INDIAN MEDICAL TRUST V. PRINCIPAL COMMISSIONER OF INCOME TAX ANDAN

CW/6896/2018

AI Insights

The case involves two writ petitions related to the Indian Medical Trust and the Income Tax Department, concerning the orders of the Income Tax Settlement Commission (ITSC) dated 30th June, 2017, and 8th February, 2018. The Indian Medical Trust sought rectification of these orders to include benefits under Section 11(1)(a) of the Rajasthan Public Trust Act, 1959, and to address issues related to unabsorbed losses and expenses on educational buildings. The Income Tax Department challenged the validity of the ITSC's orders, arguing that the disclosures made by the Trust were neither full nor true, and sought to deny the immunity from penalty and prosecution granted to the Trust. The High Court's decision favored the Trust, modifying the ITSC's orders and dismissing the Department's petition.

• Counselvise Citation: [2019] 140 COUNSELVISE.COM (IT) 750840 (HC-RAJASTHAN)
• Appeal Type: Others
• Pronouncement Date: 12-02-2019
• Assessment Year: misc
• Other Referred Cases: Assistant Commissioner of Income Tax Vs. Agra Development Authority, Industrial Infrastructure Development Corporation M.P. Ltd. Vs. Commissioner of Income Tax, State of Uttar Pradesh Vs. Vam Organic Chemicals Ltd., Oxford Academy for Career Development Vs. Commissioner of Income Tax, Commissioner of Income Tax Vs. Manav Vikas Avam Sewa Sansthan, Commissioner of Income Tax Vs. Rajasthani and Gujarati Charitable Foundation, Commissioner of Income Tax Vs. Subros Educational Society, Commissioner of Income Tax Vs. Magarana of Mewar Charitable Foundation, Commissioner of Income Tax Vs. Shri Plot Swetamber Murti Pujak Jain Mandal, Commissioner of Income Tax Vs. Institute of Banking, Union of India Vs. Ind-Swift Laboratories Ltd., Commissioner of Income Tax Vs. Settlement Commission, Jyotendrasingji Vs. S.I. Tripathi, Director of Income Tax Vs. Sri Belimatha Mahasamsthana Socio Cultural and Educational Trust, Chief Commissioner of Income Tax Vs. Geetanjali University Trust, Sanjeevamma Hanumanthe Gowda Charitable Trust Vs. Director of Income Tax, Chevoit Company Ltd. Vs. Income Tax, Director of Income Tax Vs. Raghuvanshi Charitable Trust, Commissioner of Income Tax Vs. Shri Sadguru Seva Trust, Maharishi Mahesh Yogi Vedic Vishwavidyalaya Vs. State of Madhya Pradesh and Others, Ajmera Housing Corporation and Another Vs. Commissioner of Income Tax
• Laws Referred To: Income Tax Act, 1961, Rajasthan Public Trust Act, 1959
• Result in Favour of: Applicant
• Court: HIGH COURT
• Department Lawyers: ANIL MEHTA
• Assessee Lawyers: S S HORA
• Keywords: Charitable Trust; Income tax settlement commission; Rectification Application; Retrospective effect; Undisclosed income
• Section: 132; 153A; 12A; 245C(1); 245D(4); 11(1)(a); 10(23c)(v); 10(23c)(via); 245D(2C); 245D(1); 245D(6B)

Judgement Text

"(1 of 43) [CW-6896/2018] HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR S.B. Civil Writs No. 6896/2018 Indian Medical Trust Having Its, At 4, Govind Marg, Adarsh Nagar, Jaipur In The State Of Rajasthan. ----Petitioner Versus 1. Principal Commissioner Of Income-Tax Central, Jaipur, New Central Revenue Building, State Circle, 2. Deputy Commissioner Of Income-Tax, Central Circle 1, Jaipur New Central Revenue Building, State Cir ----Respondents Connected With S.B. Civil Writs No. 11521/2018 Principal Commissioner Of Income Tax Central, Rajasthan, New Central Revenue Building Extension Building, Near Statue Circle, Janpath, Jaipur. ----Petitioner Versus M/s. Indian Medical Trust, 4, Govind Marg, Adarsh Nagar, Jaipur- 302004. ----Respondent For Petitioner(s) : Mr. S.S. Hora For Respondent(s) : Mr. Anil Mehta, AAG HON'BLE MR. JUSTICE VEERENDR SINGH SIRADHANA Order 12/02/2019 The above noted two writ applications have been taken up together for adjudication by this common order for both the writ applications are directed against the very same order of Income Tax Settlement Commission (ITSC), dated 30th June, 2017, and as consented by the counsel for the parties. The first writ application (2 of 43) [CW-6896/2018] has been instituted by the petitioner i.e. the Indian Medical Trust, with the prayer for rectification of the orders dated 30th June, 2017 and 08th Feb, 2018, made by the Income Tax Settlement Commission to the extent: a) to grant of benefit of Section 11 (1) (a) of the Rajasthan Public Trust Act, 1959, b) to bring and carry forward the unabsorbed losses, c) to grant benefit of amount spent on construction of new educational buildings, d) to grant benefit of amount incurred towards news channel; and e) for quashment of telescoping the benefit of cash expenses. The prayer clause of the first writ application, reads thus: “(a) By an appropriate writ, order or direction, the orders dated 30.06.2017 & 08.02.2018 passed by the Settlement Commission to the extent of (a) grant of benefit of section 11(1) (a) of the Act, (b) brought forward and carry forward of unabsorbed losses, (c) amount spent on construction of new educational buildings, (d) amount incurred towards news channel and (e) telescoping benefit of cash expenses be quashed, modified, set aside; (b) By an appropriate writ, order or direction, the respondents be directed to re-compute the total income after giving the benefit of (a) grant of benefit of section 11(1)(a) of the Act, (b) brought forward and carry forward of unabsorbed losses, (c) amount spent on construction of new educational buildings, (d) amount incurred towards news channel and (e) telescoping benefit of cash expenses; (c) By an interim order the demand against the petitioner be stayed; (3 of 43) [CW-6896/2018] (d) By an appropriate writ, order or direction any other relief deemed beneficial to the humble petitioner be also awarded; (e) This writ petition be allowed with costs.” 2. The second writ has been instituted by the respondent- Income Tax-Department, seeking to set aside or quash the order dated 30th June, 2017, made by the Income Tax Settlement Commission. The prayer clause of the second writ application, reads thus: “1. Issue appropriate writ, order and/or direction declaring the impugned order dated 30.06.2017 (Annexure-1) passed by Settlement Commission as bad, illegal and invalid in the eyes of law and the same may kindly be quashed and set aside; 2. Issue appropriate writ, order and/or direction by declaring that the disclosure made by the respondents in its settlement application to be neither “full” nor “true” and so, declaring the immunity granted to the respondents from penalty and prosecution as bad in law and liable to be denied; 3. In the alternative, issue any appropriate writ, order or direction and grant the benefit of extrapolation to the petitioner-department on the basis of material produced before the learned ITSC and in view of the submissions made therein. 4. In the alternative, issue any appropriate writ, order or direction and set aside the benefit given by the learned ITSC to the assessee on the basis of an unverified and a flawed valuation report; 5. Issue any other writ, order or direction which this Hon’ble Court may deem fit and proper in the circumstances of the case.” 3. Shorn off unnecessary details, the essential skeletal material facts necessary for appreciation of the controversy raised are: that the petitioner-Indian Medical Trust, came into existence through a Trust Deed dated 23rd February, 2000, and was registered under (4 of 43) [CW-6896/2018] the Rajasthan Public Trust Act, 1959 (for short, Act of 1959). The petitioner trust was also accorded registration under section 12 A of the Income-Tax Act, 1961 (for short, Act of 1961), by the Commissioner of Income Tax, Jaipur, vide registration no. 253/34 with effect from 24th March, 2000. The petitioner trust was later on granted approval under section 10 (23C) (v) and 10 (23C) (via) of the Act of 1961, by the Commissioner of Income Tax, Jaipur vide notification dated 20th March, 2006. The petitioner trust filed its returns of income year to year which were duly scrutinized in detail by the Income Tax department and the same were accepted as complete returns of income without any additions thereon. The officials of the Income tax department carried out a search and survey under section 132 of the Act of 1961 on 30th October, 2014, on 9 premises of the petitioner Trust. On the basis of the search, the respondent-department issued notices to the petitioner under section 153A of the assessment year 2009-10 to 2014-15 on 06th August, 2015. The petitioner filed the returns of income for the assessment year 2014-15 on 30th September, 2015. Thereafter, on 14th December 2015, a settlement application under section 245C (1) of the Income Tax Act, 1961, was filed by the petitioner before the Income Tax Settlement Commission for the assessment years 2009-10 to 2015-16. The application was admitted vide order dated 23rd Dec, 2015, under section 245D (1) of the Income Tax Act, 1961. The application aforesaid was not declared invalid and was maintainable under section 245D (2C) of the Income Tax Act, 1961. The respondent-department submitted the report under Rule 9 on 10th May, 2016. Comments under Rule 9A, were (5 of 43) [CW-6896/2018] submitted by the petitioner on 27th June, 2016. The Income tax Settlement Commission made the impugned order dated 30th June, 2017, under section 245D (4) of the Act of 1961. The petitioner Trust and the respondent-department, both filed rectification applications under section 245D (6B) of the Act of 1961, before the Settlement Commission, for rectification of certain factual errors and mistakes apparent of the face of the record in the impugned order dated 30th June, 2017. The respondent-department vide order dated 16th Jan, 2018, cancelled the registration granted to the petitioner Trust under section 12A of the Act of 1961 and also withdrew the approval accorded under section 10 (23C) (v) and 10 (23C) (via) of the Act of 1961, with retrospective effect from 1st April, 2006. The Settlement Commission then disposed off the rectification application filed by the petitioner Trust, vide order dated 08th February, 2018, in the backdrop of order dated 16th January, 2018, made by the respondent-department against the petitioner Trust, revoking the registration granted, retrospectively. 