9911796707
TMI Blog2015 (1) TMI 1381X X X X Extracts X X X X X X X X Extracts X X X X ..... NIL" income. The case of the assessee was selected for scrutiny and the Assessing Officer computed the taxable income of .95,95,600/- by rejecting the claim of the assessee of exemption under section 11 of the Income Tax Act on the ground that the assessee was running a Kalyana Mandapam, which is according to the Assessing Officer is a business as it was violation of provisions of section 2(15) of the Act. In the assessment order the Assessing Officer has observed that the object of the will of the testator amongst other objects is to run Kalyana Mandapam. Therefore, the object of the trust by itself constitutes running of Kalyana Mandapam and it was the will and wish of Late Sri Narayana Guruvaih. When running of the Kalyana Mandapam is it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jects of medical relief, education and relief to the poor. The ld. CIT(A), after considering the submissions of the assessee, has observed that though is a separate object clause in the trust deed for running a community hall, one can find an undercurrent of social concern of charity and charitable purpose, irrespective of caste, creed or religion. The hall was let out for nominal rent without a profit motive. The Assessing Officer has artificially coloured the hall as a separate entity created for business with profit motive. The Assessing Officer in this regard has not brought to surface any facts and materials of ulterior intention of making profit on the part of the trust. But the trust has been using the nominal rents received by runni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is in appeal before the Tribunal. 5. The ld. Counsel for the assessee has submitted that the assessee has applied for 12A registration and it was granted by the DIT(E) on 30.06.2000 from the year 1973. The main object of the assessee's trust is doing charity to the poor and education and medical aid, religious contribution, etc. and submitted that running a Kalyana Mandapam is an incidental to the activities of the assessee trust and therefore, the third limb of section 2(15) of the Act has no application to assessee's case. Further, the ld. Counsel for the assessee has submitted that the very same issue has been considered by the Coordinate Bench of the Tribunal in assessee's own case in I.T.A. No. 103/Mds/1998 dated 27.12.2004 for the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Income Tax Act. It is also a fact that based on Form No. 10A filed by the assessee on 02.05.1973, the DIT(E) has granted registration on 30.06.2000 under section 12A of the Act with effect from 02.05.1973. In so far as charitable activities carried out by the trust are concerned, from paper book page No. 39 to 41, it is very clear that the assessee is carrying charitable activities such as relief to poor, education, medical aid, etc. Even in the assessment year under consideration, the assessee had spent nearly about .35,49,082/- for charitable purpose. Therefore, the main object of the assessee trust is to carry charitable activities. 8. In so far as invoking section 2(15) of the Act is concerned, the relevant provisions of the abov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvices in relation to any trade, commerce or business. In the present case, the assessee is committed for relief to the poor, education, medical help, etc. These facts are clear from the paper book page No. 39 to 41 and page No. 59. The definition of charitable purpose under section 2(15) of the Act clarified by the CBDT vide Circular No. 11 of 2008 dated 19.12.2008. It is mentioned that the newly inserted proviso to section 2(15) will not apply in respect of the first three limbs i.e. relief of the poor, education or medical relief. Consequently, where the purpose of a trust or institution is relief to the poor, education or medical relief, it will constitute "charitable purpose" even if it incidentally involves in carrying on of commerci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... objects pertained to the Kalyanamandapam and giving the same on rent with the sole object that rental income from the Kalyanamandapam should be applied to charitable purpose only. The CIT(A) noted that in about 5 years, charity to the extent of a little over Rs. 16 lakhs was made indicating that the assessee was carrying on charitable work. On behalf of the assessee, reliance was placed on the following decisions: (a) Thiagarajar Charities vs. Addl. CIT & Anr. (1997) 140 CTR (SC) 295: (1997) 225 ITR 1010 (SC); (b) CIT vs. Samyuktha Gowda Saraswatha Sabha (2000) 245 ITR 242 (Mad); (c) Asstt. CIT vs. Thanthi Trust, Etc. Etc. (2001) 165 CTR (SC) 681 : (2001) 247 ITR 785 (SC). Identical issue was considered by this Court in the case of CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X
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