DEPUTY COMMISSIONER OF INCOME TAX (EXEMPTIONS)-1(1), MUMBAI V. INDIAN INSTITUTE FOR HUMAN SETTLEMENTS, MUMBAI

ITA 2328/MUM/2024

AI Insights

The case revolves around the Indian Institute for Human Settlements, a non-profit organization, which was denied exemption under section 11 of the Income Tax Act by the Assessing Officer, citing that its activities were commercial in nature. The organization appealed against this decision, and the CIT(E) reversed the AO's decision, leading to the revenue's appeal to the Tribunal. The Tribunal's decision focused on the validity of the 12AA registration and the scope of the AO's authority in re-examining the objects of the trust post-registration.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 303097 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-04-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2013-2014
• Other Referred Cases: ACIT(E) vs Ahmedabad Urban Development Authority, CIT vs Ahmadabad Urban Development Authority, DIT(E) vs Gemological Institute of India, CIT vs Sri Thyaga Brahma Gana Sabha, Gujarat State Co-operative Union vs CIT, Dharmadeepti vs CIT, Soorya Educational Trust vs ITO, Surat City Gymkhana vs CIT, Deputy Director of Income-tax (Exemption), Ernakulam vs Kuttukaran Foundation
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside; Opportunity of being heard; Question of law; Charitable institution
• Section: 143(3); 142(1); 143(2); 64; 11; 12AA; 22; 12A; 13; 80G; 260A; 20

Judgement Text

"Page | 1 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “C”, MUMBAI BEFORE SHRI NARENDRA KUMAR BILLAIYA, ACCOUNTANT MEMBER AND SHRI RAJ KUMAR CHAUHAN, JUDICIAL MEMBER ITA NO. 2328/MUM/2024 (A.Y: 2013-14) DCIT (Exemptions)-1(1) 6th floor, MTNL Building Cumballa Hill, Dr. G D Deshmukh Marg, Peddar Road, Mumbai-400 026 Vs. Indian Institute for Human Settlements 2, Purnima Patel Compound, L. J. Marg, Nepean Sea Road, Mumbai-400 006 PAN: AACCI0088F (Appellant) (Respondent) Assessee Represented by : Shri Yogesh Thar a/w Chaitanya Joshi, Ld. AR Department Represented by : Shri Puskaraj Bhange Patil, Ld. DR Date of conclusion of Hearing : 24.01.2025 Date of Pronouncement : 16.04.2025 O R D E R PER RAJ KUMAR CHAUHAN (J.M.): 1. This appeal is filed by the appellant/revenue against the order dated 13.03.2024 of Learned Commissioner of Income Tax (Exemptions)/National Faceless Appeal Centre, Delhi [hereinafter ITA No. 2328/Mum/2024 Indian Institute for Human Settlements Page | 2 referred to as the “CIT(E)”], wherein the Ld. CIT(E) has allowed the appeal of the assessee. 2. The brief facts as culled out from the order of lower authorities states that appellant is a prospective national education institution, incorporated u/s 25 of the Companies Act 1956 on December 23, 2008 as a non profit corporation (now u/s 8 of the Companies Act 2013). The institution is registered as a charitable organisation with the commissioner of income tax (exemption), Mumbai u/s 12A of the Act. The institution has also received exemption u/s 80G of the Act vide order dated December 22, 2009. The assessee has filed the return of income on September 29, 2013 for AY 2013-14 declaring a total income of Rs. NIL. The Appellant's case was selected for scrutiny and notices under section 143(2) and 142(1) of the Act were issued and duly served on the Appellant. In response to the said notices, the Appellant had filed all the necessary details and explanations asked by the Assessing Officer (AO). The assessment was completed u/s. 143(3) of the Act and the AO passed an order dated February 23, 2016 assessing the total income at Rs. NIL. However, exemption u/s. 11 of the Act has been denied to the Appellant on the alleged ground that no educational activities has been ITA No. 2328/Mum/2024 Indian Institute for Human Settlements Page | 3 carried out by the Appellant and receipts of consultancy charges, seminar fees sponsorship are in the nature of services provided to trade and commerce. 3. As per Memorandum of Association the sole activity of the Appellant is to promote the development and dissemination of knowledge, understanding, Information and skills in all matters connected with the establishment, operation and transformation of human settlement, including engaging in providing education and training and undertaking research, consultancy and advocacy, and taking any action in furtherance of these purposes: b) The activities from which the Appellant has received the seminar fees, course fees and sponsorship and consultancy charges are the activities in the nature of educational activities and not services provided in relation to trade and commerce, therefore, the proviso to Section 2(15) of the Act does not apply. The Appellant therefore, prays that the activities carried on by the Appellant be treated as educational activities and/or purely incidental thereto and accordingly exemption us. 11 of the Act be granted. ITA No. 2328/Mum/2024 Indian Institute for Human Settlements Page | 4 4. Aggrieved by the assessment order, assessee preferred appeal before the Ld. CIT (E) who allowed the appeal of the assessee. 