TaxTMI 
TaxTMI 
2017 (11) TMI 391
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....hich is squarely applicable to the case of the assessee for assessment year 2011-12, the Tribunal is correct in law in holding that the assessee would be eligible for exemption under Section 11 of the Income Tax Act, 1961, for the assessment year? 2. Whether, on the facts and in the circumstances of the case, and having regard to the provisions of newly inserted Section 13(8) of the Income Tax Act, 1961, inserted vide Finance Act, 2012, with retrospective effect from 01.04.2009, which squarely applies to the facts of the case of the assessee, whether, the Tribunal is correct in law in holding that the assessee is eligible for exemption under Section 11 of the Income Tax Act, 1961 for this assessment year? and 3. Whether, in the facts and the circumstances of the case, when the income generating such assets was already treated as application of income and given exemption, thus leading to double deduction which is impermissible in law? 2. In I.T.T.A.No.71 of 2017, only the first two questions of law as arising in I.T.T.A.No.391 of 2017 arise. Since the assessee is the same in both cases and the appeals arise in respect of the assessment years 2010-11 and 2011-12,....
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....he purview of the definition of the expression "charitable purpose", as an institution established for the advancement of an object of general public utility. Though Mr. K. Vasanth Kumar, learned counsel for the assessee attempted to argue on the basis of the finding recorded by this Curt in I.T.T.A.No.168 of 2015 that the assessee should be considered as an institution established for the purpose of education, we do not think that we can now go into the question in view of the fact that the Revenue alone is on appeal against the finding recorded by the Tribunal. 9. Before proceeding further, we should point out one fundamental difference between the institutions, which would automatically fall within the purview of the expression "charitable purpose" under Section 2(15) and institutions which are established for the advancement of any other object of general public utility. Section 2(15) as it stands today after the last amendment under Finance Act, 2015, w.e.f., 01.04.2016 reads as follows: Section 2 (15): "charitable purpose" includes relief of the poor, education, yoga medical relief, preservation of environment including water-sheds, forests and wildlife and preser....
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....y within the definition of the expression "charitable purpose" was actually conditional. The condition was that such an institution should not be involved in the carrying on of any activity in the nature of trade, commerce or business. In other words, if an institution, established for the advancement of any other object of general public utility, which would otherwise come within the purview of Section 2(15), is involved in the carrying on of any activity in the nature of trade, commerce or business, such an institution will come within Section 2(15) only if two conditions laid down in the clauses are satisfied. 12. Now that the Tribunal has categorized the assessee not as an institution advancing the cause of education, but as an institution established for the advancement of any other object of general public utility, the first question that was required to be addressed by the Tribunal was as to whether the assessee was involved in the carrying on of any activity in the nature of trade, commerce or business. Now let us see how this question was addressed to by the Tribunal. 13. In paragraph 11 of its order, the Tribunal analyzed the two provisos that were originally incorp....
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....on here that the Hon'ble Finance Minister had also clarified, during the course of the debate in the Parliament, that the proviso to Section 2(15) of the Act is not intended to apply to genuine charitable organizations. It was further clarified by the Hon'ble Finance Minister that the Chambers of Commerce and similar organizations rendering services to their members would not be affected by introduction of this proviso. It is fairly settled law now that reference can be made to the speech made by the Hon'ble Finance Minister at the time fo piloting the bill in the Parliament in order to ascertain the true meaning of the words and the language employed in the Statute." 16. In the light of the categorical finding recorded by the Tribunal, we are of the considered view that though the assessee has been found by the Tribunal to be an institution established for the advancement of any other object of general public utility, the assessee does not fall under the category of such an institution, which is carrying on an activity in the nature of trade, commerce or business so as to attract the proviso to Section 2 (15) at all. Hence, the first question of law arising in both cases has to....
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....ourt in the matter of Calavala Cunnan Charities, has decided the question now under consideration in favour of the assessee and we could well have decided this Batch of appeals simply on the strength of the aforesaid decision. We are however persuaded to proceed further with the discussion since a conflicting view has been expressed by the Kerala High Court in the case of Lissie Medical Institutions (supra). Though the attention of the Division Bench of the Kerala High court was drawn to the decision in Rao Bahadur Calavala Cunnan Chetty Charities (supra) and several decisions along similar lines, the court was persuaded to take a contrary view preferring to follow the rationale of the judgment of the Supreme Court in the case of Escorts (supra). 25. As noted by us earlier, the judgment of the Supreme Court in escorts turns on an entirely different position of law and would not impact the issue being discussed in the present case. 26. We are supported in our view by a plethora of decisions of various High Courts - the Bombay High Court in the case of CIT v. Munisuvrat Jain (1994 Tax Law Reporter 1084) and DIT (Exem) Vs. Framjee Cawasjee Institute (109 CTR 463); Ka....