TMI Blog2019 (7) TMI 603X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore, we hold that there has been violation of principles of natural justice and this is also grant one more ground to interfere with the orders passed by the CCIT, dated 06.05.2016. We find from the order impugned before us that the income and receipts of the assessee from the various institutions run by it have been noted from paragraph 13 of its order. There has been no exercise done by the Department to find out as to whether the assesee/Trust has generated a reasonable surplus to enable them to sustain the institution and in the event of them earning a higher surplus, whether they had ploughed back or utilising the same for achieving the objects of the trust. This exercise ought to have been done at the first instance or at least when the assessee had filed a review petition dated 28.04.2014. Thus, for the above reasons, we are of the considered view that the matter should be remanded back to the CCIT with a direction to examine the entire financials of the assessee and take a decision on merits and in accordance with law. - Tax Case Nos.286, 287 & 288 of 2018 And CMP.Nos.5464 & 5465 of 2018 - - - Dated:- 11-6-2019 - Mr. Justice T.S. Sivagnanam And Mrs. Jus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stantial question of law; (i) Whether the Appellate Tribunal is correct in law in rejecting the petition for review/rectification within the scope of section 10(23C)(vi) read with section 154 of the Act despite the mistake of law pointed out based on the decision of the Apex Court in the case of CIT Vs Society for the Promotion of Education, Adventure Sport Conservation of Environment dated 16/02/2016, granting legal recognition for deemed registration under the Act which had cascading impact on the assessment? (ii) Whether the Appellate Tribunal is correct in law in rejecting the petition for review/rectification for grant of recognition u/s 10(23C)(vi) of the Act retrospectively from the Assessment Year 2004-05 while wrongly imposing the condition for incorporating 'no profit clause' in the documents creating the appellant trust for the eligibility to get tax exemption which profit motive should be tested only in the assessment proceedings parallely and subsequently taken up by the Jurisdictiional Assessing officer not at the state of the incorporation? (iii) Whether the Appellate Tribunal is correct in law in not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 10(23C)(vi) dated 24.06.2013 was rejected. The Tribunal did not accepted the contention of the assessee that, the application filed by the appellant/trust dated 28.04.2014, should be treated as an application under Section 154 of the Act. The decision in T.C.A.No.286 of 2018 will have a direct bearing on the result of the other two appeals namely T.C.A.No.287 and 288 of 2018, which are against the substantive assessments for the assessment year 2012-13 and 2010-11 respectively. We first take up T.C.A.No.286 of 2018 for consideration. 5. The assessee/trust filed an application in Form 56(D) on 28.09.2012, seeking approval under Section 10(23C)(vi) of the Act as its annual receipts exceeded ₹ 1 Crore. A report was called for by the Chief Commissioner from the Assessing Officer of the appellant/ assessee and the assessee was given an opportunity to explain his case with regard to the report submitted by the Assessing Officer. The Chief Commissioner by order dated 24.06.2013 rejected the application on the ground that the assessee is running an educational institution and it does not appear to be running for no profit, as in the trust deed ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emption under Section 10(23C)(vi). We find that both in the first order of rejection dated 24.06.2013 and second order of rejection dated 06.05.2016. The only reason assigned by the Chief Commissioner of Income Tax is by stating that the trust deed does not specifically mention that the educational institution established by it, is not running for the purpose of profit. 9. In the petition for review dated 28.04.2014, the assesee/ trust had placed the cash flow statement for the period from 01.04.1992 till 31.03.2013. Therefore when the petition came up before the Chief Commissioner of Income Tax, Coimbatore for review, an attempt should have been made to examine the financials of the Trust. 10. As rightly pointed out by the assessee before the Chief Commissioner of Income Tax in the Review petition, the substance flow form is, what is important to be noted. We find that there has been no examination from that angle and the application made by the assessee has been rejected at the threshold solely going by the words mentioned in the deed of trust. 11. We may also note that the assessee had earlier filed applications for grant of exe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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