TaxTMI 
TaxTMI 
2019 (1) TMI 115
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....r 2011-12. 2. The assessee has filed this appeal raising the following substantial questions of law : "i. Whether, on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in law in holding that there is a violation of Section 11(5) of the Income Tax Act read with Section 13(1(d) of the Income Tax Act, when the investment was made inadvertently by ignorance of the law ? ii. Whether, on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in law in not following the judgment of the jurisdictional High Court in CIT Vs. Working Women's Forum [reported in 365 ITR 123]? iii. Whether, on the facts and in the circumstances of the case, the In....
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....nder Section 11 of the Act on the ground that there was a violation of the provisions of Section 11(5) read with Section 13(1)(d) of the Act. 4. The assessee preferred an appeal before the Commissioner of Income Tax (Appeals)-17, Chennai [for brevity, the CIT(A)], who, by order dated 20.2.2015, confirmed the order passed by the Assessing Officer. Aggrieved by that, the assessee preferred an appeal before the Tribunal, which, by the impugned order, dismissed the assessee's appeal. Hence, the assessee is before us. 5. The Tribunal rejected the assessee's case by following the decision in the case of DDIT (E) Vs. India Cements Educational Society [reported in (2016) 46 ITR (Trib.) 80 (Chennai)]. The assessee placed reliance on the decisi....
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....n (2001) 249 ITR 533]. The relevant portions of the decision in the case of Working Women's Forum read thus : "We do not agree with the said submission of the learned counsel for the Revenue. We may at the outset point out herein that the decision relied on by the Commissioner of Income-tax (Appeals) in the case of CIT Vs. Tuluva Vellala Association in T.C.No.477 of 1989, dated March 16, 1999, is rentable to the decision of this court in T.C.No.477 of 1989 and has no relevance of the issue on hand. Leaving that aside, as far as the decision of the Bombay High Court in DIT (Exemptions) Vs. Sheth Mafatlal Gagalbhai Foundation Trust MANU/MH/ 0448/2001 : [2001] 249 ITR 533 (Bom.) is concerned, it is a similar line, which was a....
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....rs is also supported by Circular No. 387, dated July 6, 1984 (see [1985] 152 ITR (St.) 1). Vide the said circular, it has been laid down in para. 28.6 that, where a trust contravenes section 13(1)(d) of the Act, the maximum marginal rate of income-tax will apply only to that part of the income which has forfeited exemption under the said provision and not to the entire income. We may also add that in law, there is a vital difference between eligibility for exemption and withdrawal of exemption/ forfeiture of exemption for contravention of the provisions of law. These two concepts are different. They have different consequences. It is interesting to note that although the Legislature withdrew section 164(2) by the Direct Tax Laws (A....
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.... High Court in the case of Sheth Mafatlal Gagalbhai Foundation Trust and held that for violating Section 11(5) of the Act, the entire income of the assessee trust cannot be assessed to tax. The special leave petition filed by the Revenue against the decision in the case of Fr. Mullers Charitable Institutions in Special Leave to Appeal (C) No.22223 of 2014 was dismissed by the Hon'ble Supreme Court by order dated 19.9.2014. 10. In addition to that, we also wish to point out that the decision in the case of India Cements Educational Society cannot be applied to the case on hand, as it was a case where there was a violation of Section 13(1)(c) of the Act and that the assessee therein invested funds in a limited company where the trustee was....