ITO(EXEMPTIONS), BHUBANESWAR vs. ADHIKAR, BHUBANESWAR

ITA 265/CTK/2017Status: DisposedITAT Cuttack24 September 2018AY 2009-1020 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the microfinance activity was carried out with the object of providing relief to the poor. It found no error in the CIT(A)'s order which considered the activity charitable, relying on various judicial precedents.

What were the facts?

The assessee, engaged in microfinance activities, reported a surplus from its operations. The Assessing Officer (AO) treated this as business income, denying exemption under Section 11 of the Income Tax Act, citing the proviso to Section 2(15) which excludes trade, commerce, or business activities from charitable purposes.

What were the issues?

Whether microfinance activities, involving lending to self-help groups and poor persons, constitute a charitable purpose or a business activity for the purpose of exemption under Section 11, considering the proviso to Section 2(15).

Which sections of the Income-tax Act were involved?

Section 2(15),Section 11

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Income Tax Appellate Tribunal, CUTTACK BENCH, CUTTACK

Before: S/SHRI N.S SAINI & PAVAN KUMAR GADALE

For Appellant: Shri S.C.Bhadra, AR
For Respondent: Shri Subhendu Datta, DR
Hearing: 05/09

Per N.S.Saini, AM

The appeal filed by the revenue is directed against the order of the CIT(A)-3, Bhubaneswar dated 9.3.2017 for the assessment year 2009-2010. 2. The revenue has raised the following grounds:

“The CIT(A) erred in allowing exemption u/s.11 claimed by “the assessee, without appreciating the fact that if an amount is collected as interest on commercial principle, the end use is not relevant as per proviso to section 2(15) and also unless the assessee satisfies the conditions which are relevant, AO can refuse exemption u/s.11 of the Act.

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ITA No. 265/CT K/ 2017 Asse ssment Year : 20 09- 10

3.

The Assessing Officer observed that in the income and expenditure account, the asse

The order continues below.

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