5. Therefore, aggrieved by the impugned order of Ld. CIT(E), revenue preferred the present appeal before us and has raised the following grounds of appeal:- i) \"\"Whether after considering the facts and circumstances of the case, and in law the Ld. CIT(A) erred in holding that the AO is not entitled to deny exemption under section 11 of the Act to the assessee in view of the registration granted u/s 12AA of the Act whereas the AO has not cancelled the registration but only denied claim of exemption for the concerned AY-2013-14 by invoking the provisions of section 2(15) as the AO found that the activities are commercial in nature ? ii) Whether on the facts and circumstances of the case and in law and in light of the law laid down by the Hon'ble Supreme Court in civil appeal no. 21762 of 2017 in various batch of appeal and SLPs [lead case ACIT(E) us Ahmedabad Urban Development Authority (2022) 143 taxmann.com 278 (SC)], the Ld. CIT(A) erred in not appreciating that the assessee is not entitled to exemption u/s 11 of the Act because it is hit by proviso to section 2(15) of the Act as the assessee is involved in the certification of certain courses and organizing of the seminars only without imparting the formal education, which are in the nature of trade, commerce or business? Whether on facts and circumstances of the case and in law, the Ld. CIT(A) was justified in concluding that the activities of assessee are not ITA No. 2328/Mum/2024 Indian Institute for Human Settlements Page | 5 covered vide proviso to section 2(15) of the Act not withstanding all the arguments of the Department which clearly established that the activities of the assessee were aimed at generating surplus and had clear components of activities that would qualify as trade, business or commerce, irrespective of how the surplus from these activities is utilized? 6. We have heard Ld. AR and Ld. DR and examined the record. It is argued on behalf of assessee that the income earned and sought to be exempted u/s 11 of the Act has been earned by the assessee from the activities which are incidental to the main object of the assessee. It is further argued that the assessee has been granted registration u/s 12AA of the Act which is valid and subsisting, therefore the Ld. AO has no locus standi to probe into the approved objects of the institution and all the activities carried out by the assessee are charitable in nature. The Ld. AR further stated that the Ld. CIT(E) has rightly granted the relief to the assessee because the case of assessee and the judgment of Ld. CIT(E) is supported by the judgment of Hon’ble Bombay High Court in the case of DIT(E) v. Gemological Institute of India (2019) 105 taxmann.com 170 (Bom). Ld. AR further submitted that the reliance by the revnue on the judgment of Hon’ble Apex Court in the case of CIT vs. Ahmadabad Urban Development Authority (AUDA) (2022) 143 taxmann.com 278 ITA No. 2328/Mum/2024 Indian Institute for Human Settlements Page | 6 (SC) is misplaced as the ratio of the AUDA case does not pertains to the power of the AO with respect to a matter /activities of a charitable institution having a valid and subsisting registration u/s 12A of the Act. Para 6 to 10 of the written submissions of assessee in that regard are relevant and extracted below:- “6. At the outset, the Respondent Assessee submits that the Supreme Court decision in AUDA (supra) has no bearing on the present appeal. This is so because the question which the Hon'ble Supreme Court was posed to decide was not relating to the assessing officer's domain to re-examine the approved objects of the trust. The precise question of law before the Hon'ble Supreme Court in the case of AUDA (supra) as stated in para 4 of the said decision reads as under: \"4. In these batch of appeals and special leave petitions, the primary question which falls for consideration is the correct interpretation of the proviso to Section 2(15) of the IT Act introduced by amendment w.e.f. 1-4- 2009....\" 7. As could be observed from the above question of law, the Hon'ble Supreme Court was called upon to decide only the scope of proviso to s. 2(15) of the Act and not as to whether or not the assessing officer can get into the approved objects of the trust during the assessment proceedings despite there being a valid and subsisting s. 12AA registration. 8. Further, in AUDA (supra), there is no whisper, much less any reference, to the earlier decision of the Hon'ble Supreme Court in Surat City Gymkhana (supra) wherein it has been held that a valid and subsisting registration u/s. 12A is a fait accompli and the same puts fetters on the ITA No. 2328/Mum/2024 Indian Institute for Human Settlements Page | 7 powers of the assessing officer. Therefore, ratio of Surat City Gymkhana (supra) is intact as of date and has not been disturbed by the decision in AUDA (supra). 