Dismissing the appeal of the revenue the Tribunal held that ; the proviso to section 2(15) was never meant to deprive genuine trusts and institutions whose main object was charity but which in the process of achieving the main object undertook some income generating activity which was ancillary and incidental to the main object, therefore letting out function hall cannot be considered as commercial activity. Tribunal also held that no disallowance can be made for failure deduct tax at source when the income of the assessee was held to be exempt . ( AY. 2012-13)
ITO v. Kalinga Cultural Trust. (2018) 61 ITR 24 (Hyd) (Trib)
S. 11 : Property held for charitable purposes – letting out function hall cannot be considered as commercial activity -Exemption is entitle-No disallowance can be made for failure deduct tax at source when the income of the assessee was held to be exempt .[ S. 2(15) , 12A, 12AA, 40(a)(ia) ]