Little Flower Education Society, CHENNAI V. ITO, Coimbatore

ITA 2270/CHNY/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 8963 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 9 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-06-2016
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 04-05-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 11-09-2014
• Court: TRIBUNAL
• Department Lawyers: P RADHAKISHNAN J
• Assessee Lawyers: S SRIDHAR
• Keywords: Charitable institution; Question of law
• Section: 80G; 12AA; 12; 10; 11

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : CHENNAI , ! ' . #$ % &' BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY , JUDICIAL MEMBER ./ I.T.A.NOS.2270, 1222/MDS./2014 / ASSESSMENT YEARS :2009-10, 2010-11 M/S.LITTLE FLOWER EDUCATIONAL SOCIETY , BHARATHI PARK ROAD, NO.2,RAMALINGAM NAGAR, SAIBABA COLONY, COIMBATORE 641 911. VS. THE INCOME-TAX OFFICER, COMPANY WARD-I, COIMBATORE. [PAN AAATL 1342 E ] ( () / APPELLANT) ( *+() /RESPONDENT) ./ I.T.A.NOS.2714/MDS./2014 / ASSESSMENT YEARS :2011-12 THE INCOME-TAX OFFICER, COMPANY WARD-I, COIMBATORE. VS. M/S.LITTLE FLOWER EDUCATIONAL SOCIETY , BHARATHI PARK ROAD, NO.2,RAMALINGAM NAGAR, SAIBABA COLONY, COIMBATORE 641 911. [PAN AAATL 1342 E ] ( () / APPELLANT) ( *+() /RESPONDENT) ITA NOS.2770,2714 & 1222/MDS./14 :- 2 -: ASSESSEE BY : SHRI S.SRIDHAR,ADVOCATE REVENUE BY : SHRI P.RADHAKISHNAN, JCIT,DR / DATE OF HEARING : 04 - 05 - 201 6 / DATE OF PRONOUNCEMENT : 24 - 06 - 2016 , / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER ITA NOS.2270 & 1222/MDS./2014 FILED BY THE ASSES SEE &ITA NO.2714/MDS./2014 FILED BY THE REVENUE ARE DIRECTED AGAINST THE DIFFERENT ORDERS OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-I, COIMBATORE FOR THE ASSESSMENT YEARS 2009-10,2010-1 1 & 2011-12 RESPECTIVELY. SINCE ISSUES INVOLVED IN ALL THESE A PPEALS ARE COMMON IN NATURE, THESE APPEALS ARE CLUBBED TOGETHER, HEARD T OGETHER, DISPOSED OFF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENC E. 2. FIRST WE TAKE UP ITA NO.2270/MDS./14 (A.Y. 2009 -10)(ASSESSEES APPEAL). 3. THE ASSESSEE RAISED THE GROUNDS IN THIS APPEAL IS THAT THE CIT(A) ERRED IN SUSTAINING THE DISALLOWANCE OF THE CONTRIB UTION MADE TO M/S.LITTLE FLOWER MONASTERY, COIMBATORE AGGREGATING TO ` 50,17,100/- ON THE APPLICATION OF SECTION 13(1)(B) OF THE ACT I N THE COMPUTATION OF TAXABLE TOTAL INCOME WITHOUT ASSIGNING PROPER REASO NS AND JUSTIFICATION. 