9. As laid down by the Hon'ble Supreme Court in CIT v. Sun Engineering Works P. Ltd. [1992] 198 ITR 297 (SC), a judgment of the Court must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the court and that the decision of the Court takes its colour from the questions involved in the case in which it is rendered. 10. In view of the foregoing, in Respondent Assessee's most humble view, decision of the Hon'ble Supreme Court in AUDA (supra) has no role to play while deciding the present appeal.” 7. It is therefore argued that the impugned order is based on legally sound reasoning and correct appreciation of provision of the Act and therefore the appeal of the revenue lacks merits and is liable to be dismissed. 8. Ld. DR on the other hand submitted that order passed by Ld. AO was legally justified and Ld. CIT(E) has failed to appreciate facts correctly and has not considered the law laid down by the Hon’ble Apex Court in the case of AUDA (supra). The extracts of page 5 of the written submission of the Ld. DR are relevant and reproduced as under:- “The nature of activities undertaken by the Assessee as described during the course of Appellate proceedings are as follows: ITA No. 2328/Mum/2024 Indian Institute for Human Settlements Page | 8 Income from Consultancy Services Rs.1,10,20,985/-: Consultancy Charges have been received from various parties which are Government entities, NGOs, Town Planning and Development authorities and the United Nations etc. which are connected with urban planning environment and development, disaster management, transport development policy, each contributing in the field of human settlements and well-being and not engaged in any business activity nor having any profit motive. The Appellant places reliance on the audited financial statements wherein the Directors Report section, the detailed nature of activities conducted by the Appellant has been described. (Refer Page No. 58 to 64 of FPB). Some of the programme's / activities undertaken by the Appellant are 8-month Programme for Working Professionals in Urban Development, Urban Practitioner's Programme, IIHS Practice Programme, helped UNDP develop its Indian poverty strategy (2012-2017), various research programme's, etc. Although the aforesaid charges have been termed and reflected as income from consultancy services, it would be appreciated that effectively the Appellant was imparting/sharing expertise and knowledge collected by way of unified effort and research in respective field to educate the constituents in furtherance of their ultimate objective of implementing the same for common good of the society. It can be seen from the above activities that Assessee provided consultancy services to the specified institution not engaged in business activity nor having any profit motive but that does not establish the charitable character of the Assessee. For example, a lawyer rendering services exclusively to charitable organizations does not make their activities charitable. Similarly, the Assessee's consultancy services are commercial in nature, regardless of the clients served. Moreover, the Assessee's financial statements reveal minimal expenditure, with substantial receipts carried ITA No. 2328/Mum/2024 Indian Institute for Human Settlements Page | 9 forward as surplus, indicating a clear profit motive. If the Assessee intended to operate as a charitable institution, it would not have charged such high fees for its services. The Assessee has not brought on record any justification with tangible back-ups as to how its own activities were non-charitable in character. It is also seen from the P&L presented during the course of Appellate proceedings that the Assessee has not carried out any activity of charitable nature but has only earned the above receipts besides income from other sources. 4. With reference to the above fact pattern, the Revenue place its reliance on the decision of the Hon'ble SC in the case of Ahmedabad Urban Development Authority (2022) 143 taxmann.com 278 (SC), wherein under almost identical fact pattern, the Hon'ble SC held that \"fee, cess, or consideration\" received for commercial activities indicates a profit motive and, therefore, falls outside the ambit of charitable purposes and is hit by the proviso to section 2(15) resulting in denial of exemption under section 11 of the Act. The Revenue also places its reliance on the decision of the Hon'ble Chennai Tribunal in the case of FRP Institute v. ITO (Exemptions) [(2017) 88 taxmann.com 835 (Chennai - Trib.)], wherein the Hon'ble Tribunal denied exemption to a professional organization conducting paid workshops, observing that such activities were inherently commercial.” 9. It is therefore argued by Ld. DR that the impugned order be set aside and the order of the AO be restored. 