Paramartha Bhooshanam Sri Nathella Sampathu Chetty Charities, CHENNAI v. DDIT, CHENNAI

CO 93/CHNY/2011 | misc
Pronouncement Date: 22-07-2011 | Result: Dismissed

Appeal Details

RSA Number 9321723 RSA 2011
Assessee PAN AAAAP0065D
Bench Chennai
Appeal Number CO 93/CHNY/2011
Duration Of Justice 1 month(s) 22 day(s)
Appellant Paramartha Bhooshanam Sri Nathella Sampathu Chetty Charities, CHENNAI
Respondent DDIT, CHENNAI
Appeal Type Cross Objection
Pronouncement Date 22-07-2011
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 22-07-2011
Date Of Final Hearing 14-07-2011
Next Hearing Date 14-07-2011
Assessment Year misc
Appeal Filed On 31-05-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH CHENNAI BEFORE SHRI N. S. SAINI ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN JUDICIAL MEMBER .. I.T.A. NOS. 744 745 746 747 748 & 749/MDS/2011 ASSESSMENT YEARS :1986-87 1987-88 1988-89 1991-92 1992-93 & 1993-9 4 THE DEPUTY DIRECTOR OF INCOME-TAX (EXEMPTIONS)-II CHENNAI. V. M/S. PARAMARTHA BHOOSHANAM SRI NATHELLA SAMPATHU CHETTY CHARITIES NO. 123 N.S .C. BOSE ROAD SOWCARPET CHENNAI-600 079. (PAN : AAAAP0065D) (APPELLANT) (RESPONDENT) A N D C.O. NOS. 92 93 94 95 96 & 97/MDS/2011 (IN ITA NOS. 744 745 746 747 748 & 749/MDS/2011 ) ASSESSMENT YEARS : 1986-87 1987-88 1988-89 1991-92 1992-93 & 19 93-94 M/S. PARAMARTHA BHOOSHANAM V. THE DY. DIRECTOR OF INCOME-TAX SRI NATHELLA SAMPATHU CHETTY CHARITIES (EXEMP TIONS)-II NO. 123 N.S .C. BOSE ROAD CHENNAI. SOWCARPET CHENNAI-600 079. (CROSS OBJECTOR) (RESP ONDENT) DEPARTMENT BY : SHRI SHAJI P. JACOB ASSESSEE BY : SHRI N. DEVANATHAN I.T.A. NOS. 744-749/MDS/2011 & CO 92-97/MDS/2011 2 O R D E R PER BENCH: ITA NOS. 744 TO 749/MDS/2011 ARE APPEALS FILED BY THE REVENUE AGAINST THE ORDERS OF THE LEARNED CIT(APPEALS)-XII CHENNAI IN ITA NOS. 452 453 454 455 456 & 457/07-08 DATED 17-01-2011 FOR THE ASSESSMENT YEARS 1986-87 1987-88 1988-89 1991-92 1992-93 AND 1993-94 RESPECTIVELY. CO. NOS. 92 TO 97/MDS/2011 ARE CROSS OBJECTIONS FILED BY THE ASSES SEE AGAINST THE REVENUES APPEALS IN ITA NOS. 744 TO 749/MDS/2011 RESPECTIVEL Y. 2. SHRI SHAJI P. JACOB LEARNED SR. DR REPRESENTED ON BEHALF OF THE REVENUE AND SHRI N. DEVANATHAN ADVOCATE REPRESENTED ON BEHALF OF THE ASSESSEE. 3. IT WAS SUBMITTED BY THE LEARNED DR THAT THE ASSE SSEE IS A TRUST REGISTERED U/S 12A(A) OF THE INCOME-TAX ACT . 