HOTEL AND RESTUARANT ASSOCIATION,MUMBAI vs. INCOME TAX OFFICER(EXEMPTION), MUMBAI

All the grounds raised by the assessee in the present appeal are interrelated and interconnected and relates to challenging the order of Ld. CIT(A) in upholding the disallowance of deduction claimed u/s 11 of the Act without considering the statement of facts, written submissions, therefore I have decided to take up all the grounds together and to adjudicate the same through the present to consolidated order.

I have heard the counsel for both the parties, perused the material placed on record and the orders passed by the revenue authorities.

From the record, I noticed that during the assessment proceedings, the assessee was show caused as to why the proviso to section 2 (15) of the act, be not invoked as the assesses activities are not “charitable” activities.

On this aspect, the assessee had elaborately discussed and filed detailed explanation before the AO and that of Ld. CIT(A).

After having heard both parties at length, and after analysing the submissions, I found the details of assessees activities, nature of activities, dominant object for which activities are carried out, background, Aims, objectives for setting up of this association. It is also noticed that assessee also mentioned the activities which they have undertaken to encourage, protect and promote the interest of their members, including legal, professional and other assistance. Apart from above assessee had also filed details regarding the facts that their activities are not restricted to the hotels and restaurants, but also extends to the “general public”

From the records, I further noticed that assessee had filed details regarding the activities for “charitable purpose” and also relied upon decisions of different judicial authorities.

Moreover, the details of conventions, lectures, exhibitions, meetings, etc for achieving the objects and also the details of filing PILs for the benefit of general public/non-members. But the AO or Ld.CIT(A) did not carry out any verification, but have decided the issues merely by relying upon the decisions of judicial authorities. 9. In my view, the issue raised in the present appeal is 4 Hotel and Restaurant Association, Mumbai more of factual in nature and therefore detailed verification were required at the end of Revenue Authority.

Be that as it may in my view, since the issue contained in the present appeal is more of factual in nature, therefore, detailed investigations or verification with regard to the activities carried out by the assessee is required to be undertaken before reaching to any conclusion. Therefore, in my considered view, the interest of justice would be met only in case the activities as mentioned in detail by the assessee is investigated / verified. Therefore, considering the facts of the present case and also keeping in view the principles of natural justice, I restore the matter back to the file of Ld. CIT(A) for deciding it afresh on merits by providing opportunity of hearing to the parties. Ld. CIT(A) shall be at liberty to call for any other documents or information from the assessee or to call for report from the Ld.AO, if so desired. The assessee shall not seek any adjournment on frivolous grounds and shall remain cooperative during the course of proceedings.

Before parting, I make it clear that my decision to restore the matter back to the file of the Ld.CIT(A) shall in no way be construed as having any reflection or expression on the merits of the dispute, which shall be adjudicated by the Ld. CIT(A) independently in accordance with law.

In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on 10.03.2025. (SANDEEP GOSAIN)

उप/सहायक पंजीकार ( Asst.