10. We have considered these submissions and also examined the record. To proceed further, we deem it necessary to examine the relevant observation of the AO which are extracted below:- ITA No. 2328/Mum/2024 Indian Institute for Human Settlements Page | 10 “4. The assessee has claimed exemption u/s.11 of the IT. Act, which has been examined. It is seen that though the assessee is claimed to be an educational institution, no such courses have been conducted during the year and the only receipts are in the nature of consultancy charges, seminar fees, sponsorship which are in the nature of services provided to trade and commerce In view of the same the assessee was required to explain as to why the provisions of Section 2(15) are not attracted and exemption claimed u/s. 11 be consequently denied 5 The assessee has in reply vide letter dated 21.12.2015 stated that the main objectives is as an educational institution and accordingly the proviso to Section 2(15) is not applicable. It has also been stated that the services is not rendered to trade or commerce. The assessee has also relied on Circular No.11/2008 of CBDT and the following decisions 1. CIT vs. Sri Thyaga Brahma Gana Sabha [1991]-188 ITR 160 (Mad) 2. Gujarat State Co-operative Union vs. CIT [195 ITR 279] (Guj.) 3 Dharmadeepti vs. ČIT [1978]-114 ITR 454 (Chennai) 4 Soorya Educational Trust vs. ITO [2012]-22 taxmann.com 222. However, the assessee's contention is not acceptable as the pre-dominent objective has to be determined on the basis of activity conducted and not merely on the basis of Article of Association and Memorandum of Understanding. In the case of the assessee there is no educational activity conducted and the receipts are mainly in the nature of general public utility. Accordingly, the circular of CBDT and the case laws cited is not applicable to the facts of the case of the assessee. It is however seen that the expenditure on account of employees and other expenses are substantially higher than ITA No. 2328/Mum/2024 Indian Institute for Human Settlements Page | 11 the receipts for the year and the assessee has claimed deficit of Rs. 3.70 crores for the year.” 11. We have also noticed as to how the ld. CIT(E) has dealt with the above observation of AO in the impugned order which becomes clear from the decision part of the impugned order in para 6 to 6.6 which are extracted below:- “6. In this case, the AO found that the activities of the appellant did not constitute “education” as contemplated in section 2(15) which defines „charitable purpose‟, as the appellant was not offering any formal course of study. Rather the income of the appellant consisted of consultancy charges, seminar fees and sponsorship. The AO held that the appellant was engaged in “any other activity of general public importance”. Since the appellant was not engaged in charitable activity, the AO denied exemption u/s 11. However, since the expenses as per income and expenditure account exceeded the gross income, the AO assessed total income as NIL. 6.1 The appellant has argued that the since the appellant is approved u/s 12AA by the Commissioner of Income Tax and since the registration has not been cancelled, denying exemption u/s 11 is wrong and that the order is abinitio invalid. 6.2 The Hon. Supreme Court in Surat City Gymkhana [2008] 170 Taxman 612 (SC) held that that registration under section 12A was a fait accompli to hold the Assessing Officer back from further probe into the objects of the trust. In this case the Supreme Court endorsed the findings of Hiralal Bhagwati Vs. CIT [2000] 246 ITR 188 (Gujarat). The High Court held as under: ITA No. 2328/Mum/2024 Indian Institute for Human Settlements Page | 12 Once the registration under section 12A(a) was granted, the grant of benefit could not be denied. The ITO was not justified in refusing the benefits which would otherwise accrue under the registration. If there was no registration, as contemplated under section 12A(a) read with rule 17A, the revenue would have been justified in making a submission that the benefit could not be granted, but where the application for registration was submitted and the registration had been granted, the benefit could not be denied on the ground that the scheme was not for the benefit of the public at large. 6.3 Following on the logic of the Supreme Court‟s order in Surat City Gymkhana in the case of Ahmedabad Urban Development Authority v. Dy. Director of Income Tax (Exemption) [2011] 335 ITR 575(Guj.- HC) the Gujarat High Court held that if the 12A registration was not withdrawn on the date of the assessment order then the income of the assessee was exempt in entirety. The AO could not have travelled beyond the certificate of registration granted under section 12AA. The effect of such a certificate of registration under section 12AA, therefore, cannot be ignored or wished away by the AO by adopting a stand that the trust or institution is not fulfilling conditions for applicability of sections 11 and 12. 