ITO (Exemptions)-II, Hyd, Hyderabad V. Kalinga Cultural Trust, Hyd, Hyderabad

ITA 913/HYD/2015

• Counselvise Citation: 91322514 RSA 2015
• Duration Of Justice: 3 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-11-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 18-01-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 06-07-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B KURMI NAIDU
• Assessee Lawyers: V SIVA KUMAR; C S SUBRAMANYAM
• Keywords: Charitable institution
• Section: 40A(3); 12A; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SMT P.MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S.RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO.913/HYD/2015 (ASSESSMENT YEARS 2 011-12) INCOME TAX OFFICER(EXEMPTION) - -II, HYDERABAD V/S M/S. KALINGA CULTURAL TRUST, HYDERABAD (PAN - AAATK 3517 C ) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI B.KURMI NAIDU, DR RESPONDENT BY : SHRI C.S.SUBRAMANYAM & SHRI V. SIVAKUMAR DATE OF HEARING 12.10.2015 DATE OF PRONOUNCEMENT 04.11.2015 O R D E R PER SMT. P. MADHAVI DEVI, JUDICIAL MEMBER : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS) 9, HYDERABA D DATED 17.4.2015, WHEREBY IT WAS HELD THAT THE ASSESSEE IS ELIGIBLE FOR EXEMPTION UNDER S.11 OF THE ACT. 2. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE IS A SOCIETY REGISTERED UNDER S.12A OF THE ACT. THE RETURN OF I NCOME FOR THE YEAR UNDER CONSIDERATION WAS FILED BY IT ON 27.9.2011 DE CLARING TOTAL INCOME OF RS.NIL, AFTER CLAIMING EXEMPTION UNDER S.11. DUR ING THE COURSE OF ASSESSMENT PROCEEDINGS UNDER S.143(3) OF THE ACT, T HE CLAIM OF THE ASSESSEE FOR EXEMPTION UNDER S.11 WAS EXAMINED BY T HE ASSESSING OFFICER AND ON SUCH EXAMINATION, HE FOUND THAT THE ASSESSEES ACTIVITY OF CONSTRUCTING JAGANNATHA TEMPLE DOES NOT CONSTITU TE A CHARITABLE ONE WITHIN THE MEANING OF S.2(15), AND THE MAIN SO URCE OF ITS INCOME, BEING BY WAY OF RENTAL INCOME RECEIVED FROM THE RUN NING OF A FUNCTIONAL HALL, WAS OF COMMERCIAL NATURE, WITHIN THE MEANING OF ITA NO.913/HYD/2015 KALINGA CULTURAL TRUST, HYDERABAD 2 PROVISO TO S.2(15). HE ACCORDINGLY, REJECTED THE C LAIM OF THE ASSESSEE FOR EXEMPTION UNDER S.11 OF THE ACT, AND BROUGHT TO TAX THE EXCESS OF INCOME OVER EXPENDITURE AS PER INCOME AND EXPENDITU RE ACCOUNT OF RS.47,34,150. CONSEQUENT TO THE DISALLOWANCE OF EX EMPTION U/S.11 OF THE ACT, THE ASSESSING OFFICER ALSO DISALLOWED AN A MOUNT OF RS.39,000 INVOKING THE PROVISIONS OF S.40A(3), AND COMPLETED THE ASSESSMENT ON A TOTAL INCOME OF RS.47,73,150 VIDE ORDER