TMI Blog2022 (8) TMI 1085X X X X Extracts X X X X X X X X Extracts X X X X ..... impugned orders not reveal the specific charitable activities that the petitioner has engaged in, though the show cause notice to the petitioner as to why the provisions of Section 2(15) not be invoked in its case, has evoked a reply to the effect that the main objects of the Trust are education, medical relief and relief to the poor. The critical issue continues to relate to the usage of funds by the petitioner as this would determine whether its activities are charitable or otherwise, This has then to be set and seen in the context of Section 2(15) of the Act. This exercise necessarily involves an appreciation of facts which this Court is not inclined to embark upon in terms of Article 226 of the Constitution of India. In any event, no legal infirmity is made out to warrant intervention in/with the impugned orders. Faced with this prospect, learned Senior Counsel for learned counsel on record, conveys that the petitioner wishes to withdraw the Writ Petitions, seeking liberty to file statutory appeals. Appeals challenging assessments for AYs 2009-2010 to 2012-2013 and 2016-2017 are stated to be pending before the first appellate authority. Seeing as all the appeals involve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner by way of an appeal before the Income Tax Appellate Tribunal (in short Tribunal / ITAT ). The Tribunal decided the appeal by an order dated 18.03.2016. 6. The Tribunal, at paragraph Nos.12 and 13 considered the merit of the petitioners claim for exemption. Inter alia, there is a finding of the tribunal that the running of community hall / Kalyana Mandapam is not an object of the assessee trust as per the deed of trust. This is a factual error insofar as clause 3(k) specifically states that to build Kalyana Mandapams, Pravachana Mandapams for the use and benefit of the public would constitute an object of the Trust. 7.The tribunal proceeds on the basis that the running of the Kalyana Mandapam is only an enabling activity in order to generate funds for feeding of the charitable activities. They, thus, refer to Section 11(4) of the Act which enables a charitable institution to run a business undertaking as a property held under a trust. Section 11(4)(a) grants relief to an assessee upon the satisfaction of two conditions: (1) that the trust maintain separate books of accounts in respect of business. (2) that the trust establish that the business is incidental to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt from community hall are incidental to the carrying out of the objects of the trust. When the Assessing Officer has not examined the utilization of rent for charitable activity, this Tribunal is of the considered opinion that utilization of the income of the assessee-trust for charitable activity needs to be examined year by year for allowing the claim of the assessee u/s 11 of the Act. The CIT(E) also has not examined the utilization of the fund for charitable purposes. The CIT(E) proceeded as if the proviso to sec.2(15) of the Act would make the assessee-trust not eligible for exemption u/s.11 of the Act. This Tribunal is of the considered opinion that proviso to sec.2(15) is applicable in respect of the trust whose object is advancement of any other general public utility. In the case before us, it is not the object of the trust to advance any public utility service. The main object as per the trust deed is to establish educational and medical institution and also providing scholarship to the needy people. Therefore, proviso to sec.2(15) may not be applicable at all. However, this Tribunal is of the considered opinion that the matter needs to be reexamined by the Assessing Off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as it stands post amendment, with effect from 01.04.2016, is extracted below: Section 2 .. (15) charitable purpose includes relief of the poor, education, [yoga] medical relief, [preservation of environment (including water sheds, 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 publicity 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, unless- (i) such activity is undertaken in the course of actual carrying out of such advancement of any other object of general public utility, and (ii) the aggregate receipts from such activity or activities during the previous year, do not exceed twenty per cent of the total receipts, of the trust or institution und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 574 of 2020 7130, 7131, 7135 9214 of 2022, and has made an endorsement to that effect. In view of the endorsement made, WP.Nos.570, 571 574 of 2020 7130, 7131, 7135 9214 of 2022, are dismissed as withdrawn. 20. Liberty as sought for is granted to the petitioner to challenge orders of assessment dated 27.12.2019, 16.03.2022, 14.03.2022 28.03.2022 for AY 2013-2014, 2014-2015, 2015-2016 2017-18 respectively. No costs. Consequently, connected Miscellaneous Petitions are closed. 21.In W.P.Nos.7130, 7131, 7135 of 2022, consequential orders of penalty under Section 271(1)(c) of the Act have been challenged and likewise, petitioner is permitted to challenge the orders of penalty by way of statutory appeal. 22. Let the appeals, as aforesaid, be filed within a period of four (4) weeks from date of receipt of the order in which event, the appellate authority shall take on file the same, without reference to limitation but ensuring compliance with other statutory conditions, if any. 23.Appeals challenging assessments for AYs 2009-2010 to 2012-2013 and 2016-2017 are stated to be pending before the first appellate authority. Seeing as all the appeals involve the claim ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
