While dismissing a departmental appeal, a division bench of the Delhi ITAT held that receiving fee from non-members can’t be a ground for denying exemption under section 11(1) of the Income Tax Act, 1961.
Assessee, PHD Chamber Of Commerce And Industry, is an association of professional and businessman to protect and promote the interest of its members, has been enjoying the exemption u/s 11(1) of the Income Tax Act.
The source of assessees’ income was membership fees from its members, specialized services, services and facilities, meetings, seminars and training programmes, sale of publication etc.
For the relevant assessment year, the Assessing Officer noted that the assesse received fee from other non-members of the institution and such income is assessable under the Income Tax Act.
The first appellate authority also accepted the contentions of the assessee by finding that the principle of mutuality is apparently not applicable in the case of the assessee.
Upholding the order, the bench noted that the case of the assessee is covered in its favour by the orders of the Ld. CIT(A)’s predecessors for the Assessment years 2006-07 to 2011-12 and also by the order of the Hon’ble Delhi High Court in assessee’s own case for the AY 2006-07 & 2007-08. The Departmental Appeal for the AY 2008-09 & 2009-10 has also been dismissed by the Tribunal.
“Therefore, the Ld. CIT(A) has rightly observed that there is no sufficient reason to deviate from the appellate orders of the Ld. CIT(A) of the earlier years allowing the exemption u/s. 11(1) and accordingly, the AO was directed to allow the exemption u/s. 11(1) with all consequential benefits, which does not need any interference on our part, hence, we uphold the action of the Ld. CIT(A) on the issue in dispute and reject the grounds raised by the Revenue and accordingly, we dismiss the Appeal filed by the Revenue.”
Read the full text of the Order below.
