Thanthi Trust v. The Director of Income-tax (Exemptions), Chennai
[Citation -2020-LL-1029-52]

Citation 2020-LL-1029-52
Appellant Name Thanthi Trust
Respondent Name The Director of Income-tax (Exemptions), Chennai
Court HIGH COURT OF MADRAS
Relevant Act Income-tax
Date of Order 29/10/2020
Judgment View Judgment
Keyword Tags genuineness of the activities • application for registration • cancellation of registration • separate books of accounts • eligible for registration • eligible for exemption • charitable institution • general public utility • application of income • charitable activities • benefit of exemption • application of mind • diversion of income • charitable purpose • source of income • donee
Bot Summary: 90 of 1961, was invalid and ineffective inasmuch as the founder who had divested himself of his interest in the newspaper business and had created an irrevocable trust in respect thereof, no power to alter the terms of the Trust Deed and that Clause 3(i) of the Original Deed dated 01.03.1954 only empowered the founder to confer additional powers on the trustees for the proper administration of the assessee Trust and had not conferred any powers on the founder of the Trust to alter the objects of the Trust; that the judgment and decree in C.S.No. After referring to some of the objects of the Trust as set out in the Deed of Trust and Supplementary Deed, the Tribunal stated that the original Trust Deed was executed for the purpose of establishment of newspaper and the surplus income from the business was to meet out the objects set out in the Supplementary Deed dated 28.06.1961 and since the main activity of the Trust is publishing newspaper, it would fall within the meaning of trade and commerce. Business undertaking can be Property Held Under Trust for Sec 11(4A)/11(4) 7) Business carried on itself is property held under trust 121 ITR 1 Surat Art Silk Association v CIT at para 12 Page 13 of typed set Para 12.Sec 11-sub-section(4) declares that for the purpose of S.11 property held under trust shall include a business undertaking, and a business can also be held under trust for a charitable purposes where it is so held, its income would be exempt from tax, provided, of course, the other requsite conditions for exemption are satisfied. 822 of 2018 considered the said phrase in the context of Section 12AA registration and held that registration of the charitable trust under Section 12AA of the Act is not an idle or empty formality; the Commissioner of Income-tax has to examine the objects of the trust as well as an empirical study of the past activities of the applicant; the Commissioner of Income-tax has to examine that it is really a charitable trust or institution eligible for registration; the object beneficial to a section of the public is an object of general public utility. 822 of 2018 of sub-Section or has obtained registration at any time under Section 12A and subsequently, the Commissioner is satisfied that the activities of such trust or institution are not genuine or are not being carried out in accordance with the objects of the trust or institution, as the case may be, he shall pass an order in writing cancelling the registration of such trust or registration. 71.In the case on hand, there is no allegation that the assessee Trust has not carried on its activities in accordance with the objects of the Trust as set out in the Deed of Trust and the Supplementary Deed. The CBDT has instructed as follows:- The issue has been considered by the Board and it has been decided that as the law stands at present, the payment of a sum by one charitable trust to another for utilisation by the donee trust towards its charitable objects is proper application of income for charitable purpose in the hands of the donee trust; and the donor trust will not lose exemption under Section 11 of the Income-tax Act, 1961, merely because the donee trust did not spend the donation during the year of receipt itself.


T.C.A.No.822 of 2018 IN HIGH COURT OF JUDICATURE AT MADRAS DATED : 29.10.2020 CORAM HONOURABLE MR.JUSTICE T.S.SIVAGNANAM and HONOURABLE MRS.JUSTICE V.BHAVANI SUBBAROYAN Judgment Reserved On Judgment Pronounced On 18.09.2020 29.10.2020 T.C.A.No.822 of 2018 (Virtual Hearing Dates : 10.07.2020, 15.07.2020, 20.07.2020, 26.08.2020, 07.09.2020, 17.09.2020 & 18.09.2020 ) M/s.Thanthi Trust, 46, E V K Sampath Road, Chennai 600007. Appellant -vs- Director of Income Tax (Exemptions) 121, Uttamar Gandhi Road, Nungambakkam, Chennai 600034. .. Respondent Prayer:- Tax Case Appeal filed under Section 260-A of Income Tax Act, 1961, against order dated 08.05.2018 made in I.T.A.No.356/Mds/2010 on file of Income Tax Appellate Tribunal 'B' Bench Chennai. 1/122 http://www.judis.nic.in T.C.A.No.822 of 2018 For Appellant : Mr.V.S.Jayakumar For Respondent : Mr.J.Narayanaswamy Senior Standing Counsel ****** JUDGMENT T.S.Sivagnanam, J. This appeal filed by assessee under Section 260A of Income Tax Act 1961 ('the Act' for brevity) is directed against order dated 08.05.2018, made in I.T.A.No.356/Mds/2010 passed by Income Tax Appellate Tribunal 'B' Bench, Chennai to decide following substantial question of law: ''Whether Tribunal was right in law in holding that appellant trust is not eligible for exemption under Section 12A of Income Tax Act, 1961 without considering merits of case in proper manner?'' 