt u/S. 11(5) and the proviso to Se o the facts of the case?"
e learned counsel for the parties, we do n f the Tribunal. Section 2(15) of the Act d
" as to include activities such as relief o relief etc., and also "advancement of any lity". Proviso to Section 2( 15) of the Act pr any other object of general public utility s e, if it involves the carrying on of any ac mmerce or business, or any activity of ren o any trade, commerce or business, for a eration provided the same is not exclude
) of the proviso with which we are not co e main object of the assessee club as not ties to the members for promotion of the held that there was no element of the e nature of trade, commerce or business proviso $to Section 2(15) of the Act is ru mption under Section 11 of the Act would a -section (1) of Section 11 provides that su ns 60 to 63, the income derived from th olly for charitable or religious purposes to me is applied to such purposes shall not b of the previous year of the person in re ent case, as recorded by the Tribunal, th urplus funds in specified deposits earni assessee's loss. In terms of sub-section (1
nd Jewellery Domestic Council
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h the lower est so made ection 2(15) upheld by idency Golf part of the and in law, appeal and rest holding ection 2(15) not find any defines term of the poor, other object rovides that shall not be tivity in the ndering any cess or fee ed by virtue oncerned. In ted above is e sport. The assessee's s. Once the led out, the arise.
ubject to the he property o the extent be included ceipt of the he assessee ing interest
1) of Section 11 of the Act, therefo therefore, correctly g arises.
6. Before closing, we of the principle of m of the decision of th
Treatment Plant (Su assessee was an A 1956. The members
Thane-Belapur regim treatment facility for not a trust and ther
Act to its income was 7. In view of the abo
Thus, in view of fac and respectfully follo
High Court (supra), I
Appellant is not cove treating the intere exemption u/s 11 a exemption u/s11(1)
Rs.1,74,27,134/- donation) be deleted
4. We have consid material available on activity of the assess
Public Utility as defi that the assessee is charitable is fundam registered under se presumed to be char
2(15) or sections 13
funds compulsorily in All India Gem An ore, such income was exempt from tax. Th granted relief to the assessee. No ques e may record that we have not based ou mutuality and therefore, the question of a he Bombay High Court in case of Comm upra) need not be gone into. In the said
Association incorporated under the Comp s of the Association were industries op me. The assessee was set up to provid r industrial effluent. The assessee therei refore, question of applicability of Section s not the subject matter of examination.
ove, the appeal is dismissed.”
cts of the case and discussions made h owing the decision of Hon’ble Juri iction
I hold that the AO has erred in consideri ered u/s 2(15) of the Act and, consequen st income as business income not and , further, in taxing corpus donation
)(d). Accordingly, I direct that the ad
(interest income) and Rs.1,60,30,00
d. Appeal is, thus, allowed.”
dered the rival submissions an n record. The issue in dispute ee is falling under the definition ned u/s 2(15) of the Act. The A s a “mutual organisation” and mentally misconceived. Once a ection 12A, its objects and ritable unless shown to be con
(1)(c)/(d). Mere earning of inte nvested in scheduled bank depo nd Jewellery Domestic Council
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he Tribunal, stion of law ur reasoning applicability mon Effluent d case, the panies Act, perating in de common n was thus n 11 of the hereinabove nal Bombay ing that the ntly erred in entitled to by denying dditions of 00/-(corpus nd perused the is whether the n of the General
AO’s conclusion d therefore not an institution is d activities are ntrary to section rest on surplus osits as required under section 11(5
commercial or mutua
4.1 In opinion of t charitable status und general public utility the matter to the (Exemption) who is a to charitable instituti certificate granted by can not deny the clai assessee is not chari assessee was already certificate u/s 12A
Therefore, this conte exemption is rejected assessee is a mutual
11 is concerned, th registered u/s 12A a the assessee is eligibl
4.2 The Hon’ble B
Presidency Golf Club
All India Gem An ), does not convert the ins al entity.
the AO if the assessee was n der the provisions of section 2(1
, then the Assessing Officer sho e concerned Commissioner authorized to withdraw the regis ion but till the continuance of y the Ld. CIT(Exemption), the A im of exemption holding that th itable in nature. The object and y approved by the Ld. CIT(Exem has been granted and which ntion of the Assessing Officer f d. Further, the Assessing Office l concern but as far as claim of e requirement that assessee t and subject to the conditions pr le for exemption.
Bombay High Court in CIT
Ltd., ITA No. 235/2017, has cle nd Jewellery Domestic Council
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titution into a not entitled for 15) of the Act as ould have moved of Income-tax stration granted f the registration
Assessing Officer he activity of the d activity of the mption) and then h is subsisting.
for declining the er has held that f exemption u/s trust should be escribed u/s 11
T(E) v. Bombay early held that:

 earning passive under section 1
commerce, or bu
 the proviso to circumstances,
 once the provis necessarily follow
4.3 This binding ju present case. The AO contradiction wherei conditions under sec from exemption unde sustained in law.
4.4 Further, the all made without any related party has b presumptive. The cor under section 11(1) including ITO (Exem
Lal Garg Education T
30.1.2009. 4.5 We find that in Jewellery Export Pr
All India Gem An e interest income on investm
11(5) is not an activity in the n usiness, o section 2(15) is not attra and so is ruled out, exemption un ws.
uri ictional precedent square
O’s interpretation—if accepted—
in compliance with the statut ction 11(5) would itself disqualif er section 11. Such an interpret legation of violation under secti cogent material. No personal been demonstrated. The conclu rpus donations are capital recei
)(d), as held by several judi mption) Vs. Smt. Basanti Devi &
Trust, IT Appeal No.5082(Delhi n identical case of Association romotion Council having simi nd Jewellery Domestic Council
15
ments mandated nature of trade, acted in such nder section 11
ely governs the —would lead to a tory investment fy an institution tation cannot be ion 13(1)(c) was benefit to any usion is purely ipts and exempt icial authorities
& Shri Chakhan i) of 2010 dated n of Gems and ilar activity on promotion of gems a has been held to be ordinate Bench of the No.3176/Mum/2023
respectively. The Trib the decision of the Ahmadabad
Urban taxmann.com 278 (SC
“5.23 In view assessee is n as activity of or overseas a the assess ma
CIT(A) on the to grant benef
After elaborat to a conclusio consideration principles laid beyond the p activity of re business. Fur proviso to sec participating following the directed to gr of law. Groun
4.6 The facts and c facts of the case of G
In view of the above
CIT(A), and the bin
Court, we find no i
All India Gem An and jewellery industry at the int e charitable u/s 2(15) of the e Tribunal in ITA No. 3175/Mum
3 for assessment year 2018-19
bunal (supra) has also examin e Hon’ble Supreme Court in n
Development
Authority
C):
w of the above discussion, we are of the not hit by the proviso to section 2(15) of f conducting or participating in exhibitions and therefore the disallowance of exempti ade by the Assessing Officer and the find issue in dispute are set aside and matte fit of section 11 and 12 as per provisions te discussion on this matter, the Hon'ble I on that in the instant case, there being n n charged from the exporter, therefore d down by the Hon'ble Supreme Court, purview of either trade, commerce and endering services in relation to trade, rther the ITAT has held that assessee is ction 2(15) of the Act as far as activity of in exhibitions within India or overseas decision of the respective juri ictional IT rant the benefit of section 11 and 12 as p nds of appeal are allowed in favour of the ircumstances in the case being
Gems and Jewellery Export Prom factual matrix, the detailed fin nding authority of the Hon’ble infirmity in the order of the L nd Jewellery Domestic Council
16
ternational level
Act by the Co- m/2023 and ITA
9 and 2017-18
ned the effect of n the case of (2022)
143
e opinion that the Act as far s within India ion claimed by dings of the Ld er restore back of law."
ITAT has come no markup on in the broad the activity is d business or commerce or not hit by the f conducting or s. Respectfully
TAT the A.O is per provisions e assessee."
g identical to the motion Council.
dings of the Ld.
e Bombay High
Ld. CIT(A). The assessee is entitled additions made by th donations were righ
Revenue are accordin
5. In the result, th
Order pronoun (RAJ KUMAR C
JUDICIAL M
Mumbai;
Dated: 24/12/2025
Rahul Sharma, Sr. P.S.

Copy of the Order forward
1. The Appellant
2. The Respondent.
3. CIT
4. DR, ITAT, Mumbai
5. Guard file.

////

All India Gem An d to exemption under section he AO in respect of interest inco htly deleted. The grounds of ngly dismissed.
he appeal of the Revenue is dism ced in the open Court on 24/ CHAUHAN)
(OM PRAK
MEMBER
ACCOUNTA ded to :

BY ORDER

(Assistant Re

ITAT, Mu nd Jewellery Domestic Council
17
n 11, and the ome and corpus appeal of the missed.
12/2025. d/-
KASH KANT)
ANT MEMBER
R, gistrar) umbai