2020 (9) TMI 1266

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....ion under section 11 to the tune of Rs.8,64,73,871/- and the order of the Ld., CIT (A) is not as per the second proviso to section 13(1)(c)(ii). 3. The Learned CIT(A) erred in not appreciating that after the amendment of the Act, by Finance Act, 1970, as per section 13(1)(c)(ii) if any part of the income or any property of the trust or the institution during the previous year used or applied by the trustees, being the person covered under section 13(1)(c) read with 13(2)(b) exemption under section 11 is to be denied to the assessee. 4. The Learned CIT(A) failed to appreciate that the second proviso to section 13(1)(c)(ii) denies the benefit of exemption under section 11 if the trustees enjoys the benefits even if it is as ....

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....so perused the relevant material available on record. It is observed that a similar issue was involved in assessee's own case for A.Y. 2010-11 and A.Y. 2011-12 and the Tribunal vide its common order dated 28.06.2017 passed in ITA No.223/PUN/2014 and ITA No.1180/PUN/2015 decided the same vide paragraphs no.6 to 10 as under :- "6. We have heard the submissions made by the representatives of rival sides and have perused the orders of the authorities below. The only dispute in the present set of appeals is; Whether the assessee has violated the provisions of section 13(1)(c)(ii) of the Act. Before proceedings further it would be relevant to first see the provisions of aforesaid section. The relevant extract of the provisions of section....

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....efore the commencement of this Act, the provisions of sub- clause (ii) shall not apply to any use or application, whether directly or indirectly, of any part of such income or any property of the trust or institution for the benefit of any person referred to in sub- section (3) in so far as such use or application relates to any period before the 1st day of June, 1970 ;" A bare perusal of the above provisions of section 13(1)(c)(ii) show that in case any income or property of the trust is used either directly or indirectly for the benefit of trustee or any person referred to sub-section (3) of section 13, the benefits granted to the trust u/s. 11 shall be forfeited. However, the first proviso to section 13(1)(c) provides an exception. Ac....

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...., there is a clear mandate in the trust deed that part of the property which is in possession of author of the trust shall be for the sole purpose of occupancy by the author of the trust or his legal heirs. The part of the property which is subject matter of dispute are 3 shops on ground floor of the building. From the perusal of English translation of Trust Deed the details of the property in possession of the author of the trust at the time of execution of Trust Deed is not discernible. Under such circumstances, we are of considered opinion that this issue needs a re-visit to the Assessing Officer. Representative of both the sides concur on the point that the part of property referred to in the Trust Deed has to be clearly identified. The....