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TMI Blog2014 (11) TMI 411X X X X Extracts X X X X X X X X Extracts X X X X ..... t at all to be included in the total income of the assessee - such type of exemption/s has/have to be distinguished from certain types of income, which are included in the total income of the assessee, but in respect of which statute provides relief by way of deduction in computing the total income, by granting rebate of tax and by granting certain other reliefs from the tax-payers - the opportunity afforded to the petitioner was inadequate, inasmuch as the order appears to be solely on the basis of the report of the DIT (E), without any opportunity to the assessee to place materials to rebut the findings contained in the report and that the tests required to be applied while examining the issue, having not been rightly applied - the order is set-aside and the matter is remanded back for fresh consideration – Decided in favour of assessee. - Writ Petition No.4320 of 2011 and M.P.No.1 of 2011 - - - Dated:- 6-11-2014 - T. S. Sivagnanam,JJ. For the Petitioner : Mr. J. Sridhar For the Respondents: Mr. T. Pramod Kumar Chopda Mr. Rajkumar Jhabakh ORDER The petitioner, a Trust, registered under the provisions of the Indian Trusts Act, 1882, has filed this writ pet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch an application, the first respondent afforded an opportunity of hearing to the petitioner, by fixing the date as 05.08.2010. On the said date, the Chartered Accountant of the petitioner / Trust, duly authorized, appeared before the first respondent. Thereafter, the first respondent, by order, dated 05.08.2010, rejected the petitioner's application stating that the petitioner / Trust is not existing solely for the purpose of education. Challenging the said order, the petitioner has filed this writ petition. 4. Mr. J.Sridhar, learned counsel appearing for the petitioner, submitted that the petitioner / Trust has been approved as a Public Charitable Trust, under Section 12A of the Act, ever since 1977, which would fortify the request for renewal of approval, under Section 10 (23C) (vi) of the Act, which was granted from the assessment year 2006-07 and the order of rejection is erroneous. Further, it is submitted by the learned counsel for the petitioner that the impugned order is in violation of principles of natural justice and the petitioner was not afforded an opportunity to rebut the presumption drawn by the first respondent for rejecting the petitioner's application ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before the first respondent and after affording an opportunity to the petitioner, who was represented by the counsel, the order has been passed. Therefore, it is submitted that the principles of natural justice has been fully complied with and the order of rejection is neither arbitrary nor illegal. 7. Further, it is submitted by the learned standing Counsel for the respondents that, there is marked distinction between a claim for exemption under Section 10 (23C) (vi) of the Act and an approval under Section 12A of the Act and the approval under Section 12A of the Act and an eligibility under Section 80G are independent provisions to that of Section 10 (23C) (vi) of the Act, and a mere grant of approval under Section 12A or eligibility under Section 80 G of the Act does not envisage automatic grant of approval under Section 10 (23C) (vi) of the Act. Further, it is submitted that merely because the petitioner / Trust is an approved charitable trust, as defined under Section 2 (15) of the Act, that will not entitle them to automatically get exemption under Section 10 (23C) (vi) of the Act, unless the conditions prescribed therein are satisfied. It is further submitted that Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ally financed by the Government; or ..... (iiiad) any university or other educational institution existing solely for educational purposes and not for purposes of profit if the aggregate annual receipts of such university or educational institution do not exceed the amount of annual receipts as may be prescribed; or ..... (vi) any university or other educational institution existing solely for educational purposes and not for purposes of profit, other than those mentioned in sub-clause (iiiab) or sub-clause (iiiad) and which may be approved by the prescribed authority..... 10. In terms of the above provision, it is clear that, any income received by any person on behalf of any university or educational institution, existing solely for educational purposes, and not for the purposes of profit, other than those mentioned in sub-Clause (iiiab) (wholly or substantially financed by the Government) or sub-clause (iiiad) (aggregate annual receipts do not exceed the amount of annual receipts as may be prescribed) and which may be approved by the prescribed authority. 11. This Court is of the opinion that the third proviso would be applicable to the case on hand, more particular ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sonal hearing means a meaningful opportunity and not for statistical purposes. The opportunity should be effective and adequate, so as to enable the assessee to place all materials before the authority prior to a decision being taken. 14. In my view, while considering the claim for exemption, the substance of the claim would be more relevant than the form. In other words, the Authority should not be solely guided by the objects set-out in various clauses in the Instrument of Trust (Deed of Trust). Rather, the authority should be guided by the activities of the Trust, as to how the funds are employed, since the exemption sought for is under Chapter-III of the Act, which deals with incomes which do not form part of the total income. Thus, under Chapter-III, more particularly, Sections 10 to 13A of the Act, the Act brings certain categories of exemption and incomes falling within those categories are completely exempt from the purview of the Act, as they are not at all to be included in the total income of the assessee. Therefore, such type of exemption/s has/have to be distinguished from certain types of income, which are included in the total income of the assessee, but in respec ..... 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