6.4 In the case of Deputy Director of Income-tax (Exemption), Ernakulam v. Kuttukaran Foundation [2012] 19 taxmann.com 331 (Cochin - Trib.) it was held that once registration is granted under section 12A by Commissioner, Assessing Officer, as a subordinate officer to Commissioner, cannot cancel registration; it is for Commissioner only to cancel registration, provided conditions under section 12AA(3) are satisfied. The ITAT took this position despite finding that the appellant was not engaged in “education” as contemplated in section 2(15). ITA No. 2328/Mum/2024 Indian Institute for Human Settlements Page | 13 6.5 The ratio of the decisions is that The Commissioner is the statutory authority to grant registration under section 12AA. The Commissioner after satisfying himself about the objects of the trust and genuineness of its activities, passes an order within six months registering the trust. He may also refuse to register the trust if he is not satisfied, after giving a reasonable opportunity of being heard to the trust. Once the 12AA registration is granted there is no power with the AO to ignore such registration. 6.6 In the light of the foregoing discussion, I concur with the appellant the AO was wrong in denying exemption u/s 11 when the appellant is approved u/s 12AA. Since the AO exceeded his authority in denying exemption u/s 11, I am not going into merit of whether the appellant is engaged in “education” as contemplated in section 2(15). 12. We now proceed to examine if the impugned order challenged in this appeal suffers from any perversity or illegality based on wrong interpretation of facts and law by Ld. CIT(E) which may warrant interference by this Tribunal. To proceed further, we deem it necessary to know the main objects of the assessee’s company as find mentioned in Article-1 of the Memorandum of Association:- “1. The name of the Company is INDIAN INSTITUTE FOR HUMAN SETTLEMENTS (\"the Company\") II. The registered office of the Company will be situated in the State of \"Karnataka. III. The objects for which the Company is established are: ITA No. 2328/Mum/2024 Indian Institute for Human Settlements Page | 14 [A] The Main Objects of the Company to be pursued by the Company on its incorporation are: (1) To Promote the development and dissemination of knowledge, understanding, information and skills in all matters connected with the establishment, operation and transformation of human settlements, including engaging in providing education and training and undertaking research, consultancy and advocacy, and taking any action in furtherance of these purposes. No object of the Company shall be carried out without permission of competent authorities whomsoever and no objects of the Company shall be carried out on commercial basis. [B] Objects incidental or ancillary to the attainment of the main object:- Knowledge Development & Dissemination (1) To establish branches or to establish any deemed universities, companies, bodies corporate, associations, societies or constituents at places in or outside India for the furtherance of its objects. (2) To assemble the best practitioners and academics from a variety of disciplines, including the disciplines relating to: i planning, design and engineering of human settlements; ii. economics; iii. the natural, earth, life and ecological, behavioral and social sciences; iv. management, governance and law; and v. any other branches of knowledge that may be relevant; ITA No. 2328/Mum/2024 Indian Institute for Human Settlements Page | 15 and to bring their minds to bear on the understanding and teaching of both problems and solutions related to human societies and settlements in India and abroad, with an emphasis on integrated, inter-disciplinary and trans- disciplinary approaches. *The Registered Office of the company is shifted from the state of Maharashtra ie, within the jurisdiction of the Registrar of Companies, Maharashtra at Mumbai to the State of Karnataka, pursuant to special Resolution passed at the Extra-Ordinary General Meeting held on June 16, 2014 and as approved by The Regional Director Western Region, Mumbai vide its order No-RD/STA/Sec. 13(120)/10/2014/7591 dated January 21, 2015. (3) To educate willing learners drawn from diverse social backgrounds and provide them with information, understanding and knowledge as also the technical, managerial and inter-personal skills needed to bring about equity and an improvement in the quality of life in human settlements and to ensure the sustainability of such settlements. (4) To create a body of knowledge, understanding, information and know- how regarding the entire range of challenges and problems with which human settlements are confronted and the possible solutions and thereafter disseminate this as widely as possible. (5) To develop higher and other education programmes and to enable learning and impart education related to the establishment, operation and transformation of human settlements to those admitted to these programmes and toward certificates, diplomas, undergraduate, postgraduate