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Facts
The Revenue filed four appeals against the assessee, Matunga Gymkhana, for assessment years 2013-2017, challenging the CIT(A)'s decision to allow exemption under Section 11 of the Income Tax Act. The Revenue contended that the assessee's activities, including interest income and compensation, were business-oriented and hit by the proviso to Section 2(15).
Held
The Tribunal held that the Revenue's stand to apply the proviso to Section 2(15) had consistently been rejected in similar past cases. The Tribunal found no change in facts or circumstances warranting a different conclusion. It noted that the Hon'ble Apex Court's decision relied upon by the Revenue was not applicable as the assessee was not found to have engaged in business or commercial activities.
Key Issues
Whether the assessee's activities constitute 'advancement of any other object of general public utility' and if it is entitled to exemption under Section 11, or if it is hit by the proviso to Section 2(15) due to alleged business/commercial activities.
Sections Cited
2(15), 11, 143(3)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, MUMBAI “D” BENCH : MUMBAI
Before: SHRI SATBEER SINGH GODARA & SHRI GIRISH AGRAWAL
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI “D” BENCH : MUMBAI BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER ITA.Nos.4375, 4374, 4373 & 4372/Mum./2023 Assessment Years 2013-2014, 2014-2015, 2015-2016 & 2016-2017 The Income Tax Officer, Matunga Gymkhana, Exemption-2(1), 263/A, Lakhamsey Napoo Room No.618, 6th Floor, vs. Road, Matunga, Mumbai. MTNL Bldg., Peddar Road, PIN -400 019. Mumbai- 400 026. Maharashtra. Maharashtra. (Appellant) (Respondent) For Revenue : Smt. Mahita Nair, Sr. DR For Assessee : S/Shri Vijay Mehta, Paresh Taparia Date of Hearing : 10.07.2024 Date of Pronouncement : 18.07.2024 ORDER PER SATBEER SINGH GODARA, J.M.
These Revenue’s four appeals ITA.Nos.4375, 4374, 4373 & 4372/Mum./2023, for assessment years 2013-2014, 2014-2015, 2015-2016 & 2016-2017, arise against the National Faceless Appeal Centre [in short the “NFAC”] Delhi’s as many Din and Order Nos. ITBA/NFAC/S/250/2023-24/1056805651(1); 1056811212(1); 1056836881(1)
2 ITA.Nos.4375, 4374, 4373 & 4372/Mum./2023 and 1056837221(1) dated 05.10.2023 and dated 06.10.2023, in proceedings u/s.143(3) of the Income Tax Act, 1961 (in short “the Act”); assessment year-wise; respectively.
Heard both the parties at length. Case files perused.
The Revenue pleads the following identical substantive grounds in it’s instant four appeals as under :
“Whether on the fads and circumstances of the case and in law, and in the light of Civil Appeal No.21762 of 2017 in various batch of appeals and SLP's [lead case ACIT (Exemptions) vs. Ahmedabad Urban Developmeni Authority [2022] 143 taxmann.com 278 (SC)], the Ld. CIT(A) erred in holding that the activities of the object of 'general utility carried on by the assessee in the present case are to be covered under residuary part of section 2(15) as "advancement of any other object of general public utility" and the assessee is not entitled to exemption u/s.11 because it is hit by the proviso to section 2(15) as the income of the assessee as spelt out clearly in the judgment of the Hon'ble Supreme Court ?
3 ITA.Nos.4375, 4374, 4373 & 4372/Mum./2023 2. Whether on the facts and circumstances of the case and in law, and in the light of Civil Appeal No.21762 of 2017 in various batch of appeals and SLP’s [lead case ACIT (Exemptions) vs. Ahmedabad Urban Development Authority [2022] 143 taxmann.com 27S (SC)], the Ld. CIT(A) is justified in allowing the benefit of exemption u/s.11 of the Income Tax Act, 1961 without appreciating that the income of the assessee consists of interest income, compensation from caterers restaurant, sale of application forms, sponsorship, compensation from decorator etc. arising from regular and systematic activities which are in the nature of trade, commerce or business ? 3. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) is justified in allowing the benefit of exemption u/s.11 of the Income Tax Act, 1961 on the interest earned when the assessee is not entitled to exemption u/s.11 because it is hit by the proviso to section 2(15) as the income of the assessee as spelt out clearly in the judgment of the Hon'ble Supreme Court in case ACIT (Exemptions) Vs. Ahmedabad Urban Development Authority [2022] 143 taxmann.com 278 (SC) ?
