Appeal details
Counselvise Citation
[2022] 106 COUNSELVISE.COM (IT) 9209 (ITAT-CHENNAI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
7 year(s) 7 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
07-07-2022
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
B
Assessment Year
2010-2011
Appeal Filed On
30-06-2015
Judgement Text
आयकर अपीलीय अिधकरण, ‘बी’ ᭠यायपीठ, चे᳖ई IN THE INCOME TAX APPELLATE TRIBUNAL ‘B’ BENCH, CHENNAI Įी महावीर ͧसंह, उपाÚय¢ एवं Įी मनोज क ु मार अĒवाल, लेखा सदèय के सम¢ BEFORE SHRI MAHAVIR SINGH, VICE PRESIDENTAND SHRI MANOJ KUMAR AGGARWAL, ACCOUNTANT MEMBER आयकर अपील सं./ITA Nos.: 1532, 1533 & 1534/CHNY/2015 & 2720/CHNY/2017 िनधाᭅरण वषᭅ /Assessment Years: 2009-10, 2010-11, 2011-12 & 2012-13 M/s. The Thanthi Trust, 86, EVK Sampath Road, Chennai – 600 007. PAN: AAATT0038R v. The JCIT (OSD)(Exemptions)II/ DDIT(Exemptions-II(i/c) / JDIT (Exemptions) / ACIT (Exemptions) Chennai – 34. (अपीलाथᱮ/Appellant) (ᮧ᭜यथᱮ/Respondent) अपीलाथᱮ कᳱ ओर से/Appellant by : Shri V. S. Jayakumar, Advocate ᮧ᭜यथᱮ कᳱ ओर से/Respondent by : Shri Guru Bashyam, CIT स ु नवाई कȧ तारȣख/Date of Hearing : 15.06.2022 घोषणा कȧ तारȣख/Date of Pronouncement : 08.07.2022 आदेश /O R D E R PER MAHAVIR SINGH, VICE PRESIDENT: These four appeals by the assessee are arising out of the orders passed by the Commissioner of Income Tax (Appeals)-17, Chennai in ITA No.348/11-12, 14 & 1232/13-14, order dated 09.03.2015 & ITA No.39/2015-16, order dated 14.09.2017. The assessments were framed by the JCIT(OSD)(Exemptions) II / DDIT(Exemptions)-II(i/c)/JDIT(Exemptions)/ACIT(Exemptions), for 2 ITA Nos.1532 to 1534/Chny/2015 & 2720/Chny/2017 the assessment years 2009-10, 2010-11, 2011-12 & 2012-13 u/s.143(3) of the Income Tax Act, 1961 (hereinafter the ‘Act’) vide orders dated 21.12.2011, 05.03.2013, 14.02.2014 & 18.03.2015 respectively. 2. The only issue in these four appeals of assessee is as regards to the orders of CIT(A) confirming the action of AO denying the benefit of exemption u/s.11 of the Act by invoking the proviso to section 2(15) of the Act, as applicable w.r.e.f. 01.04.2009 as amended by the Finance Act, 2010. The facts and circumstances are identical in all the four appeals and the issue is identical. Hence, will take the facts and grounds raised for assessment year 2009-10 in ITA No.1532/Chny/2015. The relevant grounds raised by assessee read as under:- (1) The order of the Commissioner of Income Tax Appeals 17 is against the provisions of law and contrary to the facts and circumstances of the Case. (2) The Commissioner of Income tax Appeals 17 erred in following the order of the Assessing Officer and is not correct in interpreting Section 2(15) of the Income Tax Act as applicable to the facts and circumstances of the appellant case. (3) The Commissioner of Income tax Appeals 17 has erred in not following the circulars, clarification issued by the Government and also did not appreciate that the appellant is eligible for exemption based on the decision of the Supreme Court in appellant's own case reported in 137/735 and 247/785(Sc) (4) The Commissioner of Income tax Appeals 17 should have 3 ITA Nos.1532 to 1534/Chny/2015 & 2720/Chny/2017 appreciated the findings of the Jurisdictional High Court that the entire property were held under trust and or under legal obligation was the business itself and the entire income from the business had to be utilized for the various charitable objects set out in the schedule to the decree of the High Court and therefore could not be denied of the benefit of Exemption under the Tax Act by devoting the entire surplus income to education. (5) The Commissioner of Income tax Appeals 17 is not correct in applying the proviso and the expenditure limit to the appellant's case while the appellant fulfilled the main provisions and the application of income to warrant the income eligible for exemption as per the Act. (6) It is humbly submitted that the appellant holds property under trust is the business itself and the business is carried on only and exclusively, for carrying out the charitable objects set out in the schedule in C.S.NO.90 of 1961 as approved by the High Court Order and as such the order of the Commissioner of Income Tax (Exemptions) is erroneous and void and without jurisdiction and liable to be set aside. (7) It is humbly prayed and submitted that the surplus income was utilized for educational purpose and running of schools and colleges and all activities are within the jurisdiction of the same authority and administrated by the same person and therefore the order is illegal and without jurisdiction and void therefore liable to be set aside. 