Law: Income Tax Act, 1961

Section: 11,11(4A),12AA,11(1),(2),(3)(3A),254(2)

JUDGMENT Mrs. Chitra Venkataraman, J. - The assessee is on appeal as against the common order passed by the Income Tax Appellate Tribunal relating to the assessment years 2008-09 and 2009-10. There were six appeals before the Income Tax Appellate Tribunal, out of which five were by the Revenue and one by the assessee. 2. Following are the questions of law raised by the assessee in Tax Case (Appeal)No.35 of 2014. "1. Whether the Tribunal was right in not adjudicating the specific issue raised by the Revenue questioning the decision of the Commissioner of Income Tax (Appeals) that the income from letting out the property should be treated as business income or income from property for the purpose of invoking Section 11 of the Income Tax Act, 1961? 2. Whether the Tribunal was right in holding that the matter should be remanded to the files of the Assessing Officer to examine the nature of activity and its income derived as incidental to the objects of the assessee or as a separate business for the purpose of Section 11 and more specifically for Section 11(4A)? 3. Whether the income earned from letting out of the property is taxed as business income for the purpose of invoking Section 11 of the Income Tax Act, 1961?" 2.1 The assessee herein is a Charitable Institution granted registration under Section 12AA of the Income Tax Act, 1961. The Society was formed to provide education, medical relief to the poor and objects of general public utility. It is stated that it is running lodging accommodations at two places and has a large Auditorium for conducting functions at Vepery and one such small Auditorium is at Esplanade and a large ground at Royapettah, which has a commercial value to be let out for public functions, exhibitions, etc. The Society maintains swimming pool, recreation centres and gymnasium. Two schools and a home were formed and maintained for the deprived children. Relief activities in times of flood and other natural calamities are also being carried out by the Society. The Auditorium and the hall are let out to members and non-members. Rooms are also let out to members and non-members, which included providing of food. The Assessing Officer held that…

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