November 2022
Charitable purpose — Exemption u/s 11 — Rule of consistency — Exemption consistently granted in earlier assessment years — Concurrent findings by appellate authorities that no change in activities of assessee and no activity carried out with profit motive — Supervision or monitoring of activities by donor not sufficient to hold that any profit motive is involved — Grant of benefit of exemption by tribunal proper
By K. B. Bhujle, Advocate
CIT vs. Professional Assistance For Development Action
[2022] 447 ITR 103 (Del.)
A.Y.: 2011-12
Date of order: 15th July, 2022 Section: 11 of ITA, 1961
52. Charitable purpose — Exemption u/s 11 — Rule of consistency — Exemption consistently granted in earlier assessment years — Concurrent findings by appellate authorities that no change in activities of assessee and no activity carried out with profit motive — Supervision or monitoring of activities by donor not sufficient to hold that any profit motive is involved — Grant of benefit of exemption by tribunal properThe assessee was engaged in activities for the upliftment of the poor, providing training and skill development in rural areas in the backward districts of certain states and got grants from the Central and State Governments and donations from various organisations. The assessee was allowed the benefit of exemption u/s 11 of the Income-tax Act, 1961 continuously up to A.Y. 2010-11. For the A. Y. 2011-12, the AO denied the exemption invoking the proviso to section 2(15).
The Commissioner (Appeals) allowed the exemption u/s 11 with all consequential benefits. The Tribunal found that the AO did not bring on record any evidence which suggested that the activities of the assessee were carried out with a profit motive and that in A.Ys. 2009-10 and 2010-11, the AO had held that the assessee was engaged in providing relief to the poor within the meaning o
