TaxTMI 
TaxTMI 
2021 (7) TMI 178
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....sing Officer, there was no explanation offered for many donations made by the Trust as to whether they were for activities in conformity with the objects of the Trust. Therefore, all the donations were treated as not exempted and a demand was reworked by the Assessing Officer. Consequently, the capital expenditure claimed for Rs. 21,00,56,146/- was not considered as the assessee was being taxed in the status of AOP (Association of persons) whereas an unclaimed depreciation of Rs. 10,09,67,711/- was allowed for the same reason of status of AOP. It was also observed by the Assessing Officer that out of a total amount of Rs. 6,70,21,273/- paid as donations, the assessee had claimed only Rs. 6,65,60,886/- in its return explaining that two items of Rs. 39,613/- and Rs. 5,00,000/- were given to Charities for Tsunami and to political parties, individuals and others, out of which Rs. 5,00,000/- was recovered back during the same financial year from the founder Mr.S.Ramachandra Iyer. The assessee Trust themselves had removed that amount from the list of donations. 3. The Respondent/Trust, aggrieved over this order, approached the Commissioner of Income Tax (Appeals) XII, Chennai, who in a....
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....ich held that "if any part of the income of the trust has been applied to charitable or religious purposes in India in the assessment year 1974-75 or is accumulated or is set apart for application to such purposes in India, the income to that extent is entitled to be dealt with under Section 11 (1) (a) and exemption granted in accordance with the said section". 5. According to the Commissioner of Income Tax (Appeals), it is immaterial whether the Charitable and religious purposes for which the Trust is created are confined to the objects of the Trust and what is required is that the income must be applied or accumulated for application or set apart for application as per the provisions of the Income Tax Act, 1961. Thus it was observed that even assuming that the objects of the Trust do not empower the Trustees to spend any part of the income of the Trust property for a particular purpose, still if they do spend any part of the income for charitable or religious purpose in India, it would be entitled for exemption u/s.11 (1) (a) of the Act for that year. The Commissioner of Income Tax (Appeals) gave a verdict in favour of the assessee. 6. The Revenue filed an appeal before the ....
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.... an educational institution as a deemed university? 4. Whether on the facts and the circumstances of the case, the Tribunal was right in holding that the assessee trust running educational institution by charging fee can be treated as a public charitable trust as per Section 2 (15)? 5. Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that the expenditures and donation made by the assessee trust to related individuals, political parties and others, in contravention to the objects of the trusts can be ignored while considering the applicability of exemption under Section 11? Additional Question of Law: " Whether on the facts and the circumstances of the case the order of the tribunal is not perverse and right in holding that the expenditures and donation made by assessee trust to related individuals, political parties and others, in contravention to the objects of the trusts, can be ignored while considering the applicability of exemption under Section 11" 8. Mr.J.Narayaswamy, learned Senior Standing Counsel for the Appellant/Revenue argued that the Tribunal was wrong in holding that the assessee was entitled for the exemption u/s.....
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....cide in the instant case and the findings of both Commissioner of Income Tax (Appeals) and Income Tax Appellate Tribunal are based on proper reasoning and analysis. 10. We have carefully perused the facts of the case, rival submissions, relevant records including the Assessing Officer's order, remand report, Commissioner of Income Tax (Appeals)'s order and Income Tax Appellate Tribunal's order. On a thorough reading of the Section 11 of the Income Tax Act, it is evident that there is no bar for the charitable or religious trust to claim the exemption as long as it is applied in India for such charitable or religious purposes. Section 11 (1) (a) reads as under: "Income derived from property held under Trust wholly for charitable and religious purposes, shall be exempted - 1) to the extent such income is applied in India for such purposes and 2) where any such income is accumulated or set apart for such application to such purpose in India, t the extent to which the income reaccumulated or set apart is not in excess of 15% of the income from such property. Therefore, it is clear that as per Section 11(1)(a) exemption of 15% of income is unfettered and not subject....