4. THE BRIEF FACTS OF THE ISSUE ARE THAT THE ASSES SEE IS CONTRIBUTED A SUM OF ` 50,17,100/- TO M/S.LITTLE FLOWER MONASTERY, COIMBAT ORE. THE ITA NOS.2770,2714 & 1222/MDS./14 :- 3 -: OBJECTION OF THE AO IS THAT M/S.LITTLE FLOWER MONAS TERY, COIMBATORE IS A RELIGIOUS TRUST AND HENCE CONTRIBUTION TO THE REL IGIOUS TRUST CANNOT BE ALLOWED. ACCORDING TO THE ASSESSEE, M/S.LITTLE FLO WER MONASTERY, COIMBATORE CARRIED OUT THE FOLLOWING CHARITABLE ACT IVITIES OUT OF THE FUNDS RECEIVED FROM LISIEUX MATRICULATION HR SEC. S CHOOL, COIMBATORE. SL. NO. NAME OF INSTITUTION NATURE OF ACTIVITIES 1 KARUNAI ILLAM, KAVUNDAMPALAYAM, COIMBATORE-30. ABANDONED AIDS PATIENTS AND HIV POSITIVE PERSONS ARE GIVEN TREATMENT AND SHELTER. 2 SHURUTH BHAVAN, OTTAPALAYAM, PALAKKAD, KERALA STREET ROAMING CHILDREN ARE GIVEN SHELTER AND EDUCATION 3 ALPHONSA BHAVA PERUNTHALMANNA,KERLA ORPHAN CHILDREN ARE GIVEN SHELTER AND EDUCATION. 4 UDHAYAM TRUST, THGOPPUPALAYAM,CHENNIMALA I,ERODE SPECIAL SCHOOL FOR MENTALLY RETARDED CHILDREN 5 THIRUTHUVA ASHRAM,KARIMBA PALAKKAD ORPHAN CHILDREN ARE GIVEN SHELTER AND EDUCATION 6 ATTAPAADY SOCIAL SERVICE ORGANISATION RURAL & HUMAN DEVELOPMENT 7 PRESHITHA TRUST HOSPITAL/ACADEMY POLLACHI HELATH SERVICE 8 NAVACHETANA TRUST, KARIMBA HOME FOR DESTITUTE THE LD.CIT(A) OBSERVED THAT AS SEEN FROM THE ASSESS MENT ORDER OF THE AO, M/S. LITTLE FLOWER MONASTERY IS A RELIGIOUS INSTITU TION. IT HAS NOT BEEN GRANTED 80G IN VIEW OF ITS RELIGIOUS NATURE. THE ASSESSING OFFICER IN HIS ORDER STATED THAT THE CONTRIBUTION BY THE ASSESSEE TRUST, WHICH IS A CHARITABLE INSTITUTION TO A TRUST WHICH IS A RELIGIOUS INSTITUTION TAKES T HE CHARACTER OF RELIGIOUS ITA NOS.2770,2714 & 1222/MDS./14 :- 4 -: CONTRIBUTION ONLY. SINCE THE CONTRIBUTION ARE DIREC TLY HIT BY SECTION 13(1)(B) OF THE INCOME TAX ACT, 1961, WHICH DEBARS THE CHARI TABLE INSTITUTIONS FROM EXISTING FOR A PARTICULAR RELIGIOUS COMMUNITY. HENC E, THE CONTRIBUTION TO THE LITTLE FLOWER MONASTERY WAS DISALLOWED. THE LD.A.R HAD SUBMITTED THE DETAILS OF FINANCIAL ASSISTANCE GIVEN BY LITTLE FLO WER MONASTERY TO VARIOUS ORGANIZATIONS. HOWEVER, ON VERIFICATION, IT IS FOUN D THAT THE LITTLE FLOWER MONASTERY HAS NOT CARRIED OUT ANY CHARITABLE ACTIVI TY AS SUBMITTED BY THE AUTHORIZED REPRESENTATIVE. AS SEEN FROM THE ACCOUNT S OF LITTLE FLOWER MONASTERY, IT WAS RECEIVING AMOUNTS FROM LITTLE FLO WER EDUCATIONAL SOCIETY AND WAS ADVANCING MONEY TO VARIOUS PROVINCES OF THE CHRISTIAN MISSIONARY. AS SUBMITTED IN THE EARLIER GROUNDS BY THE APPELLAN T, THE COURTS HAVE HELD THAT ANY DONATION BY A CHARITABLE INSTITUTION TO AN Y OTHER INSTITUTION WITH SIMILAR OBJECTS WOULD