OF ASS ESSMENT DATED 24.3.2014 PASSED UNDER S.143(3) OF THE ACT. 3. ON APPEAL, THE LEARNED CIT(A) FOLLOWING THE C ONSISTENT VIEW TAKEN BY THE FIST APPELLATE AUTHORITY IN ASSESSEES OWN CASE FOR PRECEDING YEARS, VIZ. ASSESSMENT YEARS 2008-09 TO 2010-11, VIDE ORDERS DATED 30.3.2012, 14.10.2014 AND 23.1.2015 RE SPECTIVELY, ALLOWED THE CLAIM OF THE ASSESSEE FOR EXEMPTION UND ER S.11 OF THE ACT. CONSEQUENT TO THE ACCEPTANCE OF THE CLAIM OF THE AS SESSEE FOR EXEMPTION UNDER S.11, THE LEARNED CIT(A), OBSERVING THAT THE GROUND RAISED BY THE ASSESSEE WITH REGARD TO DISALLOWANCE UNDER S.40A(3) AS HAVING BECOME INFRUCTUOUS, HAS TREATED THE SAME AS ALLOWED. 4. AGGRIEVED BY THE ORDER OF THE LEARNED CIT(A), R EVENUE IS IN APPEAL BEFORE US. 5. HAVING HEARD BOTH THE PARTIES AND HAVING CONSI DERED THE RIVAL CONTENTIONS IN THE LIGHT OF THE MATERIAL ON R ECORD, WE FIND THAT THE CLAIM OF THE ASSESSEE FOR EXEMPTION UNDER S.11 OF T HE ACT HAS BEEN DENIED ON THE GROUND THAT THE ACTIVITY OF THE ASSES SEE IN RUNNING THE FUNCTION HALL AND DERIVING RENTAL INCOME IS OF A CO MMERCIAL NATURE IN TERMS OF PROVISO TO S.2(15) OF THE ACT, AND ALSO TH AT CONSTRUCTING AND MAINTAINING A TEMPLE IS NOT AMONGST THE AIMS AND OB JECTS OF THE SOCIETY AND IS NOT A CHARITABLE ACTIVITY. AS CAN BE SEEN FROM THE FACTS OF THE CASE NARRATED ABOVE, IMPUGNED ORDER OF THE L EARNED CIT(A) IN ITA NO.913/HYD/2015 KALINGA CULTURAL TRUST, HYDERABAD 3 ACCEPTING THE CLAIM OF THE ASSESSEE FOR EXEMPTION I S BASED ON THE CONSISTENT VIEW TAKEN BY THE LEARNED CIT(A) IN ASSE SSEES OWN CASE FOR EARLIER YEARS. IT HAS BEEN BROUGHT TO OUR NOTI CE THAT THE ISSUE RELATING TO ASSESSEES CLAIM FOR EXEMPTION UNDER S. 11, IS ALSO COVERED IN FAVOUR OF THE ASSESSEE, BY THE DECISIONS OF THE TRIBUNAL DATED 6.6.2014 IN ITA NOS.894, 895/HYD/2013 AND 1067/HYD/ 2012 FOR ASSESSMENT YEARS 2006-07 TO 2008-09; AND DATED 3.7. 2015 IN ITA NOS.33 AND 339/HYD/2015 FOR ASSESSMENT YEARS 2009-1 0 AND 2010-11 RESPECTIVELY. A COPY EACH OF BOTH THESE ORDERS HAVE BEEN FURNISHED BEFORE US BY THE LEARNED COUNSEL FOR THE ASSESSEE A LONGWITH THE WRITTEN SUBMISSIONS FILED BY HIM. 6. IN ITS RECENT DECISION DATED 3.7.2015 IN ASSES SEES OWN CASES FOR THE ASSESSMENT YEARS 2009-10 AND 2010-11, THE TRIBUNAL, BESIDES TAKING NOTE OF THE EARLIER ORDER OF THE TRI BUNAL DATED 6.6.2014 ON THIS ISSUE FOR ASSESSMENT YEARS 2006-07 TO 2008 -09 (SUPRA), AFTER DUE CONSIDERATION OF THE NATURE OF THE ACTIVITIES O F THE ASSESSEE IN CONSTRUCTING JAGANNADHA TEMPLE AS WELL AS LETTING O UT OF THE FUNCTION HALL HELD THAT THE ASSESSEE IS ENTITLED FOR EXEMPTI ON UNDER S.11 OF THE ACT FOR THE ELABORATE REASONS DISCUSSED IN PARAS 8, 8.1 AND 8.2 OF THE ORDER, WHICH ARE REPRODUCED BELOW- 8. