Loading judgment…
Facts
The appellant, a charitable trust registered under section 12AA of the Income Tax Act, filed a return for AY 2015-16 declaring Nil income after claiming exemption under section 11. The AO denied exemption for income from a swimming pool, holding it was not integral to education, and completed assessment at Rs. 21,07,178. The CIT(A) confirmed the AO's action.
Held
The Tribunal found merit in the appellant's submission that sports are integral to education, as supported by the CBSE curriculum. The lower authorities were not justified in denying exemption for income from the swimming pool.
Key Issues
Whether the income generated from running a swimming pool by a charitable educational trust is eligible for exemption under section 11 of the Income Tax Act, 1961.
Sections Cited
12AA, 11, 143(3)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, COCHIN BENCH
Before: SHRI INTURI RAMA RAO, AM
O R D E R This appeal filed by the assessee is directed against the order of the Commissioner of Income Tax (Appeals), Faridabad [CIT(A)] dated 30.06.2025 for Assessment Year (AY) 2015-16.
Brief facts of the case are that the appellant is a charitable trust incorporated for the purpose of imparting education. It is duly registered u/s. 12AA of the Income Tax Act, 1961 (the Act). The return of income for AY 2015-16 was filed on 19.07.2016 disclosing Nil income after claiming exemption u/s. 11 of the Act. Against the said return of income, the assessment was completed by the ACIT (Exemptions), Kochi (hereinafter called "the AO") vide order dated Viswajyothi Educational and Charitable Trust 26.12.2017 passed u/s. 143(3) of the Act at a total income of Rs. 21,07,178/-. While doing so, the AO had denied exemption in respect of income earned from running of swimming pool by holding that the activity of running swimming pool is not an integral part of education.
Being aggrieved, an appeal was filed before the CIT(A), who vide the impugned order confirmed the action of the AO.
Being aggrieved, the appellant is in appeal before this Tribunal in the present appeal.
When the appeal was called on nobody appeared on behalf of the assessee despite due service of notice of hearing. Therefore, we proceeded to dispose of the appeal after hearing the learned Sr. DR. However, in the grounds of appeal it is submitted that activities if sports are integral part of education. In this regard, the appellant also submits that the curriculum of CBSE includes it as educational activity. Therefore, the learned lower authorities were not justified in denying the claim of exemption on income from running swimming pool.
6. I find merit in the submissions made by the appellant that sports is integral part of education and learned lower authorities were not justified in denying exemption u/s. 11 of the Act. I, therefore, direct the AO to allow exemption u/s. 11 of the Act in respect of profits earned from the activity of running swimming pool.
Order pronounced in the open court on 11th August, 2025.