BE AN APPLICATION OF INCOME. CIT(A) FURTHER OBSERVED THAT AS SEEN FROM THE DETAILS, LITTLE FLOWER MONAST ERY CANNOT BE CLASSIFIED AS A CHARITABLE INSTITUTION. IT WAS MENTIONED THAT THE MONASTERY WAS FOR CHARITABLE PURPOSES. THE APPELLANT COULD NOT ESTABL ISH THAT LITTLE FLOWER MONASTERYS ACTIVITIES ARE CHARITABLE IN NATURE. AS SEEN FROM THE AUDITED ACCOUNTS, LITTLE FLOWER MONASTERY WAS ADVANCING MON EY TO THE VARIOUS PROVINCES UNDER ITS CONTROL. THIS CANNOT BE EQUATED TO CHARITABLE ACTIVITY DONE BY LITTLE FLOWER MONASTERY. IN VIEW OF THIS, C IT(A) CONFIRMED THE DISALLOWANCE MADE ON THE CONTRIBUTION MADE BY THE A SSESSEE TO LITTLE FLOWER MONASTERY. AGAINST THIS, THE ASSESSEE IS IN APPEAL BEFORE US. 5. THE LD.A.R PLEADED BEFORE US THAT THE ASSESSEE HAS GIVEN DONATION TO M/S.LITTLE FLOWER MONASTERY, COIMBATORE AND THE SAM E WAS UTILIZED BY ITA NOS.2770,2714 & 1222/MDS./14 :- 5 -: THE ABOVE INSTITUTION FOR THE PURPOSE OF CHARITABLE ACTIVITIES AND THAT ITSELF HAS CONSTITUTED FOR CHARITABLE ACTIVITIES IN TERMS OF SEC.11(1) OF THE ACT. FURTHER, HE SUBMITTED THAT THE PROVISIONS OF THE SECTION 11(3) OF CLAUSE(D) IS NOT APPLICABLE TO THE FACTS OF CASE AS THE ASSESSEE HAS GIVEN DONATION TO OTHER INSTITUTIONS OUT OF THE 85% INCOME OF ASSESSEE AS MENTIONED IN SEC.11(1) OF THE ACT AND IT IS NOT OUT OF THE ACCUMULATED INCOME SET APART BY THE ASSESSEE. FOR THIS PURPOSE, HE RELIED ON THE CBDT CIRCULAR NO.8 DATED 27.08.2002 C LARIFYING THE RESTRICTION ON THE APPLICATION OF ACCUMULATED INCOM E OF THE CHARITABLE OR RELIGIOUS TRUST. 6. ON THE OTHER HAND, THE DEPARTMENTAL REPRESENTAT IVE SUBMITTED THAT M/S.LITTLE FLOWER MONASTERY, COIMBATORE RECEIVED TH E AMOUNT FROM THE ASSESSEE AND M/S.LITTLE FLOWER MONASTERY WAS ADVANCING MONEY TO VARIOUS PROVINCES OF THE CHRISTIAN MISSIONARY AND N OT FOR THE CHARITABLE ACTIVITIES AND THAT ACTIVITY CARRIED ON BY THE M/S.LITTLE FLOWER MONASTERY, COIMBATORE CANNOT BE CONSTITUTED AS CHARITABLE ACTI VITIES. HE ALSO PLACED RELIANCE IN THE CASE OF ITO VS. BELIVERS CHU RCH INDIA AND OTHERS REPORTED IN (2015) 37 ITR (TRIB) 0495 (COCHIN) WHER EIN HELD THAT IF INCOME IS PAID OR CREDITED TO ANOTHER TRUST OR INST ITUTION REGISTERED UNDER SECTION 12AA OR APPROVED UNDER SECTION 10(23C ), SAME HAS TO BE TREATED AS INCOME OF ASSESSEE. ITA NOS.2770,2714 & 1222/MDS./14 :- 6 -: 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. ADMITTEDLY, THE ASSESSEE HAS GIVEN DONATION TO M/S.LITTLE FLOWER MONASTERY, COIMBATORE AT ` 50,17,000/-. THE PLEA OF THE DEPARTMENT IS THAT M/S.LITTLE FLOWER