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PARTIES AND PERUSED THE MATERIAL ON RECORD AS WELL AS THE ORDERS OF REVENUE AUTHORITIES. AS COULD BE SEEN FROM THE ASSESSMENT ORDER, AO HAS DENIED EXEMPTION U/S 11 TO ASSESSEE PRIMARILY ON TWO REASONS, FIRSTLY, BECAUSE ASSESSEE IS CONSTRUCTING JAGANNADHA TEMPLE, WHICH, ACCORDING TO AO, IS NEITHER IN ACCORDANCE WITH THE AIMS AND OBJECTS NOR A CHARITABLE ACTIVITY. THE SECOND REASON IS, AFTER INTRODUCTION OF PROVISO TO SECTION 2(15) OF THE ACT , ASSESSEE LOOSES ITS CHARACTER OF TRUST HAVING BEEN ESTABLISHED FOR CHARITABLE PURPOSE AS IT HAS EARNED INCOME BY ENGAGING IN COMMERCIAL ACTIVITIES. AS FAR AS ALLEGATION OF AO THAT CONSTRUCTION OF TEMPLE BY ASSESSEE IS NEITHER IN ACCORDANCE WITH AIMS AND ITA NO.913/HYD/2015 KALINGA CULTURAL TRUST, HYDERABAD 4 OBJECTS OF ASSESSEE NOR CHARITABLE ACTIVITY IS CONCERNED, IT HAS TO BE REJECTED AT THE THRESHOLD I N VIEW OF THE DECISION OF THE COORDINATE BENCH IN ASSESSEES OWN CASE IN AYS 2006-07, 2007-08 AND 2008-09 IN ITA NOS. 894 & 895/HYD/13 AND 1067/HYD/12, DATED 06/06/14 WHEREIN THE COORDINATE BENCH AGREED WITH THE LD. CIT(A) THAT CONSTRUCTION OF JAGANNADHA TEMPLE IS NOT ONLY IN FURTHERANCE OF THE AIMS AND OBJECTS OF ASSESSEE SOCIETY BUT, IS ALSO A CHARITABLE ACTIVITY. IN VIEW OF THE AFORESAID, WE DO NOT FIND ANY MERIT IN THE SUBMISSIONS OF THE LD. DR THAT CONSTRUCTION OF JAGANNADHA TEMPLE IS NOT A CHARITABLE ACTIVITY. AS FAR AS THE SECOND REASON FOR DENYING EXEMPTION U/S 11 IS CONCERNED, IT IS THE ALLEGATION OF AO THAT AS ASSESSEE WAS INVOLVED IN COMMERCIAL ACTIVITY BY GENERATING INCOME BY LETTING OUT FUNCTION HALL, SELLING SOUVENIR, ETC, IT IS NOT ELIGIBLE FOR EXEMP TION IN VIEW OF THE PROVISO TO SECTION 2(15) OF THE ACT, WE ARE OF THE VIEW THAT THE SAME REQUIRES DEEPER ANALYSIS. HOWEVER, BEFORE DECIDING THE ISSUE, IT IS NECESSARY TO OBSERVE THAT THERE CANNOT BE ANY DISPUTE TO THE FACT THAT ASSESSEES OBJECTS ARE CHARITABLE IN NATURE, AS LD. DIT(E) HAS GRANTED REGISTRATION TO ASSESSEE U/S 12A OF THE ACT SINCE THE YEAR 1995 AND WHICH IS CONTINUE TILL DATE. 8.1. FURTHER, THERE IS NOTHING ON RECORD TO SUGGEST THAT IN THE INTERVENING PERIOD THERE IS ANY SUBSTANTIAL CHANGE IN THE AIMS AND OBJECTS OF ASSESSEE. THEREFORE, KEEPING IN VIEW THE AFORESAID FACTS, IT HAS TO BE DECIDED WHETHER THE INTRODUCTIO N OF FIST PROVISO TO SECTION 2(15) BY THE FINANCE ACT , 2008 W.E.F. 01/04/09 WOULD AUTOMATICALLY DISENTITLE THE ASSESSEE FROM BEING CONSIDERED AS HAVING BEEN ESTABLISHED FOR CHARITABLE PURPOSE AND THEREBY DEPRIVING IT FROM CLAIMING EXEMPTION U/S 11 OF THE ACT. A PLAIN READING OF SECTION 2(15) OF THE ACT, ALSO MAKES IT CLEAR THAT THE PROVISO APPLI ES ONLY TO THE LAST LIMB OF CHARITABLE PURPOSE I.E. ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY. THE INTENTION OF THE LEGISLATURE IN INTRODUCING THE PROVISO TO SECTION 2(15) AS COULD BE GATHERED FROM THE SPEECH OF THE HONBLE FINANCE MINISTER ON THE FLOOR OF PARLIAMENT, EXPLANATORY NOTES, DEPARTMENTAL CIRCULARS, IS TO DENY EXEMPTION TO TRUSTS OR INSTITUTIONS WHO IN THE GARB OF CHARIT Y ARE PURELY ENGAGED IN COMMERCIAL OR BUSINESS ACTIVITIES AND WHOSE MAIN INTENTION IS TO EARN PROFIT. THE PROVISO IS NEVER MEANT TO DEPRIVE GENUINE TRUSTS AND INSTITUTIONS WHOSE MAIN OBJECT ITA NO.913/HYD/2015 KALINGA CULTURAL TRUST, HYDERABAD 5 IS CHARITY BUT IN PROCESS OF ACHIEVING THE MAIN OBJECT THEY UNDERTAKE SOME INCOME GENERATING ACTIVITY WHICH IS ANCILLARY AND INCIDENTAL TO THE MAIN OBJECT. FURTHER, INCOME GENERATED FROM SUCH ACTIVITY IS ALSO UTILIZED FOR ACHIEVING THE MAIN CHARITABLE OBJECT. THE TRUE IMPORT AND EFFECT OF PROVISO TO SECTION 2(15) OF THE ACT CAME UP FOR SCRUTINY BEFORE A NUMBER OF HIGH COURTS. THE UNANIMOUS VIEW OF JUDICIARY IN THIS REGARD IS, PROVISO TO SECTION 2(15) HAS TO BE APPLIED KEEPING IN MIND THE DOMINANT OBJECT/PURPOSE OF THE TRUSTS OR INSTITUTIONS. THEREFORE, IT HAS TO BE SEEN WHETH ER THE DOMINANT OBJECT OF THE TRUST IS OF CHARITABLE NATURE IN CARRYING OUT THE OBJECT OF GENERAL PUBLIC UTILITY OR MAIN INTENTION OF THE ASSESSEE IS TO EAR N PROFIT. FURTHER, DEFINITION OF CHARITABLE PURPOSE AS DEFINED U/S 2(15) OF THE ACT CANNOT BE READ IN VACUUM, BUT, HAS TO BE READ ALONG WITH THE EXEMPTION PROVISIONS. THAT BEING THE CASE, A LITERA L INTERPRETATION TO THE PROVISO TO SECTION 2(15) CANNOT BE GIVEN IF THE OBJECTS OF THE EXEMPTION PROVISIONS ARE TO BE GIVEN FULL EFFECT. THE HONBLE DELHI HIGH COURT IN CASE OF INDIAN TRADE PROMOTION ORGANISATION VS. DIRECTOR GENERAL OF INCOME-TAX (E), 371 ITR 333 WHILE INTERPRETING THE EFFECT OF PROVISO TO SECTION 2(15) OF THE ACT, AFTER ANALYZIN G A NUMBER OF DECISIONS OF THE HONBLE SUPREME COURT AS WELL AS DIFFERENT HIGH COURTS OBSERVED THAT THE ONLY THING WHICH IS REQUIRED TO BE EXAMINED IS WHETHER THE TRUST OR INSTITUTION HAS BEEN ESTABLISHED FOR CHARITABLE PURPOSES. THE FACT THAT IT DERIVES INCOME DOES NOT