2020 (12) TMI 680

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.... for the respondent - Revenue. 2. This appeal, filed by the assessee under Section 260A of the Income Tax Act, 1961 (for short, the Act) is directed against the order dated 22.6.2018 made in ITA.No.2093/Chny/2016 on the file of the Income Tax Appellate Tribunal, Chennai 'B' Bench (for brevity, the Tribunal) for the assessment year 2012-13. 3. The appeal is admitted on the following substantial questions of law : "1. Whether the order of the Tribunal is perverse in not following the judgment relied on by the appellant in the case of Queens Educational Trust Vs. CIT - 372 ITR 699-SC and CBDT circular F.No.194/16-17II(A1) wherein it was held that where all the objects of these trusts are educational and the surplus, if a....

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....was based on an application filed in Form 56D on 03.11.2015. Though the assessee made submissions before the Authority concerned on several dates, since nothing transpired out of such proceedings, the assessee placed reliance on the deeming provision under the 9th Proviso to Section 10(23C) of the Act. Subsequently, the assessee's case was selected for scrutiny and a notice under Section 143(2) of the Act and thereafter another notice under Section 142(1) read with Section 129 of the Act were issued. The assessment was completed under Section 143(3) of the Act by denying exemption under Sections 10(23C)(vi), 11 and 12 of the Act determining the total income of Rs. 6,45,49,660/-. 6. The issue before us is with regard to certain advanc....

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....appeal on the ground that the differential excess amount of Rs. 70,25,780/- was loaned to the sister trust without adequate interest or without adequate security or both and therefore, it had clearly violated the provisions of Section 13(1)(c) read with Sections 11(5) and 13(2)(a) of the Act. There are other issues pertaining to depreciation, which was also disallowed. 9. As against the order passed by the CIT(A), the assessee filed an appeal before the Tribunal, which dismissed the same and in doing so, the Tribunal held that the assessee is carrying on the activities of profitable venture and is not undertaking any charitable activity within the scope of Section 2(15) of the Act. Aggrieved by the impugned order passed by the Tribunal, ....

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....13. We are conscious of the fact that the assessment year under consideration is 2012-13. Nevertheless, in the first paragraph of the order of the Chief Commissioner of Income Tax-3, Chennai dated 30.9.2015, there is a reference to the fact that several documents placed by the assessee were taken note of including the audited statement of accounts and reports for the years ending 31.3.2012, 31.3.2013 and 31.3.2014. In fact, the Assessing Officer was never called upon to decide or test the activities of the trust and as to whether they being charitable of not. 14. Admittedly, the registration granted under Section 12AA of the Act continued to remain valid. Therefore, in our considered view, the Assessing Officer treaded into the territory....