TMI Blog2017 (12) TMI 1177X X X X Extracts X X X X X X X X Extracts X X X X ..... ntary donation/ contributions correlated with their stay in guest house cannot lead to the conclusion that assessee are charging guesthouse/dharmashala on commercial basis. In fact it is tradition whenever the people stay in the dharmashala etc, they contribute according to their capacity to contribute and not in accordance with the pre-fixed tariff rates. No infirmity in the order of the ld CIT (A) in holding that the rental income received by the trust is not hit by the proviso to section 2(15) of the Income Tax Act. Appellant is engaged in the business of selling education - Held that:-The claim of the revenue is that assessee has to demonstrate that it exists for the poor and needy people. We do not subscribe to that view as while reading the provision of section 2 (15) no such condition is available. According to that section charitable purposes includes 'education' in its literal meaning. If the trust is providing education it carries on charitable activity, hence we reject this argument of the revenue. In view of this, the reliance placed upon by the ld Assessing Officer on the decision of the Uttarakhand High Court is incorrect. The Next issue raised by the ld AO is that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he full facts of the issue are not available on record this issue is set aside to the file of ld AO to first establish that there is any diversion of income of the trust during the year in favour of the persons specified when the vehicles are registered in the name of persons other than the assessee. Anonymous donation received - Held that:- AR has stated that the complete name and address of the donors is placed at pages No 286 to 340. We have carefully considered the rival contention of this aspect and perused the relevant documents placed at pages No 286 to 340 of the paper book. In these papers, assessee has tabulated the name, address, date, and amount of donation received. In view of this we do not find any infirmity in the order of ld CIT (A) in holding that such voluntary contribution cannot be said to be anonymous donation. However on verification of the details submitted by the assessee it shows such total donation at ₹ 39,68,455/- whereas the ld AO has computed such donation at ₹ 4081528/-. In view of it, this ground is set aside to the file of the ld AO to reconcile difference of ₹ 113073/- with the donation list given by the assessee and amount of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f assets and even not refunded caution money to the students after lapse of years thus case of assessee is fully covered with the case law decided by the Hon'ble Jurisdictional High Court in case of Asstt. CIT v. Graphic Era Educational Society [2007] 68 ITJ 608 and ration of case law of case Vodithala Education Society v. ADIT (Exem)(ITAT, hyd) 20 SOT 353 is fully applicable in the case of assessee. 3. The Ld. CIT (A) has erred in law and on facts in not appreciating the fact that imparting education with primary purpose of earning surplus of ₹ 60,75,878/- in the current year cannot be a charitable activity thus ration of case law in case of CIT v. National Institute of Aeronautical Engineering Educational Society(Uttrakhand) 315 ITR 428 and CIT v. Queens Education Society, 319 ITR 160. 4. The Ld. CIT (A) has erred in law and on facts in not appreciating the fact that there are common members in the donee trust and donor trust, thus covered as engaged in donating trust fund to its related institutions covered under the interested persons within the meaning of section 13(1)(c) read with section 13(3)(e) of the IT Act 1961 for which no further examination of applicat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) of the Act. 5. That the learned Commissioner of Income Tax (Appeals) has erred in holding, that principles of consistency do not apply, despite the fact that he has held while adjudicating the claim of the assessee that no income of the assessee is to be included in the total income, as was held in the preceding assessment years. 6. That in so holding he has failed to comprehend that admittedly the facts and circumstances of the instant year are identically the same as were in the preceding assessment years when it was held that the surplus of the assessee trust was not to be included in the total income as the income had been derived from the property held under trust and that the assessee trust was existing solely for educational and charitable purposes and there was no profit motive. 7. That the learned Commissioner of Income Tax (Appeals) has further erred in failing to consider the judgments of the Apex Court in the case of CIT v. Excel Industries Ltd. 358 ITR 295 wherein it has been held that having taken a stand in the preceding assessment years, Revenue cannot be allowed to flip-flop on the issue. 