IN ANY WAY DETRACT FROM THE POSITION THAT IT IS NOT AN INSTITUTION ESTABLIS HED FOR CHARITABLE PURPOSES. THE HONBLE HIGH COURT OBSERVED THAT MERELY BECAUSE ASSESSEE DERIVES RENTAL INCOME, INCOME OUT OF SALE OF TICKETS AND SALE OF PUBLICATIONS AND INCOME OUT OF LEASING OUT FOOD AND BEVERAGES OUTLETS IN THE EXHIBITION GROUNDS DOES NOT, IN ANY WAY, AFFECT THE NATURE OF TRUST AS A CHARITABLE INSTITUTION, IF, IT OTHERWISE QUALIFIES FOR SUCH A CHARACTER. IT WAS FURTHER OBSERVED BY THE HONBLE HIGH COURT THAT IF A MEANING IS GIVEN TO THE EXPRESSION CHARITABLE PURPOSE SO AS TO SUGGEST THAT IN CASE OF AN INSTITUTION HAVING AN OBJECT OF ADVANCEMENT OF GENERAL PUBLIC UTILITY IF DERIVES INCOME IT WOULD B E FALLING WITHIN THE EXCEPTION CARVED OUT IN THE FIRS T PROVISO TO SECTION 2(15) OF THE ACT, THEN, THERE WOULD BE NO INSTITUTION WHATSOEVER WHICH WOULD QUALIFY FOR EXEMPTION AND THE EXEMPTION PROVISION WOULD BE RENDERED REDUNDANT. THE HONBLE DELIH ITA NO.913/HYD/2015 KALINGA CULTURAL TRUST, HYDERABAD 6 HIGH COURT REFERRED TO ITS OWN DECISION IN CASE OF INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA AND ANOTHER VS. DIRECTOR GENERAL OF INCOME-TAX (E), 358 ITR 91 WHEREIN WHILE INTERPRETING EXPRESSIONS TRADE, COMMERCE AND BUSINESS, AS FIND PLACE IN TH E FIRST PROVISO TO SECTION 2(15), THE COURT HELD THAT MERELY BECAUSE FEES OR SOME OTHER CONSIDERATION IS COLLECTED OR RECEIVED BY AN INSTITUTION, IT WOULD N OT LOSE ITS CHARACTER OF HAVING BEEN ESTABLISHED FOR CHARITABLE PURPOSE. THE COURT OBSERVED, IN THIS CONTEXT, THE DOMINANT ACTIVITY OF THE INSTITUTION H AS TO BE LOOKED INTO. IF THE DOMINANT ACTIVITY OF THE INSTITUTION IS NOT BUSINESS, TRADE OR COMMERCE, THEN, ANY SUCH INCIDENTAL OR ANCILLARY ACTIVITY WOU LD ALSO NOT FALL WITHIN THE CATEGORIES OF TRADE OR COMMERCE OR BUSINESS. THE DRIVING FORCE OF THE TRUST OR INSTITUTION SHOULD NOT BE A DESIRE TO EARN PROFIT, BUT, UTILIZE THE SAME FOR ACHIEVING THE CHARITABLE OBJECTS FOR WHICH IT IS ESTABLISHED. TH E HONBE HIGH COURT LAYING DOWN THE PRINCIPLE AS TO HOW THE PROVISO TO SECTION 2(15) SHOULD BE CONSTRUED, HELD AS UNDER: 58. IN CONCLUSION, WE MAY SAY THAT THE EXPRESSION II CHARITABLE PURPOSE', AS DEFINED IN SECTION 2(15) C ANNOT BE CONSTRUED LITERALLY AND IN ABSOLUTE TERMS. IT H AS TO TAKE COLOUR AND BE CONSIDERED IN THE CONTEXT OF SEC TION 10(23C)(IV) OF THE SAID ACT. IT IS ALSO CLEAR THAT IF THE LITERAL INTERPRETATION IS GIVEN TO THE PROVISO TO S ECTION 2(15) OF THE SAID ACT THEN THE PROVISO WOULD BE AT RISK OF RUNNING FOWL OF THE PRINCIPLE