The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) granted the Income Tax Exemption to Maharashtra Housing and Area Development Authority (MHADA) as its activity of providing Affordable Housing is charitable in nature.
The assessee has been claiming the benefit of registration under section 12A of the Act. The Assessing Officer denied the exemption available to the assessee under section 11 of the Act on the ground that the activities of the assessee fall within the meaning of ‘advancement of any other object of general public utility’ as specified in proviso to section 2(15) of the Act.
Section 2(15) of the Act defines “charitable purpose” to include relief of the poor, education, medical relief, preservation of environment (including watersheds, forests and wildlife) and preservation of monuments or places or objects of artistic or historic interest, and the advancement of any other object of general public utility.
The issues raised was whether an activity construes business or is in the nature of business is largely dependent upon the factor, whether such activity is actuated by profit motive or not. Merely because MHADA builds tenements and sells them does not lead to any inference that MHADA’s activities are in the nature of trade, commerce or business.
The assessee, MHADA submitted that the issue is squarely covered by the decision of the co- ordinate Bench of the Tribunal in assessee’s own case wherein the issue has been decided in favour of the assessee.
The ITAT bench, comprising judicial member Saktijit Dey and accountant member Rajesh Kumar and Judicial Member Saktijit Dey respectfully following the decision of the coordinate Bench of the Tribunal set aside the order of CIT(A) and direct the AO to allow the exemption under section 11 of the Act to the assessee, MHADA.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.
