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1 - 9 of 9 (1.31 seconds)Section 12 in The Income Tax Act, 1961 [Entire Act]
The Societies Registration Act, 1860
Rajasthan Societies Registration Act, 1958
Section 14A in The Income Tax Act, 1961 [Entire Act]
The Income Tax Act, 1961
Commissioner Of Income-Tax vs Paramhans Ashram Trust on 8 December, 1992
ACIT vs. M/s. Shri Panchyati Dharamshala
5.2. On the other hand, the ld. A/R of the assessee vehemently supported the order
of the ld. CIT (A) and requested that the order of ld. CIT (A) may be confirmed.
5.3. We have heard the rival contentions and perused the material available on
record. The assessee society being registered is governed by the provisions of Societies
Registration Act, 1860 and now the Rajasthan Societies Registration Act, 1958 regulates
the affairs of the societies established for charitable purposes. The AO noted that the
activities of the assessee trust, its charitable purpose is that of advancement of general
public utility. The AO placing reliance on the decision of Hon'ble Jurisdictional High
Court in the case of CIT vs. Paramhans Ashram Trust (2009) 184 Taxman 204 (Raj.)
observed that the charitable purpose of the assessee society is that of advancement of
general public utility. Thus, the assessee was required to explain as to why in view of
the amended provisions of section 2(15), appropriate action u/s 13(8) be not taken. On
the explanation furnished by the assessee, the AO was not satisfied. Therefore, he
forfeited the exemption allowable to the assessee trust u/s 11 & 12 of the IT Act by
applying first proviso to section 2(15) read with section 13(8) of the IT Act, 1961. The
AO has also not allowed capital expenditure on the ground that since he has forfeited
the exemption. The ld. CIT (A) allowed the claim of the assessee for the reasons given
in para 4 to 4.3 of his order as under :-
Additional Commissioner Of Income-Tax ... vs Surat Art Silk Cloth Manufacturers ... on 19 November, 1979
4. The ld. CIT (A) also placed reliance on the judgment of Hon'ble Supreme Court
in the case of Addl. CIT vs. Surat Art Silk Cloth Mfg. Association, 121 ITR 1 (SC)
wherein it is held that what is important in the case of trust or institution is the primary
or dominant purpose. If the dominant purpose is charitable, another object which by
itself may not be charitable, would not prevent the trust or institution from being a valid
charity. The ld. CIT (A) after going through the tariff rate of room rent charged by the
assessee opined that the charges are very nominal starting from a mere Rs. 40/- and it
indicates that no profit motive is involved. He, considering all the legal and factual
position, held that proviso to section 2(15) is not attracted in this case and disallowance
of exemption u/s 11 & 12 is unjustified. Thus he directed the AO to assess the society
as per provisions of section 11 & 12 and grant the requisite exemption.
4.1. In respect of denial of claim of capital expenditure amounting to Rs. 72,35,233/-,
the ld. CIT (A) allowed the claim of the assessee by observing as under :-
Section 12A in The Income Tax Act, 1961 [Entire Act]
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