MONASTERY, COI MBATORE IS NOT ENGAGED IN THE CHARITABLE ACTIVITIES, ON THE OTHER HAND IT IS ENGAGED IN ADVANCING MONEY TO VARIOUS PROVINCES OF THE CHRISTIAN MISSIONARY AND IT IS FOR RELIGIOUS PURPOSE. AS PER THE PROVISIONS OF TH E SECTION 11(1) OF THE ACT, THE ASSESSEE IS UNDER LEGAL OBLIGATIONS TO APPLY TH E INCOME TO THE EXTENT OF 85% FOR CHARITABLE PURPOSE OR RELIGIOUS PURPOSE FOR WHICH THE TRUST WAS ESTABLISHED. THEREAFTER, THIS PROVISION ALSO ENABL ES THE CHARITABLE OR RELIGIOUS TRUST TO ACCUMULATE OR SET APART ONLY 15% OF INCOME FOR WHICH THE ASSESSEE SHALL GIVE A NOTICE TO THE AO IN A PRESCRI BED MANNER INDICATING THE PURPOSE FOR WHICH THE INCOME IS ACCUMULATED OR SET APART AND THE PERIOD FOR WHICH SUCH INCOME IS SO ACCUMULATED OR SET APART. SUCH AMOUNT HAS TO BE DEPOSITED IN THE MANNER AND FORM AS PROVIDED IN SEC TION 11(5) OF THE ACT AND EXPLANATION TO SECTION 11(2) AND SECTION 11(3) OF THE ACT MAKES EXCEPTION TO THE SEC.11(2) OF THE ACT. EXPLANATION TO SECTION 11(2) AND CLAUSE (D) OF SECTION 11(3) INSERTED BY THE FINANCE ACT, 2002 WITH EFFECT FROM APRIL 1, 2003 SAYS THAT INCOME WHICH WAS ACCUM ULATED AS PROVIDED IN SECTION 11(2) IF CREDITED OR PAID TO ANOTHER TRUST OR INSTITUTION REGISTERED UNDER SECTION 12AA OR APPROVED UNDER SECTION 10(23C ) SHALL BE DEEMED TO BE THE INCOME OF SUCH PERSON OF THE PREVIOUS YEAR I N WHICH SUCH CREDIT WAS MADE OR PAID AS THE CASE MAY BE. SECTION 11(3A) EMP OWERS THE ASSESSING ITA NOS.2770,2714 & 1222/MDS./14 :- 7 -: OFFICER TO ALLOW THE TRUST TO APPLY THE INCOME SO A CCUMULATED FOR OTHER CHARITABLE OR RELIGIOUS PURPOSE OTHER THAN THE ONE FOR WHICH THE SAME WAS ACCUMULATED OR SET APART. HOWEVER, THE PROVISO TO S ECTION 11(3A) MANDATES THAT THE ASSESSING OFFICER SHALL NOT ALLOW THE APPL ICATION OF INCOME BY WAY OF PAYMENT OR CREDIT FOR THE PURPOSES REFERRED TO IN C LAUSE (D) OF SUB-SECTION (3) OF SECTION 11 OF THE ACT. THEREFORE, IN VIEW OF THE LATEST DEVELOPMENT OF LAW WITH EFFECT FROM APRIL 1, 2003 IF THE INCOME IS PAID OR CREDITED TO ANOTHER TRUST OR INSTITUTION EVEN THOUGH THEY ARE REGISTERE D UNDER SECTION 12AA OR APPROVED UNDER SECTION 10(23C) OF THE ACT, THE SAME HAS TO BE TREATED AS INCOME OF THE ASSESSEE. 