8. That the learned Commissioner of Income Tax (Appeals) has fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trusts which violates the provisions of section 13(1)(c)of the Act. hence, according to the Assessing Officer assessee is not entitled for claiming exemption u/s 11 and 12 of the Act. vi. The six out of nine vehicles are purchases in the name of the trustees therefore the provisions of section 13(2)(g) are violated. vii. Assessee is engaged in the activities of advancement of any other objection of general public utility such as rental income, room charges in Dharamshala etc. viii. The assessee has claimed depreciation of ₹ 16,68,317/- which is not allowable since the assessee has already claimed the deduction of this sum as application of income and therefore, further claim of depreciation is not eligible. 5. Consequently total income of the assessee was assessed at ₹ 18072277/- denying it the benefit of section 11 and 12 of the Act by assessment u/s 143(3) of the act on 31.12.2012. 6. Assessee being aggrieved with the order of the ld AO, preferred an appeal before the ld CIT (A). He vide order dated 17.04.2014 held that activities of the assessee falls u/s 2(15) and not under the proviso to that section as 'any other object of the public utility' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iven by Asessing Officer in his 36 page order and given findings in a very small Para 4.1 It is humbly submitted that the following facts may kindly be considered : 1. Section 2(15) of I.T. Act has been amended w.e.f 01.04.2009. The relevant provision is reproduced below: (15) charitable purpose includes relief of the poor, education, medical relief. [preservation of environment (including watersheds, forests and wildlife) and preservation of monuments or places or objects of artistic or historic interest.] and the advancement of any other object of general public utility: Provided that the advancement of any other object of general public utility shall not be a charitable purpose, if it involves the carrying on of any activity in the nature of trade, commerce or business, or any activity of rendering any service in relation to any trade, commerce or business, for a cess or fee or any other consideration, irrespective of the nature of use or application, or retention, of the income from such activity:] Provided further that the first proviso shall not apply if the aggregate value of the receipts from the activities referred to therein is twenty-five lakh rupees} ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (ix) The assessee is charging fees at the rates prescribed by the Government without giving any discount. (x) Assessing Officer has pointed out that the assessee was charging rental against accommodation provided in Dharamshala. The money shown as donation receipt was actually room rent charged from visitors, (xi) In the details of expenditure incurred on objects of the trust, the assessee has itself mentioned 'to carry out objects of general public utility and security such as In view of the above facts, it is evident that the assessee is covered by proviso to section 2(15) and hence activities carried on by it are not for charitable purpose as per this provision. 4. Reliance is placed upon following decisions: (i) Information Systems Audit and Control Association v. DDIT (E) 157 ITD 815 /46 ITR 665 //179 TTJ 99 where Hon'ble ITAT Chennai held that Coaching for particular examination not amounting to imparting education (ii) Deshpande Education Trust v. ACIT (ITAT Bangalore) ITA No.1422 1423 (Bang)2016 (iii) M/s. Matru Karmadhara Trust v. CIT ( ITAT Chennai) ITA No. 2053/Mds/2016 (iv) Daya Nand Pushpa Devi Charitable Trust v. Addl. CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2009-10. He further referred to the order of the coordinate bench in assessee's own case for assessment year 2002- 2003, wherein on identical facts and circumstances the coordinate bench has held that there is no violation of section 13(1)(C) read with section 13(3) of the Income-tax Act 1961, which can result in to refusal of exemption to the trust. He further referred to the copy of the trust deed placed at page No. 37 - 58 of the paper book as well as the registration already granted to the trust under section 12 A of the income tax act w.e.f. 1/4/1989. He further extensively referred to his submission placed at page No. 68 - 379, which is a letter dated 30/08/2012 before ld AO explaining the queries of the ld AO. With respect to vehicles registered in the name of the trustees he submitted that the vehicles are owned by the trust, they are shown in the books of account of the trust, they are used for the purposes of the objects of the trust, their expenses including interest is borne by the trust, merely because the registration has been made in the name of the trust it does not become the asset of the trustees. In the end, he referred to the provisions of section 13 extens ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fee , sports fee, examination fee and bus charges etc are all for the purposes of educational