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TMI Blog2013 (4) TMI 397X X X X Extracts X X X X X X X X Extracts X X X X ..... ate authority vide decision dated 31.1.2012 i.e. before the date of the present order dated 22.2.2012. The impugned order however, does refer to the order of the Assessment Officer but does not notice the appellate order passed on 31.01.2012 reversing the findings of the AO On the question of books of accounts the contention of petitioner No.1 relying upon the decision of Delhi High Court in Mehta Charitable Prajnalay Trust [2012 (12) TMI 211 - DELHI HIGH COURT]. Petitioner No.1 submits that the amount mentioned in last column accumulation is less than 15% of the general reserve and therefore, the petitioner meets the prescribed parameters. This aspect has been ignored in the impugned order by recording that the surplus has been given to HNF or surplus/income has been passed on and given to HNF. The effect thereof and whether objects/use of funds by HNF can be determinative and relevant for deciding the applicable head u/s 2(15) in the case of the petitioner No.1 is an aspect which requires examination/consideration. allow the present writ petition and issue the writ of certiorari quashing the impugned order dated 22.2.2012 passed by the Director General of Income Tax (Exempt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r to aid those which are already in existence. (2) To build schools, laboratories, wells, or such other buildings of a public nature as may benefit the largest number of people in the country. (3) To publish books, pictures, maps or literature or to aid in publication of the same by the publication of which the object of Wakf are fulfilled or achieved. 47. Help may also be given to needy orphans, needy widows or helpless persons, needy authors and research scholars and victims of unforeseen calamities without restriction of caste, colour or creed. 3. The petitioner No.1 has stated that vide declaration of the founder Wakif Mutawalli dated 10.10.1985, the original deed in respect of khandani or family income was irrevocably abolished and no khandani income has ever been distributed or paid. 4. It is an undisputed position that the petitioner No.1 was granted registration under Section 10(23C)(iv) of the Act w.e.f. assessment year 1984-1985. Even prior thereto, they have been treated and regarded as a charitable institution under Section 2(15) of the Act and the applicable provisions. The earlier dispute between the Income Tax Department and the petitioner No.1 on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lity‟.The last limb is not applicable to petitioner No.1. The objects and purpose of charity undertaken by the petitioner No.1 are relief to poor, education and medical relief. It is accordingly submitted that the said amendment is not applicable to petitioner No.1. (iii) The impugned order dated 22.2.2012 does not specifically state or quote that the petitioner No.1 was/is carrying on charitable activities under the residuary head. The impugned order does not disturb the findings recorded in the earlier appellate proceedings/orders that the charitable activities in the case of petitioner No.1 relate to the first three heads i.e. relief to poor, education and medical relief. (iv) The impugned erroneously records that the Income Tax Department does not accept the decisions of the Delhi High Court in Additional Commissioner of Income Tax vs. Hamdard Dawakhana, (1986) 157 ITR 639 and Commissioner of Income Tax vs. Hamdard Dawakhana, (2001) 249 ITR 601 to cancel/recall the earlier order. (v) The assertion that the petitioner No.1 did not maintain separate books of accounts of business and charitable activities should not be accepted as the entire income or surplus or busine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has filed before us number of orders passed by CIT(Appeals) relating to assessment years 1965-66 onwards upto assessment year 1994-95 and orders of the Income Tax Appellate Tribunal from 1966-67 upto 1976-77 in which findings have been recorded that the petitioner No.1 was undertaking charitable activities covered under the clauses; relief to poor, education and medical relief. It is, therefore, clear that the impugned order has applied the first proviso to Section 2(15) of the Act without elucidating the scope and ambit of the said proviso and whether it would be applicable. The respondents have proceeded on assumption that charitable purpose undertaken by the petitioner is covered by the residuary clause, without recording any such specific finding. 12. Our attention has also been drawn to the observations made in the impugned order with regard to earlier decisions of the High Court in the case the assessee. The two decisions went in favour of the petitioner No.1. It is not understandable on what basis the author of the impugned order can ignore or disregard the said decisions by observing that; with due respect I differ with the decision . The two decisions are binding preced ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his is also application of the money for charitable purpose. It is good and valid application of money unless the transferor i.e. the assessee know or ought to have know that the money will be mis-applied by the transferor. At this stage, we record that this contention of the petitioner No.1 has not been dealt with or examined in the impugned order. We record that the petitioner No.1 has relied upon a decision of the Delhi High Court in Shri Ram Memorial Foundation, which is the jurisdictional of High Court. The petitioner has in addition also referred to instruction No. 1132 dated 05.01.1978 issued by the CBDT which states that charitable trust will not lose exemption under the Act, if it passes a sum of money to another charitable trust for utilization for charitable purpose . It is submitted that as per the Board this constitutes shall be proper utilization of money by the donor for the charitable purposes. It is pointed out to us that the petitioner No.1 has set up no less than 25 medical, educational, literary, scientific and cultural organizations, the All India Unani Tibbi Conference, Institute of History of Medicine and Medical Research, Indian Institute of Islamic Studies, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e allow the present writ petition and issue the writ of certiorari quashing the impugned order dated 22.2.2012 passed by the Director General of Income Tax (Exemptions). The Director General of Income Tax (Exemptions) will pass a fresh order dealing with all the contentions and issues raised by the petitioner No.1 keeping in mind the case law on the subject. The reason why we are remitting the matter is that we find that there are several issues and questions, which have been partially adverted to in the impugned order and we cannot in this writ petition form a firm view. We have discussed the legal contentions raised and also referred to the legal position on certain aspects but application of legal ratio is dependent upon the facts. Difference in facts can materially affect the final outcome and the legal position applicable; whether it be books of accounts, question of application of income, quantum of surplus available or the activity undertaken by HNF. For example whether activities of HNF can be treated as charitable activity of the petitioner for the purpose head under Section 2(15) as claimed by the petitioner No.1. We find ourselves handicapped and unable to give any firm/ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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