3. Brief facts are that the instrument of declaration of trust was made on 01.03.1954 between Shri S.B. Adityan (Founder) of the First Part and Shri S.T. Adityan and Shri B.R. Adityan of the Second Part. Shri S.B. Adityan started a daily newspaper known as Dina Thanthi or Daily Thanthi in 1942. As per the instrument of trust dated 01.03.1954, the founder created a trust called “Thanthi Trust" having the following properties described in the schedule settled upon it. 4 ITA Nos.1532 to 1534/Chny/2015 & 2720/Chny/2017 1. The newspaper known as Dina Thathi or Daily Thanthi at present being published as a daily newspaper in Tamil language together with the goodwill thereof, the head office of the said newspaper being presently situated at No.60, Kutcherry Road, Mylapore, Madras, as a going concern, with all its assets and liabilities. 2. All the printing machinery, printing types, furniture and accessories of the newspaper known as Dina Thanthi or Daily Thanthi above named. The purposes for which the trust was created are a)To establish the Dina Thanthi or Daily Thanthi as an organ of educated public opinion for the tamil reading public. b)To disseminate news and to ventilate opinion upon all matters of public interest through the said newspaper; and c)To maintain the said newspaper and its press in an efficient condition devoting the surplus income of the said newspaper and its press after defraying all expenses, in improving and enlarging the said newspaper and its services and placing the same on a footing of permanency. 3.1 M/s. Thanthi Trust was granted registration u/s 12A(a) of the I.T. Act vide order of the CIT, Central-II, Madras in C.No.1802/1/89-90/Cent-II dated 30.06.1989. Subsequently after serving a show cause notice dated 25.10.2011 on the assessee trust and after adhering to and fulfilling the principles of natural justice, the DIT(E), Chennai, passed an order dated 08.12.2011 u/s 12AA(3) of the Act cancelling the registration granted to the assessee trust u/s 12A(a) of the Act. Subsequent to cancellation of registration by DIT(Exemption), the assessee carried the matter before Hon’ble Madras High Court against the order of Tribunal in ITA No.356/Mds/2010, order dated 08.05.2018 and the Hon’ble High Court noted the facts in para 2 as under:- 5 ITA Nos.1532 to 1534/Chny/2015 & 2720/Chny/2017 2. The assessee is a public charitable Trust, filed an application dated 20.07.1973 for registration under Section 12A(a) of the Act before the Commissioner of Income Tax, Central-II, Chennai [CIT(A)]. The assessee Trust was constituted by a Memorandum of Association dated 01.03.1954 and subsequently by Supplementary Deed dated 28.06.1961. The CIT(A) by order dated 30.06.1989, granted registration to the assessee Trust under the said provision. Proceedings were initiated by the Director of Income Tax (Exemptions) (‘DIT(E)’) under Section 12A(a)(iii) of the Act, after noting that the assessee Trust was granted registration by the CIT(A) under Section 12A(a), by order dated 30.06.1989. The DIT(E) examined the records and noted the objects and activities of the assessee Trust. It was stated in the records that the assessee does not run any school or colleges, though such purposes have been formulated as the main objects of the Trust, the Trust engages itself in the business of publishing the Tamil news business commitments ‘Dina Thanthi’ and also job works for printing are undertaken as business commitments. The surplus of the income from the business after defraying all the expenses is utilized for donation to another Trust, ‘Aditanar Educational Trust’ only. The DIT(E) after analysis of the gross receipts of the Trust and the surplus of income from business and the donation to the ‘Aditanar Educational Trust’ for four assessment years, i.e., from 2006-07 to 2009-10, held that the only charitable activity done by the assessee is the donation to the other Trust year after year. The DIT(E) noted that the other Trust is running educational institution, it apparently may be covered by the object namely helping to run school or college or other educational institution for teaching arts and science as provided in the second object of the assessee Trust. The DIT(E) held that the assessee has not carried any other objects as provided in the Deed of Trust or Supplementary Deed. After referring to the definition of -charitable purpose- as defined in Section 2(15) of the Act, it was held that the activity of the assessee Trust may not be covered as relief to the poor, medical relief, preservation of environment and preservation of monuments or places or objects of artistic or historic interest and the advancement of any other object of general public utility. It was held that the activity of the assessee has to be examined as to whether it can be said that the assessee Trust is existing for the purpose of education or advancement or any other general public utility. The DIT(E) framed the question for consideration, whether the assessee Trust is engaged in educational activity or whether it is only doing business. It was held that the object of the Trust alone does 6 ITA Nos.1532 to 1534/Chny/2015 & 2720/Chny/2017 not make the Trust eligible for exemption; the activities are important in considering whether the Trust is eligible for exemption. 