Confederation of Real Estate Developers Association of India Vs ACIT (Exemption) (ITAT Mumbai)

The Income Tax Appellate Tribunal (ITAT) Mumbai heard appeals from the Confederation of Real Estate Developers Association of India concerning exemption under Section 11 of the Income Tax Act for assessment years 2014-15 and 2016-17. The core issue was whether the association's activities, particularly those involving members, qualified as charitable or commercial, impacting its eligibility for tax exemption. The tribunal consolidated the appeals due to common issues.

IN THE INCOME TAX APPELLATE TRIBUNAL
“C” Bench, Mumbai

Before Shri M. Balaganesh, Accountant Member
and Shri Ravish Sood, Judicial Member

ITA No.6896/Mum/2019
(Assessment Year: 2016-17)

Confederation of Real Estate
Developers Association of India,
5th Floor, PHD House,
4/2, Siri Insitutional Area,
New Delhi-110016
PAN – AABCC4354M
(Appellant) 

Vs.

ACIT (Exemption)-1(1),
Piramal Chambers, Lalbaug,
Parel, Mumbai 400 012
(Respondent)

ITA No.2815/Mum/2018
(Assessment Year: 2014-15)

M/s Confederation of Real Esate
Developers of India
Maker Bhavan II, 4th Floor,
18V Thackrey Marg,
New Marine Lines,
Mumbai 400 020
(Appellant) 

Vs.

Commissioner of Income-tax
(Appeals)-3, Room No. 354,
Aayakar Bhavan, M.K. Road,
Mumbai - 400020
PAN – AABCC4354M
(Respondent)

Appellant by: Shri Jitendra Jain &
Shri Sachin Romani, A.Rs
Respondent by: Shri. Kumar Padmapani Bora &
Ms. Kavita Kaushik, D.R

Date of Hearing : 31.07.2020
Date of Pronouncement: 15.09.2020

O R D E R

PER RAVISH SOOD, JM

The captioned appeals filed by the assessee are directed against the respective orders passed by the CIT(A)-3, Mumbai, dated 19.03.2018 and 21.08.2019 for A.Y. 2014-15 and A.Y. 2016-17, respectively, which in turn arises from the respective assessment orders passed under Sec. 143(3) of the Income Tax Act, 1961 (for short „Act‟), dated 30.11.2016 and 15.12.2018 for the aforesaid years. As common issues are involved in these appeals, the same therefore are being taken up and disposed off by way of a consolidated order. We shall first take up the appeal of the assessee for A.Y. 2016-17. The assessee has assailed the impugned order by raising before us the following grounds of appeal:

“1. The learned Commissioner of Income-tax (Appeals)-3 [CIT(A)'] erred in confirming the action of the Assessing Officer in denying the benefit of exemption under Section 11 of the Income-tax Act, 1961 (the Act') to the Appellant by applying the proviso to Section 2(15) of the Act and holding that the Appellant is carrying on activity in the nature of commerce and therefore objects of the Appellant is not to be treated as for charitable purpose.

2. In the alternative and without prejudice to the above, the CIT(A) erred in confirming the action of the Assessing Officer in not providing relief to the extent of receipts from members, applying the principle of mutuality, despite the fact that the Assessing Officer has himself treated the Assessee-trust as a mutual association.”

2. Briefly stated, the assessee which is a company registered under Sec. 25 of the Companies Act, 1956 (now Sec. 8 of the Companies Act, 2013) is registered as a trust with the DIT (Exemption), Mumbai under Sec. 12A of the Act. The assessee trust had e-filed its return of income for A.Y 2016-17 on 14.10.2016, declaring its total income at Rs. nil. Subsequently, the case of the assessee was selected for scrutiny assessment under Sec. 143(2) of the Act. In the course of the assessment proceedings it was observed by the A.O that the main objects of the assessee trust were as under:

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