THE COMMISSIONER OF INCOME TAX, vs. M/S NAVODAYA GRAMA VIKAS CHARITABLE TRUST,

THE COMMISSIONER OF INCOME TAX, (EXEMPTIONS), 6TH FLOOR, UNITY BUILDING, P. KALINGA RAO ROAD, BENGALURU - 560027.

THE ASSISTANT COMMISSIONER INCOME TAX, (EXEMPTIONS) CIRCLE-1, PRESENT ADDRESS, DCIT, (EXEMPTIONS), CIRCLE-1, GROUND FLOOR, ALBUQUERQUE HOUSE, PANDESHWAR, MANGALURU - 575 001. …APPELLANTS (BY SRI. M. THIRUMALESH, SENIOR STANDING COUNSEL) AND:

M/S NAVODAYA GRAMA VIKAS CHARITABLE TRUST, 14-7-1005, SCDCC BANK LTD, HEAD OFFICE BUILDING, KODIALBAIL, MANGALURU - 575 003. REPRESENTED BY MANAGER. …RESPONDENT (BY SRI A. SHANKAR, SENIOR ADVOCATE FOR SRI MADHUSUDHAN U.A., ADVOCATE)

Heard Sri. M. Thirumalesh, learned Senior Standing counsel for the appellants and Sri. A. Shankar, learned Senior counsel for Sri. Madhusudhan U.A., learned counsel for the respondent.

The Revenue has raised the following substantial questions of law for consideration : "1. Whether in the facts and circumstances of the case and in law the Tribunal is right in law in holding that CBDT's Circular No.100 dated 24.01.1973, is applicable to loans advanced by the assessee to SHGs (Self Help Groups) as it was issued in the context of granting of student scholarship loans for higher studies by the trust?

Whether on the facts and in the circumstance of the case and in law, the Hon'ble Tribunal is justified in not considering the fact that the money advanced to Self help Groups out of funds received from SCDCC bank and lent on higher rate of interest to the SHGs, is in the nature of business activity and not a charitable activity?"

When the matter was listed for admission, Sri A. Shankar, learned Senior Counsel appearing for the respondent- assessee, raised an objection regarding the maintainability of the appeal. It is submitted by the learned Senior Counsel that the tax effect involved in the appeal is less than ₹2 Crores, as prescribed under Circular No.09/2024 dated 17.09.2024 issued by the Central Board of Direct Taxes, the appeal would not be maintainable.

Sri M. Thirumalesh, learned Senior Standing Counsel appearing for the appellants-Revenue, submits that the

The submission of the learned counsel for the Revenue cannot be accepted. The Assessing Officer, while denying the claim of the assessee, has quantified the tax liability at ₹1,18,37,223/-. The computation of the tax effect at ₹3,79,71,102/- by the Revenue is without any basis. There cannot be two different tax liabilities, one for the purpose of enforcement pursuant to the order of assessment and another for the purpose of maintaining this appeal. It is not the case of the Revenue that any of the exceptions provided in the aforementioned Circular are attracted in the present case.

As the tax effect involved is less than ₹2 Crores, the appeal is not maintainable. Accordingly, the appeal stands dismissed.