1961. IT WAS TH E SUBMISSION THAT IN THE COURSE OF ASSESSMENT IT WAS NOTICED THAT THERE WAS VIOLATI ON OF THE PROVISIONS OF SECTION 13(1)(C) OF THE ACT. IT WAS THE SUBMISSION THAT TH E FACTS AS BROUGHT OUT BY THE ASSESSING OFFICER IN HIS ORDER IN REGARD TO THE VIO LATION UNDER SECTION 13(1)(C) HAD NOT BEEN DISPUTED BY THE ASSESSEE NOR WAS IT ADJUDI CATED BY THE LEARNED CIT(A). IT WAS THE SUBMISSION THAT THE LEARNED CIT(A) HAD H ELD THAT THE INCOME EARNED BY THE ASSESSEE TRUST BY WAY OF RENTALS AND AMENITY CH ARGES FOR THE RUNNING OF THE MARRIAGE HALL WAS INCIDENTAL TO THE ATTAINMENT OF T HE OBJECTS OF THE TRUST AND THEREFORE ENTITLED TO HAVE CONTINUED EXEMPTION U/S. 11 OF THE ACT. IT WAS THE I.T.A. NOS. 744-749/MDS/2011 & CO 92-97/MDS/2011 3 SUBMISSION THAT IT WAS NOT THE ISSUE THAT CONTINUED EXEMPTION UNDER SECTION 11 WHICH WAS DECIDED BY THE ASSESSING OFFICER. IT WAS THE SUBMISSION THAT THE EXEMPTION U/S 11 HAD BEEN DENIED TO THE ASSESSEE AS THERE WAS VIOLATION OF THE PROVISIONS OF SEC. 13(1)(C) OF THE ACT. IT WAS THE FURTHER SUBMISSION THAT THE ASSESSEE HAD ALSO NOT PRODUCED THE BOOKS OF ACCOUNT S FOR THE PURPOSE OF ASSESSMENT. IT WAS THE SUBMISSION THAT THE ORDER O F THE LEARNED CIT(A) WAS LIABLE TO BE REVERSED. 4. IN REPLY THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED THAT THE ALLEGATION OF VIOLATION OF THE SEC. 13(1) (C) WAS EXPLAINED IN THE STATEMENT OF FACTS FILED BEFORE THE LEARNED CIT(A). IT WAS THE FURTHER SUBM ISSION THAT THIS ISSUE HAD ALREADY BEEN CONSIDERED IN DETAIL BY THE JOINT DIRE CTOR OF INCOME TAX (EXEMPTIONS) IN AN APPLICATION FILED U/S 144A OF THE ACT. THE LEARNED AUTHORISED REPRESENTATIVE PLACED BEFORE US COPY OF THE DIRECTI ONS GRANTED UNDER SECTION 144A BY THE JOINT DIRECTOR OF INCOME-TAX (EXEMPTIONS). I T WAS THE SUBMISSION THAT AS THE ISSUE OF VIOLATION UNDER SECTION 13(1)(C) HAS A LREADY BEEN THE SUBJECT MATTER THE DIRECTIONS UNDER SECTION 144A FOR ADJUDICATING THE SAME IN THE ASSESSMENT PROCEEDINGS WAS BEYOND THE JURISDICTION OF THE ASSE SSING OFFICER. HE VEHEMENTLY SUPPORTED THE ORDER OF THE LEARNED CIT(A). 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. THE D IRECTIONS OF THE JOINT DIRECTOR OF INCOME-TAX (EXEMPTIONS) ARE EXTRACTED HE REUNDER: I.T.A. NOS. 744-749/MDS/2011 & CO 92-97/MDS/2011 4 ORDER U/S 144A OF I.T.ACT: DURING THE COURSE OF ASSESSMENT PROCEEDINGS FOR T HE A.Y. 1998-99 TO 2003-04 THE ASSESSEE MADE AN APPLICATION U/S 144A OF THE I.T.ACT TO CALL FOR AN EXAMINE THE RECORDS FOR ISSU E OF DIRECTIONS FOR THE GUIDANCE OF AO IN COMPLETING THE ASSESSMENT PROCEED INGS FOR THE ABOVE ASSESSMENT YEARS. 