activity of the assessee and they cannot be seen as an independent activities carried out by the assessee. He further stated that the claim of the revenue that the donation received is actually room rent charges from visitors is devoid of any merit because it is as per the will of the persons who stayed in the guesthouse and there is no fixed rate of those donations therefore, in fact, these are voluntary donation and are not room rent. He therefore submitted that assessee is not covered by the proviso to section 2 (15) of the Income-tax Act and hence activities carried on by it are for charitable purposes and eligible for preferential treatment under section 11, 12 and 13 of the Income-tax act. He further referred to the various decisions cited in para No. 4 of the written submission of the Ld. apartment representative to state that these are not applicable to the facts of the case and further the decision of the Hon'ble Delhi High Court in case of Dy. DIT v. Charanjiv Charitable trust [2014] 223 Taxman 71/43 taxmann.com 300 does not apply to the facts of the case as assessee has not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Reti and Rishikesh in the following names: a. Omkarananda Ganga-Mata Mandir b. Omkarananda Ganga Sadan c. Omkarananda Gita Sadan iv. Providing financial support to other charitable institutions having similar objects and also undertaking educational activities. 2.3 That the assessee had receipts from the educational institution of ₹ 2,34,68,3787-and other receipts in the form of voluntary donations of ₹ 65,33,5967-, rent received from properties held by the trust of ₹ 63,17,2027-, interest received of ₹ 54,38,2447- and miscellaneous receipts of ₹ 79,0007- (Rs. 65,33,5967- plus ₹ 63,17,2027- plus ₹ 54,38,2447- plus ₹ 79,0007- - Rs. l,83,68,0437-), which aggregates to ₹ 4,18,36,4217- (see page 17 of the Paper Book). That aforesaid receipt has wholly been applied towards the objects of the trust in the following manner: S. No. Particulars Amount 1. Expenditure incurred on running of the educational expenses (excluding depreciation). ₹ 1,73,92,5007/- 2. Dharmshala runn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ences which are appearing at sl. No. 1-22 of the Paper Book filed before the Hon'ble Tribunal. Assessee also filed its detailed written submissions before the learned CIT (A) which is appearing at pages 501-534 of PB wherein each of the finding of the learned AO has been countered by the assessee. The assessee submitted that there were more than 30 factual errors in the order of the learned AO. A copy of such factual errors as was submitted before the learned CIT (A) has been annexed as Annexure-I of the brief synopsis. That the learned CIT DR has made no adverse comments on such submissions which was on the record of the learned CIT (A). 2.6 That the learned CIT (A) after duly considering the finding of the learned AO, submissions of the assessee and paper book filed before him, allowed the appeal of the assessee by holding that the primary object of the assessee is education and is not carrying out object of general public utility when he did not appreciate that the assessee trust also is engaged in the advancement of object of general public utility in respect of which finding, assessee has filed its cross objections. He further held that surplus arising to the assessee h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f any other object of general public utility. Detailed submissions are at pages 512-518, 521 522-523 of PB It is submitted that aforesaid contention of the revenue is misconceived as he has failed to appreciate that predominant object of the assessee is to provide education and during the course of aforesaid objects, it has receipts from receipts of T D, enrolment fee, development fee, welfare fee, prospectus fee, sports fee, examination fee, bus charges, insurance, security, sale of MAT form, however all such receipts have been applied for the charitable purposes. It is submitted that assessee trust is running educational institution and to facilitate the students for getting the education, it has provided various facilities to the students so that students can get the education with minimum disturbance. In fact, there is no allegation that fee charged by the assessee in respect of such services are excessive. It is submitted that fee charged in respect of T D, enrolment, development, welfare, prospectus, sports, examination, bus charges, insurance, security, sale of MAT is only incidental to the object of providing edu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order, the assessee is covered by proviso to section 2(15) of the Act and hence not eligible for deduction u/ss 11 12 of the Act. The finding on the basis of which aforesaid contention has been made are as under: That the aforesaid contention of the revenue is wholly misconceived as finding of the learned AO is based on 34 factual errors and without considering the submissions made before the learned