and advanced research degrees as appropriate. (6) To provide continuing education and in-service training to institutions, professionals and others in any way connected with the establishment, ITA No. 2328/Mum/2024 Indian Institute for Human Settlements Page | 16 operation and transformation of human settlements and to award certificates, diplomas and degrees as appropriate. (7) To provide information and education in matters related to the establishment, operation and transformation of human settlements or any aspect thereof through print, information technology, mass media and telephony enabled distance learning. (8) To conduct research and investigations in all matters related to the establishment, operation and transformation of human settlements and to disseminate the findings. (9) To provide design, consultancy and advisory services to any person or organization on matters related to the establishment, operation and transformation of human settlements. (10) To print, publish and distribute studies, reports and other publications and journals and establish libraries and information systems for the processing, publishing and selling and dissemination of education, technological and research products in furtherance of the objects of the Company.” 13. We have noticed that the alleged income has been earned by the assessee from consultancy services, consultancy charges from various parties which are government entities, NGO, town planning and development authority and the United nations, etc which are connected with urban planning and development, disaster management, each contributing in the field of human settlement and well being and not engaged in any ITA No. 2328/Mum/2024 Indian Institute for Human Settlements Page | 17 business activity nor having any profit as is claimed by assessee. The detailed nature of activity conducted by the appellant has been described in the audited financial statement (reference page no. 58 to 64 of the paper book). On the basis of this material, it is being claimed by the asseseee that the activities from which consultancy and service charges have been received are not the trade or commercial activity and forms the main part of the objective of the assessee. Ld. AR has relied on the case of Hon’ble Jurisdictional High Court of Bombay in the case of Director of income Tax (Exemption) Mumbai vs. Gemological Institute of India (2019) 105 taxmann.com 179 (Bom) which is extracted below:- “1. This appeal under Section 260A of the Income Tax Act, 1961 (the 'Act') challenges the order dated 22nd March, 2013 passed by the Income Tax Appellate Tribunal (the 'Tribunal'). The appeal relates to the Assessment Year 2008-09. 2. The revenue has framed the following questions of law for our consideration: \"(a) Whether, on the facts and in the circumstances of the case and in law, the Hon'ble Tribunal was justified in confirming the order of the Ld. CIT(A) allowing exemption under Section 11 of the Act, when actually the assessee trust was not carrying on educational activities falling within the definition of education as contemplated under Section 2(15) of the Act? ITA No. 2328/Mum/2024 Indian Institute for Human Settlements Page | 18 (b) Whether, on the facts and in the circumstances of the case and in law, the Tribunal was justified in holding that the Assessing Officer cannot examine the objects to the Society as long as there is valid registration under Section 12A granted to the assessee, as held by the Hon'ble Supreme Court in the case of ACIT v. Surat City Gymkhana reported at 300 ITR 214 (SC), when it is actually the Assessing Officer who scrutinizes the case and comes out with the facts, as to whether the activities of the assessee are as per the objects mentioned in the trust deed or that the assessee have expended its income towards the objects of the trust ?\" 3. So far as question (a) is concerned, it does not arise from the impugned order of the Tribunal. The issue whether or not the educational activities carried out by the Trust in terms of objects did not satisfy Section 2(15) of the Act was not examined by the Tribunal. This in view of the decision of the Apex Court in Asstt. CIT v. Surat City Gymkhana [2008] 170 Taxman 612/300 ITR 214 to the effect that once registration is granted a trust under Section 12A of the Act then it is not open to the Assessing Officer while examining compliance with Section 11 of the Act to revisit objects of the respondent-assessee and to hold contrary to the registration granted. Thus the nature of activity in terms of Section 2(15) of the Act was not verified nor considered by the Tribunal. 4. In the above view, question (a) as posed does not arise out of the order of the Tribunal and thus, it is not entertained. 