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of <h1>Court affirms Tribunal decision on charitable trust objects, Assessing Officer's role clarified.</h1> The High Court upheld the Tribunal's decision, ruling that the trust's objects were charitable, contrary to the Commissioner's view. The court emphasized ... Exemption u/s 11 - Registration as a Charitable Trust u/s 12A - charitable activity u/s 2(15) - “to convert plays into episodes on T.V.” - HELD THAT:- Commissioner has wholly misread the objects. Clause (e) is of the objects is to create a culture among the elite class of the society for considering work of art an asset than can be passed on to the next generation with pride and prestige. Immediately, following clause (f) which has not been fully reproduced by the Commissioner in his order is to write through or with the help of literary persons, of different aptitudes or classes, plays in art and culture and other languages on different topics, to translate plays written different languages into other languages, or to convert plays into drams in to short plays or episodes or T.V. or radio plays. The Commissioner, thus, picked a portion of this clause in isolation to argue that the same was not charitable. - Decided against revenue Issues:1. Challenge to the rejection of registration of a trust as a Charitable Trust under Section 12A of the Income Tax Act, 1961.2. Interpretation of the objects of the trust and their charitable nature.3. Discretion of trustees in utilizing the income of the trust for charitable or non-charitable purposes.Issue 1: Challenge to Registration RejectionThe appeal was filed by the Revenue challenging the rejection of registration of a trust as a Charitable Trust under Section 12A of the Income Tax Act, 1961. The Commissioner rejected the application citing that the objects of the trust were not charitable in nature and that the trustees had full discretion to utilize the income for non-charitable purposes, thus refusing registration.Issue 2: Interpretation of Trust ObjectsThe Tribunal, in the impugned judgment, allowed the appeal by holding that none of the objects of the trust were charitable in nature as per the Commissioner's interpretation. The High Court reviewed the objects of the trust and focused on the misinterpretation by the Commissioner regarding one of the clauses, emphasizing that the objects were indeed charitable, such as creating a culture for art appreciation among the elite class.Issue 3: Trustees' Discretion in Income UtilizationThe crux of the matter revolved around the trustees' discretion in utilizing the trust's income for either charitable or non-charitable purposes. The Commissioner's concern was that the trustees could divert the income towards non-charitable activities due to the lack of a binding clause. However, the High Court clarified that the objects of the trust were charitable in nature, and the Commissioner's interpretation was flawed, leading to the dismissal of the Income Tax Appeal.In conclusion, the High Court upheld the Tribunal's decision, emphasizing that the objects of the trust were indeed charitable, contrary to the Commissioner's view. The court highlighted the misinterpretation of the trust's objects and reiterated that the Assessing Officer could examine compliance with charitable purposes while granting exemption under Section 11 of the Act. The appeal was dismissed, and no question of law was found to arise in the case.
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