OF EQUALITY ENSHRI NED IN ARTICLE 14 OF THE CONSTITUTION OF INDIA. IN ORDER T O SAVE THE CONSTITUTIONAL VALIDITY OF THE PROVISO, THE SA ME WOULD HAVE TO BE READ DOWN AND INTERPRETED IN THE CONTEXT OF SECTION 10(23C)(IV) BECAUSE, IN OUR VIEW , THE CONTEXT REQUIRES SUCH AN INTERPRETATION. THE CORREC T INTERPRETATION OF THE PROVISO TO SECTION 2(15) OF T HE SAID ACT WOULD BE THAT IT CARVES OUT AN EXCEPTION FROM T HE CHARITABLE PURPOSE OF ADVANCEMENT OF ANY OTHER OBJ ECT OF GENERAL PUBLIC UTILITY AND THAT EXCEPTION IS LIM ITED TO ACTIVITIES IN THE NATURE OF TRADE, COMMERCE OR BUSI NESS OR ANY ACTIVITY OF RENDERING ANY SERVICE IN RELATION TO ANY TRADE, COMMERCE OR BUSINESS FOR A CESS OR FEE OR A NY OTHER CONSIDERATION. IN BOTH THE ACTIVITIES, IN THE NATURE OF TRADE, COMMERCE OR BUSINESS OR THE ACTIVITY OF RENDERING ANY SERVICE IN RELATION TO ANY TRADE, COM MERCE OR BUSINESS, THE DOMINANT AND THE PRIME OBJECTIVE H AS TO BE SEEN. IF THE DOMINANT AND THE PRIME OBJECTIVE OF THE INSTITUTION, WHICH CLAIMS TO HAVE BEEN ESTABLISHED FOR CHARITABLE PURPOSES, IS PROFIT MAKING, WHETHER ITS ACTIVITIES ARE DIRECTLY IN THE NATURE OF TRADE, COM MERCE OR ITA NO.913/HYD/2015 KALINGA CULTURAL TRUST, HYDERABAD 7 BUSINESS OR INDIRECTLY IN THE RENDERING OF ANY SER VICE IN RELATION TO ANY TRADE, COMMERCE OR BUSINESS, THEN I T WOULD NOT BE ENTITLED TO CLAIM ITS OBJECT TO BE A 'CHARITABLE PURPOSE'. ON THE FLIP SIDE, WHERE AN INSTITUTION IS NOT DRIVEN PRIMARILY BY A DESIRE OR MOTIVE TO EARN PROFITS BUT TO DO CHARITY THROUGH THE ADVANCEM ENT OF AN OBJECT OF GENERAL PUBLIC UTILITY, IT CANNOT BUT BE REGARDED AS AN INSTITUTION ESTABLISHED FOR CHARITAB LE PURPOSES. 8.2 IF WE APPLY THE AFORESAID PRINCIPLES TO THE FACTS OF THE PRESENT CASE, IT IS TO BE SEEN THAT AS HELD BY THE COORDINATE BENCH IN ASSESSEES OWN CASE IN THE PRECEDING AYS, ASSESSEE IS PURSUING CHARITABLE ACTIVITY IN ACCORDANCE WITH ITS AIMS AND OBJECTS WHILE CONSTRUCTING THE JAGANNADHA TEMPLE. IN FACT, THE AO HIMSELF IN ASSESSMENT ORDER HAS ADMITTED THAT INCOME/FUND OF ASSESSEE IS UTILIZED IN CONSTRUCTION OF THE TEMPLE. FURTHER, THE COORDINATE BENCH IN THE SAID ORDER HELD, BY LETTING OUT FUNCTION HALL ASSESSEE IS NOT INVOLVED IN COMMERCIAL ACTIVITY SO AS TO DISENTITLE IT FROM CLAIMING EXEMPTION U/S 11. THEREFORE, CONSIDERED IN THE AFORESAID PERSPECTIVE, THERE BEING NO DISPUT E TO THE FACT THAT DOMINANT OBJECT OF ASSESSEE IS CHARITABLE IN NATURE, PROVISO TO SECTION 2(15) CANNOT BE APPLIED TO DENY EXEMPTION TO ASSESSEE U/S 11 OF THE ACT. IN OUR VIEW, AO