AO as well as overlooking the material/evidences on record. The submission of the assessee in respect of each of the finding is stated hereunder: The trust owned 55 immovable properties and has purchased hotels which are now functioning as Dharmashala. Detailed submissions are at pages 519-521 of PB It is respectfully submitted that that none of the aforesaid properties has been purchased by the assessee during this year (see pages 492-495 of the Paper Book). From the perusal of the list of the properties purchased/acquired by the assessee it would be seen that the except one property (which was acquired in AY 2005-2006), all the remaining properties were purchased either in AY 1999-2000 or before tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Hon'ble Tribunal in the case of Bharati Vidyapeeth (ITA No. 916/PN/2010 Asstt. Year: 1999-2000 dated 23rd January, 2012) has held that there is no prohibition in Section 11 that a Charitable Trust cannot give its properties on rent. Assessee amended clause 7 of the trust deed without providing information to the Commissioner of Income Tax. This contention is again misconceived as from the perusal of trust deed it would be seen that the trust deed is dated 31.03.1989 (pages 37-58 of PB) further the supplementary trust deed is dated 07.11.1989 (pages 68-71 of PB) and assessee trust was granted registration only on 31.01.1990 (page 59 of PB), as such assumption that the supplementary trust deed was not available with the Commissioner of Income Tax is wholly misconceived. Apart from the aforesaid, it is submitted that since 07.11.1989 (when the supplementary deed was executed), till AY 2009-10, assessment of the assessee trust was made and no such allegation was even made and hence the aforesaid contention of the revenue is misconceived on this ground alone. In any case, by way of the supplementary deed the object clause ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... : No. 1132, dated 5-1-1978. Assessee is receiving rental from so-called Dharmashalas. No separate books of account have been maintained which is mandatory u/s 11 (4A) of the Act. It is submitted that assessee has not charged any rental from the Dharmashalas and as such, section 11(4A) is inapplicable as Section 11(4A) is applicable only in a case where a trust is carrying out an activity for profit, and the business is incidental to the attainment of main objects, only then as per aforesaid provision, an assessee is required to maintain separate books of account in respect of such business activity. It is submitted that since the assessee is not running any business and no rental has been charged from the pilgrims staying in the Dharmashala, as such, section 11 (4A) is inapplicable. 6 out of 9 vehicles have been purchased and registered in the name of individual trustees/ manager. Detailed submissions are at pages 521-522 of PB It is submitted that though the assessee has purchased few vehicles in the name of the trustees, however such vehicles are solely used ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... education and such fee has not been charged with profit motive and all such receipts have been utilized towards the objects of the trust It is running only professional courses. It is submitted that providing education by way of professional courses is also education within the meaning of section 2(15) of the Act. Reliance is placed on the following judgments: (a) Mudra Foundation for Communications Research Education v. CCIT [2016] 287 CTR 135 (Gujarat) (b) ADIT(E) v. Bird Education Society for Travel Tourism [2016] 181 TTJ 782 (Delhi - Trib.) (c)DIT v. Sri Belimatha Mahasamsthana Socio-Cultural and Educational Trust [2011] 336 ITR 694 (Karnataka) The assessee is charging fee at the rate prescribed by the government without any discount It is submitted that assessee trust is not charging any fee over and above the fee prescribed by the Government and all the receipts of the educational institution has been utilized towards the objects of the trust (ACIT v. Graphic Era Educational Society 108 TTJ 608 (Delhi)) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efty fees and was not providing education through normal schooling, as such, facts of this case is distinguishable. Matru Karmadhara Trust v. ITO (IT Appeal NO. 2053/Mds/2016, dated 31.01.2017) In this case, assessee has not established any educational institution and was merely promoting the preaching of Shri. Aurobindo as such, it was held that acquisition of all kind of knowledge cannot be construed as education. In fact, aforesaid order supports the case of the assessee wherein it was held that education is a formal schooling which results in confirmation of a degree or diploma by government or a government agency or a university established under law. In the instant case, professional course run by the assessee are duly approved by government or a government agency or a university established under law as such aforesaid order is inapplicable