4 ITA.Nos.4375, 4374, 4373 & 4372/Mum./2023 4. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) is justified in allowing the claim of the assessee for exemption u/s. 11 of the Income Tax Act, 1961 ignoring that the assessee is basically a mutual organization with commercial objectives and hence no charitable benefits to the society ensure as such ?
Learned DR vehemently argued that the CIT(A)-NFAC has erred in law and on facts in reversing the Assessing Officer’s findings holding the assessee as having carried-out business/ commercial activities and therefore, not entitled for sec.11 exemptions since hit by sec.2(15)(proviso) as inserted by way of amendment vide Finance Act, 2010 with retrospective effect from 01.04.2009. Mrs. Nair next quotes hon’ble apex court’s landmark decision ACIT vs. Ahmedabad Urban Development Authority [2022] 143 taxmann.com 278 (SC) that such business/commercial activities performed by a charitable trust indeed disentitles it from claiming sec.11 exemption under the provisions of the Income-tax law.
5 ITA.Nos.4375, 4374, 4373 & 4372/Mum./2023 4. Learned authorized representative on the other hand has drawn strong support from the CIT(A)-NFAC’s identical lower appellate discussion. he has also filed assessee’s detailed twin paper books to buttress the point that all this has been a recurring issue between the parties for the past assessment years. Mr. Mehta then invited our attention to the tribunal’s common order dated 30.11.2016, for assessment years 2005-2006 to2009-2010 in ITA.Nos.1089/MUM./2010 [AY 2005-2006]; 4768/MUM./2013 [AY 2006-2007]; 6723/MUM./2010 [AY 2007-2008] and ITA.No.7376/MUM./2011 [AY 2008-2009]; rejecting the Revenue’s vehement contentions involving various issues i.e., addition(s) of interest income held as taxable, compensation from restaurants, decorators, miscellaneous income(s) etc., He further quotes hon’ble jurisdictional high court’s decision in Revenue’s Tax Appeal No.1764/2017 dated 22.01.2020 upholding the tribunal’s foregoing findings. This is followed by the assessee’s tabulation chart at pages 102 to 104 of the paper book for assessment years 2004-2005 to 2023-2024 wherein the department has not raised any such issue. Learned counsel has further compiled all the corresponding sec.143(1) “processing(s)” as well as sec.143(3) “assessment(s)” with
6 ITA.Nos.4375, 4374, 4373 & 4372/Mum./2023 the final outcome thereof in the first and second appeal proceedings.
It transpires from perusal thereof that the Revenue’s very stand seeking to apply sec.2(15)(proviso) (supra) has all along been rejected. We do not see any change either in the relevant facts and circumstances or any distinction in the assessee’s activity(ies) which could take us to a different conclusion in the impugned four assessment years. Faced with this situation, we adopt judicial consistency and reject the Revenue’s instant sole substantive grievance. Hon’ble apex court’s landmark decision isalso found to be not applicable herein as the taxpayer before us has not been found to have carried out any such business or commercial activity(ies)in either of these four assessment years. We wish to reiterate here that the heads of income herein again remain the same i.e., interest income and compensation etc., which already stand decided against the department as per the preceding discussion. We thus reject the Revenue’s instant sole substantive grievance in very terms.
7 ITA.Nos.4375, 4374, 4373 & 4372/Mum./2023 No other ground or argument has been pressed before us.
These Revenue’s four appeals ITA.Nos.4375, 4374, 4373 & 4372/Mum./2023 are dismissed in above terms. A copy of this common order be placed in the respective case files.
Order pronounced in the open Court on 18.07.2024
Sd/- Sd/- [GIRISH AGRAWAL] [SATBEER SINGH GODARA] ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai, Dated 18th July, 2024 VBP/- Copy to
The applicant 2. The respondent 3. The Pr. CIT, Mumbai concerned 4. D.R. ITAT, “D” Bench, Mumbai. 5. Guard File. //By Order// //True Copy // Asst. Registrar, ITAT, Mumbai Benches, Mumbai.