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TMI Blog2017 (1) TMI 1094X X X X Extracts X X X X X X X X Extracts X X X X ..... 989-90, 1992-93, 1995-96, 1996-97, 1998- 99 and 2003-04 has explicitly recorded a finding of fact and held that the objects of trust, as a whole, are for charitable purpose falling within the meaning of section 2(15) of the Act. For the A.Y. 1998-99, 2000-01, 2003-04, 2007-08 and 2008-09, the decision has been reversed by the ITAT. Once, this proposition is accepted, the issue of grant of exemption in the case of the assessee can at best be described as a debatable issue. The learned CIT(A) relied on the judgement of the Hon'ble Supreme Court in the case of CIT vs. Reliance Petroproducts (P.) Ltd [2010 (3) TMI 80 - SUPREME COURT ] wherein it has been held that penalty cannot be levied merely because the AO and the assessee hold a divergent view on allowablity of a claim for deduction. - Decided in favour of assessee - ITA Nos. 3831/MUM/2015 & ITA Nos. 3833/MUM/2015 - - - Dated:- 18-1-2017 - SHRI C. N. PRASAD (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) For The Appellant : Shri Rajesh Ojha, DR For The Respondent : Shri Anil Sathe, AR ORDER PER N.K. PRADHAN, AM The captioned appeals are filed by the revenue against the order of Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Bombay Public Trust Act by the Charity Commissioner. However, the trust was denied exemption u/s 11 of the Act on the ground that income from running of newspaper had not been applied for charitable purposes. Instead, the income earned had been spent towards acquisition of assets. The learned CIT(A) has mentioned that the assessee did not furnish any evidence to prove that it was engaged in the activity of giving relief to the poor, or education, or medical relief. Also the learned CIT(A) has mentioned that since the onus cast on the assessee that it had used its income for charitable purposes, i.e. relief to the poor, education or medical relief etc. was not discharged, the AO has denied to the assessee grant of exemption u/s 11 of the Act even though the registration of the trust u/s 12A was subsisting. The learned CIT(A) has mentioned that the quantum appeal of the assessee for the A.Y. 2007-08 and 2008-09 have also been dismissed by both the CIT(A) and ITAT. 4.1 The learned CIT(A) has also mentioned that in the assessment year prior to the impugned assessment years, the exemption u/s 11 was similarly denied by the AO which was later on upheld by the CIT(A) and ITAT. Howe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the order of the ITAT in the assessee s own case for the A.Y. 1989-90, 1992-93, 1995-96, 1996-97, 1998-99 2003-04. Also he relied on the judgement of the Hon'ble Supreme Court in the case of Thanti Trust. 7. We have heard the rival submissions and perused the relevant material on record. We begin the discussion with the decisions relied on by the learned counsel of the assessee. In the case of the assessee for the A.Y. 1989-90 (1997) 50 ITD 135, the Tribunal has held that the donations collected in boxes marked as donation towards corpus are not eligible for exemption u/s 11(1)(d); only the donations received with confirmatory letters stating that the donation was towards corpus is exempt. Also it is held therein that donations received by charitable trust without any direction whether it was towards corpus of trust is not exempt u/s 11(1)(d) and the same is assessable as income from other sources. Regarding set off loss u/s 71, the Tribunal held that the loss incurred in the said activity is a business loss and the same cannot be set off against income from other sources comprising voluntary contribution. 7.1 In the case of the assessee for the A.Y. 1992-93 (ITA No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Supreme Court in the case of Thanthi Trust (supra). In that case, it has been held that requirement of section 13(1)(bb) is that the exemption u/s 11 will not be available to such a trust that carries on any business unless the business is carried on in the course of the actual carrying out of the primary purpose of the trust , since the business of running a newspaper though held by the assessee- trust as a part of its corpus was not carried on in the course of actual accomplishment of the charitable objects of the trust, bar of section 13(1)(bb) was applicable and the assessee-trust was not entitled to exemption u/s 11 for assessment year 1979-80 to 1983-84. Further it has been held that as the assessee-trust was existing not only for public religious purposes and it is a trust and not an institution the newspaper business carried on by assessee did not fall within sub-section (4A) of section 11 and assessee was not entitled to exemption u/s 11 for the A.Y. 1984-85 to 1991-92 in respect of income of its newspaper. Finally it has been held therein that in view of substituted sub-section (4A) of section 11 w.e.f. 1st April, 1992, assessee-trust was entitled to exemption u/s 11 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the following additions: 1. Non-payment of employees employers Contribution of Provident fund (Rs. 22,57,426-10,22,021) ₹ 12,35,405/- 2. Non-payment/late payment of ESIC contribution (Rs. 3,21,183-1,78,090) ₹ 1,43,093/- 3. Penalty for contravention of law ₹ 5,910/- 4. Non-deduction of TDS on payments attracting Provisions of section 40(a)(ia) ₹ 21,30,302/- 5. Prior Period Expenses disallowed u/s 43B ₹ 23,92,292/- Total ₹ 59,08,002/- 7.8 The AO has imposed a minimum penalty of ₹ 19,32,534/- u/s 271(1)(c) on the above additions / disallowances of ₹ 59,08,002/-. 7.9 It is found that for the A.Y. 2008-09 the following additions made by the AO have been sustained by the learned CIT(A) : 1. Non-payment of employees employers Contribution of Provident fund ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... words. The words are plain and simple. In order to expose the assessee to the penalty unless the case is strictly covered by the provision, the penalty provision cannot be invoked. By any stretch of imagination, making an incorrect claim in law cannot tantamount to furnishing of inaccurate particulars. [Para 7] Therefore, it must be shown that the conditions under section 271(1)(c ) exist before the penalty is imposed. There can be no dispute that everything would depend upon the return filed, because that is the only document, where the assessee can furnish the particulars of his income. When such particulars are found to be inaccurate, the liability would arise. [Para 8] The word 'particulars' must mean the details supplied in the return, which are not accurate, not exact or correct, not according to truth or erroneous. In the instant case, there was no finding that any details supplied by the assessee in its return were found to be incorrect or erroneous or false. Such not being the case, there would be no question of inviting the penalty under section 271(1)(c). A mere making of the claim, which is not sustainable in law by itself will not amount to furnishing of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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