TaxTMI 
TaxTMI 
TaxTMI 
2017 (8) TMI 280
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....trust deed are not as per the provisions of section 10(23C)(vi) of the Act and the trust was accordingly held as not existing solely for educational purposes and its application was rejected. In its order, the learned Principal Chief Commissioner of Income-tax stated that the trust is having multiple objectives and therefore, it is not existing solely for educational purposes, all the powers are with the founder trustees and the trust is at the sole discretion of the founder trustees and Dr. Pankaj Garg and Ms. Vidushi Garg who are the founder trustees are taking undue benefits by drawing a huge remuneration from the trust which is contrary to the trust deed and the trust has failed to justify the same. Accordingly, he held that looking at the clauses of the trust deed, the trust cannot be held existing solely for educational purposes and the application seeking approval under section 10(23C)(vi) was rejected. 3. During the course of hearing, the learned authorised representative submitted that the issue of the scope of enquiry for approval under section 10(23C)(vi) as well as the issues requiring considerations at the time of grant of approval came up for consideration before the....
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....iple objects and therefore, is not existing solely for education. Undoubtedly, the appellant-trust had multiple objects in its trust deed dated November 14, 2003, however, the said trust deed was amended subsequently vide trust deed dated July 26, 2015, wherein all other objects other than education were deleted. Otherwise also, having multiple objects cannot be a reason for denial for approval as has been held by the different High Courts in the under noted cases : (i) C. P. Vidya Niketan Inter College Shikshan Society v. Union of India [2013] 359 ITR 322 (All) ; (ii) Geetanjali Education Society v. Asst. DIT (Exemptions) [2014] 267 CTR (Karn) 369 (iii) Neeraj Janhitkari Gramin Sewa Sansthan v. Chief CIT [2014] 360 ITR 168 (All) ; (iv) Digember Jain Society for Child Welfare v. DGIT (Exemption) [2010] 329 ITR 459 (Delhi) ; (v) Harf Charitable Trust (Regd.), Malerkotla v. Chief CIT [2015] 376 ITR 110 (P&H). The appellant-trust is not involved in any activity other than education. No contrary finding is there in the order of the learned principal Chief Commissioner of Income-tax or in any of the assessment order under section 143(3). (B) The trustees have derived b....
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....is applicable only on private trusts and not on charitable trust (appellant is a charitable trust). This is clear from the Central Board of Direct Taxes Circular No. 45, dated September 2, 1970, Central Board of Direct Taxes Circular No. 281, dated September 22, 1980, [1981] 131 ITR (St.) 4 and Central Board of Direct Taxes Circular No. 378, dated July 6, 1984, [1985] 152 ITR (St.) 18. Thus, the learned Principal Chief Commissioner of Income-tax has erred in categorising the appellant charitable trust as discretionary trust and thereby rejecting the application on his wrong understanding of law. The Central Board of Direct Taxes vide Circular dated August 17, 2015 has clarified that there is no law to deny approval on account of the so- called excessive powers entrusted with the founder trustee. Otherwise also, paragraph 9 of the trust was deleted and paragraph 12 of the trust deed was suitably modified. Further attention is drawn towards the following clauses of the trust deed which demonstrate that the management of the trust is through the trustees. Paragraph 13(j) : "To appoint sub-committees comprising one trustee or more for carrying out the objects and purposes o....
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....assessee-trust can only apply prospectively and in support, drawn reliance to the decision of the hon'ble Madras High Court in the case of B. S. Abdur Rahman Institute of Science and Technology v. Chief CIT [2016] 7 ITR-OL 255 (Mad) ; [2017] 78 taxmann.com 336 (Mad). 5. We have heard the rival contentions and perused the material available on record. The scope of inquiry to be carried out at the time of grant of approval under section 10(23C)(vi) of the Act had come up before the hon'ble Supreme Court in the case of American Hotel and Lodging Association (supra) and subsequently the Central Board of Direct Taxes has also come out with a Circular No. 14 of 2015 dated August 17, 2015 clarifying the issues relating to grant of approval as well as to follow the guidelines as prescribed by the hon'ble Supreme Court in the case of American Hotel and Lodging Association (supra). Apparently the order under appeal has been raised by the learned Principal Chief Commissioner of Income- tax on July 30, 2015 and he therefore does not have the benefit of going through the said Central Board of Direct Taxes circular which is binding on the Revenue authorities. 5.1 As per the scheme ....