2. assessee is public charitable Trust, filed application dated 20.07.1973 for registration under Section 12A(a) of Act before 2/122 http://www.judis.nic.in T.C.A.No.822 of 2018 Commissioner of Income Tax, Central-II, Chennai [CIT(A)]. assessee Trust was constituted by Memorandum of Association dated 01.03.1954 and subsequently by Supplementary Deed dated 28.06.1961. CIT(A) by order dated 30.06.1989, granted registration to assessee Trust under said provision. Proceedings were initiated by Director of Income Tax (Exemptions) ('DIT(E)') under Section 12A(a)(iii) of Act, after noting that assessee Trust was granted registration by CIT(A) under Section 12A(a), by order dated 30.06.1989. DIT(E) examined records and noted objects and activities of assessee Trust. It was stated in records that assessee does not run any school or colleges, though such purposes have been formulated as main objects of Trust, Trust engages itself in business of publishing Tamil news business commitments 'Dina Thanthi' and also job works for printing are undertaken as business commitments. surplus of income from business after defraying all expenses is utilized for donation to another Trust, 'Aditanar Educational Trust' only. DIT(E) after analysis of gross receipts of Trust and surplus of income from business and donation to 'Aditanar Educational Trust' for four assessment years, i.e., from 2006-07 to 3/122 http://www.judis.nic.in T.C.A.No.822 of 2018 2009-10, held that only charitable activity done by assessee is donation to other Trust year after year. DIT(E) noted that other Trust is running educational institution, it apparently may be covered by object namely helping to run school or college or other educational institution for teaching arts and science as provided in second object of assessee Trust. DIT(E) held that assessee has not carried any other objects as provided in Deed of Trust or Supplementary Deed. After referring to definition of 'charitable purpose' as defined in Section 2(15) of Act, it was held that activity of assessee Trust may not be covered as relief to poor, medical relief, preservation of environment and preservation of monuments or places or objects of artistic or historic interest and advancement of any other object of general public utility. It was held that activity of assessee has to be examined as to whether it can be said that assessee Trust is existing for purpose of education or advancement or any other general public utility. DIT(E) framed question for consideration, whether assessee Trust is engaged in educational activity or whether it is only doing business. It was held that object of Trust alone does not make Trust eligible for exemption; 4/122 http://www.judis.nic.in T.C.A.No.822 of 2018 activities are important in considering whether Trust is eligible for exemption. In this regard, reference was made to decision in Kirti Chand Tarawathi Charitable Trust vs. DIT(E) [(1998) 232 ITR 11 (Del)]. DIT(E) held that only issue to be decided is as to whether activities of assessee of giving only donation to educational institution can be said to be educational. After referring to decision in Sole Trustee, Loka Shikshana Trust vs. CIT [(1975) 101 ITR 234 (SC)]; CIT vs. Oxford University Press [(1996) 221 ITR 77 (Bom)]; CIT vs. Sorabji Nusserwanji Paarekh [(1993) 201 ITR 939 (Gujarat)]; and ACIT vs. Victoria Technical Institute [(1979) 120 ITR 358 (Madras)], it was held that it is difficult to accept that assessee's activity can be said to be educational in nature. DIT(E), therefore, came to conclusion that assessee's activities can only be for advancement of general public utility. Further, Trust is conducting business of running newspaper and turnover exceeds threshold limit as per second proviso to Section 2 (15) of Act. It was held that undoubtedly assessee is conducting business of publication of newspaper and gross receipts running into hundreds of crores of rupees exceeding threshold limit as provided under second proviso to Section 5/122 http://www.judis.nic.in T.C.A.No.822 of 2018 2(15) of Act. Therefore, first proviso to Section 2(15) of Act is squarely applicable to assessee's case and therefore activities, prima facie, shall not be charitable in nature. Further, it was held that this position will not change whether business is carried independently or given as corpus by settlor. Thus, DIT(E) held that it appears that activity of assessee is hit by proviso to Section 2(15) of Act and prima facie activities of Trust are no longer charitable in nature. 3.The assessee was called upon to show cause as to why action under Section 12AA(3) should not be taken to cancel registration granted to them under Section 12A(a) of Act. assessee was also afforded opportunity of personal hearing through their authorized representative. assessee submitted their reply dated 30.11.2011 through their Chartered Accountant in form of written submissions. 