S. 11 : Property held for charitable purposes – Assessee is engaged in educational activities to spread education in matters relating to tax laws, other laws and accountancy-Entitle to exemption – Order of CIT (A) denying the exemption was reversed . [S.2(15)12A, 80G]

Facts:

The Assessee is a Charitable Organization which was established on November 1, 1976. The assessee is the Apex body of Tax Practitioners of India. The members of the Association include Advocates, Chartered Accountants and Tax Practitioners across the Country. The appellant organizes seminars, Lectures, publishes journals, AIFTP Times, publications etc. The appellant has conducted more than 100 webinars during the period of COVID-19, any tax practitioner or public at large are allowed to attend the meetings. All the meetings were without any charges. The said Trust is registered under Bombay Public Charitable Trust Act, 1950, Society Registration Act, 1860 also registered under section 12A of the Act on January 29, 1999 and having certificate of Exemption under section 80G of the Act.

The main object of the Assessee is “to spread education in matters relating to tax laws, other laws and accountancy.”

The Ld. AO vide order dated March 28, 2014 issued under section 143(3) of the Act, inter alia proceed to assess the income of the Assessee as a Mutual Concern rather than a Charitable Organization, thereby making an Addition of Rs. 8,46,038/- by denying the exemption under section 11 of the Income-tax Act, 1961.

Held: Proviso to Section 2(15) of the Act i.e., any other activity or object of general public activity, will not apply to the assessee as the assessee is engaged in educational activity.

Further, assuming if the assessee is engaged in general public activity, if the Assessee while carrying out charitable objects earns some profit from any commercial activity to supplement, is main object, it cannot be said that the assessee has engaged itself in trade commerce and business so as to attract proviso to section 2(15) of the Act.

Further, the assessee has been granted exemption under section 11 of the Act since many years and the same has been accepted. Therefore, applying the rule of consistency the exemption has to be allowed.