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| The Tax Publishers2020 TaxPub(DT) 3502 (Chen-Trib) INCOME TAX ACT, 1961
Section 11 read with section 13(1)(c)
Where managing trustee of assessee-trust purchased property in her name utilizing funds transferred by assessee-trust and AO alleged diversion of funds of trust by trustee, considering fresh lease deed filed by assessee for first time before Tribunal and plea of assessee that although property was technically registered in name of managing trustee, but it was always held by her in fiduciary capacity for assessee-trust, matter was remanded back to AO for assessment afresh.
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Capital gains - Charitable trusts - Exemption under section 11 - Allegation that managing trustee purchased property out of funds of trust
Assessee was a public charitable trust with one of its objects to provide education. It was registered under section 12AA. AO denied exemption under section 11 on allegation that managing trustee, purchased property utilizing funds transferred by assessee-trust. Assessee contended that even though managing trustee purchased property out of funds of trust, it should not be concluded that there was a diversion of funds of trust by trustee which did not violate provisions of section 13(1)(c). AO further alleged that said property was incorporated in assessee' books of account as 'leasehold land' and not as an immovable property by way of additions to fixed assets. Held: Fresh lease deed was placed in file, which was again an additional evidence filed by assessee for first time before Tribunal and it was not tested for verification/scrutiny by lower authorities. It was claim of assessee-trust that although property was technically registered in name of managing trustee, but it was always held by her in fiduciary capacity for assessee-trust. In view of additional evidences filed by assessee for first time before Tribunal, matter was restored back to AO for framing de novo assessment.
REFERRED : CIT v. M/s. Dawoodi Bohara Jamat (2014) 364 ITR 31(SC) : 2014 TaxPub(DT) 1754 (SC) CIT v. Working Women's Forum (2015) 53 taxmann.com 85 (Madras) : 2014 TaxPub(DT) 2841 (Mad-HC) CIT-II, Lucknow v. Audh Educational Society (2011) 15 taxmann.com 235 (Allahabad) : 2012 TaxPub(DT) 0224 (All-HC) Kanahya Lal Punj Charitable Trust v. Director of Income Tax (Exemption) (2008) 171 Taxman 134 (Delhi) : 2008 TaxPub(DT) 0676 (Del-HC) St. Francis Educational Trust v. The ITO [S.P.No.112/CHNY/2020 (in I.T.A. No. 3395/CHNY/2019), dt. 13-3-2020] Deputy Director of Income Tax, (Exemtpions)-III, Chennai v. M/s. Paramasiva Naidu Muthuvel Raj Education Trust 2018 TaxPub(DT) 4178 (Chen-Trib) Deputy Director of Income Tax (Exemptions)-III v. Mahalakshmi Kunjitha Patham Educational and Charitable Trust (2016) 69 taxmann.com 71 (Chennai--Trib.) : 2015 TaxPub(DT) 3754 (Chen-Trib) BTM Education Trust v. Asstt. CIT (2006) 6 SOT 716 (Bang.-Trib.) : 2006 TaxPub(DT) 0191 (Bang-Trib)
FAVOUR : Matter remanded
A.Y. : 2016-17
IN THE ITAT, CHENNAI BENCH
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