3.2 The Hon’ble High Court framed the following question:- Whether the Tribunal was right in law in holding that the appellant trust is not eligible for exemption under Section 12A of the Income Tax Act, 1961 without considering the merits of the case in a proper manner? and the Hon’ble High Court granted registration and the relevant final finding by Hon’ble High Court in paras 87 to 90 held as under:- 87.Before we conclude, it would be relevant to take note of the CBDT instruction No.1132, dated 05.01.1978 with regard to the availability of exemption in hands of charitable Trusts of amounts paid as donation to other charitable Trusts. The CBDT has instructed as follows:- “The issue has been considered by the Board and it has been decided that as the law stands at present, the payment of a sum by one charitable trust to another for utilisation by the donee trust towards its charitable objects is proper application of income for charitable purpose in the hands of the donee trust; and the donor trust will not lose exemption under Section 11 of the Income-tax Act, 1961, merely because the donee trust did not spend the donation during the year of receipt itself. The above position may kindly be brought to the notice of all officers working your charge.”” 88.Circular No.1 of 2011 dated 06.04.2011 issued by the CBDT deals with various aspects and clause 7 of the circular deals with -cancellation of registration obtained under Section 12A of the Act-, which reads as follows:- “7.Cancellation of registration obtained under Section 12A 7.1. Section 12AA provides the procedure relating to registration of a trust or institution engaged in charitable activities. Section 12AA(3) previously provided that if the activities of the trust or institution are found to be non-genuine or its activities are not in accordance with the objects for which such trust or institution was established, the registration granted under Section 12AA can be cancelled by the Commissioner after providing the trust or institution an opportunity of being heard. 7 ITA Nos.1532 to 1534/Chny/2015 & 2720/Chny/2017 7.2. The power of cancellation of registration is inherent and flows from the authority of granting registration. However, judicial rulings in some cases have held that the Commissioner does not have the power to cancel the registration which was obtained earlier by any trust or institution under provisions of Section 12A as it is not specifically mentioned in Section 12AA. 7.3. Therefore, Section 12AA has been amended to provide that the Commissioner can also cancel the registration obtained under Section 12A as it stood before amendment by Finance (No.2) Act, 1996. 7.4. Applicability -– This amendment has been made applicable with effect from 1st June, 2010 and shall accordingly apply for assessment year 2011- 12 and subsequent assessment years.” 89. Circular No.1 of 2011 will clearly show that the amendment brought out in Section 12AA is applicable with effect from 1st June, 2010, i.e., from the assessment year 2011-12 and subsequent years. Therefore, the retrospective cancellation of the registration of the assessee is wholly without jurisdiction and the assessee cannot be vexed repeatedly on the same issue and reason for invoking the power under sub-Section (3) of Section 12AA is wholly unsustainable, without any basis and suffers from perversity writ large on the face of the order. Unfortunately, the Tribunal misdirected itself by addressing a wrong question without taking note of the earlier decisions rendered in the assessee’s own case. The DIT(E) has not recorded his satisfaction that the activities of the assessee Trust are not genuine, nor he has made any observation that the assessee had carried out activities which are not covered in the Trust Deed or in the judgment and decree in C.S.No.90 of 1961. The decisions relied on by the Revenue, in fact, would go to assist the case of the assessee, rather the Revenue. The DIT(E) committed gross error in restricting the meaning of the word ‘education’ and did not appreciate the effect of the decision in Loka Shikshana Trust (supra), which was considered in several other subsequent decisions. Above all, the DIT(E) and the Tribunal violated the rule of consistency by showing utter disregard to the judgments of the Hon’ble Supreme Court and this Court in the assessee-s own case on the very same subject and the orders of the DIT(E) and the Tribunal have to be termed to be ‘utterly perverse’. The Tribunal lost sight of the distinction between a claim for registration under Section 12AA and a claim for exemption under Section 8 ITA Nos.1532 to 1534/Chny/2015 & 2720/Chny/2017 11 of the Act. To say the least, the Tribunal-s justification would amount to judicial indiscipline for not following the decision of the Hon’ble Supreme Court and this Court in the assessee-s own case. The DIT(E) failed to adhere to the instructions issued by the CBDT which is binding on the DIT(E). As observed earlier, the recent pandemic has taught very many lessons and one of which is that, mode and method of education cannot be in any manner restricted, but should be given the widest meaning that is possible. 90. Thus, for all the above reasons, we hold that the assessee is entitled to succeed. 4. Before this decision of Hon’ble High Court of Madras came in October 29, 2020, assessments for all these four assessment years were completed denying exemption u/s.11 of the Act, on the same reasoning that the DIT(Exemptions), Chennai has cancelled the registration granted to the assessee trust u/s.12A(a) of the Act, vide order dated 08.12.2011. The AO and the CIT(A), in all the four assessment years, stated that the applicability of proviso to section 2(15) of the Act noted that the assessee is not pursuing the object of education by running its own education institutions and even it is not existing wholly for charitable purposes as it did not engage itself directly in any charitable activity for relief of the poor or education or medical relief or in the advancement of any other object of general public utility without involving the carrying on of any activity in the nature of trade, commerce or business or any activity of rendering any service in relation to any trade, commerce or 9 ITA Nos.1532 to 1534/Chny/2015 & 2720/Chny/2017 business without a cess or fee or any other consideration. The CIT(A) by identically worded orders denied the claim of exemption u/s.11 & 12 or section 10(23C) of the Act by observing in para 4.7, 4.8 & 4.9 as under:- 4.7 The appellant has been giving away every year crores of Rupees to Aditanar Educational Institutions as donation and calling the same as application of income within the meaning of sec. 11(1) of the I.T. Act, 1961. According to the appellant 'donation' is equivalent to application. But donation and 'application' are two different words having different meanings. The meaning intended to be attributed to the word 'application’ by the statute in legal perlance is "the action of putting something into operation". Whereas ‘donation' is something which ‘someone gives to other organization or charity.’ Under section 11, the Income-tax Act intends to give tax exemption to the income of the trust for charitable or religious purposes to the extent of its application to such purposes in India. According to the I.T. Act the 'income' should be 'applied' and not given away to others. By 'application' the income is put into utility operation of the charitable purposes in India. By putting the income into utility operation the trust shall be able to control, monitor and supervise the pursuance of charitable activities for which purpose the trust exists. Whereas in the case of 'donation' the trust who gives such donation shall not have any control, or supervision over the manner and discipline in which the income donated is used in the accomplishment of the desired charitable purposes. Hence the donation given by the appellant to Aditanar Educational Institution cannot be treated as 'application of income' within the meaning of sec.11 of the Act and hence the exemption claimed cannot be granted on this ground also. At the most the appellant is entitled for deduction u/s 80G of the Act in respect of donation given to the Aditanar Educational Institution provided the recipient is granted approval u/s 80G(5) of the Act. It could also be observed during the proceedings that Shri Aditanar was the chairman-cum-trustee of Aditanar Educational Trust and simultaneously the Director-cum-trustee of the appellant trust. Thus a commonality in trusteeship is apparently seen which helps to infer that 10 ITA Nos.1532 to 1534/Chny/2015 & 2720/Chny/2017 the common trustee would possibly be the prohibited beneficiary u/s 13(1)(c)(i) read with sec. 13(3)(e) of the Act. 