4.The assessee contended that they claimed exemption under Section 11(1) of Act and not under Section 10(23)(c) of Act and conditions mentioned in amendment to Section 2(15) of Act covers 6/122 http://www.judis.nic.in T.C.A.No.822 of 2018 only public utility services and not for application to educational purposes by Trust holding property for such purposes. In this regard, speech of Hon'ble Finance Minister in Parliament and Circular issued by Central Board of Direct Taxes (CBDT) in Circular No.11 of 2008 were referred. assessee referred to decision in case of MP. Madhyam vs. Joint Commissioner of Income Tax [(2004) 89 TTJ Indore 770], in which, it was held that provision of Section 12AA of Act is not meant for withdrawal or cancellation of registration already granted; that benefit of principle of promissory estoppel cannot be denied to assessee enjoying registration for last several years under same facts and circumstances, unless there is breach of conditions laid down for granting registration in specific terms; that in such cases, burden lies heavily on Department to establish as to how approach of assessee was commercial; that where predominant object is to carry out charitable purpose and not to earn profit, Society would not lose its charitable character merely because some profit arises from activity; and that where CIT(A) failed to specify as to how profit making was predominant activity of society instead of carrying out charitable 7/122 http://www.judis.nic.in T.C.A.No.822 of 2018 purpose, there was no justification in proposing cancellation of registration. Further it was stated that Department has not discharged onus cast upon it to show as to how conditions for grant of registration have been breached by assessee. Further, CIT(A) has failed to specify as to how profit earning is predominant activity of assessee-Society. assessee, further, stated that they are not challenging powers of Department to deny registration already granted to Trust, but they submitted that doctrine of promissory estoppel will come to their rescue when there is no change in circumstances not in law or in facts. Noting that in show cause notice, DIT(E) has stated that registration was granted on basis of Memorandum of Trust dated 01.03.1954 and by Supplementary Deed dated 28.06.1961, assessee stated that Department is well aware that assessee preferred appeals before Appellate Assistant Commissioner (AAC) for assessment year 1962-63 contending that they are entitled to grant of exemption under Section 11 of Act. AAC accepted plea of assessee that decree passed by this Court in C.S.No.90 of 1961 created legal obligation on Trustees to utilise income from Trust for object set out in 8/122 http://www.judis.nic.in T.C.A.No.822 of 2018 schedule to decree. decree passed by this Court in said suit was mandatory in nature and that assessee had credited in books of accounts 75% of income in favour of 'Aditanar College'' and therefore, assessee was entitled to benefit of exemption under Section 11 of Act. It was further stated that aggrieved by orders of AAC, Revenue preferred appeals to Tribunal contending that Supplementary Deed dated 28.06.1961, which was subject matter of C.S.No.90 of 1961, was invalid and ineffective inasmuch as founder who had divested himself of his interest in newspaper business and had created irrevocable trust in respect thereof, no power to alter terms of Trust Deed and that Clause 3(i) of Original Deed dated 01.03.1954 only empowered founder to confer additional powers on trustees for proper administration of assessee Trust and had not conferred any powers on founder of Trust to alter objects of Trust; that judgment and decree in C.S.No.90/1961 not being judgment in rem was not binding on Revenue; that judgment was rendered in originating summon wherein complicated questions of law and fact could not be gone into without going into validity of Supplementary Deed dated 9/122 http://www.judis.nic.in T.C.A.No.822 of 2018 28.06.1961; same cannot be relied on by assessee and institution of such suit was not genuine but collusive and fraudulent; even if Supplementary Deed dated 28.06.1961 was valid and effective, no property having been separately endowed for said object; there was no scope for application of Section 11 of Act inasmuch as there was assignment for charitable purposes of income only and not of property which yields income and that there being no application of income for assessment years in question for objects contemplated in Section 11 of Act, assessee was not entitled to claim exemption. assessee Trust contended before Tribunal that in view of judgment and decree of this Court in C.S.No.90 of 1961, it was no longer open to Revenue to contend that Supplementary Deed was not valid that as result of decree in said Suit, Trustees were under legal obligation to apply income for objects mentioned in schedule to decree and they had no discretion to apply entire income for maintenance of newspaper business, that Press already existing should be considered as one constituted by Original Deed as modified by decree of this Court and even if original objects set out in original Trust Deed continued to be 10/122 http://www.judis.nic.in T.C.A.No.822 of 2018 object of Trust, they were to be considered only as ancillary, in view of modification made by this Court. Tribunal decided case in favour of assessee holding that by reason of judgment and decree in C.S.No.90 of 1961, objects of Trust are only those set out in schedule to said decree and they are charitable objects and that assessee will be entitled to exemption from tax in respect of such income