TMI Blog2021 (7) TMI 178X X X X Extracts X X X X X X X X Extracts X X X X ..... ct set out in the Trust deed. If the Assessing Officer had objection regarding the entire amount of donation, then her remand report should not have accepted any of the donations with valid reasons. Charity is clearly defined as relief of the poor, education, yoga, medical relief, preservation of environment, etc., Thus public charitable trust donating to activities other than education cannot be denied exemption u/s.11 of the Act. Therefore, the conclusion of the Assessing Officer is totally unwarranted. No reason to interfere with the order of the Commissioner of Income Tax (Appeals) and Income Tax Appellate Tribunal. We reject the grounds of appeal taken by the Revenue. - Tax Case Appeal No.1059 of 2014 - - - Dated:- 2-7-2021 - Hon'ble Mr.Justice M. Duraiswamy And Hon'ble Mrs.Justice R. Hemalatha For the Appellant : Mr.J. Narayanaswamy Senior Standing Counsel For the Respondent : Ms.Pushya Sitaraman Senior Counsel for Ms.J. Sree Vidya JUDGMENT R.HEMALATHA, J. This appeal is filed against the order dated 20.07.2011 in ITA.No.1531/MDS/2009 of ITAT Chennai, Bench-B. 2. The respondent/assessee is a Trust registered under Section 12AA of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Income Tax (Appeals) concluded that the Trust-deed had empowered the Trustees to apply the trust funds to anyone or more of the specified objects of the Trust and the Assessing Officer cannot interfere in the discretion of the Trustees. Furthermore, it was also held by the Commissioner of Income Tax (Appeals) that the Assessing Officer ought to have referred the matter to Commissioner of Income Tax for withdrawal of the Registration u/s. 12(AA) (3) of the Act and only upon the receipt of the order of the Commissioner, the denial of exemption u/s.11 could have been proceeded with. Thus the lack of jurisdiction on the part of Assessing Officer was also pointed out in that order. It was further observed that out of the total sum of ₹ 6,65,60,886/- disbursed by the appellant towards Charity and Donations during the previous year 2006-07 relevant to the Assessment Year 2007-08, the Assessing Officer has accepted an amount of ₹ 6,50,66,000/- as donations made in pursuant of the objects of the Appellant. According to the Assessing Officer, the balance of ₹ 14,94,886/-, constituting 0.34% of the total expenditure of the appellant, are not in accordance with the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enditure for charitable or religious purpose would be entitled for exemption u/s.11 (1) (a) of the Act for that year as held by the Andhra Pradesh High Court in Trustees of H.E.H. the Nizam's Pilgrimage Money Trust Vs. CWT/IT (171 ITR 323), which was also confirmed by the Apex Court. It was also concluded by the Income Tax Appellate Tribunal that the Trust was a Public Charitable Trust as evidenced in the Trust deed dated 19.04.1984 and the supplementary deeds dated 06.05.2000 and 19.01.2001. The Income Tax Appellate Tribunal has upheld the order of the Commissioner of Income Tax (Appeals). 7. Now the present appeal is filed on the following substantial questions of law and additional substantial question of law: Substantial Questions of law: 1. Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in holding that the trust deed dated 19.04.1984 alone would be relevant to conclude about the objects and activities of the trust? 2. Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in holding that the income of the trust need not be applied towards the obj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he question as to whether the payments of donations by the Trust were in consonance with the objects of the Trust. Therefore, his contention was that the Assessing Officer was right in declaring the donations which were not in conformity with the objects of the Trust as not entitled for exemption u/s.11 of the Act. He also contended that the order of both Commissioner of Income Tax (Appeals) and Income Tax Appellate Tribunal are perverse and liable to be set aside. 9. Per contra, Ms.Pushya Sitaraman, learned counsel for the respondent/assessee made certain arguments which are listed below. (i) The Assessing Officer though in her original report had declared all the donations to the tune of ₹ 6,65,60,886/- as not entitled for exemption took a complete u-turn in her remand report accepting most of the donations as permissible barring a few totalling to ₹ 14,94,886/- (ii)The Assessing Officer's interpretation that the Trust was granted Registration under Section 12AA of the Act only based on the objects of the Trust which were solely educational in nature and any donations/contribution to activities other than educational purposes were violative and not ent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sioner of Income Tax (Appeals) as well as the Income Tax Appellate Tribunal disagreed with the contention of the Assessing Officer that withdrawal of registration u/s.12AA is not a prerequisite for the denial of exemption under Section 11 of the Act. 13. Section 13 of Income Tax Act, 1961, specifies the circumstances where exemption under Sections 11 and 12 would not be available for a Trust. The reasons where Section 13 would be invoked are 1. Income not for the benefit of Public - Section 13 (1) (G) 2. Income from Trust for the benefit of a particular religion or caste ( if trust created after 01.04.1962) 3. Any income of the Trust which benefits certain person 4. Income or property used for the benefit of a person. 14. The compliance of the following main condition is essential for claiming exemption under Section 11: a) Trust must have been created for any lawful purpose b) Such trust/institution must be for charitable/religious purposes. 15. According to Section 2(15), charitable purpose includes relief of the poor, education, yoga, medical relief, preservation of environment and preservation of monuments or places or objects of artistic or historic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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