4. Mr. S.S. Hora, learned counsel for the petitioner, reiterating the pleaded facts and grounds of the writ application contended that the petitioner is a Trust which is running various educational institutions including Medical college, Dental college, Institute Of Engineering and Technology, School of Nursing, Nursing college, Physiotherapy college, Pharmacy college, Institute of Pharmacy, Para medical technology college, Institute of Management, International School and Hospital. It is further pointed out that the main object of the petitioner Trust is to impart education and (6 of 43) [CW-6896/2018] provide medical help to the poor and needy and through free medical camps as well, without any aim to earn profit. Further, the petitioner Trust came into existence vide trust deed dated 23rd Feb, 2000 and was registered under the Act of 1959. The petitioner Trust was granted registration under section 12A of the Act of 1961 vide registration no. 253/34 on 24th March, 2000. And it was further granted approval under section 10 (23C) (v) & 10 (23C) (via) of the Act of 1961 by the Commissioner of Income Tax, Jaipur, vide notification dated 20th March, 2006, for Assessment Year 2004-05 to 2006-07 and thereafter vide notification dated 29th April, 2008 for Assessment Year 2007-08 and so on thereafter. The petitioner Trust filed its returns of income every year including for the assessment year 2001-02 to 2012-13 and the same were scrutinized in detail by the Income Tax Department regularly, without any addition to the returns of income submitted. 5. Learned counsel further stated that a search and survey was conducted by the officials of the Income Tax Department on 30th October, 2014, under section 132 of the Income Tax Act, 1961, on the premises of the petitioner. The petitioner filed a Settlement Application under section 245C (1) of the Act of 1961, before the Income Tax Settlement Commission on 14th December 2015, for the period of assessment years 2009-10 to 2015-16. The petitioner offered additional undisclosed income of Rs. 1,70,00,000/- (Rupees One crore seventy lacs), for the aforesaid period of assessment years and as per law; Entire tax and interest was deposited by the petitioner beforehand. The Income Tax (7 of 43) [CW-6896/2018] Settlement Commission accepted the said application vide order dated 23rd December, 2015 and further stated that settlement application was not invalid and maintainable according to the disclosures made by the petitioner Trust and other relevant material found in the said application. The petitioner during the hearing on the admitted settlement application co-operated with due diligence by providing assistance, detailed submissions, comments, counter comments etc. during the whole process of adjudication before the Income Tax Settlement Commission. The respondents arbitrarily made the irrational submission before the Income Tax Settlement Commission to treat the petitioner Trust as a commercial establishment, which was however blatantly rejected by the Commission with the following observation: “However, in view of the fact that the applicant is an entity registered u/s. 12A and also recognized u/s. 10(23C)(iv) of the I.T. Act, according to us, there are primarily two issues that need to be taken cognizance of and resolved by us.” 6. Be that as it may, the irrational submission of the respondent-department was rejected; however, the respondent- department made another baseless and arbitrary submission before the Income Tax Settlement Commission to withdraw the registration granted to the petitioner under section 12A and under section 10 (23C) (v) & 10 (23A) (via) of the Act of 1961; that plea was also declined by the Commission with the following observation: (8 of 43) [CW-6896/2018] “However, the Settlement Commission declined to interfere and held that it is not the prescribed authority to pass such an order.” 7. Thereafter, the Income Tax Settlement Commission made its final order under section 245D (4) of the Act of 1961, on the settlement application vide order dated 30th June, 2017, whereby the total income of the petitioner was calculated to be Rs. 53,94,68,710/- (Rupees Fifty three crores ninety four lacs sixty eight thousand seven hundred ten). 8. Learned counsel for the petitioner Trust also pointed out that the order dated 30th June, 2017, made by the Income Tax Settlement Commission, suffered with certain factual errors apparent on the face of record and the findings arrived at being contrary to the provisions of the Act of 1961, and therefore, the petitioner filed a rectification application dated 19th Sep, 2017, before the Commission. The respondent-department also filed rectification application. The points raised in the rectification application by the petitioner, which were to be rectified by the Income Tax Settlement Commission, reads thus: 1.The corpus donations of the petitioner trust were treated as income of the trust while they were entitled to get the benefit under section 11 (1) (a) of the Act, and the said donations were not to be treated as income of the trust. 2.The benefit of carry forward of losses or deficit for the period of assessment year 2010-11 to 2012-13 as under section 11 (1) (a) of the Act, was not given to the petitioner trust. 3.The investment made by the petitioner trust, in the TV Channel was considered to be done so for deriving profits whereas the acquiring of the TV Channel was done in lieu (9 of 43) [CW-6896/2018] with the objectives of the petitioner trust i.e. for educational purpose. 4.The depreciation in respect to the expenditure made in lieu of construction of educational buildings of Rs. 25,78,00,000/- (Rupees twenty five crores seventy eight lacs), was not accounted for by the Settlement Commission thus contrary to the provisions under section 11 (1) (a) of the Act. 9. Further, the Income Tax Settlement Commission in its order dated 30th June, 2017, held that the petitioner Trust spent an amount of Rs. 25,78,00,000/- (Rupees twenty five crores seventy eight lacs), for construction of educational buildings but failed to give the depreciation in respect of the expenditure for construction of the above stated amount. The Settlement Commission held that section 11 (6) of the Act of 1961, restricts the petitioner Trust from claiming depreciation. Thus, the Commission lost sight of the fact that the said provision was inserted in the Act of 1961, on 01st April, 2015, and therefore, it could only be applied prospectively. And the depreciation in respect of the expense claimed by the petitioner Trust was for the assessment years 2009-10 to 2014- 15. Thus, the Settlement Commission clearly went wrong and against the provisions of the Act of 1961 and failed to extend the benefit under section 11 (1) (a) of the Act of 1961, to the petitioner Trust. 10. Learned counsel for the petitioner vehemently argued that for the respondent’s arbitrary and irrational submission to withdraw the registration of the petitioner under section 12A and under section 10 (23C) (v) and 10 (23A) (via) of the Act of 1961, was rejected by the Commission; then the respondents came up with a more arbitrary and adopted an illegal manner to frustrate (10 of 43) [CW-6896/2018] the petitioner’s rectification application that was pending before the Income Tax Settlement Commission, by cancelling the registration granted under section 12A and also withdrew the approval granted under section 10 (23C) (v) and 10 (23A) (via) of the Act of 1961, to the petitioner with retrospective effect with effect from 01st April, 2006, vide order dated 16th Jan, 2018. The petitioner preferred a writ petition against the order dated 16th Jan, 2018, before the Income Tax appellate Tribunal, which wrongly upheld the impugned order of the respondent. The petitioner, thereafter preferred an appeal against the order dated 12th Oct, 2018, of the Income Tax appellate Tribunal before the Division Bench of this Court, which in turn stayed the impugned order dated 16th Jan, 2018 made by the respondents vide its order dated 20th December, 2018. 11. It is urged that the Income Tax Settlement Commission, summarily disposed of the rectification application filed by the petitioner vide order dated 8th February, 2018. The Income Tax Settlement Commission totally failed to take note of the fact that the respondent-department in order to frustrate the efforts of a settlement by the petitioner, arbitrarily withdrew the registration granted under section 12A and approval accorded under section 10 (23C) (v) and 10 (23A) (via) of the Act of 1961, with retrospective effect; and further made the observation that since the registration and approval of the petitioner had been withdrawn with retrospective effect, hence, no benefit under section 11 (1) (a) of the Act of 1961, shall be admissible to the petitioner for it is (11 of 43) [CW-6896/2018] not a ‘charitable trust’ in view of the order dated 16th Jan, 2018, of the respondents. 12. According to learned counsel the rectification application that was filed by the petitioner before the Income Tax Settlement Commission, was for rectification of the order dated 30th Oct, 2017, which ought to have been decided considering the status of the petitioner at the time of passing of the order dated 30th Oct, 2017, whereas the Income Tax Settlement Commission relied on a subsequent order of the respondent-department dated 16th Jan, 2018, in denying the rectifications pleaded and prayed for by the petitioner, which is bad in the eye of law and contrary to the provisions of the Act of 1961, itself. Furthermore, the Income Tax Settlement Commission, failed to realize that the respondent- department, does not have the power to cancel the registration granted, with retrospective effect. 13. Learned counsel for the petitioner also pointed out the fact that the respondent-department revoked the registration of the petitioner Trust in an arbitrary manner contrary to well settled principles of law and precedents. Under the law in the face of section 12AA (3) of the Act of 1961, the registration could have been cancelled only in following two situations: a) When the activities of the trust are not genuine or b) The activities are not carried out in accordance with objects of the Trust. 14. In case of the petitioner Trust, neither the genuineness of its activities has been doubted nor were the activities being carried out for the object other than the object of the Trust. Therefore, (12 of 43) [CW-6896/2018] the cancellation of registration of the petitioner Trust, is, in itself arbitrary, irrational and without any reason or justification in law. 15. Learned counsel for the petitioner also pleaded that Income Tax Settlement Commission determined the losses which are the deficits of the assessment years 2009-10 to 2015-16 vide order dated 30th June, 2017, but, failed to give the benefit of carry forward of loss which is a contradictory view to its findings under section 11 (1) (a) of the Act of 1961, for the denial is on the basis of the alleged cancellation of registration of the petitioner Trust with retrospective effect by the respondent department vide order dated 16th Jan, 2018. And, such an act of the Settlement Commission, is, contrary to its own findings in the face of its order dated 30th June, 2017. 