4.8 The appellant claims that it is running the business of publishing the newspaper "Dina Thanthi" and job work of printing as incidental to the attainment of the charitable objectives. This appears to be very strange. The business of the appellant was started in 1942 and the Thanthi Trust came into existence in March 1954 with the sole purpose of running the newspaper publishing and printing business. The original trust deed dated 01.03.1954 which enshrines the principal and dominating objects of the appellant does not indicate therein any kind of charitable purpose. Hence the appellant was prevented from instituting any claim for exemption u/s 11 and 12 of the Act. The situation continued till a supplementary deed of trust was introduced in 28.06.1961 which accommodated. Without prejudicing the original, principal and dominating purposes of the deed of trust dated 01.03.1854 - six objects of charitable purposes to abate the purportedly staged court case by S.T. Adityan and others against the founder of the appellant trust Shri S.B. Adityan. So it is apparent from the aforesaid facts that the six charitable objects though not ever accomplished, came into existence only as incidental to the main business of the appellant and not vice-versa as stated by the appellant. It is an undisputable and undeniable fact that the appellant cannot at any cost afford to jeopardize its main and primary business of publishing newspaper “Dina Thanthi” and printing job work. Hence with the intention of securing perpetual and profitable existence to its primary business of publishing newspaper and printing the appellant caused the incidence of the six so called charitable objects which are only kept in nominal existence on paper as a ritual for covering itself with the veil of charitable character. Hence the argument of the appellant that it is running the business of publishing the newspaper ‘Dina Thanthi’ and job work of printing as incidental to the attainment of charitable objectives cannot be accepted for the reasons discussed above. 4.9 As the appellant trust is not eligible to claim exemption u/s 11 and 12 or 10(23C) of the Act, obviously its case needs to be considered for deduction of donations u/s 80G of the Act in computing the total income. 11 ITA Nos.1532 to 1534/Chny/2015 & 2720/Chny/2017 In this case the entire donation was given to M/s. Aditanar Educational Institution which does not enjoy the privilege u/s 80G of the I.T. Act. Hence the donation can also not be deducted to arrive at the total income. 5. In the result, the appeals of the appellant are dismissed for all the assessment years in question i.e. Assessment Years 2009-10 to 2011-12. Aggrieved, assessee came in appeal before the Tribunal in all the years. 5. Before us, ld.counsel for the assessee heavily relied on the decision of Hon’ble Madras High Court in assessee’s own case i.e., Thanthi Trust vs. DIT(Exemptions) in T.C.A. No.822 of 2018, order dated 29.10.2020, wherein the Hon’ble High Court has discussed the issue and held that where assessee trust was engaged in business of publishing newspaper, though assessee did not run any school or college, surplus of income from business was utilized for donation to a particular assessee-trust which was running educational institution, the amounts which were earned by assessee trust was spent for charitable purposes and it also falls under the category of education in term of proviso to section 2(15) of the Act. The ld.counsel for the assessee stated that Hon’ble High Court in paras 44 to 46 has thoughtfully considered that the assessee is in 12 ITA Nos.1532 to 1534/Chny/2015 & 2720/Chny/2017 the field of education and the relevant paras 44 to 46, he referred reads as under:- 44.In the case of Thanthi Trust vs. CBDT & Ors. [(1995) 213 ITR 0639], the assessee filed a bunch of writ petitions to quash Circular No.372, dated 08.12.1983 issued by the CBDT and the orders of the Department denying exemption under Section 11 of the Act to the assessee Trust for the assessment years 1984-85 to 1991-92 and, to direct the Department to consider the assessee’s claim for exemption under Section 11, independent of Circular No.372, dated 08.12.1983. It was held that inasmuch as the business carried on by the assessee is itself held under ‘Trust for public charitable purposes’ and the business is carried on only for the purposes of carrying on the charitable objects as found by the Hon’ble Division Bench in 137 ITR 735 (Madras), the provisions of sub’Section (4A) of Section 11 cannot have any application. The appeal filed by the Revenue against the decision in 137 ITR 735 (Madras), in the case of CIT vs. Thanthi Trust [(1999) 