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Facts
The Revenue appealed against the order of the CIT(A) which allowed exemption under Sections 11 & 12 of the Income Tax Act, 1961. The issue pertained to income earned by the assessee from hiring out its auditorium and providing space for rent, which the Revenue contended was commercial in nature.
Held
The Tribunal held that the issue was squarely covered in favour of the assessee by previous orders of the ITAT and the Hon'ble Delhi High Court in the assessee's own case. Therefore, the appeal filed by the Revenue was dismissed.
Key Issues
Whether the income from hiring out an auditorium and providing space for rent, commercial in nature, is eligible for exemption under Sections 11 & 12 of the Income Tax Act, 1961.
Sections Cited
11, 12, 2(15)
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Income Tax Appellate Tribunal, DELHI ‘C’ BENCH,
Before: SHRI ANUBHAV SHARMA, & SHRI NAVEEN CHANDRA
This appeal by the Revenue is directed against the order of the Ld.
CIT(A), Delhi dated 18.06.2025 pertaining to A.Y 2017-18.
The grounds raised by the Revenue read as under: 1) Whether on facts and in the circumstance of the case, Ld. CIT(A) has erred in allowing the exemption u/s 11 & 12 of the Income Tax Act, 1961.
(ii) Whether on facts and in the facts and in the circumstance of the case, Ld. CIT(A) has erred in ignoring he fact that the assessee was predominantly engaged in the activities of hiring out of auditorium and providing space for rent in lieu of fee, which were commercial in nature and hence, Ist proviso to Section 2(15) of the Income Tax Act 1961 is applicable in this case. (iii) Whether on facts and in the circumstance of the case, Ld. CIT(A) has erred in ignoring the fact that the Ld. CIT(A) is justified in deleting the addition made by the AO on the ground of principle of consistency and by ignoring a legal principle that the principles of res judicata has no applicability on decision of income tax authorities as each assessment year is a separate proceeding. (iv) That the appellant craves leave to add, amend, alter OR forgo any ground/(s) of appeal either before OR at the time of hearing of the app”
At the very outset, the ld. counsel for the assessee vehemently submitted that the issue of claim of exemption u/s 11 & 12 of the Income-tax Act, 1961 [the Act, for short] against the income from hiring out of auditorium and providing space for rent in lieu of fee were commercial in nature is answered in favour of the assessee and against the Revenue by decision of the ITAT and the Hon'ble Delhi High Court in the case of assessee itself.
Page 2 of 4 [A.Y 2017-18] Indian National Theatre Vs ITO 4. Per contra, the ld. DR relied on the orders of the authorities below but fairly conceded that the issue is covered in favour of the assessee and against the Revenue.
We have heard the rival submissions and have perused the relevant material on record. We find force in the contention of the ld. counsel for the assessee that the issue involved in this case is squarely covered in favour of the assessee and against the Revenue. We find that the co- ordinate bench in assessee’s own case for A.Ys 1986-87 to 1988-89 has allowed the appeal of the assessee on identical issue vide order in ITA 7892-7893/D/91 and ITA 1589/D/92 dated 22.04.1999. Further, the Hon'ble Delhi High Court has also upheld the order of the ITAT and dismissed the appeal filed by the Revenue in the case of assessee in ITA 620/2012 order dated 19.11.2012 and of 2012 order dated 05.09.2012.
Respectfully following the order of the jurisdictional High Court of Delhi [supra] and the co-ordinate bench of the ITAT [supra], we dismiss the grounds of appeal raised by the Revenue.