TMI Blog1992 (1) TMI 192X X X X Extracts X X X X X X X X Extracts X X X X ..... ome of the assessee were mixed up, he concluded that the income applied to charitable purposes must be regarded as having come out of the two streams of income, namely, agricultural and non-agricultural, on proportionate basis. Proceeding to calculate on the aforesaid basis the non-agricultural income applied to charitable purposes, the Assessing Officer found that there were shortfall in the application of such income to such purposes. Accordingly, he brought the shortfalls to tax. 3. The first appellate authority declined to interfere in the matter. The assessee took up the matter in appeal before the ITAT contending, inter alia, that the assessee was maintaining separate books of account for agricultural and non-agricultural operations and that consequently. the lower authorities were not justified in denying the assessee the benefit of exemption under section 11 to the full extent. Finding that this plea was raised before them for the first time, the Tribunal set aside the assessment orders and remitted the matter to the first appellate authority for fresh consideration and decision. This was on 30-4-1976. 4. On 21-1-1985 the first appellate authority, in his turn, remitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rated before us the arguments that had earlier been advanced unsuccessfully before the D.C. (Appeals). Thus the basic contention of Mr. Philip George was that the impugned assessment orders which were passed on 30-11-1987 were hit by the bar of limitation. It is a matter of record that on 21-1-1985 the first appellate authority remitted the matter to the Assessing Officer for de novo examination. Therefore, under the provisions of section 153(2A) of the Act the reassessments ought to have been completed on or before 31-3-1987. They were, however, completed on 30-11-1987. Therefore, the reassessment were clearly hit by the bar of limitation. In this regard he referred to and relied upon the CBDT Circular No. 10-P(V-68) of 1968 dated 11-10-1968. Turning then to the merits of the case, he contended that as has been held by the Bombay High Court in the case of CIT v. Silk Art Silk Mills Association Ltd. [1990] 182 ITR 38 there is no question of apportioning the sum applied to charitable purpose as had been done by the Assessing Officer. In view of the foregoing, therefore, contended Shri Philip George, the assessee is entitled to succeed. 8. On his part Shri G. Natarajan, the learn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cular designed to regulate and/or monitor the working of the Department. Even here--this is the second point--the Circular itself makes it clear that in cases of the type referred to therein, fresh assessments should normally be completed within a period of two years. The use of the word "normally" is significant. At the time when the Circular was issued, the Act did not prescribe any time limit for making fresh assessments in cases of the type referred to in the said Circular. It could not have been the intention of the Board that fresh assessments in all such cases should invariably be completed within a period of two years, irrespective of the nature and the extent of the inquiries that might be warranted by each case. Finally, the Board cannot acting under section 119 of the Act issue Circulars overriding, contravening, or in effect amending the provisions of the Act--see CIT v. Autofin Ltd. [1985] 151 ITR 741 (AP) ; CIT v. Sahney Steel Press Works Ltd. [1985] 152 ITR 391 (AP) and CIT v. Ramchandra Poddar Charitable Trust [1987] 164 ITR 662 (Cal.). Indeed in Gestetner Duplicators (P.) Ltd. v. CIT [1979] 117 ITR 1 the Supreme Court made it clear that the Court will not give ef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act deals with 'Income from property held for charitable or religious purposes'. Exemption under section 11 is available in respect of income derived from property held under trust wholly for charitable or religious purposes, if and only if the various conditions set out not only in that section but also in sections 12, 12A, 13 and 60 to 63 are fulfilled. 20. Even though the focus of section 11 is on a particular class of income, namely income from property held in trust wholly and exclusively for religious and charitable purposes, yet income derived from one category of property, namely, agricultural lands, is not covered by that section for the simple reason that agricultural income is exempt from income-tax to start with. To put it differently if a public charitable trust were to hold agricultural land only, then the agricultural income derived by it would be exempt under section 10(1) itself, because, as we have noticed earlier, under the Constitution, Parliament is not competent to levy tax on agricultural income. The position will not be any different even if a public charitable trust were to hold properties, some of which are agricultural land. Here agricultural inco ..... X X X X Extracts X X X X X X X X Extracts X X X X
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