2. IN THE APPLICATION FILED BY THE ASSESSEE U/S 14 4A OF THE I.T.ACT THE ASSESSEE REQUESTED FOR ISSUE OF DIRECT ION ON THE FOLLOWING ISSUES: A) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE ASSE SSING OFFICER WAS RIGHT IN REOPENING THE ASSESSMENT S FOR THE ASST. YEARS 1998-99 TO 2003-04. B) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE ASSESSING OFFICER WAS RIGHT IN HOLDING TH AT THE PROVISIONS OF SECTION 13(1)(B) AND 13(1)(C) ARE APPLICABLE TO TH E FACTS OF THE CASE. IN ORDER TO EXAMINE THE ISSUES INVOLVED THE CASE HAS BEEN POSTED FOR HEARING FIXING THE DATE OF HEARING TO 8. 03.06 AND ON REQUEST OF THE ASSESSEES AUTHORIZED REPRESENTATIVE THE CA SE WAS TAKEN UP FOR HEARING ON 15-03-06 AND THE INFORMATION FURNISHED H AS BEEN EXAMINED. THE CASE WAS AGAIN DISCUSSED WITH THE AR ON 21.3.06. THE BRIEF FACTS OF THE CASE ARE AS UNDER : 3. SHRI NATHELLA SAMPATHU CHETTY MADE REGISTERED D EED OF SETTLEMENT EXECUTED ON 01-03-1958 IN FAVOUR OF SMT. NATHELLA SULOCHANA HIS SECOND WIFE SETTLING TWO IMMOVABLE PR OPERTIES IN HER FAVOUR INTER ALIA WITH THE FOLLOWING OBJECTS: A) TO PROVIDE FOR FOOD AND SHELTER TO SUCH OF THE LINEAL DESCENDENTS MALE AND FEMALE OF THE SETTLER W HO MAY BE IN NEED I.T.A. NOS. 744-749/MDS/2011 & CO 92-97/MDS/2011 5 OF THE SAME ON THEIR APPLICATION IN WRITING TO THE TRUSTEES DECLARING THAT THEY ARE IN ACTUAL NEED OF SUCH ASSISTANCE. B) FOR PERFORMING VYSYA THATHYARADHANA THAT IS FEEDING PILGRIMS BELONGING TO THE VYSYA 108 GOTHRAM COMMUNITY IN TIRUMALAI ALLO INDIA VYTSYA SAMAJAM RAMANUJA KOOTAM DURING BRAHMOTHSAVAM FESTIVAL EVERY YEAR AND ALSO OFFERING DONATIONS TO SUCH VYSYA THATHIARADHANAS CONDUCTED IN THENGALAI S AMPRATHAYAKA DIVYAADESAMS OUT OF 108 DIVYADESAMS: C) FOR PROVIDING EDUCATIONAL SCHOLARSHIPS OR SCHO OL BOOKS TO STUDENTS BELONGING TO THE VYSYA 108 GOTHRA MS COMMUNITY AND STUDYING IN ANY OF THE SCHOOLS IN THE CITY OF MADRAS. D) FOR PROVIDING RELIEF TO THE POOR AND INDIGENT MEMBERS OF THE VYSYA 108 GOTHRAM COMMUNITY RESIDING IN THE CITY OF MADRAS. 4. SUBSEQUENTLY A REGISTERED DEED OF SURRENDER WAS EXECUTED IN FAVOUR OF A TRUST COMPRISING A BOARD OF THREE TRUST EES OF THE SAME FAMILY BY SMT. SULOCHANA WIFE OF SRI NATHELLA SAM PATHU CHETTY ON 30-03-72 AND THE OBJECTS OF THE TRUST ARE AS UNDER: THE INCOME FROM AND OUT OF THE TRUST PROPERTY SHA LL BE USED BY THE TRUSTEES FOR ANY OF THE FOLLOWING PURPOSES NAMELY : A) FOR PERFORMING VYSYA THATHEYARADHANA THAT IS FE EDING PILGRIMS BELONGING TO THE VYSYA 108 GOTHRAM COMMUNI TY IN TIRUMALAI ALL INDIA ARYA VYSYA SAMAJAM RAMANUJAKUTA M DURING BRAHMOTHSAVAM FESTIVAL EVERY YEAR AND ALSO OFFERING DONATIONS TO SUCH ARYA VYSYA THATHIARADHANA CONDUCTED IN THENGAL AI SAMPERATHAYAKA VIVYADESAMS OUT OF 108 DIVYADESAMS. I.T.A. NOS. 744-749/MDS/2011 & CO 92-97/MDS/2011 6 B) FOR PROVIDING EDUCATIONAL SCHOLARSHIPS OR SCHOO L BOOKS TO STUDENTS BELONGING TO THE VYSYA 108 GOTHRAM COMM UNITY AND STUDYING IN ANY OF THE SCHOOLS IN THE CITY OF MADRA S. C) FOR PROVIDING RELIEF TO THE POOR AND INDIGENT M EMBERS OF THE VYSYA 108 GOTHRAM COMMUNITY RESIDING IN THE CITY OF MADRAS. 