7.1 THE MAIN CONTENTION OF LD.A.R IS THAT IT WAS D ONATED OUT OF THE INCOME OF ASSESSEE RELATING TO ASSESSMENT YEAR UNDE R CONSIDERATION AND NOT OUT OF ACCUMULATED INCOME OF ASSESSEE. AS SUCH SEC. 11(3) IS APPLICABLE TO THE FACTS OF THE CASE AND NOT SEC.11(5) (D) OF THE ACT. IN THE PRESENT CASE, ASSESSEE GIVEN DONATION TO M/S.LITTLE FLOWER MONASTERY. ACCORDING TO AO, THE ASSESSEE WAS HIT BY PROVISIONS OF THE SECTI ON 13(1)(B) OF THE ACT. SECTION 13(1)(B) READS AS FOLLOWS:- SEC.13 : SECTION 11 NOT TO APPLY IN CERTAIN CASES (1) NOTHING CONTAINED IN SECTION 11 OR SECTION 12 SHALL OPERATE SO AS TO EXCLUDE FROM THE TOTAL INCOME OF THE PREVIOUS YEAR OF THE PERSON IN RECEIPT THEREOF- (A) XXXX (B) IN THE CASE OF A TRUST FOR CHARITABLE PURPOSE S OR A CHARITABLE INSTITUTION CREATED OR ESTABLISHED AFTER COMMENCEME NT OF THIS ACT, ITA NOS.2770,2714 & 1222/MDS./14 :- 8 -: ANY INCOME THEREOF IF THE TRUST OR INSTITUTION IS C REATED OR ESTABLISHED FOR THE BENEFIT OF ANY PARTICULAR RELIGIOUS COMMUNI TY OR CASTE; FROM THE ABOVE, IT IS EVIDENT THAT THE SECTION 13(1 )(B) IS APPLICABLE FOR A TRUST WHICH IS ESTABLISHED FOR CHARITABLE PURPOSE. THEREFORE, SECTION 13(1)(B) IS NOT APPLICABLE FOR RELIGIOUS TRUST. THIS ISSUE IS CONSIDERED BY THE HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. BARKATE S AIFIYAH SOCIETY , 213 ITR 492 WHEREIN THEIR LORDSHIPS HELD AS UNDER:- THAT THE TRIBUNAL HAD RIGHTLY HELD THAT SECTION 13( 1)(B) APPLIES ONLY TO TRUSTS WHICH WERE PURELY FOR CHARITABLE PURPOSES AND THE ASSESSEE TRUST WAS CHARITABLE AS WELL AS RELIGIOUS IN NATUR E AND THE ASSESSEE WAS ENTITLED TO EXEMPTION U/S.11 OF THE ACT. 7.2 SIMILAR VIEW IS TAKEN BY HONBLE M.P. HIGH COU R IN THE CASE OF CIT VS. DAWOODI BOHRA JAMAT REPORTED IN 317 ITR 342 WHEREIN THEIR LORDSHIPS HELD AS UNDER:- THAT SECTION 13(1)(B) IS ATTRACTED IN THE CASE OF INCOME OF THE TRUST FOR CHARITABLE PURPOSE OF A COMMUNITY OR CASTE, WHI CH WAS NOT THE CASE HERE. THUS, THE TRIBUNAL IGHTLY DECIDED THE ISSUE OF APPLICABILITY OF SECTION 13(1)(B) HOLDING THAT SINC E THE ASSESSEE WAS A RELIGIOUS TRUST, THE PROVISIONS OF THE SECTION 13 (1)(B)WERE NOT APPLICABLE BECAUSE THEY WERE APPLICABLE IN THE CASE OF THE TRUST ESTABLISHED FOR CHARITABLE PURPOSES. FROM THE ABOVE, IT IS EVIDENT THAT THEIR LORDSHIPS OF HONBLE GUJARAT HIGH COURT AS WELL AS M.P.HIGH COURT HAVE HELD THAT SECTION 13(1)(B) ITA NOS.2770,2714 & 1222/MDS./14 :- 9 -: WOULD BE APPLICABLE ONLY TO THE TRUSTS WHICH IS PUR ELY FOR CHARITABLE PURPOSE. EVEN IF A TRUST IS FOR CHARITABLE AS WELL AS RELIGI OUS PURPOSE, THE SECTION 13(1)(B) WOULD NOT BE APPLICABLE. ADMITTEDLY, THE A SSESSEE TRUST IS A CHARITABLE. THEREFORE, SECTION 13(1)(B) WOULD BE AP PLICABLE. 