16. Furthermore, the Income Tax Settlement Commission also declined the acquisition of the TV channel to be in consonance of the objects of the petitioner Trust on the ground for having not furnished any evidence in that behalf. Whereas, the petitioner acquired the TV Channel for educational purposes only and was conducting courses of both graduation and post-graduation in 'Mass Media' and 'Journalism', which is in accordance and in consonance with the objective of the Trust and evidence in this regard was also submitted during the course hearings on the settlement application before the Income Tax Settlement Commission. Thus, the petitioner was entitled to benefit under section 11 (1) (a) of the Act of 1961, as application of fund and depreciation on amounts spent in construction of buildings and new buildings for education and acquisition of the TV Channel as (13 of 43) [CW-6896/2018] well, which was not accorded contrary to the provisions of law. In order to fortify his stand learned counsel for the petitioner has relied upon the following opinions:  Assistant Commissioner of Income Tax Vs. Agra Development Authority (2018) 90 Taxman 288  Industrial Infrastructure Development Corporation M.P. Ltd. Vs. Commissioner of Income Tax (2018) 4 SCC 494  State of Uttar Pradesh Vs. Vam Organic Chemicals Ltd. (2010) 6 SCC 222  Oxford Academy for Career Development Vs. Commissioner of Income Tax (2009) 315 ITR 382  Commissioner of Income Tax Vs. Manav Vikas Avam Sewa Sansthan (2011) 336 ITR 250  Commissioner of Income Tax Vs. Rajasthani and Gujarati Charitable Foundation (2018) 7 SCC 810  Commissioner of Income Tax Vs. Subros Educational Society (2018) 7 SCC 548  Commissioner of Income Tax Vs. Magarana of Mewar Charitable Foundation (1987) 164 ITR 439  Commissioner of Income Tax Vs. Shri Plot Swetamber Murti Pujak Jain Mandal (1995) 211 ITR 293  Commissioner of Income Tax Vs. Institute of Banking (2003) 264 ITR 110  Union of India Vs. Ind-Swift Laboratories Ltd. (2011) 4 SCC 635  Commissioner of Income Tax Vs. Settlement Commission (2014) 369 ITR 606  Jyotendrasingji Vs. S.I. Tripathi (1993) Supp (3) SCC 389  Director of Income Tax Vs. Sri Belimatha Mahasamsthana Socio Cultural and Educational Trust (2011) 336 ITR 694  Chief Commissioner of Income Tax Vs. Geetanjali University Trust (2013) 3 RLW 2049  Sanjeevamma Hanumanthe Gowda Charitable Trust Vs. Director of Income Tax (2006) 155 Taxman 466  Chevoit Company Ltd. Vs. Income Tax (2011) SCC Online Cal 1106 (14 of 43) [CW-6896/2018]  Director of Income Tax Vs. Raghuvanshi Charitable Trust (2010) SCC Online Del 2488  Commissioner of Income Tax Vs. Shri Sadguru Seva Trust (Bombay High Court, Dated: 27th Nov, 2018)  Maharishi Mahesh Yogi Vedic Vishwavidyalaya Vs. State of Madhya Pradesh and Others (2013) 15 SCC 677  Ajmera Housing Corporation and Another Vs. Commissioner of Income Tax (2010) 8 SCC 739 17. Per contra; Mr. Anil Mehta, learned counsel for the respondents, strenuously contended that a search was conducted under section 132 of the Act of 1961 on 30th October 2014, by the Income Tax Department on the premises of the petitioner Trust wherein a total of 9 premises of the Trust were searched which resulted in seizer of an abundant amount of evidence in the form of diaries, registers, loose papers and computer prints. The seized evidence helped in establishing the receipts of unaccounted capitation fee charged by the petitioner Trust which was not recorded in their regular books of accounts. The petitioner also failed to establish the fact that the capitation fee was ever used for any ‘charitable purpose’ of the petitioner Trust; thus, it implied that the said capitation fee was charged in contravention to the by-laws and objectives of the petitioner Trust. In this regard notices were issued to the petitioner under section 153A of the Act of 1961, on 30th Oct, 2014 for the assessment year 2009-10 to 2014-15. Returns of income of assessment year 2014-15 was filed on 30th Sep, 2015. Notice for the assessment year 2015-16 was issued under section 142 (1) of the Act of 1961. Before the assessment could have been completed the petitioner filed a settlement application before the Income Tax Settlement Commission under section 245C (1) of the Act of 1961, offering an (15 of 43) [CW-6896/2018] amount of taxable income of Rs. 1,70,00,000/- ((Rupees One crore seventy lacs), for the assessment years 2009-10 to 2015- 16. The aforesaid settlement application was admitted by the Income Tax Settlement Commission vide order dated 23rd Dec, 2015. The settlement application of the petitioner was allowed to proceed further under section 245A (4) of the Act of 1961. Report under Rule 9 was submitted before the Income Tax Settlement Commission, counter to which, as reply, under Rule 9A was also submitted by the petitioner. The respondent-department filed counter comments to the reply of the petitioner raising several issues before the Income Tax Settlement Commission, which were decided by the Commission, vide order dated 30th June, 2017 made under section 245D (4) of the Act of 1961. 18. It was pointed out by the counsel for the respondent that the petitioner Trust was created for several charitable purposes and objects, including that of ‘medical treatment and education’ as per the deed of the 'Indian Medical Trust' whereas it was only operating as a commercial venture. Further, the object of the Trust was to provide free medical treatment and assistance to the needy through medical camps and other events which though are within the ambit of ‘charitable purpose’, but, to the contrary, the petitioner Trust was engaged solely in educational activities by setting up various educational institutions. The petitioner Trust was operating only on the commercial lines with a view to earn huge amount of profits through its activities, one of which is ‘capitation fee’ charged through involuntary donations. (16 of 43) [CW-6896/2018] 19. Learned counsel further argued that the Income Tax Settlement Commission in its order dated 30th June, 2017, overlooked the huge amount that was charged as ‘capitation fee’ and huge profits earned by the petitioner Trust. The respondent- department emphasized and made submissions before the Income Tax Settlement Commission with reference to the unaccounted donations and capitation fee, so collected by the petitioner Trust and also submitted diaries as well as evidence, that was required to be looked into to ascertain whether the entries were voluntary donations which were not recorded in the regular books of accounts. It was further pointed out to the Income Tax Settlement Commission that the voluntary donations towards corpus, accepted by the petitioner Trust were duly recorded in the previous years of returns filed; however, in the relevant years, which were the subject matter of the settlement application, there were no clear records found in the regular books of accounts. 20. Further, the petitioner Trust accepted donations only from the students who have been admitted in MBBS/ PG/ MBS/ BDS, which were not recorded in the normal books of accounts. The year statics analysis of the diary, which was seized during the search and seizure process, revealed an average amount of capitation fee for a particular subject of MBBS, as per particular financial year, which is as follows:  FY 2008-09 - Rs. 20,00,000 (Rupees Twenty lacs)  FY 2009-10 -Rs. 10,00,000 (Rupees ten lacs)  FY 2010-11 -Rs. 10,00,000 (Rupees Ten lacs)  FY 2011-12 -Rs. 24,00,000 (Rupees Twenty four lacs) (17 of 43) [CW-6896/2018]  FY 2012-13 -Rs. 27,00,000 (Rupees Twenty seven lacs)  FY 2013-14 -Rs. 40,00,000 (Rupees Forty lacs )  FY 2014-15 -Rs. 40,00,000 (Rupees Forty lacs) 21. Furthermore, unexplained cash, jewelry, undisclosed investments, foreign travel and tours made out of the petitioner Trust money, were detected during the search conducted by the respondent-department and that was also tendered in evidence before the Income Tax Settlement Commission, but, the Commission failed to take note of this vital evidence. 22. Learned counsel for respondents further asserted that the petitioner Trust, to cover up the undisclosed income, unearthed by the respondent-department, came up with a lame excuse of not making required entries in the books of accounts, stating that there was a change of employees/staff in the accounts department of the petitioner Trust, and therefore, the said donations could not be recorded properly. Even the Income Tax Settlement Commission after considering the above mentioned reply of the petitioner Trust made an observation in the impugned order dated 30th June, 2017, that the donations accepted by the petitioner Trust, had no declaration of the donors, and thus, the said donations shall not form a part of the corpus of the petitioner Trust i.e. they won’t be considered as corpus donations which are exempt under section 11 (1) (d) of the Act of 1961, and these donations shall be treated as ordinary receipts which shall form a part of the petitioner’s income only. 23. Learned counsel for the respondents also urged that the Income Tax Settlement Commission dealt with the issue of claim (18 of 43) [CW-6896/2018] in the application as to unaccounted receipts in the petitioner’s buildings on the basis of valuation report submitted by the respondent-department; however, the Commission in an arbitrary manner accepted the unaccounted expenditures of Rs. 25,78,00,000/- (Rupees twenty five crores seventy eight lacs), as certified by the valuation officer, although there were glaring discrepancies in the record of books and receipts recovered by the respondent-department. The Income Tax Settlement Commission rightly disallowed the expenses incurred by the petitioner Trust in acquiring TV Channel amounting to Rs. 3,00,00,000/- (Rupees Three crores) and further Rs. 5,61,40,605/- (Rupees Five crores Sixty one lacs forty thousand six hundred five), as the incurred expenses were not intertwined with the objectives of the petitioner Trust. 