Daya Nand Pushpa Devi Charitable Trust v. Addl. CIT (IT Appeal No. 4238/Del/2015, dated 21.09.2016) In this case, the assessee was providing hostel to the students, which was treated by the Hon'ble Tribunal as business and no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. DIT v. Charanjiv Charitable Trust [2014] 267 CTR 305 (Delhi) In the instant case, assessee has advanced the sum to a company i.e. M/s. Ansal Properties and Industries Ltd. (APIL) which was a prohibited person, it was held that assessee trust has violated provisions of section 13(l)(c), as such, exemption u/s 11 was denied. It is submitted that in the instant case, assesses has not infringed the provisions of section 13(l)(c) of the Act as donations were given to the trusts having common trustees, and such donations were not utilized for the benefit of the trustees but were utilized towards the attainment of its objects and such trusts have also utilized the sum towards the charitable objects as such, provisions of section 13(l)(c) is inapplicable. Further in respect of purchase of vehicles, it is submitted that vehicles have been utilized towards the purposes of the trust and there is not even any allegation that such vehicles have been used for the benefit of the trustees, as such, aforesaid judgment is inapplicable. ACIT v. Graphic Era Educational Society 108 TTJ 608 (Delhi). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 377 ITR 650. wherein the assessee had been enjoying exemption u/s 11 of the Income Tax Act since the inception of the Trust. However, in the AY 2006-07 the same was disallowed on the ground that the assessee was running an allopathic hospital; whereas under the deed of trust it was set up with object to impart education in and to improve ayurvedic system of medicine. In fact the IT AT upheld the contention of the revenue. This contention of the revenue was rejected by the High Court on the ground that it is impermissible to do so. The court held at page 671 para 43 that, it is not possible to accept that the grant of exemption to the assessee for the past several decades was palpably erroneous and successive Assessing Officer were wrong in accepting that the activities of the assessee were in furtherance of its charitable objects, entitling the assessee to escape the levy of income tax . The Hon'ble High Court allowed the appeal of the assessee by giving other reasons as well however, primarily it held that if an exemption is being granted since several years, the same cannot be denied, the facts remaining the same. 6. In the instant case, it is submitted that the facts con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 10,32,0167- and there is no surplus. In other words, since the surplus as stated above is without considering the sum as has been applied for charitable purposes, the AO had wrongly included of ₹ 56.48.5267 - while computing the total income at ₹ 1,80,72,2777-; whereas there is no surplus, instead of there being excess of expenditure over receipts. Secondly the learned AO again erred in making addition of ₹ 42,83,6877- being inter organization donation; whereas said sum represented donation to the Trust whose objects are identical i.e. running of schools. Thus the addition made of ₹ 42,83,6877- had incorrectly been made. Thirdly the AO again made an addition of the two sums i.e. ₹ 32,11,5107- and ₹ 32,60,2377-, despite the same was not considered while adopting surplus of ₹ 56,48,5267-, which is evidently a double addition. It is stated that ₹ 56,48,5267-when was adopted as surplus included the said sum. Lastly depreciation which is allowable has been added i.e. ₹ 16,68,3177-, which has to be allowed while computing total income, (see Delhi High Court in DIT v. Indraprastha Cancer Society, 229 Taxman 93) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hram Library are two public libraries run by the trust in the area of Muni Ki reti. VI. The trust runs three Dharmashalas in Muni Ke reti and Rishikesh, where pilgrims to the holy shrines of Garhwal can stay. VII. The trust is financially supporting research into organic farming and the benefit of Agnihotra on agriculture and environment. 11. During the course of assessment proceedings the ld Assessing Officer has held that assessee is not entitled for special treatment of sections 11 and 12 for the reason that it is carrying on activities in the nature of business, as given a donation to other trust and also the properties of the trust were held by the trustees. Accordingly, the assessment order was framed u/s 143(3) of the Act on 31.03.2012 where the income of the assessee is assessed without giving benefit of sections 11 and 12 of the Act. 12. Based on the above it is apparent that ld Assessing Officer has held that appellant is engaged in the business of education and therefore, not eligible for benefit u/s 11. He was further of the view that the properties of the trust are held for commercial purposes to earn the profit such as rental income from Dharmashala as wel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rely registering vehicles in the name of any trustee could be understood as a matter of convenience and not as a method for exploiting trust assets for personal use. In conclusion it needs to be directed to the AO to allow the benefits of section 11 of the Act to the Appellant. These 4 grounds are accordingly allowed. 