7.3 IN THIS CASE, THERE IS NO DISPUTE THAT THE ASS ESSEE HAS ADVANCED MONEY IN THIS ASSESSMENT YEAR AT ` 50,17,100/- TO M/S.LITTLE FLOWER MONASTERY, WHICH IS A RELIGIOUS TRUST. THE PRESENT ASSESSEE, M/S.LITTLE FLOWER EDUCATION SOCIETY IS REGISTERED U/S.12A OF T HE ACT AS A CHARITABLE TRUST. THE A.R PLEADED THAT A CHARITABLE TRUST COULD ALSO CARRY ON THE RELIGIOUS ACTIVITIES AND THE ASSESSEE COULD BE TREATED AS A TRUST CARRYING ON RELIGIOUS AND CHARITABLE ACTIVITI ES. WE ARE NOT IN AGREEMENT WITH THE ABOVE PROPOSITION OF THE LD.A.R. THE ASSESSEE REGISTERED AS CHARITABLE TRUST AND ITS OBJECTIVE SH OULD BE SOLELY CONCENTRATED TO THE CHARITABLE ACTIVITIES ONLY. TH E CHARITABLE TRUST CARRY ON THOSE OBJECTS WHICH ARE ENLISTED IN ITS OB JECT CLAUSE COULD SPEND ITS INCOME FOR THAT PURPOSE ONLY. THOUGH LD.A .R AGREED THAT THE ASSESSEE IS A CHARITABLE TRUST, HE MADE A PLEA THAT RELIGIOUS ACTIVITIES IS ALSO PERMITTED TO BE CARRIED ON. HOWEVER, CHARITAB LE TRUST CANNOT CARRY ON RELIGIOUS ACTIVITIES. AS SUCH IN OUR OPINI ON THE DONATION GIVEN TO ACTIVITIES CARRIED ON BY THE ASSESSEE TO ANOTHER TRUST, WHICH IN TURN RELATED TO THE RELIGIOUS ACTIVITIES, THEN THE ASSES SEE IS HIT BY PROVISIONS ITA NOS.2770,2714 & 1222/MDS./14 :- 10 - : OF THE SECTION 13(1)(B) OF THE ACT. BEING SO, THE ASSESSEE CANNOT BE GRANTED THE EXEMPTION U/S.11 OF THE ACT, THOUGH THE ASSESSEE DONATED TO RELIGIOUS TRUST OUT OF INCOME OF ASSESSEE TRUST. IT NEEDLESS TO SAY HEREIN THAT ANY CHARITY DONATION OUT OF ACCUMULATED FUNDS IS NOT POSSIBLE AFTER 01.04.2002 AS IT IS HIT BY SEC.11(3 ) (D) OF THE ACT. HOWEVER, THIS IS NOT THE CASE HEREIN BEFORE US. WE ARE CONCERNED HEREIN ABOUT DONATION OUT OF CURRENT INCOME TO ANOT HER INSTITUTION WITH RELIGIOUS OBJECTS CANNOT BE CONSIDERED AS APPLICATI ON OF INCOME FOR CHARITABLE PURPOSE. IN OTHER WORDS, THE CHARITABLE TRUST CANNOT DONATE TO THE TRUST WHICH IS FORMED FOR RELIGIOUS PURPOSE. WITH THIS OBSERVATION, WE DISMISS THE APPEAL OF ASSESSEE. 7.4 IN THE RESULT, THE APPEAL OF ASSESSEE IN ITA NO .2274/MDS./14 STANDS DISMISSED. 8. NOW WE TAKE UP ITA NO.1222/MDS./14 (A.Y. 2010- 11)(ASSESSEES APPEAL). 9. THE ASSESSEE RAISED THE GROUNDS IN THIS APPEAL IS T HAT THE CIT(A) ERRED IN SUSTAINING THE DISALLOWANCE OF THE CONTRIBUTION MADE TO M/S.LITTLE FLOWER MONASTERY, COIMBATORE AGGREGATING TO ` 92,40,000/- ON THE APPLICATION OF SECTION 13(1)(B) OF THE ACT I N THE COMPUTATION OF TAXABLE TOTAL INCOME WITHOUT ASSIGNING PROPER REASO NS AND JUSTIFICATION. 9.1 THE ASSESSEE HAS FILED ADDITIONAL GROUNDS AS F OLLOWS. ITA NOS.2770,2714 & 1222/MDS./14 :- 11 - : 1. THE CIT(A) WENT WRONG IN NOT CONSIDERING THE EX CESS APPLICATION OF THE RECEIPTS GENERATED BY THE APPELL ANT WHILE MAKING THE COMPUTATION AS PER SECTION 11 OF THE ACT WITHOUT ASSIGNING PROPER REASONS AND JUSTIFICATION. 