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TMI Blog2016 (3) TMI 1443X X X X Extracts X X X X X X X X Extracts X X X X ..... eferring to the trust deed, the copy of which is available at page 1 of the paper book, the ld. Sr. Counsel submitted that the trust was established by a deed of trust dated 27.3.1991 executed by Justice S. Natarajan, a retired judge of the Supreme Court. The objects of the trust are to establish educational, medical and charitable organizations for general public, to institute scholarships for the deserving students, and to provide general medical relief to the public. In furtherance of its objects, the assessee requested the Cosmopolitan Club, Madurai, to allot a piece of land. According to the ld. Sr. Counsel, the Cosmopolitan Club, Madurai, owns vacant land to the extent of 64 grounds and 1484 sq ft in Madurai city. The vacant site was found to be excess of its holding under Tamilnadu Urban Land Ceiling and Regulation Act. On the application made by the assessee, 2 Acres of land was allotted to the assessee on lease subject to certain conditions prescribed in G.O.(Ms)No. 1118 dated 25.10.1996. As per the conditions imposed by Government of Tamilnadu, the assessee-trust constructed a community hall. The rental income received from the community hall was utilized for carrying out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her found that letting out of the community hall is a commercial activity which cannot be allowed after introduction of proviso to sec. 2(15) of the Act. After amendment of sec. 2(15) by introducing two provisos, the legislature took away the activity of general public utility outside the scope of charity u/s 2(15) of the Act. According to the ld. DR, the object of the trust is a general public utility, but when the assessee is receiving rental income from letting out of the community hall or kalyana mandapam, the assessee is not eligible for exemption u/s 11 of the Act. Referring to the order of the State Government, the ld. DR pointed out that the land was allotted to the assessee on the ground that 50% concession on the rent shall be given to the poor citizens. However, the assessee never gave any concession to the poor citizens. The assessee has violated the conditions imposed by the State Government while letting out the community hall. While letting out the community hall, the assessee has collected enormous amount as corpus donation and a marginal amount was disclosed as rental income. In fact, the assessee has collected more than Rs. 52 lakhs as corpus donation during the y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d vs ITO, 313 ITR(AT) 182. 8. Two of the trustees filed petitions before this Tribunal praying for an opportunity of hearing. One Smt. Indra Subramaniam, by her letter dated 29.5.2015 claimed herself that she is one of the trustees of the assessee-trust. She has also made an allegation in the petition that the assessee-trust wrongly classified the rental income as voluntary donation with an intention of not spending the income for charity as required by law. 9. Shri K. Ravi, the ld. Counsel for Smt. Indra Subramaniam, appeared before this Tribunal during the course of the hearing of appeal. The ld. Counsel submitted that he represents Smt. Indra Subramaniam, one of the trustees of the assessee-trust and he should be given an opportunity to argue the appeal. On a query from the Bench under what provision of the Income-tax Act, 1961, Smt. Indra Subramaniam is praying for an opportunity of being heard especially when she is not responsible for filing return of income on behalf of the assessee-trust, the ld. Counsel could not point out any provision in the Income-tax Act, 1961. Shri K. Ravi, ld. Counsel submitted that the Code of Civil Procedure prescribes a procedure to file an appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tention to do justice, this Tribunal requested Shri Ravi, the ld. Counsel for Smt. Indra Subramaniam, to explain the actual grievance of Smt. Indra Subramaniam. Shri K. Ravi, ld. Counsel for Smt.Indra Subramaniam very fairly submitted that he is supporting the case of the Revenue. It is unfortunate that a trustee of the assessee-trust is supporting the case of the Revenue. Therefore, it is obvious that there is a conflict of interest between Smt. Indra Subramaniam and the assessee-trust. This Tribunal is of the considered opinion that conflict of interest between the assesseetrust and a trustee cannot be decided by this Tribunal. It is for the respective persons including Smt. Indra Subramaniam to approach the competent Civil Court for redressal of their grievance if they are so advised. This Tribunal cannot be made as a platform for resolving their personal grievances. As observed earlier, this Tribunal is of the considered opinion that the object of the Income-tax Act is only to assess the taxable income, levy tax and collect the same. Other than that, the Income-tax Act does not empower any of the authorities including this Tribunal to redress the personal grievances of the thir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itan Club, Madurai. The main objects of the trust are establishing educational institution and providing scholarships to the students. Running of community hall/kalyana mandapam is not the object of the assessee-trust as per the trust deed. Sec. 11(4) of the Act enables the charitable institution to hold a business undertaking as a property held under a trust. Sec. 11(4A) of the Act provides that when the business of the trust is incidental to the attainment of the objectives of the trust and the trust is maintaining separate books of account in respect of such business, the provisions of sec. 11 would be applicable and the assessee is entitled for exemption. The Assessing Officer, in fact, found that running of community hall is incidental to the attainment of the objects of the trust, therefore, entitled for exemption u/s 11 of the Act. This Tribunal is of the considered opinion that when the main object of the assessee is education and providing scholarship to the needy people, the assessee naturally needs money to feed the charitable activity and performing the objects of the trust. Therefore, the business can be held as property under the trust. However, the assessee is expect ..... X X X X Extracts X X X X X X X X Extracts X X X X
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