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TMI Blog2011 (7) TMI 1019X X X X Extracts X X X X X X X X Extracts X X X X ..... adjudicated by the learned Commissioner of Income-tax (Appeals) even though it is a subject matter of the appeal before the learned Commissioner of Incometax (Appeals). The learned Commissioner of Income-tax (Appeals) has only adjudicated upon the issue as to whether the business of running the Kalyanamandapam is incidental to the attainment of the objects of the trust and therefore it is entitled to the exemption under section 11. In the circumstances as it is noticed that the learned Commissioner of Income-tax (Appeals) has not adjudicated on the issue of violation of sections 11 and 13(1)(b) and 13(1)(c), the issues in the appeals are restored to the file of the learned Commissioner of Income-tax (Appeals) for readjudication after granting the assessee adequate opportunity to substantiate its claim - Decided in favour of Revenue. - - - - - Dated:- 22-7-2011 - Order I. T. A. Nos. 744 to 749/Mds/2011 are appeals filed by the Revenue against the orders of the learned Commissioner of Income-tax (Appeals)XII, Chennai, in I. T. A. Nos. 452, 453, 454, 455, 456 and 457/07-08, dated January 17, 2011 for the assessment years 1986-87, 1987-88, 1988-89, 1991-92, 1992-93 and 1993-94 r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 13(1)(c) has already been the subject matter, the directions under section 144A for adjudicating the same in the assessment proceedings was beyond the jurisdiction of the Assessing Officer. He vehemently supported the order of the learned Commissioner of Income-tax (Appeals). We have considered the rival submissions. The directions of the Joint Director of Income-tax (Exemptions) are extracted hereunder : "Order under section 144A of Income-tax Act : During the course of assessment proceedings for the assessment years 1998-99 to 2003-04 the assessee made an application under section 144A of the Income-tax Act to call for and examine the records for issue of directions for the guidance of the Assessing Officer in completing the assessment proceedings for the above assessment years. 2. In the application filed by the assessee under section 144A of the Income-tax Act. The assessee requested for issue of direction on the following issues : (A) Whether, on the facts and circumstances of the case, the Assessing Officer was right in reopening the assessments for the assessment years 1998-99 to 2003-04. (B) Whether, on the facts and circumstances of the case, the Assessing O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g educational scholarships or school books to students belonging to the Vysya 108 Gothram community and studying in any of the schools in the city of Madras. (c) For providing relief to the poor and indigent members of the Vysya 108 Gothram community residing in the city of Madras.' The assessment in this case was reopened under section 148 of the Income-tax Act for the following reasons : Two immovable properties belonging to Sri Nathella Sampathu Chetty were settled in favour of his second wife Smt. N. Sulochana by way of deed of settlement dated March 1, 1958 with the objectives that the income earned from these properties shall be used to provide food and shelter to lineal descendants of the settler and 108 Gothram community. Therefore no trust in effect was created through the settlement deed dated March 1, 1958 nor any property was bestowed on the trust. The actual trust was created only by settlement deed dated March 30, 1972 by Smt. Sulochana in which she extinguished her beneficiary ownership in immovable properties in favour of the trust governed by a board of trustees as mentioned in the surrender deed. Thus, the trust had been created only after the commencement of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ious trust and the provisions of section 13(1)(b) attracts only in the case of charitable trust or institution created for the benefit of any particular religious community or caste and section 13(1)(c) attracts in those cases where the income of the trust is utilised for the benefit of any individual trustee or relatives of the trustees. In support of this the authorised representative relied on the decision of the Gujarat High Court in the case of CIT v. Barkate Saifiyah Society reported in [1995] 213 ITR 492 (Guj). On going through the facts of the case, there is no evidence to show that the trust of the assessee was registered as religious and charitable trust. Even after going through the returns of income filed or the accounts, statements, or audit reports filed along with the return of income, it does not indicate it is a charitable and religious trust. It is basically a public charitable trust. As could be seen from the objects of the trust as per the trust deed dated March 30, 1972 cited supra, basically the trust was created for the benefit of the following : 'The income from and out of the trust property shall be used by the trustees for any of the following purposes, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Income-tax (Exemptions) is accordingly directed to assess the income of the trust for the assessment years 1998-99 to 2003-04 taking into account the violation of section 13(1)(b) of the Income-tax Act. (Sd.) S. Samuel Prasad, Joint Director of Income-tax (Exemptions), Chennai." A perusal of the directions clearly shows that the Joint Director of Income-tax (Exemptions) under section 144A has categorically held that there is violation of section 13(1)(b). This has been followed by the Assessing Officer and the same has not been adjudicated upon by the learned Commissioner of Income-tax (Appeals). At the outset it is noticed that the Assessing Officer has specifically made an allegation that there has been a violation of section 13(1)(c). This finding of the Assessing Officer as also the finding of the Assessing Officer that the assessee had not produced its books of account for verification have not been adjudicated by the learned Commissioner of Income-tax (Appeals). In fact, the learned Commissioner of Income-tax (Appeals) is only mentioning that the assessee's income is entitled for exemption under section 11. Undisputedly, the Assessing Officer himself has mentioned that ..... 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