5. Ground number 5 challenges the disallowance of ₹ 42,83,6877/- given to other charitable trusts by invoking sections 13(1)(c)(ii) r/w 13(3)(c) of the Act. The Id. ARs have averred as under on this issue:- 1.1 It is submitted that except for the instant assessment year, in none of the aforesaid assessment years, donation made to the other organisations were disallowed by the revenue. 1.2 It is submitted that while making the addition of the aforesaid sum, learned A O has held that since in the donee trust, some of the trustees are common as such, by giving donations to the trust, appellant has infringed the provisions of section !3(l)(c) r/w section 13(3)(e) of the Act and thus not eligible for claiming exemption. Further, while making the addition of the aforesaid sum. learned AO also placed reliance on the order of (he Tribunal in the case of Aurolab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for profit as such, since the charitable institutions does not exist for profit as such charitable trusts/institutions are not covered by the aforesaid provision. It is submitted that if the provisions of section 13(1) r/w/s 13(3}(a)...(e) and Explanation (3) are read together, then it would be abundantly clear that donations made by a trust to another trust is not hit by rigours of section l3 of the Act and therefore findings of the learned AO in making addition of the aforesaid, sum is against the statutory provisions and therefore liable to be deleted. 1.6 That learned Income Tax Officer has erred in holding that the donations of ₹ 42,83,687/- to 10 other organizations which are also charitable trusts, is not the application of income as he has failed to appreciate that the moment the donation is effected in favour of the donee trust which is also a charitable trust, application of the income for charitable or religious purposes is complete. 1.7 If is submitted that if the assessee either itself uses any part of its income for charitable purposes or donates the same to any other charitable trust, such income is exempt from inclusion in the total income of the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (1)(a) but also u/s 143(3) of the Act]. One of the foundational principles of taxation is that the principle of res judicata does not apply to tax proceedings and that there can be no estoppels on that basis. In, this case no relief is due only on the basis of the fact that once the returned income has been accepted in the past then the department cannot tamper with the assesse's claim until and unless some new facts are brought to light. While it would be desirable to have a certain finality in legal proceedings, nothing prevents an AO from a reappraisal of existing facts and thereafter arriving at a different conclusion vis-a-vis earlier years. An illuminating passage contained in the case of Krishak Bharti Cooperative Ltd. v. DCIT reported in 350 ITR 24 (Delhi) may be reproduced:- It is now necessary to take up the submission that the Tribunal erred in departing from the consistency rule. This is based on the fact that for a period of about 15 year, the income-tax authorities had accepted the assessee's submissions and permitted annual amortization of the initial lease consideration as advance rent. There cannot be a wide application of the rule of consistency. In Rad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arguments after relying on a number of authorities to aver that the ld. AO's findings are not in consonance with the law. However, at this stage it would be sufficient to allow these grounds on the basis of findings recorded earlier through which the Appellant has been allowed the benefit of section 11 of the Act. - 8. Ground 8 challenging levy of interest u/ss 234A, 234B, 234C, 234D of the Act is disposed off as being consequential to the substantive findings. 9. Ground 9 challenges the initiation of penalty u/s 271(1)(c) of the Act. This ground is dismissed since mere initiation itself is not an appealable order u/s 246A of the Act. 10. In result this appeal is partly allowed.' In this background we proceed to decide the grounds raised by the Revenue. 