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TMI Blog2019 (7) TMI 603X X X X Extracts X X X X X X X X Extracts X X X X ..... I.T.A Nos1819/Mds/2016 & 1820/Mds/2016 against the order rejecting the claim for exemption under Section 10(23C)(vi) of the Act, for the assessment years 2012- 13 and I.T.A.No.2053/Mds/2014 for the assessment year 2010-11 respectively. 2. T.C.A.No.286 of 2018 has been filed raising the following substantial questions of law: "(i) Whether the Appellate Tribunal is correct in law in rejecting the petition for review/rectification within the scope of section 10(23C)(vi) read with section 154 of the Act despite the mistake of law pointed out based on the decision of the Apex Court in the case of CIT Vs Society for the Promotion of Education, Adventure Sport & Conservation of Environment dated 16/02/2016, granting legal recognition for deeme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation under the Act which had cascading impact on the assessment? (ii) Whether the Appellate Tribunal is correct in law in rejecting the petition for review/rectification for grant of recognition u/s 10(23C)(vi) of the Act retrospectively from the Assessment Year 2004-05 while wrongly imposing the condition for incorporating 'no profit clause' in the documents creating the appellant trust for the eligibility to get tax exemption which profit motive should be tested only in the assessment proceedings parallely and subsequently taken up by the Jurisdictiional Assessing officer not at the state of the incorporation? (iii) Whether the Appellate Tribunal is correct in law in not interpreting the scope of the power of review harmoniou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the form of provisos below section 12A(2) of the Act by the Finance (No.2) Act, 2014 as retrospective applicability or prospective applications? 3. We have heard Mr.A.S.Sriraman, learned counsel for the appellant/assessee trust in all the cases and Mr.J.Narayanaswamy, learned Senior Standing Counsel for the the respondent/Revenue. 4. The order impugned before us is a common order. T.C.A.No.286 of 2018 is taken as the lead case because this appeal challenges the order passed by the Tribunal confirming the order passed by the Chief Commissioner of Income Tax dated 06.05.2016 in and by which, application made by the assessee/trust for review of the rejection order passed by the Chief Commissioner of Income Tax, Coimbatore under Section 10(23 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the school was started in the year 1992 and it has got around 2,000 students on its rolls, various activities of the trust were mentioned in the petition for review. 6. It was pointed out that the definition of charitable purpose, as defined in Section 2(15) of the Act, contemplates pursuing as well as providing education and per se it should be reckoned as charitable activity within the ambit of the said definition. Further it was pointed out that the activities of the assessee/trust were not tested independently, so as to consider their request for approval under Section 10(23C)(vi) of the Act and in not doing so, it has gone against the well established principle that 'substance over form' is required to be considered while pas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... specifically mention that the educational institution established by it, is not running for the purpose of profit. 9. In the petition for review dated 28.04.2014, the assesee/ trust had placed the cash flow statement for the period from 01.04.1992 till 31.03.2013. Therefore when the petition came up before the Chief Commissioner of Income Tax, Coimbatore for review, an attempt should have been made to examine the financials of the Trust. 10. As rightly pointed out by the assessee before the Chief Commissioner of Income Tax in the Review petition, the substance flow form is, what is important to be noted. We find that there has been no examination from that angle and the application made by the assessee has been rejected at the threshold ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been no exercise done by the Department to find out as to whether the assesee/Trust has generated a reasonable surplus to enable them to sustain the institution and in the event of them earning a higher surplus, whether they had ploughed back or utilising the same for achieving the objects of the trust. This exercise ought to have been done at the first instance or at least when the assessee had filed a review petition dated 28.04.2014. 14. Thus, for the above reasons, we are of the considered view that the matter should be remanded back to the Chief Commissioner of Income Tax with a direction to examine the entire financials of the assessee and take a decision on merits and in accordance with law. 15. In the result the TCA.No.286/19 is a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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