SREE NARAYANA DHARMA PARIPALANA YUVAJANA SAMITHI,KODUNGALLUR vs. INCOME TAX OFFICER EXEMPTION WARD- THRISSUR, THRISSUR

Brief facts of the case are that the appellant is a charitable trust duly registered u/s. 12A of the Income Tax Act, 1961 (the Act). The return of income for AY 2012-13 on 15.03.2013 declaring total income of Rs. 11,39,180/- after claiming exemption u/s. 11 of the Act. Against the said return of income, the assessment was Sree Narayana Dharma Paripalana Youvajana Samithi completed by the ITO (Exemption), Thrissur vide order dated 27.02.2015 passed u/s. 143(3) of the Act at a total income of Rs. 25,75,620/-. While doing so, the AO assessed the income earned from business of Kuri of Rs. 25,75,621/- as business income by rejecting the contention of the appellant that the business is held under the trust for charitable purposes.

Being aggrieved, an appeal was filed before the CIT(A), who vide the impugned order confirmed the action of the AO by holding that running of Kuri business was not incidental to attainment of objects of the appellant trust.

Being aggrieved, the appellant is in appeal before this Tribunal in the present appeal.

The learned counsel for the assessee submitted that in earlier assessment years the assessee’s claim for exemption u/s. 11 of the Act was allowed by the Tribunal placing reliance on the decision of the Hon'ble Kerala High Court in the case of Biowin Agro Research v. ITO (Exemption), wherein, it is held that the income of the business is utilised for genuine purposes of the trust or incidental to attainment of the object of the trust, is eligible for exemption u/s. 11 of the Act.

On the other hand, the learned Sr. DR supported the orders of the learned lower authorities, submitting that no interference is called for.

In the result, the appeal filed by the assessee stands allowed.