24. Learned counsel further pointed out that the respondent- department also submitted before the Income Tax Settlement Commission that total amount of cash found during the search was Rs. 4,20,13,305/- (Rupees Four crores twenty lacs thirteen thousand three hundred five), and the seized amount was Rs. 3,22,89,270/- (Rupees Three crore twenty two lac eighty nine thousand two hundred seventy); however the account books maintained by the petitioner Trust showed negative cash balances, which was clearly meant that the record of books of accounts, maintained by the petitioner Trust, was false, fabricated and untrue. Further, the cash recovered from the premises of various employees of the petitioner Trust, was arbitrarily considered belonging to them in individual capacity by the Income Tax (19 of 43) [CW-6896/2018] Settlement Commission, whereas the said employees had no other means of their own to have accumulated such huge amount of cash. The petitioner’s disclosure of Rs. 1,70,00,000/- (Rupees one crore seventy lacs), before the Income Tax Settlement Commission through settlement application, was in fact not anywhere near the real amount that the petitioner had accumulated through the means of involuntary donations and capitation fee and charges, which were estimated by the respondent department to be about Rs. 79,19,00,000/- (Rupees seventy nine crore nineteen lacs). 25. Learned counsel vehemently asserted that considering the above stated facts and materials available on record, it was evident before the Income Tax Settlement Commission that the disclosure made by the petitioner Trust was neither full nor true. The claim, as stated was rejected by the Commission and determined the additional income of the petitioner Trust to be Rs. 41,08,08,869/- (Rupees Forty one crore eight lacs eight thousand eight hundred sixty nine), against the amount of Rs. 1,70,00,000/- (Rupees One crore seventy lacs). Hence, the Income Tax Settlement Commission, without application of mind and without considering the material facts submitted by the respondent-department, made the order dated 30th June, 2017, granting immunity from prosecution and penalty to the petitioner Trust. In support of his stand learned counsel for the respondents has relied upon the following opinions:  Sinhagad Technical Education Society Vs. Income Tax (2012) 343 ITR 23 (Bombay High Court) (20 of 43) [CW-6896/2018]  U.P. Distillers Association Vs. Commissioner of Income Tax (2017) 399 ITR 143 (Delhi High Court)  Navodaya Education Trust Vs. Union of India (2018) 405 ITR 30 (Karnataka High Court)  Sri Vidyaranya Seva Sangha Vs. Commissioner of Income Tax, ITA No. 702/Bang/2014 (ITAT Bangalore)  Ajmera Housing Corporation and Another Vs. Commissioner of Income Tax (2010) 8 SCC 739. 26. Heard the learned counsel for the parties and with their assistance perused the materials available on record as well as gave my thoughtful consideration to the rival submissions at bar and the opinions referred to and relied upon. 27. Considering the entire factual matrix, materials available on record and pleadings of the parties in the writ applications, in totality, this court can safely conclude that in fact the crux of the matter and the issues, in dispute, in substance are: I. Whether the petitioner Trust should be accorded the benefit of carry forward of losses for subsequent years as contemplated under section 11 (1) (a) of the Act of 1959? II. Whether the petitioner Trust is entitled to the benefits under the application for the amount spent on construction of educational buildings and depreciation in respect to such expenses as contemplated under section 11 (1) (a) of the Act of 1959? III. Whether the money invested in acquisition of the TV Channel shall be considered to be in view of the object of the Trust? (21 of 43) [CW-6896/2018] IV. Whether the Commissioner of the Income Tax Department has the power to cancel or withdraw registration under section 12 A of the Act of 1961, of a Trust, with retrospective effect? V. Whether the disclosure made before the Settlement Commission by the petitioner Trust is full and true? 28. Indisputably, the order dated 16th Jan, 2018, made by the Commissioner of Income Tax thereby canceling the registration granted under section 12A and withdrawing the approval given under section 10 (23C) (v) & 10 (23A) (via) of the Act of 1961, to the petitioner Trust with retrospective effect from the date of 01st April, 2006, was arbitrary in the face of the provisions of the Act of 1961; and therefore, cannot be deemed to be in consonance with any possible interpretation to be valid or legal. This court is of the opinion that the provisions of section 12AA (3) of the Act of 1961, empowers the Commissioner of Income Tax to initiate steps for cancellation of the registration of a Trust, but, the legislation had no intention of giving the said provision, a retrospective effect. For in such a situation, the same would have been clearly specified in the said provision. Interpretation of the said provision has to be harmonious rather than being prejudicial to the institutions as it would instigate and create a fear of the Income Tax Department. I find support in my opinion from the following cases with reference to the issue of cancellation or withdrawal of registration with retrospective effect: (22 of 43) [CW-6896/2018] A. In the case of Oxford Academy for Career Development Vs. Commissioner of Income Tax: (2009) 315 ITR 382, it was thus observed that: 16. In the instant case, the petitioner is a registered society, which was earlier granted registration under Section 12A on 1-4-1999. A survey was conducted at the business premises on 20-9-2002, from where documents were impounded. The registration was cancelled for the assessment years 2000-01 and 2001-02 for the reasons that the surplus was quite heavy. In the impugned order, it was mentioned by the CIT that there was an unusual huge margin and the petitioner was engaged in the commercial activities rather than charitable. As per the balance-sheet, huge amount from the student was charged. The profit margin embodied in the charges taken from the students are so huge and it proves the profit motive of the petitioner. The funds were misused by the president and his family members of the petitioner. 20. The expression \"charitable purpose\" is defined in Section 2(15) of the IT Act, 1961. It is of inclusive nature as revealed in the language. Earlier the words \"the advancement of any other object of general public utility\" in this definition were succeeded by the words \"not involving the carrying on of any activity for profit\". These words were omitted by the Finance Act, 1983, w.e.f. 1st April, 1984. 26. In the light of the above discussion and by considering the totality of the facts and circumstances of the case, we hold that the order dt. 9th March, 2004, passed by the CIT (Annex. No. 15 to the writ petition) as per the then law is without power and jurisdiction and therefore, it is liable to be set quashed. 27. Accordingly, the impugned order dt. 9th March, 2004, passed by opposite party No. 2 withdrawing/rescinding the order granting registration on 1st April, 1999, to the petitioner's society under Section 12A of the Act, is quashed. Consequently, the registration granted to the petitioner's society on 1st April, 1999, stands restored for the assessment years under consideration.” (23 of 43) [CW-6896/2018] B. In the case of Assistant Commissioner of Income Tax Vs. Agra Development Authority: (2018) 90 Taxman 288, it was observed thus: “50. In the context of the IT Act, 1961 it is undisputed that the grant of registration is a one time affair. The assessee is required to apply for registration under s. 12A of the Act. Once the assessee has been registered under s. 12A of the Act, by a specific order passed by the CIT, it stands established for the purpose of the Act that the activity being pursued by that assessee is for a \"charitable purpose\", under s. 2(15) of the Act. 51. Then, there is nothing in the language of s. 12AA(3) of the Act that may suggest registration of the assessee may be cancelled with retrospective effect. The use of the words 'or have obtained registration at any time under s. 12A of the Act' added by amendment w.e.f. 1st June, 2010, only indicate that the CIT was vested with the power to cancel a registration that may have been granted to an assessee at any time prior to the aforesaid amendment itself. However, it does not indicate that thereby the CIT had been empowered to cancel the registration of the assessee with retrospective effect i.e., w.e.f. a date prior to the date of issuance of the order/notice to cancel the registration. 52. Clearly, the act of cancellation of registration has serious civil consequences. In absence of any legislative intent expressed to suggest that the legislature had empowered the CIT to cancel the assessee's registration under s. 12A of the Act with retrospective effect, such power could not be deemed to exist or arise or be exercised to unsettle closed/part transactions especially because in this case the ground for cancellation has not arisen out of allegation of fraud, collusion or misrepresentation. 53. Therefore, we are of the view that the cancellation of the assessee's registration under s. 12A of the Act, if at all, could be done only prospectively and not retrospectively as had been done by the CIT in this case. Thus, question No. 1 is answered in the negative that is in favour of the assessee and against the Revenue.” 29. Thus, it is more than clear that section 12 AA (3) of the Act of 1961, doesn’t suggest or in any way contemplate that the (24 of 43) [CW-6896/2018] registration of the assesse may be cancelled with retrospective effect. And therefore, this court is of the view that the cancellation of registration can only be prospective. 