14. The first ground is that the assessee has rented out various commercial properties and reported commercial receipts in the form of rental income of ₹ 6317202/- which is separate activity purely commercial in nature and does not have any relation between educational activities and thus covered under the amended provisions of 2(15) of the Act. We have carefully considered the rival contentions. The re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat trust has purchased properties and exploited them completely for earning rental income without having any dominant object of serving the main objects of the trust. The proviso to section 2(15) of the Act speaks about the activities carried out by the assessee in the nature of trade, commerce or business. Further the contention of the revenue is that The assessee is receiving rental of ₹ 63,17,202/- from so-called Dharmashalas from other parties . It is also the arguments of the revenue that no separate books of account have been maintained for Dharmashalas which is mandatory as per provisions of Section 11 (4A). The identical issue has been decided by coordinate bench in ACIT v. Shri Panchayati Dharmashala for AY 2010-11 on 01.01.2016 in [IT Appeal No. 809 (Jaipur) of 2013 after analysis the trust deed where it is stated that in the eventuality of dissolution the trust property is vest in another trust or to the state government and income arising from such activities shall only be spent charitable activities the coordinate bench has held that such activities of Dharmashala cannot be said to be carried out in the nature of trade, commerce or business. The coordinate bench ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er is reversed by the Hon'ble Supreme Court in Queen's Educational Society v. CIT 372 ITR 699 (SC) wherein it has been held that if the trust makes surplus it cannot lead to a conclusion that it ceases to exist solely for educational purposes and becomes an institution for the purpose of profit. The predominant object must be applied and the purpose of education should not be submerged by a profit making motive. If after meeting of expenditure a surplus arises incidentally it cannot be said that the institute does not exist solely for education purposes. Furthermore the various receipts stated to be based on the business motive are all related to educational activities of the trust therefore they cannot be looked into isolation without looking the predominant objective of the trust for which it exists. Further the courses offered by the trust institute are recognized courses of various universities and it is not private coaching classes but recognized courses. Therefore the objection of the revenue that it is fees received for professional coaching does not sustain. Further the fees charged by the assessee it is alleged that does not offer any discount to needy people. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... according to us assessee has utilized its income for the purposes of its own object by donating to that trust. It is not the case of the revenue that such donations are given to the trust, which does not have the objects of education. The ld Assessing Officer has relied upon the decision of Aurolab Trust v. CIT the facts of which are entirely different. In view of this ground No 4 of the appeal of the revenue is dismissed. 17. Ground No 5 of the appeal of the revenue is that since six vehicles have been purchased in the name of the trustees , it violated the proviso contained in section 13(2)(g) read with section 13(3)(e) of the Act and therefore, the trust loses the exemption of its income in its entirety. It is as claimed by assessee that it has 9 vehicles out of which six vehicles are registered in the name of the trustees or Managers of the trust or its various branches. Three of them are the scooters; all of them are purchased in the earlier year. The ld Assessing Officer has applied the provisions of section 13(2)(g) of the Act to say that any income or property of the trust shall be deemed to have been used or applied for a benefit of a person its income or property of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ill provide adequate opportunity to establish before the ld AO that no income is diverted in favour of the specified persons. In view of this ground no 5 is set aside to the file of the ld AO only with respect to the issues of diversion of income in favour of the specified persons with respect to six vehicles only. 18. The ground No 6 of the appeal of the revenue is related to the anonymous donation received by the trust of ₹ 40,81,528/-. Claim of the revenue is that the guest house income shown by the assessee which is stated to be voluntary contribution by the assessee appellant, is an anonymous donation as the receipt does not show the complete name and address of the donor. The ld AR has stated that the complete name and address of the donors is placed at pages No 286 to 340. We have carefully considered the rival contention of this aspect and perused the relevant documents placed at pages No 286 to 340 of the paper book. In these papers, assessee has tabulated the name, address, date, and amount of donation received. In view of this we do not find any infirmity in the order of ld CIT (A) in holding that such voluntary contribution cannot be said to be anonymous donati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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