Law:

Section:

Section 2(15) of the Income-tax Act, 1961 - Charitable/religious purpose - Assessment year 1996-97 - Assessee-trust established to provide for general public utility, grounds and buildings, which were convenient, desirable or necessary for games and sports both indoor and outdoor and to promote, manage or assist in promotion or management of all forms of social intercourse of athletic sports, pastimes and/or cultural and educational activities for its members would be 'charitable organization' under section 2(15) [In favour of assessee] The assessee-trust was established to provide for general public utility, grounds and buildings, convenient, desirable or necessary for games and sports both indoor and outdoor and to promote, manage or assist in the promotion or management of all forms of social intercourse of athletic sports, pastimes and/or cultural and educational activities for its members. The assessee claimed exemption under section 11. The Assessing Officer held that the dominant object of the assessee was to provide amenities and facilities to the members of the club and consequently, it was a mutual organization and its income was taxable accordingly. On appeal, the Commissioner (Appeals) upheld the order of the Assessing Officer. The Tribunal, however, reversed the findings of the Commissioner (Appeals) holding that the activities of the assessee fulfilled requirement of section 2(15). Held that there was a finding of fact that the assessee was providing sports facilities as a part of its activities consisting of badminton, table tennis, billiards, cricket and skating among others. During the assessment year, the assessee had expended an amount of nearly Rs. 50 lakhs on constructing a swimming pool. The fact that the assessee provided service to its members did not detract from the position that it advanced a general public utility. The advancement of any object of benefit to the public or a section of the public as distinguished from a benefit to an individual or a group of individuals would be a charitable purpose. The membership of the society was drawn from a diverse cross-section of the society. The assessee did not exist only for an individual…

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