derived from business as is shown to have been actually parted by it and actually spent on such charitable objects during relevant previous years. With this finding, Tribunal directed that assessments for two years in question should be modified. Aggrieved by such decision of Tribunal, Revenue as well as assessee Trust sought for references to this Court and following questions were referred for opinion of this Court: (1) Whether on facts and circumstances of case, by reason of judgment and decree of Madras High Court in C.S.No.90 of 1961, objects of trust are only those that are set out in schedule to said decree and not those for which trust was originally founded and that such objects are charitable 11/122 http://www.judis.nic.in T.C.A.No.822 of 2018 objects within meaning of section 2(15) of Income Tax Act 1961? (2) Whether on facts and circumstances of case, trustees are not bound to apply income that is left after meeting, lawful and normal expenses for running business for carrying out objects set out in schedule to decree in C.S.No.90 of 1961? (3) Whether, on facts and circumstances of case, Tribunal was right in holding that trust in respect of entirety of business for objects mentioned in schedule to decree in C.S.No.90 of 1961 on file of High Court, Madras and not merely in respect of income from said business? 5.The questions which were referred for consideration were answered in favour of assessee in CIT vs. Thanthi Trust [(1982) 137 ITR 0735 (Madras)]. This decision was affirmed by Hon'ble Supreme Court in (1999) 239 ITR 502 (SC). In latter part of this judgment, we shall dwell deeper into reasons assigned by Hon'ble Division Bench for accepting case of assessee and rejecting that of Revenue. 12/122 http://www.judis.nic.in T.C.A.No.822 of 2018 6.The assessee further stated that Income Tax Act covers charity on two different fields, one is for application and another field covers generation of income. application of surplus income is covered by Section 11(1) of Act and generation of income is covered by Section 10(22) of Act. 7.It was further contented that Division Bench of this Court in decision reported in 123 ITR 611, held that Trust has obligation annexed to ownership by specific property and not with non existing property. It was explained that in case of assessee Trust, property held by Trust is business undertaking which was in existence at time of creation of Trust and after judgment in C.S.No.90 of 1961, it became legal obligation on Trustees, formal deed is not necessary, if it binds trustee and as such decree in C.S.No.90 of 1961 creates legal obligation on Trustees to spend surplus income of Trust only for educational purpose and not to any other purpose. It was further contended that Department has attempted to import conditions stipulated in Section 10(23)(C) into Section 11(1) which is not in 13/122 http://www.judis.nic.in T.C.A.No.822 of 2018 accordance with law. Further, it was pointed out that sub-Sections (1), (4) and (4a) of Section 11 of Act were not omitted or amended and same situation and circumstances continues, so far as assessee Trust is concerned. With regard to applicability of Section 11(4a), assessee referred to judgment of Honble Supreme Court in their case reported in ACIT vs. Thanthi Trust [(2001) 247 ITR 785(SC)]. assessee referred to instrument of declaration of Trust dated 01.03.1954 registered as document no.136/1954 on file of Sub Registrar, Mylapore and Supplementary Deed dated 28.06.1961 and submitted that judgment in C.S.No.90 of 1961 validates Supplementary Deed and has held that Trustees are bound to apply surplus income to objects mentioned in Supplementary Deed. Further, it was submitted that Director/Trustee is Chairman of governing body of College from very inception, he is managing and running newspaper as Director, chosen by other trustees and he is also Chairman of educational agency which is Society which runs various Colleges in Thiruchendur and there is no other effective way to carry out directions, of those contained in judgment in C.S.NO.90 of 1961 and wishes of 14/122 http://www.judis.nic.in T.C.A.No.822 of 2018 Founder of Thanthi Trust. Therefore, it is submitted that it is not sustainable to contend that (a) Trust does not run any School or College; (b) only surplus income is held under Trust; (c) property of running business is not held for purpose of Trust and only surplus income is held under Trust. It is submitted that all these three aspects have been decided by Courts and they are in favour of assessee Trust. Further, it was pointed out that registration under Section 12(A)(a) was granted to assessee on basis of declaration of Trust dated 01.03.1954 and Supplementary Deed dated 28.06.1961 and mechanically without due application of mind, registration cannot be proposed to be cancelled. Without prejudice to above submissions, it was stated that in any event, Department cannot cancel registration retrospectively. Further, decisions which were referred to by DIT(E) relate only to Section 10(22) of Act and they are not applicable to assessee's case, as they claimed exemption under Section 11(1) of Act and not under Section 10(23)(C) of Act. Further, it was submitted that newly inserted proviso to Section 2(15) is applicable only to objects of advancement