5. So far as question (b) is concerned, the impugned order of the Tribunal has followed the decision of the Supreme Court in Surat City Gymkhana (supra) wherein it has been held that once the trust has received registration under Section 12A of the Act and that registration is subsisting then it is not open to the Assessing Officer to re-examine the objects of the trust to take a view contrary to the view taken while granting registration under Section ITA No. 2328/Mum/2024 Indian Institute for Human Settlements Page | 19 12A of the Act. The Tribunal observed that the only examination to be carried out by the Assessing Officer is whether or not the provisions of Section 11 have been complied with by the assessee for purpose of extending benefit of the exemption. 6. In the above view, as question (b) stands concluded by the judgment of the Apex Court in Surat City Gymkhana (supra). Therefore, question (b) as posed does not give any rise to any substantial question of law. 7. This appeal is dismissed. No order as to costs.” 14. We have carefully considered the arguments advanced by the rival parties and have marshalled the reasoning and gist of their submissions. The arguments raised on behalf of the assessee with respect to non- applicability of Hon’ble Apex Court case of AUDA (supra) are more convincing than the arguments raised by the revenue/appellant in that regard. The ratio of the Hon’ble Jurisdiction High Court squarely covers the facts and circumstances of the case in hand. As is evident from the para 6.3 onwards of the impugned judgment as Ld. CIT(E) held that if 12A registration was not withdrawn on the date of the assessment order then the income of the assessee was exempt in entirety and the Ld. AO could not have travelled beyond the certificate of registration granted u/s 12A of the Act. It was further held by Ld. CIT(E) that once the 12AA registration is granted, there is no power with the AO to ignore such ITA No. 2328/Mum/2024 Indian Institute for Human Settlements Page | 20 registration and the Ld. AO was wrong in denying exemption u/s 11 when the appellant is approved u/s 12AA. The Ld. CIT(E) further held that since the AO exceeded his authority in denying exemption u/s 11, he was not going into merit of whether the appellant was engaged in “Education” as contemplated in section 2(15) of the Act. While deciding so, the Ld. CIT(E) has relied upon the judgment of Hon’ble Supreme Court in Surat City Gymkhana (2008) 170 taxmann 612 (SC) wherein it was held that the registration u/s 12A was a fait accompli to hold the AO back from further probe into the objects of the trust. The Surat City Gymkhana case (supra) has been relied by the Hon’ble Jurisdictional High Court in Director of Income Tax (Exemption), Mumbai vs. Gemological Institute of India (supra). It is to be noticed that the SLP filed by revenue against the Jurisdictional High Court judgment was dismissed by the Hon’ble Supreme Court vide order dated 15th April 2019 reported as (2019) 105 taxmann.com 180 (SC). 15. On perusal of the grounds in the present appeal, it is to be noticed that only ground no. 1 pertains to the matter decided by Ld. CIT(E) and the ground no. 2 and 3 pertains to applicability of section 2(15) of the Act and the said aspect has not been decided by the Ld. CIT(E) because the ITA No. 2328/Mum/2024 Indian Institute for Human Settlements Page | 21 AO has exceeded his authority in denying exemption u/s 11 and therefore the question of applicability of section 2(15) in the case of assessee was left open being academic as there was no need to decide the said question on merit. We do not find any illegality in the impugned order passed by Ld. CIT(E) which may warrant interference by this Tribunal. 16. We respectfully follow the decision of Hon’ble Jurisdictional High Court in Director of income Tax (Exemption) Mumbai vs. Gemological Institute of India (2019) 105 taxmann.com 179 (Bom) (supra) and we have noticed that there is no illegality or perversity in the impugned order and the Ld. CIT(E) has decided the issue with well reasoned appreciation of facts and has meticulously followed the relevant legal precedents applicable to the controversy before him. For these reason, we find no merit in this appeal and the ground no. 1 raised by the revenue is dismissed. Ground no. 2 and 3 pertains to the matter which has not been decided by the Ld. CIT(E) and we agree with Ld. CIT(E) that there was no need for deciding the question of applicability of section 2(15) of the Act on merit. Therefore the decision on ground no. 2 and 3 pales into insignificance in view of ITA No. 2328/Mum/2024 Indian Institute for Human Settlements Page | 22 decision of ground no. 1. Therefore, the order of the Ld. CIT(E) is confirmed. 17. In the result, the appeal filed by the revenue is dismissed in above terms. Order pronounced in the open court on 16.04.2025. Sd/- Sd/- (NARENDRA KUMAR BILLAIYA) (RAJ KUMAR CHAUHAN) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) Mumbai / Dated 16.04.2025 Dhananjay, Sr.PS Copy of the Order forwarded to: 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// BY ORDER (Asstt. Registrar) ITAT, Mumbai "