Tax Relief

ITAT: Mhada presents reasonably priced housing qualifying for tax breaks in Mumbai | Information from Mumbai

Mumbai: The Income-Tax Appellate Tribunal (ITAT) in Mumbai found in its latest ruling that the Maharashtra Housing and Area Development Authority (Mhada) is entitled to income tax (IT) exemption as its activities are of a charitable nature .
Mhada, a legal housing agency that deals with the provision of affordable housing, appealed to the IAT because it was denied the 2014-15 tax exemption. In its October 13 ruling, the tax court relied on an earlier ruling on the same subject for 2009/10, which was in Mhada’s favor.
If a registered charitable corporation carries out charitable activities, its income is tax-free according to Section 11 of the IT Act. According to Section 2 (15), the term “non-profit” purpose includes the “promotion of any other object of general public benefit”. A reservation to this section introduced from April 1, 2009 provides that this definition no longer applies if the non-profit organization carries out an activity or provides a service in the form of a commercial trade or commercial activity for remuneration.
However, certain exceptions are foreseen when such activities are carried out as part of the attainment of their main objectives; or if the income from such activities in a financial year does not exceed the stipulated amount, Article 2 (15) is not violated. In such cases, the non-profit organization is entitled to an IT exemption in accordance with Section 11.
In the case of Mhada, the IT official rejected the tax exemption he had requested for 2014-15 under Section 11 based on his reading of the reservation on Section 2 (15). ITAT Bank, which includes Judicial Member Saktijit Dey and Accountant Member Rajesh Kumar, referred to the earlier ITAT regulation, which stated, “Whether an activity is a business or is the nature of a business depends largely on whether there is such an activity “is carried out for profit reasons or not. Just because Mhada builds and sells apartment buildings does not mean that its activities are of a commercial, commercial or business nature. ”
Following the earlier decision, the bank overturned the commissioner’s order (complaints), which appeared in favor of the tax authority, and ruled that Mhada would be granted a tax exemption.

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