of any other object of general public utility and same is not applicable to assessee's case 15/122 http://www.judis.nic.in T.C.A.No.822 of 2018 whose objects are solely for purpose of education. With above submission, assessee prayed for dropping proposal to cancel registration granted to it under Section 12A(a) by invoking power under Section 12A(A)(3) of Act. 8.The DIT(E) by order dated 08.12.2011, cancelled registration granted to assessee Trust with effect from 01.04.2009 (AY 2009-10) i.e., from date of introduction of proviso to Section 2(15) of Act. 9.The DIT(E) stated in its order that it is undisputed fact that assessee is not running educational institution by itself; it is only giving donation to another Trust; word 'Education' is not defined under Income Tax Act and therefore, have to rely on decisions of various Courts for interpreting word 'Education'. After referring to judgment in ACIT vs. Victoria Technical Institute [(1979) 120 ITR 358 (Madras)], it held that since assessee was not running educational institution, their activity will fall under category of advancement of any other object of 16/122 http://www.judis.nic.in T.C.A.No.822 of 2018 general public utility as used in Section 2(15) of Act and those activities would not fall within scope of educational activity, as held in Victoria Technical Institute (supra). Reference was made to decision of Hon'ble High Court of Gujarat in Sorabji Nusserwanji Paarekh (supra). Relying upon decision in case of Loka Shikshana Trust (supra), it was stated that word 'Education' connotes process of training and developing knowledge, mind and character of students by normal schooling. Further, by once again referring to above stated decision, it was held that it is necessary to run educational institution to qualify under category 'Education' in Section 2(15) of Act. It was further stated that material differences between Section 2(15) and Section 2(22) as far as education is concerned, is use of word 'solely'. Further, DIT(E) accepted that there is no dispute that objects of Trust as per Supplementary Deed dated 28.06.1961 were ratified by judgment in C.S.No.90 of 1961 and that Department is accepting objects as per Supplementary Deed after series of litigations. However, none of decision in assessee's case had dealt with issue that Institution is not running educational institution even then it can be said to pursue objects 17/122 http://www.judis.nic.in T.C.A.No.822 of 2018 of education. While considering contention raised by assessee stating that proposal to cancel registration is hit by principles of promissory estoppel, DIT(E) held that decision in MP. Madhayam (supra) will not come to rescue assessee, as there is change of law from date of registration under Section 12AA of Act and proviso to Section 2(15) of Act was inserted with effect from 01.04.2009. DIT(E) after referring to surplus and reserve in Balance Sheet of assessee, observed that there is huge surplus and reserve available in Balance Sheet invested in stocks, cash and bank balance and loans and advances. Thus, it was held that assessee is engaged and pursuing objects of general public utility and not education and conducting business of newspaper having turnover running in to crores of rupees much more than threshold limit provided in second proviso. Therefore, DIT(E) concluded that objects and activities of assessee is no longer chargeable in nature and therefore, cannot be said to pursue charitable activity and registration can be cancelled under Section 12AA(3) of Act. Accordingly, registration was cancelled with effect from 01.01.2009. 18/122 http://www.judis.nic.in T.C.A.No.822 of 2018 10.Aggrieved by such order, assessee filed appeal before Tribunal. Before Tribunal, among other things, assessee contended that DIT(E) failed to appreciate that definition of term 'charitable purpose' is condition precedent for grant of exemption and not condition precedent for granting registration; that it failed to appreciate that assessee is not carrying on any business activity as activity of Trust but is continuing to carry on activities vested with Trust by settler; it failed to note that two components of activity namely (i) of continuing to carry on obligation entrusted upon Trust (ii) obligation to utilise funds being resultant income over expenditure in accordance with directives of settlor; that principle of overriding, title will apply to resultant income of newspaper activity and such amounts are bound to be applied only for chargeable purpose and hence activities of Trust are genuine; that interpretation given to Section 2(15) of Act is incorrect; DIT(E) failed to appreciate findings of this Court in assessee's own case, wherein it was held that entire property were held under Trust and / or under legal obligation was business itself and entire income from business have to be utilised for various 19/122 http://www.judis.nic.in T.C.A.No.822 of 2018 charitable objects set out in schedule to decree of this Court and therefore they cannot be denied benefit of exemption under Act. other contents and decisions which were referred by assessee while submitting their reply dated 30.11.2011 to show cause dated 25.10.2011, were placed before Tribunal. Revenue contended that as per Trust Deed dated 01.03.1954, object of Trust was to establish newspaper as organ of educated public opinion for Tamil reading public and to disseminate news and to ventilate opinion upon all matters of public interest through it. It was further stated that assessee does not run any school or college, though such purposes have been stipulated as main objects of Trust. activities of trust in conducting newspaper business cannot be said as imparting education within scope of charitable activity. 