COMMISSIONER OF INCOME TAX vs. M/S.NACHIPUR EDUCATIONAL TRU

T.C.A.Nos.419 to 421 of 2016 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 23.08.2022 CORAM : THE HONOURABLE MR. JUSTICE R. MAHADEVAN AND THE HONOURABLE MR. JUSTICE MOHAMMED SHAFFIQ T.C.A.Nos.419 to 421 of 2016 Commissioner of Income Tax, Chennai. ... Appellant in all TCAs Versus M/s.Nachipur Educational Trust, No.16, Rajammal Street, Shenoy Nagar, Chennai - 600 003. PAN: AABTN 3631R ... Respondent in all TCAs Appeals preferred under Section 260A of the Income Tax Act, 1961, against the order dated 01.10.2015 passed by the Income Tax Appellate Tribunal, “C” Bench, Chennai, in I.T.A.Nos.2063, 2064 and 2065/Mds/2014.

For Appellant : Mr.J.Narayanaswamy Standing Counsel in all TCAs For Respondent : Mr.Hari Shankar Mani in all TCAs Page 1/5 https://www.mhc.tn.gov.in/judis T.C.A.Nos.419 to 421 of 2016

COMMON JUDGMENT (Judgment of the Court was delivered by R.MAHADEVAN, J.) These tax case appeals have been filed by the appellant / Revenue, challenging the common order dated 01.10.2015 passed by the Income Tax Appellate Tribunal, “C” Bench, Chennai, in I.T.A.Nos.2063, 2064 and 2065/Mds/2014, relating to the assessment years 2004-05, 2005-06 and 2006-07, by raising the following substantial questions of law:-

" (i) Whether on the facts and in the circumstances of the case the Tribunal was right in holding that the assessee had not violated the provisions of Section 13 (1) (d) even though the assessee trust had allowed the private limited company to utilise the trust funds for the purpose of construction of meditation hall in the land belonging to the trust and said hall was not reflected as an asset in the assessee balance sheet but was reflected in the balance sheet of the company. (ii) Whether on the facts and in the circumstances of the case the Tribunal was right in holding that the assessee had not violated the provisions of section 13(1)(d) even though the directors of the private limited company were the trustees and their relation and they have benefited directly and indirectly. (iii) Whether on the facts and in the circumstances of the case the tribunal was right in holding that by taking physical possession of the meditation hall the assessee trust had become the owner without appreciating the conditions stipulated under Section 2 (47) (V) read with section 53A of T.P.Act. (iv) Whether on the facts and in the circumstances of the case the tribunal was right in holding that investment of the trust funds in the private limited company which in turn had built the meditation hall and had reflected the said asset in the companies Page 2/5 https://www.mhc.tn.gov.in/judis T.C.A.Nos.419 to 421 of 2016 balance sheet had to be ignored without appreciating the provisions of section 11(5) of the Act which bars investments of such nature and bars consequential benefits under section 11. (v) Whether on the facts and in the circumstances of the case the Tribunal was right in holding that even though the assessee had not provided the details of the donors, the income is to be treated as application to income towards construction of mediation hall and the said income cannot be assessed to tax. (vi) Whether on the facts and in the circumstances of the case the Tribunal was right in holding that the provision of section 115BBC cannot be invoked on the grounds of application of income even though the section specifically envisages disallowance of Rs.1 lakhs or 5% whichever is higher. " 2. When the matters were taken up for consideration, the learned counsel for the appellant / Revenue brought to the notice of this court the Circular No.17/2019 dated 08.08.2019 issued by the Central Board Direct Taxes, wherein, it is stipulated that appeals shall not be filed/pursued by the Department before the High Court in cases where the tax effect does not exceed Rs.1,00,00,000/- (Rupees One Crore). It is also submitted that the tax effect in these appeals is less than the threshold limit. 3. In the light of the aforesaid submissions made by the learned counsel for the appellant / Revenue, the present appeals, wherein, the tax effect is said to be less than the monetary limit imposed, are dismissed as Page 3/5 https://www.mhc.tn.gov.in/judis T.C.A.Nos.419 to 421 of 2016 withdrawn, keeping open the substantial questions of law for determination in appropriate cases. No costs. (R.M.D., J.) (M.S.Q., J.) 23.08.2022

Internet : Yes

Index : Yes / No av To 1. The Income Tax Appellate Tribunal, “C” Bench, Chennai. 2. The Commissioner of Income Tax, Chennai. 3. The Deputy Director of Income Tax (Exemptions), Chennai - 600 034. Page 4/5 https://www.mhc.tn.gov.in/judis T.C.A.Nos.419 to 421 of 2016 R. MAHADEVAN, J. and MOHAMMED SHAFFIQ, J. av T.C.A.Nos.419 to 421 of 2016 23.08.2022 Page 5/5 https://www.mhc.tn.gov.in/judis