Case Number: ITA 690/DEL/2019
Appellant: UMAK Education Trust, S-135, Greater Kailash II, New Delhi
Respondent: Joint Commissioner of Income Tax (Exemption), Range-2, Delhi
Assessment Year: 2014-15
Result: Appeal Dismissed
Case Filed On: 2019-01-31
Order Type: Final Tribunal Order
Date of Order: 2022-11-02
Pronounced On: 2022-11-02
UMAK Education Trust, the appellant, filed an appeal against the order dated 5th November 2018 of the Commissioner of Income Tax (Appeals) [CIT(A)]-40, New Delhi, relating to the assessment year 2014-15. The case primarily revolved around the tax treatment of training fees received by the trust and whether these fees should be considered as business income under Section 11(4A) of the Income Tax Act, 1961.
The appellant contested the assessment order on the following grounds:
The case was heard by the Income Tax Appellate Tribunal (ITAT), Delhi Bench “G”, New Delhi, with Shri Anil Chaturvedi, Accountant Member, and Shri Anubhav Sharma, Judicial Member, presiding. The appellant was represented by Ms. Kanika Jain, CA, and the revenue was represented by Shri Abhishek Kumar, Sr. DR.
The ITAT reviewed the facts of the case, including the memorandum of understanding (MOU) between UMAK Education Trust and the hotels (A B Hotels Ltd. and Bhadohi Hotels Ltd.). The tribunal noted that the training provided by the trust was for managerial level employees of the hotels and was not aligned with the trust’s primary educational objectives.
The tribunal upheld the decision of the Assessing Officer (AO) and the CIT(A) that the training fees received by the trust should be considered as business income under Section 11(4A) of the Income Tax Act, 1961. The ITAT emphasized that the activities conducted were commercial in nature and not incidental to the attainment of the trust’s objectives.
In conclusion, the ITAT dismissed the appeal filed by UMAK Education Trust. The tribunal upheld the CIT(A)’s decision to treat the training fees as income from business and profession under Section 11(4A) of the Income Tax Act, 1961. This case highlights the importance of ensuring that activities conducted by charitable trusts align with their primary objectives to qualify for tax exemptions under Section 11 of the Income Tax Act, 1961.
Source: Income Tax Appellate Tribunal, Delhi Benches “G”, New Delhi
Disclaimer: This article provides an overview of the case and is not a substitute for professional legal advice. For detailed information, readers are encouraged to refer to the official case documents and consult with a qualified legal professional.
UMAK Education Trust vs JCIT (E), Range-2, Delhi: Assessment Year 2014-15
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