11.The assessee had not offered any donation to other educational trust but only to one Trust and therefore, order of cancellation of registration is proper. Tribunal held that for purpose of registration of Trust, charitable purpose is essential ingredient otherwise, 20/122 http://www.judis.nic.in T.C.A.No.822 of 2018 registration under Section 12A cannot be accorded to any Trust. After referring to some of objects of Trust as set out in Deed of Trust and Supplementary Deed, Tribunal stated that original Trust Deed was executed for purpose of establishment of newspaper and surplus income from business was to meet out objects set out in Supplementary Deed dated 28.06.1961 and since main activity of Trust is publishing newspaper, it would fall within meaning of trade and commerce. Tribunal faulted in not offering donation to other educational Trust or Societies but only 'Adhitanar Educational Trust' and that is single activity of assessee Trust. Referring to decision in Yogiraj Charity Trust vs. CIT [(1976) 103 ITR 777 (SC)], it is held that if any of objects of Trust cannot be treated as charitable, claim of entire Trust for exemption has to fail. Further, Tribunal held that assessee has not carried out any other activity in nature as provided in Supplementary Deed and only activity besides printing of newspaper being, giving donation to particular Trust. said activity cannot be treated as activity for advancement of any other object of general public utility, in light of Section 2(15) of Act, as it stood 21/122 http://www.judis.nic.in T.C.A.No.822 of 2018 amended from 01.04.2009. In ground no.1 placed in impugned order, Tribunal has faulted assessee in offering donation only to one Trust, therefore, came to conclusion that same cannot be treated as charitable activity, since Trust has not carried out main objects in Supplementary Deed namely, establishing and running Schools or Colleges. Tribunal came to conclusion that litmus test of charitable institution is that it should primarily carrying on charitable activity which is not case of assessee Trust. There is distinction between carrying on of charitable activity and donations for charitable purpose and that assessee Trust having not carried out any charitable activity but only carrying on business activity is not entitled for registration. With these observations and findings, appeal was dismissed by Tribunal. 12.Aggrieved by such order, assessee has preferred this Tax Case Appeal. 13.Mr.V.S.Jayakumar, learned counsel for appellant with view to assist this Court to take decision in matter and also to 22/122 http://www.judis.nic.in T.C.A.No.822 of 2018 assimilate all relevant facts and details regarding past litigation between assessee and Department on same subject matter, prepared his notes on submissions in form of Power Point Presentation (PPT). 14.To best of our knowledge, this is first time, we have come across arguments advanced by learned counsel by submitting PPT before this Court. One school of thought seeks to condemn PPT presentations and have faulted speakers who had used PPT as being monotonous and boring. fault does not lie on PPT but on presenter, invariably presenter reads out what is displayed in presentation, forgetting that Powerpoint Presentations give salient features and bullet points on which speaker will elaborate. If PPT is done in such form, it is very effective way of presenting any topic and in our view, Mr.V.S.Jayakumar, learned counsel has done this excellently, which has assisted this Court and we have no doubt in our mind, it has also assisted learned Standing Counsel for respondent/Revenue. For better appreciation, we would quote PPT as presented before us to enable Court to decide appeal as hereunder:- 23/122 http://www.judis.nic.in T.C.A.No.822 of 2018 Basic facts Thanthi Trust was formed on 01.03.1954 Objects (1) to sustain Dina Thanthi or Daily Thanthi as organ of educated public opinion for Tamil reading public; (2) To disseminate news and to ventilate opinion upon all matters of public interest through said news paper; (3) to maintain said newspaper and its Press is efficient condition devoting surplus income of said newspaper and its Press after defraying all expenses, in improving and enlarging said newspaper and its services and placing same on footing of permanency. Supplementary trust deed dt 28.06.1961 1) Establishing and running school or college , for teaching of journalism; 2) Establishing and running or helping to run schools, colleges or other educational institutions for teaching arts and science; 3) Establishing of scholarships for students of journalism, arts and science; 4) Establishing and or running or helping to run hospitals for students; 5) Establishing and or running or helping to run orphanages and 6)Other educational purposes; Decree in Civil suit No. 90/1961 dated 02.03.1962. Schedule to this decree is referred to in 137 ITR 735(Mad) which mentions same six objects. Court observed; It is clear that object of trust is not in any manner opposed to law and there is nothing illegal in prayers being allowed .There can , therefore, be no objection to aforesaid prayers being allowed. Ordered accordingly. 