| Aug-03-2021

Charitable Society Providing Hostel Facilities to Staff and Students Is Integral Part Of ‘Educational Activities’, Exemption Allowed

In Durga Charitable Society v. JCIT [I.T.A. No. 4440/DEL/2015 decided on July 22, 2021] Durga Charitable Society (“the Appellant”) is a Society duly registered under Society Registration Act, 1860 and is engaged in running various educational institutions, medical colleges and charitable hospitals.

Assessing Officer- The return of income for Assessment Year 2010-11 declared NIL income. Assessed surplus of Hostel as business income under Section 114(A) of the Income Tax Act, 1961 (“IT Act”) and disallowed hostel expenses amounting to Rs. 3,92,25,432/- and made addition under the head income from business and profession. Being aggrieved, the Appellant appealed.

Commissioner (Appeals) - Dismissed the appeal.

Hon’ble ITAT, New Delhi - Held that in absence of any evidence to show that the hostel facilities were provided to anybody other than students and staff of the trust, the hostel facilities provided by the educational institution shall be construed to be the intrinsic part of the ‘educational activities’ of the Appellant and they cannot be considered different than activities of the society of ‘education’. The Commissioner (Appeals) and the Assessing Officer failed to consider that the hostel facility is incidental to achieve the object of providing education as per object of the trust and hence comes under the charitable purpose which is exempt under Section 11 of the IT Act. Thus, allowed the appeal.

Online GST Course by Bimal Jain

Recorded: Certified Advanced GST Course

Course Details: Certificate of Participation will be Provided, Free GST Updates on E-mail, WhatsApp, Telegram for 1 Year, Background Material and PPT will be Provided on the downloadable basis, Total 21 Recorded Sessions (60 Hours), will be available for 120 hours or 60 Days whichever expires earlier.

For Registration:- https://cutt.ly/hxjl5Cu

Recorded: GST Course on Exports, Deemed Exports, SEZ, Imports, Merchandise Exports, Inverted Duty Structure (including Refunds)

Course Details: 6 Online Recorded Sessions of 2.30Hrs each with Background Material (BGM)

For Registration:- https://cutt.ly/pvw7mzl

For more details,
Call: +91-8076563802 | E-mail: intern@a2ztaxcorp.com | Web: www.a2ztaxcorp.in

DISCLAIMER: The views expressed are strictly of the author and A2Z Taxcorp LLP. The contents of this article are solely for informational purpose. It does not constitute professional advice or recommendation of firm. Neither the author nor firm and its affiliates accepts any liabilities for any loss or damage of any kind arising out of any information in this article nor for any actions taken in reliance thereon.