WITHOUT EXAMINING THE ISSUE IN PROPER PERSPECTIVE HAS ABRUPTLY CONCLUDED THAT ASSESSEE IS NOT ENTITLED TO EXEMPTION U/S 11 OF THE ACT ONLY BECAUSE PROVISO TO SECTION 2(15) WAS INTRODUCED W.E.F. 01/04/09. IN OUR VIEW, PROVISO TO SECTION 2(15) OF THE ACT WI LL NOT APPLY AUTOMATICALLY TO EVERY TRUST OR INSTITUTI ON IRRESPECTIVE OF THE FACT, WHETHER THE DOMINANT OBJECT OF THE TRUST OR INSTITUTION IS CHARITABLE PURPOSE OR EARNING PROFIT. WHEN IN THE PRESENT CASE ASSESSEE IS REGISTERED AS CHARITABLE INSTITUTION AN D THERE IS NO CHANGE IN THE AIMS AND OBJECTS OF ASSESSEE IN THE IMPUGNED AY AND THE ACTIVITIES OF ASSESSEE OVER THE YEARS REMAINS THE SAME, THE PROVISO TO SECTION 2(15) CANNOT BE APPLIED TO ASSESSEE TO DENY EXEMPTION U/S 11 OF THE ACT. IN VIEW OF THE AFORESAID, WE DO NOT FIND ANY MERIT IN THE SUBMISSIONS OF THE LD. DR SO AS TO DISTURB THE FINDING OF THE LD. CIT(A) ON THIS ISSUE. ACCORDINGL Y, WE UPHOLD THE ORDER OF LD. CIT(A) BY DISMISSING THE GROUNDS RAISED. ITA NO.913/HYD/2015 KALINGA CULTURAL TRUST, HYDERABAD 8 7. FACTS AND CIRCUMSTANCES OF THE CASE IN THE YEA R UNDER APPEAL, VIZ. ASSESSMENT YEAR 2011-12, BEING SIMILAR TO THOSE CONSIDERED BY THE COORDINATE BENCHES OF THE TRIBUNA L IN ASSESSEES OWN CASE FOR EARLIER YEARS NOTED ABOVE AND IN THE ABSEN CE OF ANYTHING TO THE CONTRARY BROUGHT ON RECORD BY THE LEARNED DEPAR TMENTAL REPRESENTATIVE, WE FIND NO JUSTIFICATION TO INTERFE RE WITH THE IMPUGNED ORDER OF THE CIT(A) ON THIS ISSUE, WHICH IS ACCORDI NGLY CONFIRMED. 8. AS FOR THE GRIEVANCE OF THE REVENUE ON THE ISSU E OF DISALLOWANCE MADE BY THE ASSESSING OFFICER INVOKING THE PROVISIONS OF S.40A(3), AS CORRECTLY OBSERVED BY THE LEARNED CIT( A), ONCE THE CLAIM OF THE ASSESSEE FOR EXEMPTION UNDER S.11 HAS BEEN A CCEPTED, THE DISALLOWANCE MADE BY THE ASSESSING OFFICER UNDER S. 40A(3) HAS NO LEGS TO STAND, AND THE GROUND OF THE ASSESSEE BEFOR E THE LEARNED CIT(A) BECOMES INFRUCTUOUS. WE ACCORDINGLY FIND NO MERIT IN THE GROUND OF THE REVENUE ON THIS ISSUE AS WELL. 9. IN THE RESULT, REVENUES APPEAL IS DISMISSED PRONOUNCED IN THE COURT ON 4 TH NOVEMBER, 2015 SD/- SD/- (S.RIFAUR RAHAMAN) (P.MADHAVI DEVI) ACCOUNTANT MEMBER. JUDICIAL MEMBER DT/- 4 TH NOVEMBER, 2015 COPY FORWARDED TO: 1. M/S. KALINGA CULTURAL TRUST, PLOT NO.1269, ROAD NO. 12, BANJARA HILLS, HYDERABAD 500 012 2. INCOME TAX OFFICER (EXEMPTION ) - 2 , HYDERABAD 3. COMMISSIONER OF INCOME - TAX(APPEALS) 9, HYDERABAD 4. COMMISSIONER OF INCOME - TAX (EXEMPTION), HYDERABAD 5. DEPARTMENTAL REPRESENTATIVE ITAT, HYDERABAD B.V.S.