24/122 http://www.judis.nic.in T.C.A.No.822 of 2018 Registration u/s 12 was granted by CIT on 30.06.89 though applied for in year 1973 after delay of 20 days. Delay was condoned. Assessments u/s 143(3) were made from Y 56-57 till Y 96-97 dealing with Sec 11 exemption. Refer Pg 139 of spiral binding. From Y 97-98 till 08-09 there were no disputes. For AY 09-10 to 12-13- Exemption u/s 11 was denied by AO/CIT(A) and appeals before ITAT along with refusal of registration u/ s 12 A were listed several times. Only appeal relating to refusal of registration u/s 12 r/w 12AA was disposed off which is impugned order passed by ITAT in this TC(A) 822 if 2018 Donations list for various years from inception refer pg 22-23-spiral binding. Aditanar educational trust is only donee Charitable activities of assessee trust was questioned by tax department from Y 68-69 and 69-70 for first time and exemption u/s 11 was denied. Refer 137 ITR 735(Mad)(see below).Other aspects like application of income etc were considered in earlier assessment years appeals. ITAT and HC upheld that supplementary deed was not valid as trustees have no power under deed to change objects-but because of Civil Court decree ordering prayer to carry out six objects mentioned therein, there was legal obligation on part of trustees to carry out charitable activities which are six in numbers and so trust is eligible for exemption u/s 11. Case law: (i) Sree Anjaneya Medical Trust v CIT 382 ITR 399(Ker) S.12A is one time registration. Exemption is annual -ACIT v Agra Dev 25/122 http://www.judis.nic.in T.C.A.No.822 of 2018 Authority (2018) 90 taxmann.com 282(All) at 203- 218 at pg 215 para 49 PB II ; 12 A- is fait accompli per Justice Ashok Bhan-CIT v Surat City Gymkhana Trust - (2008) 300 ITR 214(SC) para B / 5 Addl typed set case law I ; TNCA v CIT 360 ITR 633(Mad) and Gujarat Cricket Assn v CIT -419 ITR 561(Guj)- 12 exemption is not idle or empty formality- Addl typed set-I Sec.2(15) w e f 01.04.2009 by F (No.2) 2009 2(15) Charitable purpose includes relief of poor, education, medical relief .and any other object of General Public Utility Provided that advancement of any other object of general public utility shall not be charitable purpose, if it involves carrying on any activity , in nature of trade, commerce or business Provided further that first proviso shall not apply if aggregate value of receipts from activities referred to therein is 25 lakhs rupees or less in previous year 2(15)proviso is not attracted as main object is education and hence not violated TNCA(2014) 360 ITR 633(Mad); Gujarat Cricket 419 ITR 561(Guj)PB- II, DIT(E) v Chartered Accountants Study Circle 347 ITR 321(Mad) Observations on education in Thanthi Trust s reported cases. Hon ble Justice G.Ramanujam and Hon ble Justice Sengotuvelan -137 ITR 735 (Mad) Pg 50 to 75 (i) para 26 pg 66: In this case founder of trust has clearly evinced intention to create public charitable trust as seen from preamble and cl3(k) of original trust deed and charitable objects referred to in schedule to decree in CS no. 90 of 1961 have to be fulfilled 26/122 http://www.judis.nic.in T.C.A.No.822 of 2018 from and out of income from business which is directed to be held under trust or other legal obligation. Those charitable objects fall within first two categories referred to in S 2(15). Viz relief of poor and education. It is to carry out and fulfill those objects business is carried on. Thus primary purpose is to carry out charitable objects and business is carried on as means in course of actual carryng out that primary purpose and not as end in itself. While predominant object of trust is carrying out of charitable objects referred to its two off three categories of charitable purpose referred to in S 2(15), carrying on of business which is actually property held under trust or other legal obligation is incidental and profit resulting therefrom business can be taken to be by product. (ii)Page 65 para 22 end. principle laid down by SC(121 ITR1) in said decision seems to squarely apply to this facts of case. In this case property held under trust or under legal obligation is business itself and entire income from business has to be utilised for various charitable objects set out in schedule to decree in CS No.90 of 1061. Thus, objects will clearly fall under head relief of poor,education, medical relief etc, and merely because trust is carrying on charitable objects referred to in schedule to decree, it cannot be deprived of S.11. (iii) Page 65-66 para 25 : As pointed out by SC , if contention of revenue is accepted, no trust can carry on any business even for fulfillment of charitable objects, such as, relief of poor, education and medical relief, and, therefore, such contention cannot be accepted. If intention of legislature were to prohibit trust or institution 27/122 http://www.judis.nic.in T.C.A.No.822 of 2018 established for charitable purpose or for prohibition of object