TMI Blog2019 (1) TMI 115X X X X Extracts X X X X X X X X Extracts X X X X ..... olation of Section 11(5) of the Act. For the above reasons, the appeal filed by the assessee is allowed, the orders passed by the Tribunal, the CIT (A) and the Assessing Officer are set aside and the substantial questions of law are answered in favour of the assessee. - Tax Case Appeal No.888 of 2018 - - - Dated:- 6-12-2018 - Mr. Justice T. S. Sivagnanam And Mr. Justice N. Sathish Kumar For the Appellant : Mr.G.Baskar For the Respondent : Mr.S.Rajesh JUDGMENT T.S.SIVAGNANAM, J. This appeal by the assessee under Section 260A of the Income Tax Act, 1961 (hereinafter called the Act) is directed against the order passed by the Income Tax Appellate Tribunal (herein after called the Tribunal), Chennai in ITA.No.183 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 29.9.2011 declaring - NIL- income. The assessee is registered as a public charitable trust under Section 12AA of the Act. The returns were selected for scrutiny and a notice under Section 143(2) of the Act was issued on 13.9.2012. Subsequently, details were called for by the Assessing Officer by issuing a notice under Section 142(1) of the Act dated 18.9.2013, to which, the assessee responded through their authorized representative and records were produced, which were examined by the Assessing Officer. Ultimately, the Assessing Officer found that the trust had invested a sum of ₹ 17 lakhs in M/s.Kumari Chit Fund, in violation of Section 11(5) of the Act. Therefore, the Assessing Officer completed the assessment on 14.3.2014 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relied upon by the Tribunal in the case of CIT Vs. Nagarathu Vaisiyargal Sangam [reported in 246 ITR 164] stating that that was a case of violation under Section 13(1)(c) of the Act. However, the Tribunal rejected the said miscellaneous petition filed by the assessee vide order dated 23.11.2016. 7. The question would be as to whether the Assessing Officer was right in totally rejecting the claim of exemption under Section 11 of the Act on the ground that the assessee had violated the provisions of Section 11(5) read with Section 13(1)(d) of the Act. This issue was considered in the case of Working Women s Forum and that the Division Bench of this Court concurred with the decision of the Bombay High Court in the case of DIT (Ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held as follows (page 537): Under section 161(1A), which begins with a non obstante clause, it is provided that where any income in respect of which a person is liable as a representative assessee consists of profits of business, then tax shall be charged on the whole of the income in respect of which such person is so liable at the maximum marginal rate. Therefore, reading the above two phrases show that the Legislature has clearly indicated its mind in the proviso to section 164(2) when it categorically refers to forfeiture of exemption for breach of section 13(1)(d), resulting in levy of maximum marginal rate of tax only to that part of the income which has forfeited exemption. It does not refer to the entire income being subjecte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r followed the decision in the case of Working Women s Forum and denied exemption only with regard to interest earned from the deposits with M/s.Kumari Benefit Fund. A copy of the said assessment order dated 06.1.2016 is placed before us. Further, we wish to point out that this issue had arisen for three assessment years, in one of which namely the assessment year 2013-14, the assessee s case was accepted by the Assessing Officer, who applied the decision in the case of Working Women s Forum. The appeal before us pertains to the assessment year 2011-12. So far as the assessment for the year 2012-13, there was no scrutiny. 9. Further, the High Court of Karnataka, in the case of CIT Vs. Fr. Mullers Charitable Institutions [report ..... X X X X Extracts X X X X X X X X Extracts X X X X
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