2022 (8) TMI 1085

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....ralikrishnan Senior Standing Counsel COMMON ORDER This is a batch of 11 Writ Petitions and the detailed submissions of Mr.R.V.Eswar, learned Senior Counsel for Mr.R.Sandeep Bagmar, learned counsel for the petitioner and Mrs.Hema Murali Krishnan, learned Senior Standing Counsel for the Income Tax Department have been heard. 2.The petitioner is the Tamizhavel P.T.Rajan Commemoration Trust (in short 'Trust') constituted under a Deed of Trust dated 27.08.1991. The deed has thirteen objects in clause 3 thereof and seven specific powers endowed upon trustees, in addition to general powers to carry out the objects of the trust, in clause 6 thereof. 3.The petitioner enjoys the benefit of certification under Section 12A of the Income Tax Act, 19....

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....ly an enabling activity in order to generate funds for feeding of the charitable activities. They, thus, refer to Section 11(4) of the Act which enables a charitable institution to run a business undertaking as a property held under a trust. Section 11(4)(a) grants relief to an assessee upon the satisfaction of two conditions: (1) that the trust maintain separate books of accounts in respect of business. (2) that the trust establish that the business is incidental to the attainments of the object and not vice versa. 8.Paragraph Nos.12 & 13 of the Tribunal's order, that constitute the Brahmastra of the petitioner's case, read as follows: '...... 12.Now coming to the merit of the appeal filed by the assessee, now doubt, the assessee-....

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....ceived petitions regarding tax evasion by the assessee. The assessee was receiving corpus donation in the guise of letting out the community hall to the poor people. This fact was disclosed in the return filed by the assessee itself under the Service Tax Act. Therefore, the question arises for consideration is whether the assessee is carrying out the charitable activity in accordance with the objects of the trust or not? It is also needs to be examined whether the assessee-trust, in fact, utilized the income from community hall for charitable activity or not. The Assessing Officer simply found that receipts of rent from community hall are incidental to the carrying out of the objects of the trust. When the Assessing Officer has not examined....

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.... exemption u/s 11, in accordance with law after giving a reasonable opportunity to the assessee.' 9. In conclusion, the tribunal remands the matter to the file of the Assessing Officer who was directed to examine the aspect of utilization of income. Inter alia, the assessing authority was also directed to devote attention to various tax evasion petitions that are stated to have been received making allegations as regards the functioning of the Trust. 10. The assessing officer has given effect to the order of the Income tax Appellate Tribunal and passed orders of assessment in respect of Assessment Years (AY) 2013-14, 2014-15, 2015-16 and 2017-18 rejecting the claim for exemption in terms of Section 11 of the Act. Hence these writ petition....

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....onuments or places or objects of artistic or historic interest,] and the advancement of any other object of general publicity utility; [Provided that the advancement of any other object of general public utility shall not be a charitable purpose, if it involves the carrying on of any activity in the nature of trade, commerce or business, or any activity of rendering any service in relation to any trade, commerce or business, for a cess or fee or any other consideration, irrespective of the nature of use or application, or retention, of the income from such activity, unless- (i) such activity is undertaken in the course of actual carrying out of such advancement of any other object of general public utility, and (ii) the aggregate rece....

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....this would determine whether its activities are charitable or otherwise, This has then to be set and seen in the context of Section 2(15) of the Act. This exercise necessarily involves an appreciation of facts which this Court is not inclined to embark upon in terms of Article 226 of the Constitution of India. In any event, no legal infirmity is made out to warrant intervention in/with the impugned orders. Faced with this prospect, learned Senior Counsel for learned counsel on record, conveys that the petitioner wishes to withdraw the Writ Petitions, seeking liberty to file statutory appeals. 18.W.P.Nos.29471, 29476 and 30843 of 2019 challenge notices under Section 148 and orders disposing objections to assumption of jurisdiction. In light....