5. THE ASSESSMENT IN THIS CASE WAS REOPENED U/S 148 OF THE I.T.ACT FOR THE FOLLOWING REASONS: TWO IMMOVABLE PROPERTIES BELONGING TO SRI NATHELLA SAMPATHU CHETTY WERE SETTLED IN FAVOUR OF HIS SECOND WIFE SM T. N. SULOCHANA BY WAY OF DEED OF SETTLEMENT DT. 1.03.58 WITH THE O BJECTIVES THAT THE INCOME EARNED FROM THESE PROPERTIES SHALL BE US ED TO PROVIDE FOOD AND SHELTER TO LINEAL DESCENDANTS OF THE SETTL ER AND 108 GOTHRAM COMMUNITY. THEREFORE NO TRUST IN EFFECT WA S CREATED THROUGH THE SETTLEMENT DEED DT. 1.03.58 NOR ANY PRO PERTY WAS BESTOWED ON THE TRUST. THE ACTUAL TRUST WAS CREATE D ONLY BY SETTLEMENT DEED DT. 30.03.72 BY SMT. SULOCHANA IN W HICH SHE EXTINGUISHED HER BENEFICIARY OWNERSHIP IN IMMOVABLE PROPERTIES IN FAVOUR OF THE TRUST GOVERNED BY A BOARD OF TRUSTEES AS MENTIONED IN THE SURRENDER DEED. THUS THE TRUST HAD BEEN CR EATED ONLY AFTER THE COMMENCEMENT OF THE I.T.ACT 1961. THE TRUST CO ULD NOT BE GRANTED EXEMPTION U/S 11 AND 12 OF THE ACT IN VIEW OF THE SPECIFIC PROVISIONS CONTAINED IN SEC. 13(1)(B) OF I.T. ACT. 6. THE ASSESSEES REPRESENTATIVE SHRI N. DEVANATHAN ADVOCATE IN HIS WRITTEN SUBMISSION STATED THAT THE PROVISION S OF SEC. 13(1)(B) ARE NOT APPLICABLE TO THE FACTS OF THE CASE AND ALS O FILED A COPY OF THE REPLY SUBMITTED TO THE DI(E) IN WHICH HE OBJECTE D TO THE PROPOSED REOPENING OF THE ASSESSMENTS AND CANCELLAT ION OF I.T.A. NOS. 744-749/MDS/2011 & CO 92-97/MDS/2011 7 REGISTRATION GRANTED U/S 12A OF THE I.T.ACT. THE A R OF THE ASSESSEE DURING THE COURSE OF THESE PROCEEDINGS REQUESTED TO READ THE REPLY FILED BY THE ASSESSEE BEFORE THE DIT(E) AS PART AND PARCEL OF HIS EXPLANATION IN THESE PROCEEDINGS. IN THE REPRESENT ATION SUBMITTED TO THE DIT(E) FOR THE PROPOSED CANCELLATION OF REGIS TRATION IT WAS STATED THAT THE APPLICATION FOR REGISTRATION OF THE TRUST U/S ASSESSEE12A OF I.T.ACT WAS CONSIDERED BY THE CIT AN D THE REGISTRATION WAS GRANTED TO THE TRUST AFTER CONSIDE RING THE MATERIALS FURNISHED BY THE ASSESSEE-TRUST. IT WAS ALSO SUBMI TTED THAT SINCE NO FRESH FACTS COMES TO LIGHT FOR CANCELLATION OF R EGISTRATION CANCELLATION OF REGISTRATION IS NOT WARRANTED. IT WAS ALSO SUBMITTED THAT THE TRUST HAS BEEN SPENDING ITS INCOME TOWARDS CHARITABLE PURPOSES WITHOUT CASTE OR CREED AND THE INCOME HAS NOT BEEN UTILIZED FOR THE PURPOSE OF ANY PARTICULAR RELIGIOU S COMMUNITY. THEREFORE THE REOPENING OF THE ASSESSMENT FOR