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TMI Blog2021 (3) TMI 368X X X X Extracts X X X X X X X X Extracts X X X X ..... ove appeal. 2.1 The Assessing Officer while completing the assessment under section 143(3) found that the assessee trust had lent the money to its group trusts, viz., Brotherhood Trust, Daughters of Mary Immaculate Collaborators Trust, and Society for Education for Life. Since the lending of money were in violation of provisions of section 13(1)(d) read with 11(5), exemption was denied to the assessee trust. 2.2 Aggrieved over the assessment order, the assessee filed an appeal before the Commissioner of Income Tax (Appeals), who allowed the appeal holding that the amounts lent to the group trust does not amount to violation under section 13(1)(d) read with 11(5), since the objects of the assessee trust and the trust to whom the money were lent were similar. Further, it held that the amounts lent cannot be treated to have benefited any person directly or indirectly and the loan given are outside the purview of section 13(1)(c) and 13(1)(d). 2.3 Aggrieved over the order passed by the Commissioner of Income Tax (Appeals), the Revenue has filed an appeal before the Income Tax Appellate Tribunal, and the Tribunal also confirmed the order passed by the Commissioner of Income T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the Commissioner was not permissible under Section 13(1)(d) of the Act. Counsel for the petitioner relied on the decisions of the Supreme Court in S. RM. M. CT. M. Tiruppani Trust v. CIT [1998] 230 ITR 636 and in Addl CIT v. A. L. N. Rao Charitable Trust [1995] 216 ITR 697 and contended that Section 11(2)(b) read with Section 11(5) applies only to unspent amount below 75 per cent. of the income. According to the petitioner, since it has admittedly spent 75 per cent. of the income during the year, Sections 11(2)(b) and 11(5) have no application at all. On the other hand standing counsel for the Department pointed out that the decisions pertain to assessment prior to the amendment to Section 13 and, therefore, those decisions have no application. Obviously the decisions only refer to Section 11 and not to Section 13, whereas the decision of the Commissioner under challenge is based on Section 13(1)(d) of the Act. Sri P. Balachandran, appearing for the petitioner, relied on the decision of the Gujarat High Court in Orpat Charitable Trust v. CIT [2002] 256 ITR 690 and that of the Delhi High Court in Director of Income-tax (Exemption) v. Agrim Charan Foundation [2002] 253 ITR 59 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rity during the year. However, the matter does not end here because Section 13 introduces a further condition which is as follows : 13. (1) Nothing contained in Section 11 or Section 12 shall operate so as to exclude from the total income of the previous year of the person in receipt thereof-- *****. . (d) in the case of a trust for charitable or religious purposes or a charitable or religious institution, any income thereof, if for any period during the previous year- (i) any funds of the trust or institution are invested or deposited after the 28th day of February, 1983, otherwise than in any one or more of the forms or modes specified in Sub-section (5) of Section 11 ; or (ii) any funds of the trust or institution invested or deposited before the 1st day of March, 1983, otherwise than in any one or more of the forms or modes specified in Sub-section (5) of Section 11 continue to remain so invested or deposited after the 30th day of November, 1983 ; or (iii) any shares in a company (not being a Government company as defined in Section 617 of the Companies Act, 1956 (1 of 1956), or a corporation established by or under a Central, State or Provincial Act) are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 13(1)(d). (ii) 2015 (53)Taxmann.com 85(Madras) [Commissioner of Income Tax v. Working Women's Forum] wherein the Division Bench of this Court held as follows:- ... 3 Learned counsel appearing for the Revenue submitted that when the assessee had violated the provisions of section 13(1)(d), the question of granting exemption under section 11 did not arise. According to the Revenue, the Tribunal committed a serious error in not considering the fact that the investment by the assessee in MIOT Hospitals Ltd. was conscious and, hence, violated under section 11(5)/13(1)(d) ofthe Act ought to have been considered for confirming the assessment. 4. 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 theCommissioner 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 rentable to thedecision of this court in T.C. No. 477 of 1989 and has no relevance of the issue onhand. Leaving that aside, as far as the decision of the Bombay High Court in DIT (Exemptions) v. Sheth Mafatlal Gagalbhai Foundation Trust MA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect Tax Laws (Amendment) Act, 1989, the Legislature did not touch the proviso to section 164(2) which has been on the statute book right from April 1, 1985. The said proviso was inserted by the Finance Act, 1984. The proviso specifically refers to violation of section 13(1)(d) and its consequences. 7. On a careful consideration of the materials available on record and the submissions made by the learned counsel on either side and also the judgments relied upon by the learned counsel on either side, it could be seen that the ratio laid down by the Delhi High Court and the Division Bench of this Court in the Judgments relied upon by the learned counsel for the respondent squarely applies to the question of law raised in the appeal. 8. Since the facts and circumstances of the case on hand differs from the facts and circumstances of the Judgment relied upon by the learned counsel for the appellant, the said ratio cannot be applied to the present case. 9. In these circumstances, following the ratio laid down in the Judgments reported in 2010 (326) ITR 146 [cited supra] and 2015 (53)Taxmann.com 85(Madras) [cited supra] , the question of law is decided against the Revenue an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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