ITPO gets Income Tax Exemption

The Delhi High Court allowed the petition of India Trade Promotion Organisation challenging the withdrawal of certain income tax exemptions granted to it till 2012. It had challenged the constitutional validity of section 2(15) of the said Income Tax Act, but the court upheld it and only read it down. The organization claimed exemption under the charitable clause provision, as they conducted activities relating to the promotion of Indian Trade and such activities fell within the ambit of the expression “advancement of any other object of general public utility”. But according to the new provision to Section 2(15), these objects were not regarded as charitable purposes. The revenue authorities contended that the organization had huge surplus in banks and it had derived income from trade fairs. The High Court rejected this line of argument and said that the expression “Charitable Purpose” could not be construed literally. “If a literal interpretation is given, the provision would be at a risk of running foul of the principle of equality enshrined in Article 14 of the Constitution”.