TRIBUNE TRUST CHANDIGARH vs. COMMISSIONER OF INCOME TAX CHANDIGARH AND ANR

ITA/62/2015HC Punjab & HaryanaPHHC01110163201523 December 2016Author: MR. JUSTICE M.M. AGGARWAL,MR. JUSTICE AVNEESH JHINGAN74 pages
AI SummaryDismissed

What were the facts?

The appeals concern the interpretation of Section 2(15) of the Income Tax Act, 1961, particularly its proviso, and its application to charitable trusts. ITA No. 62 of 2015 is an appeal by The Tribune Trust against an ITAT order that restored the Assessing Officer's order, setting aside the CIT(A)'s decision for Assessment Year 2009-10. The trust claims its objects are charitable despite a 2008 amendment, relying on historical exemptions and Privy Council judgments. ITA No. 147 of 2016 is an appeal by the Commissioner of Income Tax (Exemption) against M/s Improvement Trust, Moga. The judgment consolidates these appeals due to similar legal questions and reliance on the same authorities, noting contrasting facts leading to different outcomes.

What did the High Court hold?

The High Court held that the questions of law raised in ITA No. 62 of 2015 are answered in favour of the Revenue and against the Assessee, and the question of law raised in ITA No. 147 of 2016 is answered in favour of the assessee. The reasoning appears to be that the amendment to Section 2(15) by the Finance Act, 2008, particularly the proviso, significantly altered the definition of 'charitable purpose' for activities involving trade, commerce, or business, even if the income was not applied for profit. The judgment distinguishes the case of Jammu Development Authority, stating it was based on specific findings of fact that the assessee was not advancing objects of general public utility. The Court also clarified that the omission of Section 10(20A) did not affect the applicability of Sections 2(15), 11, 12, 12A, and 12AA. Therefore, for ITA No. 62 of 2015, the assessee's claim for exemption was likely denied due to the proviso to Section 2(15). For ITA No. 147 of 2016, the Improvement Trust, Moga, was found to be entitled to relief, likely because its activities did not fall foul of the proviso or it was otherwise eligible under the relevant provisions.

What were the issues?

1. Whether, in the facts and circumstances, the purpose/objects of The Tribune Trust are charitable in nature despite the 2008 Amendment to Section 2(15), especially when its functions/nature of operation have not changed? (Assessee's contention: Yes, the amendment does not alter the charitable nature of its operations. Revenue's contention: The amendment, particularly the proviso, restricts the definition of charitable purpose for activities involving trade, commerce, or business. Reliance was placed on the judgment in Sole Trustee Loka Shikshana Trust v/s CIT (1975) 101 ITR 234 by the assessee, and the revenue likely argued it does not apply or is distinguished. 2. Whether the respondents could dispute the charitable nature of The Tribune Trust despite its status being settled by the Privy Council and continuous exemptions granted by the CBDT since 1984-85? (Assessee's contention: No, historical approvals and judicial pronouncements should bind the revenue. Revenue's contention: Not recorded. 3. Whether the impugned orders are legally sustainable? (This is a general question encompassing the above issues). The High Court noted that the core issue is the interpretation of Section 2(15) and its proviso, requiring comparison of amendments and Supreme Court judgments.

Which sections of the Income-tax Act were involved?

Section 2(15),Section 10(23C)(iv),Section 143(1),Section 143(2),Section 4(3),Section 10(20A),Section 12AA(1)(b)(i),Section 260-A,Section 12,Section 12A

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH

Income Tax Appeal No.62 of 2015 (O&M)

DATE OF DECISION: 23.12.2016

The Tribune Trust …..Appellant versus

Commissioner of Income Tax, Chandigarh and another

.....Respondents

(2) Income Tax Appeal No.147 of 2016 (O&M)

The Commissioner of Income Tax (Exemption), Chandigarh.

…..Appellant versus

M/s Improvement Trust, Moga

.....Respondent

CORAM:- HON'BLE MR.JUSTICE S.J. VAZIFDAR, CHIEF JUSTICE HON’BLE MR. JUSTICE DEEPAK SIBAL, JUDGE.

Present: Mr. Akshay Bhan, Senior Advocate with

Mr. Alok Mittal, Advocate for the appellant IN

ITA No. 62 of 2015. Mr. Denesh Goyal, Advocate for the respondents in ITA No. 62 of 2015 and for the appellant in Mrs. Radhika Suri, Senior Advocate with Ms. Rinku Dahiya, Advocate, for the respondent in ..

S.J. VAZIFDAR, CHIEF JUSTICE:

After we reserved judgment in ITA No.62 of 2015, Mrs. Radhika Suri, the learned senior counsel requested us to hear ITA No.147 of 2016 stating that similar questions arise therein. We acceded to the

The order continues below.

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