30. As regards the issue of the petitioner Trust’s disclosure being full and true or not; this court is of the view that the petitioner Trust’s disclosure shall be considered full and true for when it filed the settlement application before the Income Tax Settlement Commission, for it disclosed its undisclosed income in the said application and the same was allowed by the Commission, so also accepted under section 245D (1) of the Act of 1961, while declaring the said application as “not invalid” and maintainable under section 245D (2C) of the Act of 1961. I am fortified in my view from the opinion in the case of Jyotendrasinhji Vs. S.I. Tripathi and Others (1993) Supp (3) SCC 389, wherein the Apex Court of the land held thus: “16. It is true that the finality clause contained in Section 245-I does not and cannot bar the jurisdiction of the High Court under Article 226 or the jurisdiction of this court under Article 32 or under Article 136, as the case may be. But that does not mean that the jurisdiction of this Court in the appeal preferred directly in this court is any different than what it would be if the assessee had first approached the High Court under Article 226 and then come up in appeal to this court under Article 136. A party does not and cannot gain any advantage by approaching this Court directly under Article 136, instead of approaching the High Court under Article 226. This is not a limitation inherent in Article 136; it is a limitation which this court imposes on itself having regard to the nature of the function performed by the Commission and keeping in view the principles of judicial review. May be, there is also some force in what Dr. Gauri Shankar says viz., that the order of commission is in the nature of a package deal and that it may not be possible, ordinarily speaking, to dissect its order and that the assessee should not be permitted to accept what is favourable to him and reject (25 of 43) [CW-6896/2018] what is not. According to learned Counsel, the Commission is not even required or obligated to pass a reasoned order. Be that as it may, the fact remains that it is open to the Commission to accept an amount of tax by way of settlement and to prescribe the manner in which the said amount shall be paid. It may condone the defaults and lapses on the part of the assessee and may waive interest, penalties or prosecution, where it thinks appropriate. Indeed, it would be difficult to predicate the reasons and considerations which induce the commission to make a particular order, unless of course the commission itself chooses to give reasons for its order. Even if it gives reasons in a given case, the scope of inquiry in the appeal remains the same as indicated above viz., whether it is contrary to any of the provisions of the Act. In this context, it is relevant to note that the principle of natural justice (audi alterant portent) has been incorporated in Section 245-D itself. The sole overall limitation upon the Commission thus appears to be that it should act in accordance with the provisions of the Act. The scope of enquiry, whether by High Court under Article 226 or by this Court under Article 136 is also the same - whether the order of the Commission is contrary to any of the provisions of the Act and if so, has it prejudiced the petitioner/appellant apart from ground of bias, fraud & malice which, of course, constitute a separate and independent category. Reference in this behalf may be had to the decision of this Court in Sri Rant Durga Prasad v. Settlement Commission MANU/SC/0429/1989 : [1989]176ITR169(SC), which too was an appeal against the orders of the Settlement Commission. Sabyasachi Mukharji, J., speaking for the Bench comprising himself and S.R. Pandian, J. observed that in such a case this Court is \"concerned with the legality of procedure followed and not with the validity of the order.\" The learned Judge added \"judicial review is concerned not with the decision but with the decision-making process.\" Reliance was placed upon the decision of the House of Lords in Chief Constable of the N.W. Police v. Evans [1982] 1 W.L.R.1155. Thus, the appellate power under Article 136 was equated to power of judicial review, where the appeal is directed against the orders' of the Settlement Commission. For all the above reasons, we are of the opinion that the only ground upon which this Court can interfere in these appeals is that order of the Commission is contrary to the provisions of the Act and that such contravention has prejudiced the appellant. The main controversy in these appeals relates to the interpretation of the settlement deeds - though it is true, some contentions of law are also raised. The commission has interpreted the trust deeds in a particular manner, Even if the interpretation (26 of 43) [CW-6896/2018] placed by the commission the said deeds is not correct, it would not be a ground for interference in these appeals, since a wrong interpretation of a deed of trust cannot be said to be a violation of the provisions of the Income Tax Act. It is equally clear that the interpretation placed upon the said deeds by the Commission does not bind the authorities under the Act in proceedings relating to other assessment years.” 31. In the Case of The Commissioner of Income Tax Vs. Settlement Commission and Another:(2014) 369 ITR 606; it was observed thus: “10. On a consideration of the facts and circumstances of the case, as also the submissions made across the bar, I am of the view that the following issues arise for consideration in this case, namely; (1) Whether this court, in exercise of its jurisdiction under Article 226 of the Constitution of India, will interfere with orders passed by the Settlement Commission under Section 245D of the Income Tax Act, 1961 and if so, to what extent? (2) Whether, on account of the offer of additional amounts by the assessees towards undisclosed income, at the instance of the Settlement Commission, it could be inferred that the assessees had not made a full and true disclosure of their income for the purposes of settlement and thereby denuded the Commission of its jurisdiction to proceed with the matter? (3) Whether, in the instant case, the Settlement Commission was justified in refusing to the department an opportunity to conduct further investigation to ascertain the exact amount of income that had been allegedly undisclosed by the assessees? (4) Whether the findings of the Settlement Commission with regard to the alleged undervaluation of closing stock by two of the assessees is liable to be interfered with? Issue 1: The first issue to be considered is the nature of the jurisdiction that is to be exercised by this court while dealing with a writ petition filed under Article 226 of the Constitution of India, challenging the orders passed by the (27 of 43) [CW-6896/2018] Settlement Commission under the I.T. Act, 1961. It is trite that this court, in exercise of its jurisdiction under Article 226 of the Constitution of India, does not assume the role of an appellate authority to conduct a merit review of orders passed by the Settlement Commission. Its role is confined to one of judicial review, of the orders of the Settlement Commission, by applying the well-settled principles that inform the exercise of such a jurisdiction. Accordingly, this court would be concerned with the decision making process, adopted by the Commission, and not the decision itself. It would be apposite to notice some of the judgments that clearly indicate that the scope of enquiry of this court, in matters involving a challenge to orders passed by the settlement commission, is only to see whether the order of the Commission complies with the statutory provisions of Chapter XIX-A of the I.T. Act. The Supreme Court in the case of Jyotendrasinhji v. S.I. Tripathi and Others - (MANU/SC/0313/1993 : 1993 (201) ITR 611 (SC)), observed as follows at page 623: \" .....Be that as it may, the fact remains that it is open to the Commission to accept an amount of tax by way of settlement and to prescribe the manner in which the said amount shall be paid. It may condone the defaults and lapses on the part of the assessee and may waive interest, penalties or prosecution, where it thinks appropriate. Indeed, it would be difficult to predicate the reasons and considerations which induce the Commission to make a particular order, unless the Commission itself chooses to give reasons for its order. Even if it gives reasons in a given case, the scope of enquiry in the appeal remains the same as indicated above, viz., whether it is contrary to any of the provisions of the Act. In this context, it is relevant to note that the principle of natural justice (audi alteram partem) has been incorporated in section 245D itself. The sole overall limitation upon the Commission, thus, appears to be that it should act in accordance with the provisions of the Act. The scope of enquiry, whether by the High Court under article 226 or by this Court under article 136, is also the same - whether the order of the Commission is contrary to any of the provisions of the Act and if so, apart from ground of bias, fraud and malice which, of course, constitute a separate and independent category, has it prejudiced the petitioner/appellant..…\" The Karnataka High Court in N. Krishnan (Decd. By legal representative, K. Badrinarayan, and others) v. Settlement (28 of 43) [CW-6896/2018] Commission and Others - (MANU/KA/0065/1989 : 1989 (180) ITR 585) observed as follows at page 597: \"The provision for settlement would show that it is in the nature of statutory arbitration to which a person may submit himself voluntarily. Hence, many of the grounds on which an arbitration award could be set aside would not be available in view of the nature and jurisdiction of the Settlement Commission. A decision of the Settlement Commission could be interfered with only (i) if grave procedural defects such as violation of the mandatory procedural requirements of the provisions in Chapter XIX-A of the Income-tax Act, 1961, and/or violation of the rules of natural justice are made out; or (ii) if it is found that there is no nexus between the reasons given and the decision taken by the Settlement Commission. The court cannot interfere either with an error of fact or error of law alleged to have been committed by the Settlement Commission.\" More recently, the Supreme Court in Union of India and Others v. Ind-Swift Laboratories Limited - (MANU/SC/0140/2011 : (2011) 4 SCC 635) observed as follows at page 643: \"An order passed by the Settlement Commission could be interfered with only if the said order is found to be contrary to any provisions of the Act. So far as the findings of fact recorded by the Commission or question of facts are concerned, the same is not open for examination either by the High Court or by the Supreme Court. In the present case the order of the Settlement Commission clearly indicates that the said order, particularly, with regard to imposition of simple interest @ 10% per annum was passed in accordance with the provisions of Rule 14 but the High Court wrongly interpreted the said Rule and thereby arrived at an erroneous finding. So far as the second issue with respect to interest on Rs. 50 lakhs is concerned, the same being a factual issue should not have been gone into by the High Court exercising the writ jurisdiction and the High Court should not have substituted its own opinion against the opinion of the Settlement Commission when the same was not challenged on merits.