2022 (11) TMI 255 - SC - Income Tax

Court clarifies interpretation of Income Tax Act for charitable trusts, dismisses appeals, affirms decisions.

ASSISTANT COMMISSIONER OF INCOME TAX (EXEMPTIONS) Versus AHMEDABAD URBAN DEVELOPMENT AUTHORITY

The court clarified that the judgment on the interpretation of Section 2(15) of the Income Tax Act, 1961 in relation to charitable trusts was conclusive ... Exemption u/s 11 - Clarification to the order [ 2022 (10) TMI 948 - SUPREME COURT] - Applicable retrospectively or not - scope and amplitude of the definition “charitable purpose” - revenue seeks a clarification of the judgment delivered by this court [2022 (10) TMI 948 - SUPREME COURT] that para 254 of the judgment should be such as to “enable the Revenue to redo the assessments in accordance with the above judgments for the past and examine the eligibility on a yearly basis for the future and thus render justice HELD THAT:- A plain reading of the conclusions recorded in Para 253 (A)(B)(C) (D) and (E) would disclose that this court consciously recorded its findings, with the intent of finally deciding the issues, for various organizations- in relation to the assessment years in question, - whereas in Para 253 (F), the court remitted the matter for examination and orders by the assessing officer. Similarly, the conclusion in Para 253 G, was conclusive with respect to the claim of private trusts; the appeals were dismissed. These conclusions are accurately reflected in the final, operative directions in Para 254. In Para 254 (i) to (iv), the conclusions recorded are against the revenue. In Para 254 (v), (vi), (vii) and (vii), the conclusions, are in favour of the revenue. The reference to application of the law declared by this court’s judgment, therefore, has to be understood in the context, which is that they apply for the assessment years in question, which were before this court and were decided; wherever the appeals were decided against the revenue, they are to be treated as final. The reference to future application has to be understood in this context, which is that for the assessment years which this court was not called upon to decide, the concerned authorities will apply the law declared in the judgment, having regard to the facts of each such assessment year. In view of this discussion, no further clarification is necessary or called for. Issues:Clarification sought by revenue regarding a judgment on the interpretation of Section 2(15) of the Income Tax Act, 1961 in relation to charitable trusts.Analysis:The revenue sought clarification on a judgment regarding the interpretation of Section 2(15) of the Income Tax Act, 1961, specifically related to charitable trusts. The court had considered various activities of charitable trusts, organizations, and bodies, and pronounced conclusions in the judgment. The revenue argued that certain paragraphs of the judgment precluded them from examining facts and assessing assessment years for the parties involved in the appeals.The court, in its analysis, pointed out that the conclusions in the judgment were intended to finally decide issues for various organizations concerning the assessment years in question. While some matters were remitted for further examination, certain conclusions were conclusive, leading to the dismissal of appeals. The court clarified that the law declared in the judgment applied to the assessment years before the court, and decisions against the revenue were final. Future application of the law was to be understood in the context of assessment years not decided by the court, where authorities would apply the law based on the judgment and facts of each year.Ultimately, the court concluded that no further clarification was necessary, as the judgment's directions were clear regarding the application of law to past and future assessment years. The application seeking clarification was disposed of accordingly.