239 ITR 0502] was considered by the Hon’ble Supreme Court wherein, it was held that the Aditanar College was run, not by the assessee Trust, but by another registered charitable society and in such circumstances, the High Court was right in its conclusion which it had arrived at holding that no part of the Revenue’s case, at any point of time that the credit entries made in the assessee’s books of account were not genuine or true or that they were mere make-believe or bogus. Further, it was observed that it was also not brought to the notice of the Hon’ble Supreme Court that the ITO doubted the said entries and called upon the assessee to produce the accounts of the College and that the assessee failed to produce the same. With these observations, the appeal filed by the Revenue was dismissed. Thus, in the light of the above decisions in the assessee’s own case, it will be too late in the day for the Revenue to now contend that the activities of the assessee are not charitable purposes. The attempt of the Revenue is to rake up a settled issue with an attempt to reopen the entire matter under the guise of introduction of the provision of Section 2(15), which defines ‘charitable purpose’. Such attempt is wholly unsustainable and impermissible under law. The Revenue is estopped both on law as well as on facts from raising any contention as mentioned by the DIT(E) in its order dated 08.12.2011. The said order is an outcome of wrong understanding of the legal provisions, the effect of the judgment in C.S.No.90 of 1961 and the series of litigations between the Department and the assessee Trust all of which were in favour of the assessee. Thus, on the 13 ITA Nos.1532 to 1534/Chny/2015 & 2720/Chny/2017 facts of the case, the principle of estoppel will hit the Revenue and they are not entitled to state that the assessee Trust is not carrying on a charitable activity and thus, it is not in the field of education, etc. 45. Having steered clear of this issue based on the decisions rendered by the Hon’ble Supreme Court in the assessee’s own case, we now move on to consider the other decisions on what is the meaning of ‘education’. We have seen that the DIT(E) in its order dated 08.12.2011, has made an observation that the word ‘education’ has not been defined under the Act and therefore, he would refer to the decision in the case of Victoria Technical Institute (supra), Oxford University Press (supra), Sorabji Nusserwanji Parekh (supra) and Loka Shikshana Trust. 46. The argument of Mr.V.S.Jayakumar, is that the decision in Loka Shikshana Trust (supra) was rendered by a Three Judge Bench of the Hon’ble Supreme Court. As per the observation of Hon’ble Mr.Justice M.H.Beg, as could be seen from paragraph 32 of the judgment, it has been observed that although the term ‘education’, as used in Section 2(15) of the Act, seems wider and more comprehensive than education through educational institutions, such as universities, whose income is given an exemption from income tax separately under Section 10(22) provided the educational institution concerned does not insist “for the purpose of profit”, yet it seems that educational effects of a newspaper or publishing business are only indirect, problematical and quite incidental so that, without imposing any condition or qualification upon the nature of information to disseminate or material to be published, the mere publication of news or views cannot be set to serve a purely or even predominantly education purposes in its ordinary usual sense. Hon’ble Mr.Justice H.R.Khanna in paragraph 41 of the judgment has held that what education connotes in clause (15) of Section 2 is the process of training and developing the knowledge, skill, mind and character of student by normal schooling. It is submitted that there is no separate view recorded by Hon’ble Mr.Justice A.C.Gupta, who was the third Hon’ble Judge in the Three Judge Bench. Therefore, it is submitted that one of the Hon’ble Judges of the Three Judge Bench has given a wider meaning to the word ‘education’ occurring in clause (15) of Section 2 whereas, the other Hon’ble Judge has given a narrower meaning to the word ‘education’ to mean normal schooling. 