\" Hence, it is well settled that the power of judicial review is not to be exercised to decide the issue on facts or on an interpretation of the documents available before the Court. It follows, therefore, that in the instant case, the enquiry by this Court can only be with regard to whether or not the Settlement Commission exercised a jurisdiction that it did (29 of 43) [CW-6896/2018] not have or, alternatively, if it did have the jurisdiction, whether it erred in the exercise of that jurisdiction. In the latter event, this court would also have to bear in mind the nature of the jurisdiction exercised by the Settlement Commission, which is akin to a statutory arbitration. Issues 2 and 3: It is the case of the department in the writ petitions that the offer of additional amounts by the assessees, over and above the amounts initially disclosed by it as undisclosed income in their applications before the settlement commission, and pursuant to the suggestions of the settlement commission in the course of the proceedings before it, rendered the original disclosure made by them as one that was not \"a full and true disclosure\" of the income that was not disclosed by it before the assessing officer or the manner in which such income was derived. The petitioner relies heavily on the decision of the Supreme Court in Ajmera Housing Corporation and Another v. Commissioner of Income Tax - (MANU/SC/0623/2010 : 2010 (326) ITR 642 (SC)) in support of its said contention. 11. Before embarking upon a consideration of the merits of the said contention of the petitioner, I feel it would be apposite to notice the scheme of Chapter XIX-A of the I.T. Act, 1961 that deals with Settlement of Cases. As observed by a Constitutional Bench of the Supreme Court in Commissioner of Income-Tax v. Anjum M.H. Ghaswala and Others - (MANU/SC/0662/2001 : 2001 (252) ITR 1 (SC)), Chapter XIX-A of the Act was introduced by the Taxation Laws (Amendment) Act, 1975 with effect from 01.04.1976, for the purpose of quick settlement of cases, so that the tax due to the department is collected at the earliest. On a perusal of the relevant provisions under the Act, I note that the scheme provides for the preferring of an application by an assessee, that contains a full and true disclosure of his income which has not been disclosed before the assessing officer, the manner in which such income has been derived and the additional amount of income tax payable on such income. Such application is to be made to the Settlement Commission, which is then to proceed with the application in the manner detailed thereafter. The settlement commission is required to take a preliminary decision, after hearing the applicant, as to whether the application deserves to be rejected or whether it should allow the application to be proceeded with. If it is the latter, then the Settlement Commission is required to call for a report from the (30 of 43) [CW-6896/2018] Commissioner, who has to submit the said report within thirty days. On a consideration of the report of the Commissioner, the Settlement Commission can, after hearing the applicant, declare the applications as invalid. If it is not declared invalid, then the Settlement Commission proceeds to call for records from the Commissioner. On receipt of the records from the Commissioner and after examining it, if the Settlement Commission feels that any further enquiry or investigation is required in the matter, it may direct the Commissioner to make or cause to be made such further enquiry or investigation and furnish a report on the matters covered by the application and any other matter relating to the case. The Commissioner has then to furnish the said report to the Settlement Commission within a period of ninety days. The settlement commission then proceeds to pass final orders in the matter, after perusing the report of the Commissioner, if any, and after giving the assessee and the Commissioner an opportunity of being heard. The settlement commission can also pass orders granting immunity to the applicant from penalty and prosecution under the I.T. Act. Such orders can be passed on the Settlement Commission being satisfied that the applicant has co-operated with the Commission in the proceedings before it and has made a full and true disclosure of his income and the manner in which such income has been derived. The orders passed by the Settlement Commission, are to be conclusive as to matters stated therein, in terms of Section 245-I of the I.T. Act, and will be rendered void only if it is subsequently found by the Settlement Commission that the orders were obtained by fraud or misrepresentation. 12. It is apparent from a perusal of the scheme of Chapter XIX-A of the I.T. Act that the jurisdictional fact that confers the settlement commission with the jurisdiction to proceed with an application is the filing by an applicant, of an application that that contains a full and true disclosure of his income which has not been disclosed before the assessing officer, the manner in which such income has been derived and the additional amount of income tax payable on such income. If, at any stage of the proceedings before the settlement commission, it finds that the disclosure made by the applicant is not a full and true disclosure, then the said authority cannot proceed further with the application. It gets denuded of its jurisdiction to proceed with the matter. It is in the backdrop of this fact that I must analyse the decision of the Supreme Court in the case of Ajmera Housing Corporation (Supra) that has been relied upon by (31 of 43) [CW-6896/2018] the petitioner. It must, at once be noted that the provisions of Chapter XIX-A that were analysed by the Supreme Court in that case were slightly different from those under consideration in the instant case in that, it was the provisions, as they stood prior to the amendments introduced by the Finance Act, 2007, that were considered by the Supreme Court. Moreover, the Supreme Court was considering the case of an assessee who had suo motu revised his declaration, by making offers of additional amounts by way of disclosure of income at various stages of the proceedings before the Settlement Commission. Under those circumstances, the Court found that, judging by the assessee's own conduct, his original application could not be seen as containing a full and true disclosure of his income for the purposes of settlement under the Act. The relevant observations in the judgment of the Supreme Court are to be found in paragraphs 27, 31, 36 and 39 and are extracted hereunder: \"27. It is clear that disclosure of \"full and true\" particulars of undisclosed income and \"the manner\" in which such income had been derived are the pre-requisites for a valid application under section 245C(1) of the Act. Additionally, the amount of income-tax payable on such undisclosed income is to be computed and mentioned in the application. It needs little emphasis that section 245C(1) of the Act mandates \"full and true\" disclosure of the particulars of undisclosed income and \"the manner\" in which such income was derived and, therefore, unless the Settlement Commission records its satisfaction on this aspect, it will not have the jurisdiction to pass any order on the matter covered by the application.\" 31. .................. It is plain from the language of sub-section (4) of section 245D of the Act that the jurisdiction of the Settlement Commission to pass such orders as it may think fit is confined to the matters covered by the application and it can extend only to such matters which are referred to in the report of the Commissioner under sub-section (1) or subsection (3) of the said section. A \"full and true\" disclosure of income, which had not been previously disclosed by the assessee, being a pre-condition for a valid application under section 245(1) of the Act, the scheme of Chapter XIX-A does not contemplate revision of the income so disclosed in the application against item No. 11 of the Form. Moreover, if an assessee is permitted to revise his disclosure, in essence, he would be making a fresh application (32 of 43) [CW-6896/2018] in relation to the same case by withdrawing the earlier application. In this regard, section 245(3) of the Act which prohibits the withdrawal of an application once made under sub-section (1) of the said section is instructive inasmuch as it manifests that an assessee cannot be permitted to resile from his stand at any stage during the proceedings. Therefore, by revising the application, the applicant would be achieving something indirectly what he cannot otherwise achieve directly and in the process rendering the provision of sub-section (3) of section 245C of the Act otiose and meaningless. In our opinion, the scheme of the said Chapter is clear and admits of no ambiguity. 36. We are convinced that, in the instant case, the disclosure of Rs. 11.41 crores as additional undisclosed income in the revised annexure, filed on September 19, 1994 alone was sufficient to establish that the application made by the assessee on September 30, 1993 under Section 245C(1) of the Act could not be entertained as it did not contain a \"true and full\" disclosure of their undisclosed income and \"the manner\" in which such income had been derived. However, we say nothing more on this aspect of the matter as the Commissioner, for reasons best known to him, has chosen not to challenge this part of the impugned order.\" 39. .................. Apart from the fact, as explained above, not contemplated in the scheme, withholding of the information regarding filing of the revised annexure, disclosing undisclosed income of Rs. 11.41 crores as against the income of Rs. 1.94 crores, disclosed in the annexure forming part of the application, deprived the commissioner of his right to object to the maintainability of the assessee's application on the ground that the assessee had not made true and full disclosure of their income in the previous application, the foundational requirement of a valid application under section 245C(1) of the Act. Accordingly, we have no hesitation in rejecting the argument.\" 13. The issue to be considered here is whether, the observations of the Supreme Court in the aforementioned judgment are to be taken to mean that in every case where an applicant makes an offer of additional amounts, even at the instance or suggestion of the settlement commission, it would follow that the original declaration made by the applicant did not contain a full and true disclosure of his income and thereby rendering it invalid and, consequently, denuding the settlement commission of its jurisdiction to (33 of 43) [CW-6896/2018] proceed further in the matter? In my view, such an interpretation would render meaningless the scheme of settlement that is envisaged under the I.T. Act. One cannot discount the possibility of the Settlement Commission finding the disclosure of income made by an assessee as being full and true and yet requiring minor adjustments to include even those amounts, which though disputed by the assessee, would nevertheless be offered by the assessee in the interests of putting an end to litigation and in the spirit of settlement. These could be amounts, in respect of which, neither the department nor the assessee have sufficient material to substantiate their contentions, but the assessee is nevertheless willing to give up his claim in the interests of finality to litigation. The consent by an assessee to forgo such amounts, at the suggestion of the Settlement Commission, cannot have the effect of rendering his original disclosure dubious for the purposes of settlement under the Act. In my opinion, it is only in those cases where an assessee resiles from his original declaration of undisclosed income, by suo motu effecting revisions thereto, that he renders his application invalid for the purposes of settlement. In cases where additional amounts are offered by an assessee, pursuant to a relinquishment of his claims with regard to the non-taxability of such income, it would not be a case where the assessee is resiling from his original stand as regards undisclosed income. In the latter type of cases, the Settlement Commission would be well within its jurisdiction to include such amounts in the final amount for which the case before it is settled with the assessee. In taking the said view, I am fortified by the decision of the Bombay High Court in Director of Income-Tax (International Taxation) v. Income-Tax Settlement Commission and Others - (MANU/MH/0550/2014: 2014 (365) ITR 108 (Bom.)).” 