TaxTMI 
TaxTMI 
2018 (1) TMI 858
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....sessee is a Trust and filed its return of income declaring 'nil' income on 11/09/12. Ld. AO completed the assessment by making addition in the hands of the assessee at Rs. 94,63,660/-. Ld. AO disallowed the exemption under section 11 and 12 of the Act to assessee by observing as under: "It is pertinent to mention here that the Hon'ble High Court has given a verdict in this case vide its order in ITA NO.162/2001 dt.17.7.2014 and the relevant portion of which is reproduced as under:- "Till the will is probated and it is affirmed that the will is genuine, the respondent trust could not acquire legal right on the property as such for the purpose of the present Act i.e. Income Tax Act, 1961 ..... ..... In view of the factual position elucidated above and affirmed by the CIT(A) and the Tribunal, we do not think allegation of violation of section 11(5) of the Act arises for consideration or should be accepted". In view of the High court order the exemption u/s.11 and 12 which were earlier being disallowed as there was a violation under section 13( 1 )( d) of the I. T. Act, the same is accepted and allowed. However, since the trust is not carrying on....
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....me Tax (Appeals) has noticed that the Will, the shares are to become the corpus of the trust acquisition is dependent upon adjudication of the Probate. Thus, there cannot be violation of Section 11(5) in the facts of the present case. 7. With regard to advance of Rs. 1,10,000/-, Commissioner of Income Tax (Appeals) has observed that the same was paid by the trustees for raising a memorial for late Raja Bahadur Sardar Singh. The project however has not been completed because of the ongoing dispute. However, the Business India had paid interest on the said amount. Accordingly payment of Rs. 1, 1 0,000/- cannot be treated as an investment which was made and which was covered and regulated by Section 11(5) of the Act. The intent and purpose behind payment of Rs. 1, 1 0,000/- was not investment. 8. The aforesaid view has been affirmed by the Tribunal. 9. Learned counsel for the appellant revenue has not been able to controvert and deny the aforesaid factual position. In fact, he was asked whether the revenue has filed or taken similar objections in respect of other years and denied benefit of Section 11. He is unable to answer the said question but counsel for....
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.... Ld. DR has contested the action of the Ld.CIT (A) for both the years under consideration, contending that the Ld. CIT (A) has erred in allowing to the assessee the benefits under Sections 11 and 12 of the Act, ignoring the fact that the assessee continues to hold investment in shares of Indian and foreign companies in contravention of Section 13(1)(d) of the Act: and also in absence of any charitable activity carried out by the assessee. 10. The Id. counsel for the assessee, on the other hand, has placed strong reliance on the impugned orders in this regard. 11. The Tribunal, in its Order dated 19.12.2008 (supra), in the assessee's case for Assessment Year 2004-0-3 has held as follows:- "I have gone through the order of lower authorities and found that A.O. has denied benefit of Section 11 on the plea that violation of 13 (1)(d) during the year under consideration. Before the CIT (A), as the appeal was filed belatedly by 8 months and 14 days, the CIT (A) dismissed the appeal in limine, on the plea of late filing, and the merits were not considered. We found that assessee has explained the reasons for delay and after going through the same, we found that he ha....
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....ssessee's appeal. In paragraph 3 of the order of the tribunal, it was further observed that on being confronted with the earlier orders of the tribunal, the department conceded that the issue of exemption under section 11 is covered in favour of the assessee. This order of the tribunal for the assessment year 1993-94 was followed by the tribunal for the assessment years 1994-95 to 1996-97 and 1998-99. In view of these consistent orders, in one of which the assessee's ground to the effect that in view of the litigation pending before the Hon'ble High Court the income could not be applied for charitable purposes and it must be taken to have been accumulated has also been considered, we hold that notwithstanding the reason given by the Ld. Commissioner of Income Tax (Appeals) in the impugned order that the assessee did not apply its income to any charitable activity in India during the year, the assessee would be eligible for the exemption under section 11. Admittedly, the facts for the year under appeal are the same in the earlier year which means that the question of non-application of any income to charitable purposes was also present in the earlier years, though that q....