14 ITA Nos.1532 to 1534/Chny/2015 & 2720/Chny/2017 5.1 The ld.counsel for the assessee further referred to paras 58 to 63, which reads as under:’ 58. The above referred decisions will be squarely applicable to the case of the assessee. In fact, the DIT(E) accepts this position with regard to the finality of the judgment and decree in C.S.No.90 of 1961. In paragraph 7(b) of its order dated 08.12.2011, the DIT(E) accepts the objects as per the Supplementary Deed as ratified in C.S.No.90 of 1961. If such be the admitted factual position, then the Revenue cannot dispute the fact that the amounts, which were earned by the assessee Trust, have to be necessarily spent for a charitable purpose as per the mandate under the Supplementary Deed as confirmed in C.S.No.90 of 1961 and therefore, it is a case of diversion of income by overriding title. Therefore, it goes without saying that the Department should be consistent in their approach and change of officers cannot change the legal position which stood concluded in the assessee’s case. The argument that the Revenue can take a re-look because of the amendment to Section 2(15) by amended proviso is an argument which has to be outrightly rejected especially, when the Department has accepted the finality of the judgment in C.S.No.90 of 1961. (To be noted, the Department has no other option, or else they may be liable for contempt of Court.) 59. The Hon’ble Supreme Court in Radhasoami Satsang vs. CIT [(1992) 193 ITR 0321 (SC)], while considering the question whether, the income derived by the assessee therein, a religious institution, is entitled to exemption under Sections 11 and 12 of the Act, noted the contention raised by the assessee that in the absence of any change in circumstances, the Revenue should have felt bound by the previous decisions and no attempt should have been made to reopen the question. In support of such contention, the assessee relied upon the decision of the Full Bench of this Court in the case of T.M.M.Sankaralinga Nadar & Bros. vs. CIT [(1929) 4 ITC 226 (Madras)] and the decision of the Hon’ble Supreme Court in the case of Parashuram Pottery Works Co. Ltd. vs. ITO [(1977) 106 ITR 1 (SC)] wherein, it was held that the policy of law is that there must be a point of finality in all legal proceedings, that stale issues should not be reactivated beyond a particular stage and that lapse of time must induce repose in and set at rest judicial and quasi-judicial controversies as it must in other spheres of human activity and that assessments are certainly quasi- judicial and these observations equally apply. The Hon’ble Supreme Court 15 ITA Nos.1532 to 1534/Chny/2015 & 2720/Chny/2017 held that strictly speaking res judicata does not apply to income tax proceedings, each assessment year being a unit, what is decided in one year may not apply in the following year where a fundamental aspect permeating through different assessment years has been found as a fact one way or other and parties have allowed the position to be sustained, it would not be appropriate to allow the position to be changed in a subsequent year. 60. In Surat City Gymkhana (supra) the question was whether the appeals filed were covered by an earlier decision of the same High Court, which has not been challenged by the Revenue and has attained finality, therefore, the appeal is not maintainable before the Hon’ble Supreme Court. The Hon’ble Supreme Court held that the decision of the High Court having not been challenged by the Revenue and attained finality, the assessee was entitled to registration under Section 12A of the Act. 61. The above mentioned two decisions explain the rule of consistency. As referred to and pointed out in Radhasoami Satsang (supra), there must be a point of finality in all legal proceedings and stale issues should not be reactivated beyond a particular stage and this would apply to quasi-judicial matters as well income tax assessment being quasi-judicial, the theory of finality is equally applicable. To say the least, the assessee cannot be harassed. This principle has to be necessarily transposed to the facts of the instant case on account of the various decisions of the Hon’ble Supreme Court in the assessee’s own case, viz., 137 ITR 735, 239 ITR 503 and others wherein, the Hon’ble Supreme Court and this Court had considered the objects as spelt out in the Deed of Trust, as spelt out in the Supplementary Deed, the judgment and decree in C.S.No.90 of 1961, the finding rendered by the Division Bench in 137 ITR 735, which was affirmed and all other subsequent decisions have clearly and consistently held that the activity done by the assessee Trust is charitable activity and they are entitled for registration/exemption. This issue cannot be reopened by the Revenue, that too, by a perverse interpretation of the amendment to the proviso to Section 2(15) of the Act. 62. Moving a step further, we hasten to add that even such an argument is remotely possible, is not available to the Revenue on account of the earlier decisions of this Court and the Hon’ble Supreme Court which has attained finality and therefore, the issue cannot be reactivated and there can be no re-look by the Revenue on the aspect of the charitable nature of the assessee 16 ITA Nos.1532 to 1534/Chny/2015 & 2720/Chny/2017 Trust and therefore, curtain has to be drawn and finality should prevail. While on this issue, we would have been well justified in imposing exemplary cost on the Revenue for their unsustainable interpretation. 