Section 2(15): Charitable activity – commercial activity – violation of section 13(2) – ITAT is the last fact-finding authority: [section 260A]

7 Commissioner of Income Tax (Exemption) Mumbai vs. Kutchi Sarvodaya Nagar

[ITXA No. 1887 OF 2018, Dated: 11/06/2025; A.Y. 2011-12 (Bom) (HC)]

Section 2(15): Charitable activity - commercial activity - violation of section 13(2) - ITAT is the last fact-finding authority: [section 260A]

The Assessee is a Trust registered with Director of Income Tax (Exemption), Mumbai under Section 12A of the Act. The Assessee filed its Return of Income declaring a total income of ₹NIL. The Assessee, Trust was constructing houses for its members and this was the only activity of the Trust for the last 50 years. The construction of these houses was for deserving vegetarians. For the purpose of construction, the Assessee Trust acquired 51,000 Sq. yards of land from Shri. V. K. Chedda at ₹2.75 Per Sq. yard. 352 persons came forward to participate and contributed ₹501/- as a membership fee and accordingly a sum of ₹1,76,352/- was collected and from that amount the said plot was purchased in the year 1962. It was also observed from the Income and Expenditure Account and the Balance-sheet that the Assessee had collected ₹48.68 crores from its members as instalments, till date, towards construction of flats. Transfer fees to the tune of ₹6.35 crores was also collected by the Assessee till date. For