THE ABOVE ASSESSMENT YEARS BY THE ADIT(E) AND THE PROPOSED CAN CELLATION OF REGISTRATION U/S 12AA OF THE I.T.ACT ARE UNWARRANTE D. 7. THE ASSESSEES REPRESENTATIVE REITERATED THE SAM E GROUNDS AND STATED THAT THE RE-OPENING OF ASSESSMENTS FOR T HE ASST. YEARS 1998-99 TO 2003-04 IS NOT CORRECT AND ALSO STATED T HAT THE PROVISIONS OF SEC. 13(1)(B) AND 13(1)(C) ARE NOT AP PLICABLE TO THE FACTS OF THE CASE. 8. DURING THE COURSE OF HEARING OF THE CASE FOR DIR ECTION U/S 144A OF THE I.T.ACT BEFORE THE UNDERSIGNED THE AUTHORIZ ED REPRESENTATIVE VEHEMENTLY ARGUED THAT THE PROVISION S OF SEC. 13(1)(B) AND 13(1)(C) ARE NOT APPLICABLE SINCE THE ASSESSEE-TRUST IS A PUBLIC CHARITABLE AND RELIGIOUS TRUST AND THE PRO VISIONS OF SEC. 13(1)B) ATTRACTS ONLY IN THE CASE OF CHARITABLE TRU ST OR INSTITUTION I.T.A. NOS. 744-749/MDS/2011 & CO 92-97/MDS/2011 8 CREATED FOR THE BENEFIT OF ANY PARTICULAR RELIGIOUS COMMUNITY YOR CASTE AND SEC. 13(1)(C) ATTRACTS IN THOSE CASES WHE RE THE INCOME OF THE TRUST IS UTILIZED FOR THE BENEFIT OF ANY INDIVI DUAL TRUSTEE OR RELATIVES OF THE TRUSTEES. IN SUPPORT OF THIS THE AUTHORIZED REPRESENTATIVE RELIED ON THE DECISION OF THE GUJARA T HIGH COURT IN THE CASE OF CIT VS. BARKATE SAIOFIYAH SOCIETY REPOR TED IN 213 ITR 492. ON GOING THROUGH THE FACTS OF THE CASE THERE IS NO EVIDENCE TO SHOW THAT THE TRUST OF THE ASSESSEE WAS REGISTER ED AS RELIGIOUS AND CHARITABLE TRUST. EVEN AFTER GOING THROUGH THE RETURNS OF INCOME FILED OR THE ACCOUNTS STATEMENTS OR AUDIT REPORTS FILED ALONG WITH THE RETURN OF INCOME IT DOES NOT INDICA TE IT IS A CHARITABLE AND RELIGIOUS TRUST. IT IS BASICALLY A PUBLIC CHARITABLE TRUST. AS COULD BE SEEN FROM THE OBJECTS OF THE TR UST AS PER TRUST DEED DATED 30.03.72 CITED SUPRA BASICALLY THE TRUS T WAS CREATED FOR THE BENEFIT OF THE FOLLOWING: THE INCOME FROM AND OUT OF THE TRUST PROPERTY SHA LL BE USED BY THE TRUSTEES FOR ANY OF THE FOLLOWING PURPOSES NAMELY A) FOR PERFORMING VYSYA THATHAYARADHANA THAT IS FEEDING PILGRIMS BELONGING TO THE VYSYA 108 GOTHRAM COMMUNITY IN THIRUMALAI ALL INDIA ARYA VYSYA SAMAJAM RAMANUJAKU TAM DURING BRAMOTHSAVAM FESTIVAL EVERY YEAR. B) FOR PROVIDING EDUCATIONAL SCHOLARSHIPS OR SCHO OL BOOKS TO STUDENTS BELONGING TO THE VYSYA 108 GOTHRA M COMMUNITY AND STUDYING IN SCHOOLS IN THE CITY OF MADRAS. I.T.A. NOS. 744-749/MDS/2011 & CO 92-97/MDS/2011 9 C) FOR PROVIDING RELIEF TO THE POOR AND INDIGENT MEMBERS OF THE VYSYA 108 GOTHRAM COMMUNITY RESIDING IN MADRAS. 