2. THE CIT(A) FAILED TO APPRECIATE THAT EVEN AFTER REJECTION OF THE PLEA OF CONTRIBUTION OF ` 92,40,000/- AS APPLICATION OF INCOME, THERE WAS EXCESS APPLICATION MUCH MORE THAN THE INCOME/REVENUE GENERATED THEREBY VITIATING THE ADDI TION SUSTAINED IN THE IMPUGNED ORDER COMPLETELY. THE ASSESSEE FILED A PETITION FOR ADDITIONAL GROUND EXPLAINING THE REASONS FOR NOT RAISING THE GROUND IN EARLIER OCCAS ION. 9.2 WE HAVE GONE THROUGH THE REASONS ADVANCED BY T HE ASSESSEE FOR NOT RAISING THE ABOVE GROUND ON THE EARLIER OCC ASION. WE ARE CONVINCED BY THE REASONS ADVANCED BY THE ASSESSEE AND ACCORDINGLY WE ARE ADMITTING THE ADDITIONAL GROUNDS BY PLACING RELIANCE ON THE JUDGEMENT OF SUPREME COURT IN THE CASE OF NATIONAL THERMAL POWER CO. LTD. VS. CIT REPORTED IN [1998] 229 ITR 383 (SC )WHEREIN HELD THAT:- THE VIEW THAT THE TRIBUNAL IS CONFINED ONLY TO ISSU ES ARISING OUT OF THE APPEAL BEFORE THE COMMISSIONER OF INCOME -TAX (APPEALS) TAKES TOO NARROW A VIEW OF THE POWERS OF THE APPELLATE TRIBUNAL (VIDE, E.G., CIT V. ANAND PRASAD [1981] 128 ITR 388 (DELHI), CIT V. KARAMCHAND PREMCHAND P. LTD. ITA NOS.2770,2714 & 1222/MDS./14 :- 12 - : [1969] 74 ITR 254 (GUJ) AND CIT V. CELLULOSE PRODUC TS OF INDIA LTD. [1985] 151 ITR 499 (GUJ) [FB]). UNDOUBTE DLY, THE TRIBUNAL WILL HAVE THE DISCRETION TO ALLOW OR NOT A LLOW A NEW GROUND TO BE RAISED. BUT WHERE THE TRIBUNAL IS ONLY REQUIRED TO CONSIDER A QUESTION OF LAW ARISING FROM THE FACT S WHICH ARE ON RECORD IN THE ASSESSMENT PROCEEDINGS WE FAIL TO SEE WHY SUCH A QUESTION SHOULD NOT BE ALLOWED TO BE RAISED WHEN IT IS NECESSARY TO CONSIDER THAT QUESTION IN ORDER TO COR RECTLY ASSESS THE TAX LIABILITY OF AN ASSESSEE. ACCORDINGLY WE ADMIT THE ADDITIONAL GROUNDS OF THE ASSESSEE FOR ADJUDICATION. 10. REGARDING MAIN GROUND IN THIS APPEAL, WHICH IS ALREADY DISCUSSED IN ITA NO.2270/MDS./2014. ACCORDINGLY, W E DISCUSS THIS ISSUE AS COVERED AGAINST THE ASSESSEE BY OUR FINDIN GS IN PARA NO.7.1 OF THIS ORDER FOR ASSESSMENT YEAR 2009-10. ACCORDINGL Y, THIS GROUND IS DISMISSED. 10.1 REGARDING ADDITIONAL GROUNDS, THE MAIN PLEA O F LD.A.R IS THAT THE APPLICATION OF INCOME IN THIS ASSESSMENT YEAR IS MO RE THAN REQUIRED AND AS SUCH PROVISIONS OF THE SECTION 13(1)(B) OF THE ACT CANNOT BE APPLIED. IN OUR OPINION, THIS ARGUMENT OF ASSESSEE IS HAVING NO MERIT. ONCE THERE IS VIOLATION UNDER SECTION 13(1)(B) OF THE AC T, THE ASSESSEE LOSSES EXEMPTION U/S.11 OF THE ACT, THOUGH THE ASSESSEE MA DE EXCESS APPLICATION