32. Although reliance has been placed on the case of Ajmera Housing Corporation and Another Vs. Commissioner of Income Tax (2010) 8 SCC 739, by the respondent-department to buttress its argument to not to consider the disclosure of the petitioner Trust to be full and true for the Trust filed the settlement application with delay, informing of undisclosed income before the Income Tax Settlement Commission. To the contrary; the observations made by the Apex Court of the land in the case of Ajmera Housing (34 of 43) [CW-6896/2018] (supra), cannot be construed to be a ratio decidendi in the factual matrix of the case at hand. In the case of Ajmera Housing (supra), there were multiple disclosures made by the assessee at different stages of the proceedings before the Income Tax Settlement Commission. Further, no full and true disclosures were made about the receipts and revision of receipts as well. On the other hand, facts of the case at hand are entirely different and distinguishable. 33. The Income Tax Settlement Commission made an error while adjudicating upon the rectification application filed by both the parties vide order dated 30th June, 2017. The Income Tax Settlement Commission, arbitrarily and irrationally based its adjudication on the order dated 16th Jan, 2018, made by the respondent-department. Thus, modification of the original order dated 30th Jun, 2017, on that count is completely perverse and contrary to the provisions of the law. The Income Tax Settlement Commission should not have relied upon the arbitrary and illegal order dated 16th Jan, 2018, made by the respondent-department, while considering the rectification applications that were filed regarding the order dated 30th June, 2018. The Commission should have kept in mind, the petitioner Trust’s status at the time when the original order dated 30th June, 2018 was made and not the status subsequent to the order dated 16th Jan, 2018, made by the respondent-department. Thus, at the time of the passing of the original order, the petitioner Trust was a registered entity under section 12A and withdrawal of the approval accorded under section 10 (23C) (v) & 10 (23A) (via) of the Act of 1961, as a (35 of 43) [CW-6896/2018] consequence of cancellation or withdrawal of the same; cannot have retrospective effect as has been discussed earlier. It is therefore, evident from the factual matrix of the case at hand, that the petitioner Trust, is entitled to all the benefits under section 11 (1) (a) of the Act of 1959, including set off or carry forward of losses to the subsequent year(s) and depreciation, in respect to expenses incurred for construction of educational buildings in terms and tune with the objects of the Trust. The view aforesaid finds support from the opinion in the case of CIT V. Institute of Banking Personnel Selection (IBPS) (2003) 131 Taxman 386 (Bombay), holding thus: “Whether depreciation could be denied to the assessee, as expenditure on acquisition of the assets had been treated as application of income in the year of acquisition? It was held by the Bombay HC that section 11 of the Act makes provision in respect of computation of income of the trust from the property held for charitable or religious purposes and it also provides for application and accumulation of income. On the other hand, section 28 of Act deals with charge ability of income from profits and gains of business and section 29 provides that income from profits and gains of business shall be computed in accordance with section 30 to section 40C that covers section 32(1) which provides for depreciation in respect of building, plant and machinery. Here, the Court rejected the argument of revenue that section 32 of the Act was the only section granting benefit of deduction on account deprecation, and held that normal depreciation can be considered as a legitimate deduction in computing the real income u/s 11(1) of the assessee on general principles (i.e. normal commercial manner) of the Act after providing for allowance for normal depreciation and deduction thereof from gross income of the trust although the trust may not be carrying on any business and the assets in respect whereof depreciation is claimed may not be business assets. Further, the Court also went on to mention that the legislature, realizing that there was no specific provision In (36 of 43) [CW-6896/2018] this behalf in the Act, has made amendment in section 11(6) of the Act vide Finance Act No. 2/2014 which became effective from the Assessment Year 2015-16. The Delhi High Court has taken the view and rightly so, that the said amendment is prospective in nature. Further, once assessee is allowed depreciation, he shall be entitled to carry forward the depreciation as well.” 34. In the case of Director of Income Tax Vs. Sri Belimatha Mahasamsthana Socio Cultural and Educational Trust (2011) 336 ITR 694, para 10 reads thus: “10. As far as the amount of Rs. 14,36,500 which is claimed by the Assessee in the name of corpus donation is concerned, though the Assessee was not able to give the names and addresses of the donors as well as the mode of payments etc., the fact that such amount has been received by the trust is not in dispute. The Tribunal in fact has not accepted the contention of the Assessee that the said donation has to be treated as corpus donation. On the other hand, the Tribunal has held that the said amount since it has come from third parties the same would have to be treated as income. However, if the said amount is utilised or extended for charitable purpose, then the said amount would be eligible for exemption under Section 11(1)(d) of the Act, The Tribunal rightly rejected the claim of the Assessee to treat the said amount as corpus donation and has correctly in our view granted the relief under Section 11(1)(d) on this aspect of the matter also.” 35. In the case of Commissioner of Income Tax Vs. Shri Plot Swetamber Murti Pujak Jain Mandal (1995) 211 ITR 293, para 9 reads thus: “9. In view of the two decisions of this court above referred to, it is the well-settled position that income derived from the trust property has to be determined on commercial principles and if commercial principles for determining the income are applied, it is but natural that the adjustment of the expenses incurred by the trust for charitable and religious purposes in the earlier year against income earned by the trust in the subsequent year will have to be regarded as application of income of the trust for charitable and (37 of 43) [CW-6896/2018] religious purposes in the subsequent year in which such adjustment has been made having regard to the benevolent provisions contained in Section 11 of the Act and will have to be excluded from the income of the trust under Section 11(1)(a) of the Act. In view of the above discussion, we are of the opinion that, on the facts and in the circumstances of the case, the assessee is entitled to carry forward expenses for set off in the subsequent year. The question referred to us is, therefore, answered in the affirmative, i.e., in favour of the assessee and against the Revenue.” 36. In the case of Director of Income Tax Vs. Raghuvanshi Charitable Trust (2010) SCC Online Del 2488, paras 9 to 10 reads thus: “8. It would be fruitful to refer to the discussions contained in Institute of Banking (supra), Per. Hon'ble Mr. Justice S.H. Kapadia, which is advanced before us by the learned Counsel for the Revenue to repel the same in the following words: “Now coming to question No. 3, the point which arises for consideration is: whether excess of expenditure in the earlier years can be adjusted against the income of the subsequent year and whether such adjustment should be treated as application of income in the subsequent year for charitable purposes? It was argued on behalf of the Department that expenditure incurred in the earlier years cannot be met out of the income of the subsequent year and that utilization of such income for meeting the expenditure of earlier years would not amount to application of income for charitable or religious purposes. In the present case, the Assessing Officer did not allow carry forward of the excess of expenditure to be set off against the surplus of the subsequent years on the ground that tin the case of a charitable trust, their income was assessable under self-contained code mentioned in Section 11 - 13 of the Income Tax Act and that the income of the charitable trust was not assessable under the head \"Profits and gains of business\" under Section 28 in which the provision for carry forward of losses was relevant. That, in the case of a charitable trust, there was no provision for carry forward of the excess of expenditure of earlier years to be adjusted against income of the subsequent years. We do not find any merit in this argument of the Department. Income derived from the trust property has also got to be computed on commercial principles and if commercial principles are applied then adjustment of expenses incurred by the trust for charitable and religious purposes in the earlier years against the income (38 of 43) [CW-6896/2018] earned by the trust in the subsequent year will have to be regarded as application of income of the trust for charitable and religious purposes in the subsequent year in which adjustment has been made having regard to the benevolent provisions contained in the Section 11 of the Act and that such adjustment will have to be excluded from the income of the trust under Section 11(1)(a) of the Act. Our view is also supported by the judgment of the Gujarat High Court in the case of CIT v. Shri Plot Swetamber Murti Pujak Jain Mandal MANU/GJ/0259/1993 : [1995] 211 ITR 293. Accordingly, we answer question No. 3 in the affirmative, i.e., in favour of the assessee and against the Department.” 