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Facts
The assessee, Hotel and Restaurant Association, filed an appeal against the CIT(A) order upholding the disallowance of deduction claimed under Section 11 of the Income Tax Act for AY 2016-17. The assessee contended that the CIT(A) erred by not considering their submissions and that the activities were for charitable purposes.
Held
The Tribunal observed that the issue was factual and required detailed investigation and verification of the assessee's activities. The Tribunal restored the matter back to the CIT(A) for fresh adjudication on merits, with an opportunity of hearing for both parties.
Key Issues
Whether the assessee's activities were for 'charitable purposes' to qualify for deduction under Section 11, and whether the CIT(A) properly considered the facts and submissions.
Sections Cited
11, 2(15), 250
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “SMC” BENCH MUMBAI
Before: HON’BLE SHRI SANDEEP GOSAIN
Date of Hearing 27.01.2025 Date of Pronouncement 10.03.2025 आदेश / ORDER
PER SANDEEP GOSAIN, JM:
1. The present appeal has been filed by the assessee challenging the impugned order 29.02.2024 passed u/s 250 of the Income Tax Act, 1961 (‘the Act’), by the National Faceless Appeal Centre, Delhi / CIT(A), for the A.Y 2016- 17. The assessee has raised the following grounds of appeal:
1. That on the facts and circumstances of the case, the order passed by the learned CIT(A) in upholding the disallowance of deduction claimed by the appellant under section 11 of the IT Act is bad and erroneous in law. b) That the learned CIT(A)
2 Hotel and Restaurant Association, Mumbai erred in not considering the statement of facts, grounds of appeal and written submissions filed by the appellant during the appeal proceedings in proper perspective. Detailed Grounds of appeal is attached as attachments which includes Statements of Facts and Grounds of appeal.
2. 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).
3 Hotel and Restaurant Association, Mumbai
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.
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.
5 Hotel and Restaurant Association, Mumbai
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) JUDICIAL MEMBER Mumbai, Dated 10/03/2025 KRK, PS आदेश की "ितिलिप अ"ेिषत/Copy of the Order forwarded to : अपीलाथ" / The Appellant 1. ""थ" / The Respondent. 2. संबंिधत आयकर आयु" / The CIT(A) 3. आयकर आयु"(अपील) / Concerned CIT 4. िवभागीय "ितिनिध, आयकर अपीलीय अिधकरण, मु"बई / DR, ITAT, Mumbai 5. गाड" फाईल / Guard file. 6. आदेशानुसार/ BY ORDER, स"ािपत "ित ////
उप/सहायक पंजीकार ( Asst.