CHIDAMBARAM PILLAI CHARITABLE AND EDICATIONAL TRUST,TRICHY vs. ITO, EXEMPTIONS WARD, TRICHY

Aforesaid appeal by assessee for Assessment Year (AY) 2012-13 arises out of the order of learned Commissioner of Income Tax (Appeals)-1, Trichy [CIT(A)] dated 11.10.2018 in the matter of assessment framed by the Ld. Assessing Officer [AO] u/s. 143(3) of the Act dated 23.03.2015.

Upon perusal, we find that the assessee trust was assessed u/s 143(3) on 23.03.2015. It transpired that the building was constructed on the property leased out by the trustee. Accordingly, Ld. AO held that the assessee was hit by the provisions of Sec. 13(1)(c)(ii) since the funds were diverted for the benefits of the trustees. The assessee submitted that the land was leased for a period of 51 years after which the land was to be handed back. The construction of the building did not result into any benefit to the trustees. The trustees could neither make use of the building nor demand any compensation for the building as rent. Therefore, no benefit was extended to the trustees. However, rejecting the same, the construction cost of Rs.49.42 Lacs as incurred by the trust was held to be taxable at maximum marginal rates. Though the assessee preferred further appeal, however, the same was dismissed by Ld. CIT(A) on the ground that construction was directly hit by the provisions of Sec.13(1)(c) of the Act. Aggrieved, the assessee is in further appeal before us.

Upon careful consideration of impugned order, we find that no finding has been rendered in the impugned order as to what benefit has been extended by the trust to the trustees. The Ld. CIT(A) has overlooked the grounds raised by the assessee and did not render any independent findings. Therefore, considering the arguments made by Ld.