PRINCIPAL COMMISSIONER OF IN vs. M/S.MAHASEMAM TRUST

Judgt. dt. 17.10.19 in T.C.A.760 & 762/19 PCIT v. Mahasemam Trust 1/5 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 17.10.2019 CORAM THE HONOURABLE ACTING CHIEF JUSTICE AND THE HON'BLE MR.JUSTICE C.SARAVANAN Tax Case (Appeal) Nos.760 & 762 of 2019 Principal Commissioner of Income Tax Central 2, No.108, Mahatma Gandhi Road, Chennai Appellant Vs. M/s.Mahasemam Trust, No.2/47-B, Melur Road, Uthangudi, Madurai 625 107. PAN: AAATM7040C Respondent Tax Case Appeals filed under Section 260A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal, 'C' Bench, Chennai, dated 9.8.2017 made in ITA Nos.2919/Mds/2016 & 2920/Mds/2016. For Appellant : Mr.T.R.Senthilkumar Senior Standing Counsel assisted by Ms.K.G.Usharani, Junior Standing Counsel For Respondent : Mr.K.G.Ragunath COMMON JUDGMENT (Delivered by Dr.VINEET KOTHARI, ACJ) These Tax Case Appeals have been filed by the Revenue, calling in question the correctness of the order passed by the Income Tax http://www.judis.nic.in Judgt. dt. 17.10.19 in T.C.A.760 & 762/19 PCIT v. Mahasemam Trust 2/5 Appellate Tribunal, 'C' Bench, Chennai, dated 9.8.2017 made in ITA Nos.2919/Mds/2016 & 2920/Mds/2016, by raising the following substantial questions of law: "(i) Whether the Appellate Tribunal is correct in law in directing the Assessing Officer to give benefit of Sections 11 and 12 of the Act to the Assessee Trust? (ii) Whether the Appellate Tribunal is correct in law when the activity of micro financing to poor at an exorbitant rate of 24% constitutes 'relief of the poor' and falls within the ambit of charitable activity as defined in Section 2(15) of the Income Tax Act? (iii) Whether the Appellate Tribunal is correct in law in holding that the Assessee Trust is rendering service in the nature of 'providing relief to the poor' only on the ground that the Assessee is not serving to "rich and affluent" by ignoring the fact that the Assessee Trust with a commercial motive has made poor as its target group for earning income on commercial lines? (iv) Whether the Tribunal is correct in law in concluding that the consultation fee paid to the Trustees/Relatives of the Trustees is reasonable and that there is no http://www.judis.nic.in Judgt. dt. 17.10.19 in T.C.A.760 & 762/19 PCIT v. Mahasemam Trust 3/5 violation of any of the provisions of the Act, ignoring the fact that the amount paid to them is not proportionate to the services rendered by them especially when such service was rendered only by other trusts and the assessee had only acted as a facilitator, and as such there is a violation of the provisions of Section 13(2)(c) of the Income Tax Act?" 2. When the matters are taken up for admission, learned Senior Standing Counsel brought to our notice the Circular instruction issued by the Central Board of Direct Taxes vide Circular No.17/2019 dated 8th August 2019, 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). 3. In the instant cases, the tax effect is said to be less than the monetary limit imposed and therefore, the Appeals filed by the Revenue are dismissed, as withdrawn, keeping open the substantial questions of law for determination in appropriate cases. No costs. (V.K.,ACJ.)(C.S.N.,J) 17.10.2019 http://www.judis.nic.in Judgt. dt. 17.10.19 in T.C.A.760 & 762/19 PCIT v. Mahasemam Trust 4/5 Index : Yes/No Internet : Yes/No ssk. To 1. Principal Commissioner of Income Tax Central 2, No.108, Mahatma Gandhi Road, Chennai 2. Income Tax Appellate Tribunal, 'C' Bench, Chennai. 3. The Income Tax Officer, Ward II(4), Madurai. 4. M/s.Mahasemam Trust, No.2/47-B, Melur Road, Uthangudi, Madurai 625 107. http://www.judis.nic.in Judgt. dt. 17.10.19 in T.C.A.760 & 762/19 PCIT v. Mahasemam Trust 5/5 DR.VINEET KOTHARI, ACJ. and C.SARAVANAN, J. ssk. T.C.(A) Nos.760 & 762 of 2019 17.10.2019. http://www.judis.nic.in