9. THEREFORE THE CREATION OF TRUST AND ITS OBJECTI VES ARE PARAMOUNT IMPORTANCE THAN THE ACTUAL SPENDING OF IN COME OF THE TRUST. SECTION 13(1)(B) SPEAKS OF CHARITABLE INSTIT UTION/TRUST CREATED OR ESTABLISHED FOR THE BENEFIT OF ANY PARTICULAR CO MMUNITY OR CASTE. THIS SECTION DOES NOT SPEAK HOW THE MONEY IS SPENT AND TO WHOM THE MONEY WAS SPENT. EVEN IF THE MONEY HAS BEEN SPE NT TO PERSONS OTHER THAN A SPECIFIC GROUP OF PEOPLE MENTI ONED IN THE OBJECTIVES OF THE TRUST AS CLAIMED THERE IS VIOLAT ION SINCE THE VERY PURPOSES OF CREATION OR ESTABLISHMENT OF THE CHARIT ABLE TRUST IS FOR THE BENEFIT OF A PARTICULAR RELIGIOUS COMMUNITY OR CASTE MENTIONED IN THE TRUST DEED. THERE IS NOTHING ON RECORD TO S HOW EITHER IN THE OBJECTIVES OF THE TRUST OR IN THE ACTIVITIES OF THE TRUST THAT IT IS A RELIGIOUS AND CHARITABLE TRUST. THEREFORE THE CLAI M OF THE ASSESSEE THAT IT IS A CHARITABLE AND RELIGIOUS TRUST IS NOT SUPPORTED BY ANY EVIDENCE ON RECORD. IT HAS BEEN REGISTERED AS A P UBLIC CHARITABLE TRUST AND ACCORDINGLY ASSESSABLE TO TAX. 10. THEREFORE THE CASE RELIED UPON BY THE ASSESSEE IS NOT APPLICABLE TO THE FACTS OF THE CASE. AFTER CONSIDE RING THE WRITTEN SUBMISSIONS AS WELL AS THE ARGUMENT PUT FORTH BY TH E ASSESSEES ADVOCATE I AM OF THE OPINION THAT THERE IS A CLEAR VIOLATION U/S 13(1)(B) OF THE I.T.ACT AND THEREFORE THE REOPENING OF ASSESSMENTS FOR THE ASST. YEARS 1998-99 TO 2003-04 IS JUSTIFIED . FURTHER SINCE THE ASSESSEE-TRUST WAS CREATED WITH THE OBJECTS OF UTILIZING ITS INCOME FOR THE BENEFIT OF A PARTICULAR RELIGIOUS CO MMUNITY TO WHICH I.T.A. NOS. 744-749/MDS/2011 & CO 92-97/MDS/2011 10 THE TRUSTEES BELONG NAMELY VYSYA 108 GOTHRAM COMMU NITY THERE IS A VIOLATION OF THE PROVISIONS OF SEC. 13(1)(B) O F THE ACT. I FIND NO REASON TO INTERFERE WITH THE REOPENING OF THE ASSES SMENTS BY THE ADIT(E) FOR THE ASSESSMENT YEARS 1998-99 TO 2003-04. THE ADIT(E) IS ACCORDINGLY DIRECTED TO ASSESS THE INCOME OF THE TRUST FOR THE ASST. YEARS 1998-99 TO 2003-04 TAKING INTO ACCOUNT THE VIOLATION OF SEC. 13(1)(B) OF THE I.T.ACT. SD/- (S. SAMUEL PRASAD) JOINT DIRECTOR OF INCOME TAX (EXEMPTIONS) CHENNAI. A PERUSAL OF THE DIRECTIONS CLEARLY SHOWS THAT THE JOINT DIRECTOR OF INCOME-TAX (EXEMPTIONS) UNDER SECTION144A HAS CATEGORICALLY HEL D THAT THERE IS VIOLATION OF SECTION 13(1)(B). THIS HAS BEEN FOLLOWED BY THE ASS ESSING OFFICER AND THE SAME HAS NOT BEEN ADJUDICATED UPON BY THE LEARNED CIT(A) . 