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TMI Blog2011 (7) TMI 1019X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. It was the submission that the facts as brought out by the Assessing Officer in his order in regard to the violation under section 13(1)(c) had not been disputed by the assessee nor was it adjudicated by the learned Commissioner of Income-tax (Appeals). It was the submission that the learned Commissioner of Income-tax (Appeals) had held that the income earned by the assessee-trust by way of rentals and amenity charges for the running of the marriage hall was incidental to the attainment of the objects of the trust and therefore entitled to have continued exemption under section 11 of the Act. It was the submission that it was not the issue that continued exemption under section 11 which was decided by the Assessing Officer. It was the submission that the exemption under section 11 had been denied to the assessee as there was violation of the provisions of section 13(1)(c) of the Act. It was the further submission that the assessee had also not produced the books of account for the purpose of assessment. It was the submission that the order of the learned Commissioner of Income-tax (Appeals) was liable to be reversed. In reply, the learned authorised representative submitted t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mt. Nathella Sulochana his second wife settling two immovable properties in her favour, inter alia, with the following objects : (a) To provide for food and shelter to such of the lineal descendents male and female of the settler who may be in need of the same on their application in writing to the trustees declaring that they are in actual need of such assistance. (b) For performing Vysya Thatheyaradhana that is feeding pilgrims belonging to the Vysya 108 Gothram community in Tirumalai All India Vysya Samajam Ramanujakutam during Brahmothsavam festival every year, and also offering donations to such Vysya Thathiaradhanas conducted in Thengalai Samprathayaka Divyaadesams out of 108 Divyadesams. (c) For providing educational scholarships or school books to students belonging to the Vysya 108 Gothram community and studying in any of the schools in the city of Madras. (d) For providing relief to the poor and indigent members of the Vysya 108 Gothram community residing in the city of Madras. 4. Subsequently, a registered deed of surrender was executed in favour of a trust comprising a board of three trustees of the same family, by Smt. Sulochana, wife of Sri Nathella Sampat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee during the course of these proceedings requested to read the reply filed by the assessee before the Director of Income-tax (Exemptions) as part and parcel of his explanation in these proceedings. In the representation submitted to the Director of Income-tax (Exemptions) for the proposed cancellation of registration it was stated that the application for registration of the trust under section 12A of the Income-tax Act was considered by the Commissioner of Income-tax and the registration was granted to the trust after considering the materials furnished by the assesseetrust. It was also submitted that since no fresh facts comes to light for cancellation of registration, cancellation of registration is not warranted. It was also submitted that the trust has been spending its income towards charitable purposes without caste or creed and the income has not been utilised for the purpose of any particular religious community. Therefore, the reopening of the assessment for the above assessment years by the Additional Director of Income-tax (Exemptions) and the proposed cancellation of registration under section 12AA of the Income-tax Act are unwarranted. 7. The assessee's repre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peaks of charitable institution/trust created or established for the benefit of any particular community or caste. This section does not speak how the money is spent and to whom the money was spent. Even if the money has been spent to persons other than a specific group of people mentioned in the objectives of the trust as claimed, there is violation since the very purposes of creation or establishment of the charitable trust is for the benefit of a particular religious community or caste mentioned in the trust deed. There is nothing on record to show either in the objectives of the trust or in the activities of the trust that it is a religious and charitable trust. Therefore the claim of the assessee that it is a charitable and religious trust is not supported by any evidence on record. It has been registered as a 'public charitable trust' and accordingly assessable to tax. 10. Therefore the case relied upon by the assessee is not applicable to the facts of the case. After considering the written submissions as well as the argument put forth by the assessee's advocate, Iam of the opinion that there is a dear violation under section 13(1) (b) of the Income-tax Act and therefore th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the books of account were not produced for verification. The Assessing Officer has also specifically mentioned violation in regard to the provisions of section 13(1)(b) and 13(1)(c). This finding of the Assessing Officer has not been adjudicated by the learned Commissioner of Income-tax (Appeals) even though it is a subject matter of the appeal before the learned Commissioner of Incometax (Appeals). The learned Commissioner of Income-tax (Appeals) has only adjudicated upon the issue as to whether the business of running the Kalyanamandapam is incidental to the attainment of the objects of the trust and therefore it is entitled to the exemption under section 11. In the circumstances as it is noticed that the learned Commissioner of Income-tax (Appeals) has not adjudicated on the issue of violation of sections 11 and 13(1)(b) and 13(1)(c), the issues in the appeals are restored to the file of the learned Commissioner of Income-tax (Appeals) for readjudication after granting the assessee adequate opportunity to substantiate its claim. In the circumstances, the appeals of the Revenue are allowed for statistical purposes. In the cross-objections the assessee has vehemently supported t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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