63. In the light of the above finding, we are not required to proceed any further to examine the other contentions raised by the Revenue which largely rest upon the observations in Loka Shikshana Trust (supra). We have explained as to how the case of the Revenue cannot be sustained with reference to the said decision. Nevertheless we also note the other arguments, which were submitted by the learned counsel for the appellant, which would go in a way to strengthen our conclusion. 5.2 The ld.counsel for the assessee then finally stated that even Hon’ble High Court of Madras has considered the amendment to proviso to section 2(15) of the Act viz-a-viz the facts of the present case and held in paras 71 & 72 that the assessee’s activities are not to be held as non-genuine because of the amendment. The Hon’ble High court discussed in paras 71 & 72 as under:- 71. In the case on hand, there is no allegation that the assessee Trust has not carried on its activities in accordance with the objects of the Trust as set out in the Deed of Trust and the Supplementary Deed. The Revenue has accepted the said fact and also acceded to the finality of the judgment and decree in C.S.No.90 of 1961. The DIT(E) seeks to bring the assessee-s case in the first limb of sub-Section (3) by stating that the activities of the Trust are not genuine. 72. We find that except for stating that the activities are not genuine because of the amendment to the proviso to Section 2(15), there is no other allegation, with regard to the genuineness of the Trust. We have referred to the decisions to show that the amendment to Section 2(15) cannot make activity of a trust not genuine, which was hither to genuine while enjoying the registration under Section 12AA prior to the amendment. Therefore, we are of the view that the DIT(E) failed to record his satisfaction as required 17 ITA Nos.1532 to 1534/Chny/2015 & 2720/Chny/2017 to be done under sub-Section (3) of Section 12AA. The satisfaction should be on the activities of the Trust and finding should be rendered as to how such activities are not genuine. The activities of the assessee Trust have not been disputed, nor there is any allegation of non genuine activities. Therefore, by referring to the amendment to the proviso to Section 2(15) and referring to the meaning of the word ‘education’ as spelt out in certain decisions, cannot be construed to be a satisfaction, which is contemplated under sub-Section (3) of Section 12AA. Finally, the Hon’ble High Court has considered this issue and held that the DIT(E) committed gross error in restricting the meaning of the word ‘education’ and did not appreciate the effect of the decision in Loka Shikshana Trust (supra), which was considered in several other subsequent decisions and allowed the claim of assessee. The relevant paras 87, 88 & 89 have already been reproduced in para 3.2 above. 6. On the other hand, the ld. CIT-DR Shri Kumar Ajeet & Guru Bashyam, both relied on the orders of the lower authorities. 7. After hearing rival contentions and going through the facts of the case, we noted that this case is fully covered in favour of assessee by the decision of Hon’ble High Court of Madras in assessee’s own case, wherein the issue of registration u/s.12A of the Act was challenged and Hon’ble High Court has categorically 18 ITA Nos.1532 to 1534/Chny/2015 & 2720/Chny/2017 held that this issue cannot be reopened by the Revenue and Revenue is not entitled to state that the assessee’s trust is not carrying on charitable activity and thus, it is not in the field of education, etc. Once, Hon’ble High Court had held that the assessee is in the field of education, assessee is fully entitled for claim of deduction u/s.11 of the Act. We order accordingly. Therefore, in all the four years, appeals of the assessee are allowed. 8. In the result, the appeals filed by the assessee are allowed. Order pronounced in the open court on 8 th July, 2022 at Chennai. Sd/- Sd/- (मनोज कुमार अᮕवाल) (MANOJ KUMAR AGGARWAL) लेखा सद᭭य /ACCOUNTANT MEMBER (महावीर ᳲसह ) (MAHAVIR SINGH) उपा᭟यᭃ /VICE PRESIDENT चे᳖ई/Chennai, ᳰदनांक/Dated, the 8 th July, 2022 RSR आदेश कᳱ ᮧितिलिप अᮕेिषत/Copy to: 1. अपीलाथᱮ/Appellant 2. ᮧ᭜यथᱮ/Respondent 3. आयकर आयुᲦ (अपील)/CIT(A) 4. आयकर आयुᲦ /CIT 5. िवभागीय ᮧितिनिध/DR 6. गाडᭅ फाईल/GF.
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