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TMI Blog2014 (8) TMI 681X X X X Extracts X X X X X X X X Extracts X X X X ..... ade the investment in MIOT Hospitals Ltd. consciously and thereby contravened the provisions of section 11(5)/ 13(1)(d) of the Act ?" are the only questions of law raised in these tax case appeals preferred by the Revenue relating to the assessment years 2001-02, 2002-03 and 200304 considering the common order of the Tribunal. The assessee is a trust registered under section 12AA of the Income-tax Act, 1961, and is providing employment to poor women, assisting weaker sections of the society for personal development, maintaining destitute homes, rehabilitation of victim of national calamities, etc. Evidently, the assessee had invested a sum of Rs. 20,000 in the share of MIOT Hospitals Ltd. Since section 13(1)(d) recognises investment only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act ought to have been considered for confirming the assessment. We do not agree with the said submission of the learned counsel for the Revenue. We may at the outset point out herein that the decision relied on by the Commissioner of Income-tax (Appeals) in the case of CIT v. Tuluva Vellala Association in T. C. No. 477 of 1989, dated March 16, 1999, is relatable to the decision of this court in T. C. No. 477 of 1989 and has no relevance of the issue on hand. Leaving that aside, as far as the decision of the Bombay High Court in DIT (Exemptions) v. Sheth Mafatlal Gagalbhai Foundation Trust [2001] 249 ITR 533 (Bom) is concerned, it is a similar line, which was applied by the Tribunal. The assessee therein was brought under section 164 to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ported by Circular No. 387, dated July 6, 1984 (see [1985] 152 ITR (St.) 1). Vide the said circular, it has been laid down in para. 28.6 that, where a trust contravenes section 13(1)(d) of the Act, the maximum marginal rate of income-tax will apply only to that part of the income which has forfeited exemption under the said provision and not to the entire income. We may also add that in law, there is a vital difference between eligibility for exemption and withdrawal of exemption/forfeiture of exemption for contravention of the provisions of law. These two concepts are different. They have different consequences. It is interesting to note that although the Legislature withdrew section 164(2) by the Direct Tax Laws (Amendment) Act, 1987, whi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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