Rajasthan High Court - Jodhpur
Commissioner Of Income Tax vs Manna Trust on 12 January, 2022
Bench: Akil Kureshi, Rekha Borana
HIGH COURT OF JUDICATURE FOR RAJASTHAN AT
JODHPUR
D.B. Income Tax Appeal No. 1/2021
Commissioner Of Income Tax, Exemption, Jaipur.
----Appellant
Versus
Manna Trust, B-6, Pinkcity Apartment, Akar Marg, Jaipur
(Rajasthan).
----Respondent
For Appellant(s) : Mr. K.K. Bissa through V.C.
For Respondent(s) : Mr. Sidharth Ranka through V.C.
HON'BLE THE CHIEF JUSTICE MR. AKIL KURESHI
HON'BLE MS. JUSTICE REKHA BORANA
Order
12/01/2022
This appeal has been filed by the revenue to challenge the
judgment of the Income-Tax Appellate Tribunal raising following
questions for our consideration:
1. "Whether on the facts and circumstances of the case
and law, the Hon'ble Tribunal in justified in stating that
neither Explanation 2(a) nor explanation 2(b) to Section
263 is applicable in this case and thus, holding the action
u/s 263 wrong without appreciating the fact that no
verification or enquiry was made by the AO even on
reasons for scrutiny selection and exemption was
allowed without verification of charitable nature of
activities of trust?"
2(a) "Whether on the facts and circumstances of the
case and law, the Hon'ble Tribunal is justified in stating
that the AO had examined the aspects relating to
payments made to persons specified u/s 13(3) as well as
capital expenditure incurred during the year, by
conducting necessary inquiries, when the AO has failed
to conduct necessary inquiries?"
2(b) "Whether on the facts and circumstances of the
case and law, the Hon'ble Tribunal is justified in holding
that the CIT(E) should have conducted necessary
inquiries on above issues during the proceedings u/s 263
(2 of 3) [ITA-1/2021]
and should not have set-aside the assessment to the AO
for conducting necessary inquiries, ignoring the
provisions of Explanation 2(a) to section 263 which
require the AO to conduct necessary inquiries and if the
AO has failed to do so in assessment proceedings, the
CIT is empowered to set aside the assessment for the
conduct of necessary inquiries by the AO?"
3. "Whether on the facts and circumstances of the case
and law, the Hon'ble Tribunal is justified by holding that
the proviso to Section 2(15) is not applicable in the case
of the asseessee ignoring the fact that the assessee,
being engaged in the advancement of objects of general
public utility and having more than 20% of its receipt
through contract which falls under the ambit of
commercial activity in view of the provisions of the
Income Tax Act, 1961?"
4. "Whether on the facts and circumstances of the case
and law, the Hon'ble Tribunal is justified by holding that
the order of Hon'ble Kerala High Court in case of
Annadan Trust (citation) is not applicable in the case of
the assessee inspite of the similar facts that both are
running mid day meal programme for which the directly
or indirectly receive consideration from government
under a contract and this is the main source of income of
these trusts?"
The revenue has challenged the decision of the Income-Tax
Appellate Tribunal by which the Tribunal has set aside the
revisional order passed by the Commissioner of Income-Tax in
exercise of powers under Section 263 of the Income-Tax Act, 1961
(for short, 'the Act') denying the benefit of exemption in favour of
respondent-assessee Trust on its income being charitable Trust.
The respondent Trust is a registered charitable trust. The
assessing officer for the assessment year 2016-17 accepted the
return filed by the trust and granted exemption as applicable
under law. The Commissioner, Income-Tax took the said order in
revision under Section 263 of the Act and held that the activities
of the trust were not charitable in nature but were commercial
activities and therefore denied the exemption. This order was
carried in appeal and Tribunal by the impugned judgment reversed
the judgment of the Commissioner primarily on the ground that
(3 of 3) [ITA-1/2021]
the registration of the Trust under Section 12AA of the Act still
continues. Meaning thereby, that the revenue does not dispute
the nature of the charitable activities. Secondly, that the
commercial activities are not primary activities of the trust and
predominant activity of the trust is charitable. The generation of
reasonable surplus would not indicate that the trust is not
engaged in charitable activities. The Tribunal was also of the
opinion that the assessing officer having made proper inquiry and
having taken plausible view, the Commissioner in exercise of
revisional powers could not have reversed the assessment order.
We are broadly in agreement with the view of the Tribunal. It
is well settled through a series of judgments that power under
Section 263 of the Act can be exercised only when twin conditions
of the order of assessing officer being erroneous and prejudicial to
the interest of revenue are satisfied. The Jurisdiction of the
Commissioner under Section 263 of the Act is restricted and
cannot be equated with the appellate jurisdiction. The
Commissioner does not sit in appeal. The Tribunal also correctly
noticed that the registration of the Trust under Section 12 AA of
the Act has not been disturbed. We also notice that in the earlier
order when the assessing officer had denied the benefit of
exemption to the trust, the Commissioner (Appeals) had reversed
the order of the assessment.
In these circumstances, no question of law arises.
The appeal is dismissed accordingly.
(REKHA BORANA),J (AKIL KURESHI),CJ
7-a.asopa/-
Powered by TCPDF (www.tcpdf.org)
