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TMI Blog2017 (9) TMI 563X X X X Extracts X X X X X X X X Extracts X X X X ..... rne out of records that the Revenue chose not to rescind the approval in earlier years. The Ld. Counsel for the assessee urged that withdrawal of exemption is very harsh step as the assessee has been enjoying the benefit of exemption, for several years. We deem it proper to restore this issue to the file of the CIT(E) to reconsider the submissions of the assessee, and give last opportunity to convert the shares into specified assets within a specified period, and meantime withdraw exemption u/s 11 & 12 in respect of income earned from the investment made in non-specified assets. This ground of assessee’s appeal is allowed for statistical purpose. - ITA No. 264/JP/2016 - - - Dated:- 13-7-2017 - SHRI KUL BHARAT, JM AAD SHRI VIKRAM SINGH YA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... On the contrary, Ld. Departmental Representatives opposed the submissions. 5. We have heard the rival contentions, perused the material available on record. The Ld. CIT(E) withdrawn the exemption on the ground that assessee is holding the asset in the form of shares of M/s Om Metals Infra Project Ltd. for the last many years, which is not in the specified modes. This fact is also borne out from Auditor s report. Ld. CIT(E) observed that as the claim of the assessee that these shares were not acquired from the funds of the trust. It is immaterial whether the shares have been purchased by the Trust from its own funds or have been donated by somebody. He was of the view that as per 6th proviso read with 3rd proviso of section 10(23C) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that even after there is a investment in the modes which are not as per Sec. 11(5), then the entire exemption of the Trust shall not go, only the income from said investment will be liable for charging tax at the maximum marginal rate. As such the applicable of Sec. 13(1)(d) was kept limited. It was also held that on the basis of these investments, the entire benefit of Sec. 11 and 12 cannot be forfeited. This version was taken by the Hon ble Bench on the basis of Daudi Bohra Trust case decided by the Hon ble Supreme Court of India. It was also stated that the there are judgments of the Hon ble ITAT, High Courts and Supreme Court that the issue in relation to investment in violation of Sec. 11(5) have got finality and in such cases the onl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h Court in the matter of Director of Income tax vs. Seth Mafat Lal Gogai 249 ITR 33, DIT vs. Agrim Charan Charitable Trust 253 ITR 593. In view of the above judgment of the Hon ble ITAT, Jaipur, Hon ble High Court and Hon ble Supreme Court the Trust will not forfeit exemption of its other income except to the income earned from the said ineligible investment. Further, on the facts we also reiterate our stand that the trust is having 2 parts- one part relates to its educational activity and for that the Trust got certificate u/s 10(23C)(vi) of the Income Tax Act and the investment shown in the shares is not coming from education division of the Trust which is certified by the Auditors in the Balance Sheet of the educational institute submitt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee had not filed any evidence with regard to receipt of shares and donation in the year 2006-07. This observation of the Ld. CIT(E) is not correct. The assessee had filed the details, he submitted that even if it is presumed that investment in the modes which are not as per Sec. 11(5) of the Act, then the entire exemption of the Trust shall not go, and only the income from said investment should be made liable for charging tax at the maximum marginal rate. The Ld. Counsel placed reliance on the decision of the Tribunal in the case of M/s Santoba Durlabhji vs. ITO in ITA No. 241 242/JP/2014, also placed reliance on the Judgment of the Hon ble Delhi High Court in the case of Director of Income Tax Vs. Shri Radha Krishan Charitable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... escinding the notification granted u/s 10(23C)(vi) of the Act, under the facts of the present case. The Ld. Counsel for the assessee has placed on record the order of CIT(A) pertaining to the AY 2008-09 dated 12-8-2016 in assessee s own case. In that year the issue of rescinding the notification u/s 10(23C)(VI) was not under consideration. The only issue which requires to be considered whether the Ld. CIT(E) was justified in withdrawing the notification and benefit u/s 10(23C)(vi) of the Act, on the basis that the assessee has not made investment in the specified assets. There is no dispute with regard to the fact that the assesee kept this investment as it is without converting into the same in the mode specified under the Act despite elap ..... X X X X Extracts X X X X X X X X Extracts X X X X
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