TMI Blog2011 (5) TMI 854X X X X Extracts X X X X X X X X Extracts X X X X ..... d the benefit available under section 10(23C) (iiiad) as well as the benefit of section 11. In the grounds of appeal filed before the Tribunal the assessee has raised two sets of contentions. The first set of contentions is against the jurisdiction of the assessing authority in reopening the impugned assessments. The second set of contentions is against the findings of the lower authorities that the assessee is not entitled for the benefits available either under section 10(23C)(iiiad) or under section 11 of the Income-tax Act, 1961. First we shall consider the issue on its merits. The assessee is a charitable trust. It has been registered under section 12A(a) of the Income-tax Act, 1961 through the appropriate proceedings dated March 9 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the absence of form, what is to be looked into is whether the assessee-trust is in fact imparting training in performing arts like various dance forms including traditional Kuchipudi. So far this crucial question, which is the soul of the issue, is concerned, no adverse findings have been made by the assessing authority. The hon'ble Calcutta High Court in the case of CIT v. Doon Foundation [1985] 154 ITR 208 (Cal), has held that educational institutions need not be affiliated to Universities or Boards and what is to be seen is that the object clause of the trust is for educational purposes and it has carried out a fullfledged teaching of the relevant course. The hon'ble Karnataka High Court in the case of CIT v. Academy of General Edu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nefit on an unsustainable proposition of "regular educational institution". Thus the question of exemption available to the assessee under section 10(23C)(iiiad) is decided in favour of the assessee. Again, the benefit under section 11 was denied to the assessee on the ground that the assessee-trust has violated the provisions of law contained in section 13(3)(c)/(d). Shri Ravi Shankar, one of the trustees of the assessee, who is also the son of the founder of the trust, had availed of a financial support of Rs. 2,49,000 for the assessment year 2002-03 and of Rs.4,85,000 for the following assessment year 2003-04. According to the assessing authority the application of these funds by the assessee-trust falls within the meaning of section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ception [2000] 241 ITR 193 (Mad). In the said judgment the hon'ble High Court has held that the provisions of sections 12, 13(3)(b) and 13(1)(c) could not be invoked without looking into the substance of the transaction and without ascertaining the real nature of the transaction. The court continued to observe that it is pertinent to note that it was not the case of the Department that the beneficiary has sufficient wherewithal. The assessing authority failed to appreciate that the trustee had reimbursed the sum and had agreed to reimburse the balance. The hon'ble court continued to observe that the Assessing Officer cannot ignore the constitutional background of the obligations of the State in regard to health care, which has been fulfille ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... discharging its obligation alone and not extending any undue advantage to its trustee Shri Ravi Shankar. Therefore, in the facts and circumstances of this case and in the light of the above judgment of the hon'ble Madras High Court, we find it very hard to hold that the payment made to Shri Ravi Shankar has been hit by section 13(3)(c)/(d). Therefore we find that the Assessing Officer is not justified in denying the benefit of section 11 to the assessee-trust. This issue is also decided in the assessee's favour. In the light of our decisions recorded above, we direct the Assessing Officer to reconsider the returns filed by the assessee for the assessment years under appeal and give exemptions and benefits available to the assessee under ..... X X X X Extracts X X X X X X X X Extracts X X X X
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