OF INCOME FOR ASSESSMENT YEAR UNDER CONSIDERATION. THE TRUST INCOME OF ASSESSMENT SHOULD BE SPENT FOR THE CHARITABLE OBJE CTS FOR WHICH ASSESSEE- ITA NOS.2770,2714 & 1222/MDS./14 :- 13 - : TRUST IS ESTABLISHED. IT CANNOT SPEND ANY PURPOSE O THER THAN THE CHARITABLE PURPOSE AND THE RELIGIOUS ACTIVITIES IS NOT FORMING THE PART OF THE OBJECT CLAUSE OF THE ASSESSEE TRUST AND THERE IS VIOLATION OF CLAUSE UNDER SECTION 13(1)(B) OF THE ACT, AS SUCH THE ASSESSEE TRUST LOS SES ITS CLAIM OF EXEMPTION U/S.11 OF THE ACT. THUS, THE ADDITIONAL GROUND RAIS ED BY THE ASSESSEE IS ALSO DISMISSED. 11. LASTLY WE TAKE UP ITA NO.2714/MDS./14 (A.Y. 201 1-12)(REVENUES APPEAL). 12. THE REVENUE IS IN APPEAL BEFORE US BY RAISING THE FOLLOWING GROUNDS. 1. THE ORDER OF LD.CIT(A) IS NOT ACCEPTABLE ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE LD.CIT(A) ERRED IN OVERLOOKING THE FACT THA T WHEN THERE WAS A VIOLATION OF SEC.13(1)(B), THE ASSESSEE LOSES THE EXEMPTION U/S.11. 3. IN VIEW OF THE ABOVE, THE LD.CIT(A) ERRED IN GRA NTING THE ASSESSEE THE BENEFIT OF SET OFF OF THE CONTRIBUTION S TO THE RELIGIOUS TRUST AGAINST EXCESS APPLICATION OF INCOM E THEREBY REDUCING THE TAXABLE INCOME TO NIL. 4. THE LD.CIT(A) OUGHT TO HAVE APPRECIATED THE FACT THAT THE CONTRIBUTIONS MADE FOR RELIGIOUS PURPOSES COULD N OT BE TERMED CHARITABLE BY VIRTUE OF THE ULTIMATE END U SE OF SUCH CONTRIBUTIONS. 13. HERE, THE ASSESSEE HAS GIVEN DONATION OF ` 1,20,00,000/- TO M/S.LITTLE FLOWER MONASTERY, COIMBATORE AND THE SAM E ISSUE IS ITA NOS.2770,2714 & 1222/MDS./14 :- 14 - : DISCUSSED EARLIER IN APPEAL NO.2270/MDS./2014 BY IN VOKING THE PROVISIONS OF THE SECTION 13(1)(B) OF THE ACT BY TH E AO. HOWEVER, THE LD.CIT(A) ALLOWED THE CLAIM OF ASSESSEE. AGAINST TH IS THE REVENUE IS IN APPEAL BEFORE US. 14. THIS ISSUE IS DISCUSSED IN ITA NO.2270/MDS./20 14. ACCORDINGLY, THIS ISSUE IS COVERED AGAINST THE ASSESSEE BY OUR F INDINGS IN PARA NO.7.1 OF THIS ORDER FOR ASSESSMENT YEAR 2009-10.. HENCE, THE APPEAL OF REVENUE IS ALLOWED. 15. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSE E FOR ASSESSMENT YEARS 2009-10 & 2010-11 ARE DISMISSED AND THE APPEA L OF REVENUE FOR ASSESSMENT YEAR 2011-12 IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 24 TH JUNE, 2016, AT CHENNAI. SD/ - SD/ - ( . ! ) ( DUVVURU RL REDDY ) ) % / JUDICIAL MEMBER ( ) (CHANDRA POOJARI) / ACCOUNTANT MEMBER #$ / CHENNAI %& / DATED: 24 TH JUNE, 2016 K S SUNDARAM &' ) *+ ,+ / COPY TO: 1 . -. / APPELLANT 3. / () / CIT(A) 5. +01 ) 2 / DR 2. )3-. / RESPONDENT 4. / / CIT 6. 1! 4 / GF