M/S INNOVTIVE MICROFINANCE FOR POVERTY ALLEVIATION,CHENNAI vs. DCIT(EXEMPTIONS),CHENNAI CIRCLE, CHENNAI
What did the Tribunal hold?
The Tribunal upheld the orders of the AO and CIT(A), confirming that the assessee's microfinance activities, characterized by exorbitant interest rates, were commercial in nature and not charitable. Therefore, the claim for exemption under Section 11 was disallowed.
What were the facts?
The assessee, a microfinance institution, claimed exemption under Section 11 of the Income Tax Act for AY 2013-14. The Assessing Officer (AO) and Commissioner (Appeals) denied this exemption, holding that the assessee's activities were commercial due to high interest rates charged.
What were the issues?
Whether the microfinance activities of the assessee, involving high interest rates, qualify as charitable activities for exemption under Section 11, or if they constitute commercial activities hit by the proviso to Section 2(15).
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Cases cited in this judgment(10)Show listHide list
Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.
- CIT v. Vegetable Products Ltd.2,664 citing88 ITR 192 · 1973 · SC
- Addl. CIT v. Surat Art Silk Cloth Manufacturers Association328 citing121 ITR 1 · 1980 · SC
- Radhasoami Satsang v. CIT168 citing259 ITR 489 · 2000 · HC
- Asstt. CIT v. Thanthi Trust98 citing247 ITR 785 · 2001 · SC
- Commissioner of Sales Tax v. Sai Publication Fund62 citing258 ITR 70 · 2002 · SC · Read judgment
- ITO (Exemption), Madurai v. Kalanjiam Development Financial Services7 citing64 Taxmann.com 255 · 2015
- Spandana (Rural & Urban Development Organisation) v. ACIT7 citing40 DTR 153 · 2010
- ADIT(E) v. Bharatha Swamukhi Samsthe6 citing28 DTR 13 · 2009 · ITAT
- Sakhi-Saheli Microfinance Forum v. CIT(E)4 citing108 Taxmann.com 435 · 2019
- Sreema Mahila Samity v. DCIT3 citing167 ITD 420 · ITAT
Income Tax Appellate Tribunal, ‘C’ BENCH, CHENNAI
Before: SHRI MAHAVIR SINGHAND SHRI JAGADISH
PER MAHAVIR SINGH, VICE PRESIDENT:
This appeal by the Revenue is arising out of the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi in Order No.ITBA/NFAC/S/250/2023- 24/1058109186 (1) dated 21.11.2023. The assessment was framed by the DCIT(Exemptions), Chennai Circle, Chennai for the assessment year 2013-14 u/s.143(3) of the Income Tax Act, 1961 (h
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