9. It is clear from the above that as many as five High Courts have interpreted the provision in an identical and similar manner. Learned Counsel for the Revenue could not show any judgment where any other High Court has taken contrary view. Since we are in agreement with the view taken by the aforesaid High Court, we answer these questions in favour of the assessee and against the Revenue. 10. Before we part with, we may point out that learned Counsel for the assessee in ITA No. 589/2008 and ITA No. 25/2009 submitted that the questions involves in these two appeals are purely academic. In these cases even in the current year, more than 75%/85% (as the case may be) of the income was applied for charitable purpose and therefore, no set off was required to be claimed. Further, it is not necessary to go into this issue once we have decided the question of law in favour of the assessee.” 37. Although, High Court is not required to interfere with the order dated 30th June, 2017 of the Income Tax Settlement Commission, but, in the circumstance where there is a perverse finding by the Income Tax Settlement Commission, which is apparent on the face of it, then such a finding can be set aside or rectified. In the case of Chevoit Company Ltd. Vs. Commissioner of Income Tax (2011) SCC Online Cal 1106, the Apex court of the land, held thus: “After hearing Mr. Bajoria, the learned senior Advocate appearing on behalf of the appellant and Mr. Shome, the learned senior Advocate appearing on behalf of the Revenue, (39 of 43) [CW-6896/2018] we find that the assessee in support of his claim produced details of vouchers and other document in support of the claim in respect of those three items. It appears that the Assessing Officer did not at all consider those documents nor did he find those documents to be manufactured or otherwise not relevant and on the basis of a mere guesswork, deducted the amount. Similarly, the Commissioner of Income-tax (Appeals) after finding that the approach of the Assessing Officer was erroneous, allowed the entire claim of the assessee without verifying those documents and the Tribunal below took a midway by modifying both the orders without, however, any reference to any of the materials produced by the assessee.” 38. The opinion of the Apex Court of the land is thus, applicable on all fours of the matter at hand, and the findings of the Income Tax Settlement Commission which are perverse, are therefore required to be interfered with and adjudicated upon by this court. 39. The exclusion of the investment made by the petitioner Trust in the TV Channel appears to be one such perversity. On a glance of the facts and materials available on record of the case at hand, it is evident that the said TV Channel was acquired by the petitioner Trust for educational training in 'Journalism' and 'Mass Communication', as it was offering courses for graduation and post-graduation in 'Mass Communication' and 'Journalism'. The Apex Court of the land in the case of Maharishi Mahesh Yogi Vedic Vishwavidyalaya Vs. State of Madhya Pradesh and Others (2013) 15 SCC 677, held thus: “77. Having considered the various submissions and the analysis made based on detailed circumstances leading to the intricacies of Vedas, the field it covers, as noted by the Division Bench, as well as the concept of education, which has been explained by very many learned and prominent persons to whom we have made detailed references to in the earlier part of our judgment, we are of the considered view that education is the base for every other subject to be taught in (40 of 43) [CW-6896/2018] the process of learning. Therefore, establishment of the University as the Preamble goes to state was to provide for education in the forefront. It will be appropriate to hold that such a provision for education in so far as the Appellant University was concerned, should concentrate and focus in the prosecution of research in Vedic learning and practices and to provide for matters connected therewith or incidental thereto. While holding so, it will have to be stated in uncontroverted terms that merely because such specific reference was made to prosecution of research in Vedic learnings, it could be held that the imparting of education in the Appellant University should be restricted to the said subject alone and not in any other subject. 78. In our considered view, such a narrow interpretation would be doing violence to the very basic concept of education, and would create a serious restrain on the University, where, imparting of education is the primary objective and dealing with any specific subject may be for enabling any one to acquire special knowledge on such subjects. In other words, any such restrictive interpretation would go against the basic tenets of the concept of education, which no Court can venture to state.” 40. Applying the principle aforesaid, it is evident that education cannot be confined to the meaning of one subject only and keeping this precedent in mind, it is concluded that the said investment in TV Channel shall be considered to be in consonance with the objectives and in the purview of the objects of the Trust. 41. Now I shall deal with the case law, referred to and relied upon by the learned counsel for the respondents. 42. In the case of Sinhagad Technical Education Society Vs. Income Tax (2012) 343 ITR 23 (Bombay High Court), it was held that the assessee society did not carry out any activity since 2001 and the school building was given on lease to another society for the purpose of running the school, which did not amount to carrying out the activities of the Trust or activities done (41 of 43) [CW-6896/2018] in accordance of the objectives of the Trust. Furthermore, it was also held that the assessee was not filling returns of income regularly. To the contrary, in the case at hand, no such contentions or allegations have been asserted by the respondent-department. 43. The cancellation of the registration of the petitioner Trust under section 12A of the Act of 1961, with retrospective effect; is arbitrary and contrary to the provisions of the Act of 1961. The Commissioner of Income Tax has been empowered to initiate the steps for cancellation of the registration of a Trust in terms of text of section 12AA (3) of the Act of 1961, but the legislation had no intention of its applicability with retrospective effect otherwise that would have been clearly specified in the said provision. The interpretation of the said provision has to be harmonious rather than being vindictive or instigating or creating fear in the assessees qua the Income Tax Department. Be thus as it may, in the matter at hand, the order dated 16th Jan, 2018, passed by the Commissioner of Income Tax, appears to be more vindictive, as the order dated 30th June, 2017, of the Income Tax Settlement Commission went against them. Cancellation was required to be made according to the due process of law. 44. In the case of U.P. Distillers Association Vs. Commissioner of Income Tax: (2017 399 ITR 143, the contention that the search was conducted in respect of his own premises and not that of the assessee/association; was repelled for General Secretary-Mr. R.K. Miglani, conducted the assessee’s activities from the same premises; this is not the case at hand. That apart, opinion in the case of Radico Khaitan and Mohan (42 of 43) [CW-6896/2018] Meakin was not relied for that matter arose in the backdrop of decision of Settlement Commission and findings recorded by Settlement Commission, which are statutorily final and necessarily sacrosanct unless suffered with perversity on the face of record. Thus, the factual matrix of the case at hand is entirely different and distinguishable. Hence, the opinion has no application to the facts of the instant matter at hand. 45. In the case of Navodaya Education Trust Vs. Union of India (2018) 405 ITR 30; so referred to by the counsel for the respondents, the activities of the trust were horrendous as held by the Court as well and there were clear violations and illegalities on the face of it. The finding of Rs. 86,10,00,000/- (Rupees Eighty Six crore Ten lacs), shown in the books of record as TRF i.e. Transfer to Trustees, for building up their personal assets and other pay offs, clearly reflected the running of the said trust like a business establishment. To the contrary, in the case at hand, no such allegations were made by the respondent-department to the Income Tax Settlement Commission. Thus the facts of the case referred to and relied upon are not similar to the one at hand. Considering the issue of capitation fee and charges, the Income Tax Settlement Commission, on a consideration of the evidence on this issue, came up with the conclusion to allow it to the corpus of the petitioner Trust. 46. In the case of Sri Vidyaranya Seva Sangha Vs. Commissioner of Income Tax, ITA No. 702/Bang/2014 (ITAT Banglore), the facts are similar to the matter discussed (43 of 43) [CW-6896/2018] above, Sinhagad Technical Education Society Vs. Income Tax, thus no further explanation on the same issue is required. 47. For the reasons and discussions aforesaid and in view of the singular factual matrix of the case at hand; the writ petition of the petitioner trust, merits acceptance and is hereby allowed. 48. In the result, the petitioner-Trust is entitled to the benefit of Section 11(1) (a) of the Rajasthan Public Trust Act, 1959 and for carry forward of unabsorbed losses as well as benefit of amount spent on construction of new educational buildings. The petitioner-Trust is also entitled for benefit of amount incurred in acquisition of TV Channels and quashment of telescoped benefit of cash expenses. 49. Accordingly, orders dated 30th June, 2017 and 8th February, 2018, shall stand modified to the extent aforesaid. The respondents are directed to re-compute the total income of the petitioner-Trust in compliance of the directions supra, within two months from the date a certified copy of this order is presented. 50. As a consequence of foregoing discussions and adjudication on writ application of the petitioner-Trust (Writ Petition No.6896/2018); the writ petition instituted by the respondent-Department (Writ Petition No.11521/2018), has to be dismissed, and is, hereby dismissed. 51. However, in the facts and circumstances of the matters at hand, there shall be no order as to costs. A copy of this order be placed in each of the file. (VEERENDR SINGH SIRADHANA),J Pcg/171-172 "