6. AT THE OUTSET IT IS NOTICED THAT THE ASSESSING O FFICER HAS SPECIFICALLY MADE AN ALLEGATION THAT THERE HAS BEEN A VIOLATION OF SECTI ON 13(1)(C). THIS FINDING OF THE ASSESSING OFFICER AS ALSO THE FINDING OF THE ASSESS ING OFFICER THAT THE ASSESSEE HAD NOT PRODUCED ITS BOOKS OF ACCOUNTS FOR VERIFICA TION HAVE NOT BEEN ADJUDICATED BY THE LEARNED CIT(A). IN FACT THE LEARNED CIT(A) IS ONLY MENTIONING THAT THE ASSESSEES INCOME IS ENTITLED FOR EXEMPTION U/S.11. UNDISPUTEDLY THE ASSESSING OFFICER HIMSELF HAS MENTIONED THAT THE ASSESSEE IS A TRUST REGISTERED U/S 12A(1) OF THE ACT. THIS FINDING ITSELF MAKES THE INCOME OF T HE ASSESSEE-TRUST EXEMPT U/S.11. HOWEVER THE REGISTRATION U/S. 12A(A) DOES NOT GIVE A BLANKET APPROVAL TO THE I.T.A. NOS. 744-749/MDS/2011 & CO 92-97/MDS/2011 11 TRUST THAT ITS INCOME IS EXEMPT. THE ASSESSING OFF ICER IS DUTY BOUND TO VERIFY VIOLATIONS IF ANY IN REGARD TO SECTIONS 11 AND 13 . ONCE THE ASSESSING OFFICER HAS MADE A FINDING IN REGARD TO THE VIOLATIONS THEN SU CH FINDING WOULD HAVE TO BE DISLODGED BEFORE THE INCOME IN RELATION TO THE VIOL ATION IS GRANTED THE BENEFIT OF EXEMPTION U/S 11. HERE THE ASSESSING OFFICER HAS SPECIFICALLY MENTIONED THAT THE BOOKS OF ACCOUNTS WERE NOT PRODUCED FOR VERIFICATIO N. THE ASSESSING OFFICER HAS ALSO SPECIFICALLY MENTIONED VIOLATION IN REGARD TO THE PROVISIONS OF SECTIONS 13(1)(B) AND 13(1)(C). THIS FINDING OF THE ASSESSI NG OFFICER HAS NOT BEEN ADJUDICATED BY THE LEARNED CIT(A) EVEN THOUGH IT IS A SUBJECT MATTER OF THE APPEAL BEFORE THE LEARNED CIT(A). THE LEARNED CIT(A) HAS ONLY ADJUDICATED UPON THE ISSUE AS TO WHETHER THE BUSINESS OF RUNNING THE KAL YANAMANDAPAM IS INCIDENTAL TO THE ATTAINMENT OF THE OBJECTS OF THE TRUST AND THER EFORE IT IS ENTITLED TO THE EXEMPTION UNDER SEC.11. IN THE CIRCUMSTANCES AS IT IS NOTICED THAT THE LEARNED CIT(A) HAS NOT ADJUDICATED ON THE ISSUE OF VIOLATIO N OF SECTIONS 11 AND 13(1)(B) AND 13(1)(C) THE ISSUES IN THE APPEALS ARE RESTORE D TO THE FILE OF THE LEARNED CIT(A) FOR RE-ADJUDICATION AFTER GRANTING THE ASSES SEE ADEQUATE OPPORTUNITY TO SUBSTANTIATE ITS CLAIM. IN THE CIRCUMSTANCES THE APPEALS OF REVENUE ARE ALLOWED FOR STATISTICAL PURPOSES. 7. IN THE CROSS OBJECTIONS THE ASSESSEE HAS VEHEMEN TLY SUPPORTED THE ORDER OF THE LEARNED CIT(A). AS WE HAVE RESTORED THE ISSUES IN THE REVENUES APPEALS TO I.T.A. NOS. 744-749/MDS/2011 & CO 92-97/MDS/2011 12 THE FILE OF THE LEARNED CIT(A) FOR RE-ADJUDICATION THE CROSS OBJECTIONS FILED BY THE ASSESSEE HAVE BECOME INFRUCTUOUS AND ARE DISMISSED AS INFRUCTUOUS. 8. IN THE RESULT THE APPEALS FILED BY THE REVENUE ARE ALLOWED FOR STATISTICAL PURPOSES AND THE CROSS OBJECTIONS FILED BY THE ASSE SSEE ARE DISMISSED. 9. THE ORDER WAS PRONOUNCED IN THE COURT ON 22/7/20 11. SD/- SD/- (N. S. SAINI) (GEORGE MATHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER CHENNAI DATED THE 22 ND JULY 2011. H. COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE