VINTAGE & CLASSIC CAR CLUB OF INDIA,MUMBAI vs. COMMISSIONER OF INCOME TAX (EXEMPTION), MUMBAI

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ITA 1859/MUM/2024Status: DisposedITAT Mumbai02 September 2024AY 2023-24Bench: MS PADMAVATHY S (Accountant Member), SHRI SANDEEP SINGH KARHAIL (Judicial Member)1 pages

AI SummaryAllowed

Facts

The assessee, a charitable trust, applied for registration under sections 12AA and 80G of the Income Tax Act. The CIT(E) rejected the application, stating it was incomplete and that the activities (organizing vintage car exhibitions and collecting entry fees) constituted trade or business, not charitable activities.

Held

The Tribunal observed that the CIT(E) had not considered all the details submitted by the assessee and had not applied the principles laid down by the Supreme Court regarding charitable activities that may involve trade or commerce. Therefore, the case was remanded.

Key Issues

Whether the activities of the assessee, including collecting entry fees for vintage car exhibitions, constitute trade or business, disqualifying it for registration under sections 12AA and 80G.

Sections Cited

12AA, 80G

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Cases cited in this judgment

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ACIT v. Ahmedabad Urban Development Authority
143 Taxmann.com 278 · 2022 · SC
379 citing

Income Tax Appellate Tribunal, “F” BENCH, MUMBAI

Before: SHRI SANDEEP SINGH KARHAIL, JM

For Appellant: Shri Ankush Kapoor, CIT-DR

Hearing: 28.08.2024Pronounced: 02.09.2024

(Assessment Year: 2023-24) Vintage & Classic Car Club of India CIT (Exemptions), 4th Floor, Nanabhai Mansion, Room No. 601, 6th Floor, Sir P.M. Road, Fort, Cumballa Hill MTNL TE Bldg, Vs. Mumbai-400001. Pedder Road, Dr. Gopalrao Deshmukh Marg, Cumballa Hill, PAN : AACCV3256C Mumbai-400026. Appellant) : Respondent) : Shri Haresh Purushotamdas Shah, Appellant /Assessee by AR : Shri Ankush Kapoor, CIT-DR Revenue / Respondent by Date of Hearing : 28.08.2024 Date of Pronouncement : 02.09.2024 O R D E R Per Padmavathy S, AM: These appeals by the assessee are against the separate order of Commissioner of Income Tax (Exemptions), Mumbai [in short 'the CIT(E)'] both dated 22.02.2024 for Assessment Year (AY) 2023-24 rejecting the registration under section 12AA and registration under section 80G of the Income Tax Act, 1961 (the Act).

The assessee is a charitable trust and filed the application in Form-10AB seeking registration under section 12AA of the Act. The CIT(E) rejected the application stating that the application filed by the assessee is incomplete and the required documents accompanying the application were not furnished. The CIT(E) further held that as per the Form-10AB filed the objects of the assessee is “Advancement of any other objects of General Public Utility” and that the main activity carried on was arrangement of Annual Vintage Vehicle Fiesta and Vintage Car Exhibitions for which the assessee is taking entry fee. Therefore the CIT(E) held that the activities of the assessee are in the nature of trade, commerce or business and the fees collected cannot be construed as voluntary donations received as per the provisions of section 12AA of the Act. Therefore, the CIT(E) rejected the application made by the assessee for registration under section 12AA as well as registration under section 80G of the Act.

We heard the parties and perused the material on record. The main contention of the ld. AR is that the CIT(E) while rejecting the application has considered only one submission made by the assessee on 02.02.2024 but did not consider the submissions dated 05.02.2024. The ld. AR further contending that the activity of the assessee in arranging Annual Vintage Vehicle Fiesta and Vintage Car Exhibitions is not in the nature of trade, commerce or business as the entry fee collected is very nominal and that the assessee is mainly engaged in advancement of any other objects of General Public Utility which is eligible for registration under section 12AA of the Act. In this regard, we notice that the Hon’ble Supreme Court in the case of ACIT(E) Vs. Ahmedabad Urban Development Authority [2022] 143 taxmann.com 278 (SC) has laid down certain principles with regard to charitable institutions with the objects of advancement of any other objects of General Public Utility carrying on certain activities which can be in the nature of trade or commerce whether can be considered engaged in charitable activities. Further we notice that the CIT(E) while rejecting the application has not considered all the details furnished by the assessee completely and has not considered the principles laid down by the Hon’ble Supreme Court. Therefore, in the interest of natural justice and fair play, we remand the issue of rejection of registration under section 12AA as well as registration under section 80G of the Act back to the CIT(E) with a direction to consider the issue based on the various details furnished by the assessee, keeping in mind, the principles laid down by the Hon’ble Supreme Court in the case of Ahmedabad Urban Development Authority (supra). Needless to say that the assessee be given a reasonable opportunity of being heard. It is ordered accordingly.