of general public utility from carrying on any activity for profit , it would have provided in clearest terms.. iv) Pg 60 para 18:The supplementary deed as well as decree in C S No.90 of 1961 proceed on basis that as original objects had since been achieved, new objects substituted for them. new objects are purely charitable. (v) Pg 61 para 19 end : Once there is surplus, there is no discretion left in trustees to spend same for any non-charitable purpose and they are bound to spend same for any of charitable purposes referred to in schedule to decree, all of which are admittedly charitable objects. Pg 61 para 19 end. (vi) pg65 para 25: In case on hand property held under trust is business itself and business is carried on only and exclusively, for carrying out charitable objects set out in schedule to decree in CS No.90 of 1961 (vii) Pg 185 238 ITR 635(Mad) Hon ble Justice R.Jayasimhababu-@ 186: 137 ITR 735 followed .that those charitable objects fall under relief to poor and education referred to in S. 2(15) and that primary purpose of trust is to carry out charitable objects and that business is carried on only as means in course of actually carrying out primary purpose of trust, and not as end itself. viii) Pg-143 144- 91 ITR 261(Mad)- Hon ble Justice G.Ramanujam and Hon ble Justice V Ramaswami- In original assessment for Y 62-63 to 67-68,- In all these Ays ITO has specifically found that 75% of income of trust had been applied for recognized charitable purposes,namely, education. 28/122 http://www.judis.nic.in T.C.A.No.822 of 2018 ix) Hon ble Justice N.V.Balasubramanaiam and Hon ble Justice P Thangavel 239 ITR 510(Mad) pg 159 applied 137 ITR 735; X) 172 Hon ble Chief Justice K Swami and Hon ble Justice K. Somasundaram J at 213 ITR 626(Mad) para 14- 146 ITR(st) 187 SLP against 137 ITR 735 admitted on Qs 4,5 and 6 and Qs 1 to 3 were dismissed. Observations of Supreme Court in Thanthi Trust s case Hon ble Chief Justice of India Barucha, (2001)247 ITR 785(SC) at para 20- 21 pg 184 of PB- para21 end 11(4A)- trust, therefore , is entitled to benefit of S.11 for A Y 92-93 and thereafter. It is, therefore, we should add, not in dispute, that income of its newspaper has been employed to achieve its objectives of education and relief to poor and that it has maintained separate books of account in respect thereof. .Pg. 180 of PB para 6 Court observes 137 ITR 735 has become final and binding on revenue, namely, that primary purpose of trust was to carry out charitable objects and that business carried on only as means in course of actual carrying on purpose of trust. ) Hon ble Justice Jeevan Reddy-(1999) 239 ITR 502(SC) CIT v Thanthi trust- application of income aspect only-para 2-page 208PB- 2. It appears that Adityanar College was run, not by assessee trust, but by another registered charitable society. In circumstances, HC was right in conclusion which it arrived at. ..It may also be mentioned that it is no part of revenue s case at any point of time that credit entries made in assessee s books of account were not genuine or true or that they were mere make believe or bogus. It was never doubted. 29/122 http://www.judis.nic.in T.C.A.No.822 of 2018 Meaning of education/utilization of surplus Meaning of education is wider and not narrower- Justice Beg; Per Hon ble Justice Khanna meaning of education is narrower; Regarding Hon ble Justice Gupta s view there is no indication in judgment in (1975) 101 ITR 234(SC) Lok Shikshana Trust v ITO- Submission is meaning of education is obiter dicta and is not ratio decidendi in view of disapproval of this judgment in 121 ITR 1(SC) Surat Art Silk Association v ITO as noticed in 137 ITR 735(Mad) Thanthi Trust v CIT. Investor Financial Education Academy v ITO TC(A) 900/2018 dated 04.09.2020(unreported) is relied on. ICAI Accounting Research Foundation v DIT 321 ITR 73(Del) followed Gujarat State Co-op Union v CIT 195 ITR 279(Guj) and Ahmedabad Management Assn Followed. Alembic Chemical works Ltd v CIT- 177 ITR 377(SC)-modern developments should be judicially noticed. Utilization of surplus- reasonable to hold 15% with assessee. Investor Financial Education Academy v ITO TC(A) 900/2018 dated 04.09.2020.(unreported) IT Act envisages 15 % being retained and 85% must be spent. Refer page for utilisation mentioned in impugned order of DIT/ITAT as also spiral binding at pages 22-23 of spiral binding. Diversion by over riding title/rule of consistency Diversion by overriding title- ground raised before ITAT not answered. CIT v Tollygunge Club Ltd 107 ITR 776(SC) CIT v Bijili Cotton Mills P Ltd 116 ITR 60(SC) 30/122 http://www.judis.nic.in T.C.A.No.822 of 2018 Rule of consistency Radhsoami Satsang v CIT (1992) 193 ITR 321(SC) ACIT v Surat City Gymkhana (2008) 300 ITR 214(SC) Same issue considered in another facet of income tax exemption u/s 11 which is relevant here also while considering rejection of registration u/s 12A. Case law on first three limbs 121 ITR 1(SC) Surat Art Silk Association v CIT para 8 page 10 of PB I - Sec 2(15) which gives inclusive definition of charitable purpose. It provides that charitable purpose includes relief of poor, education, medical relief and advancement of any other object of general public utility not involving carrying on of any activity for profit. In same para: It is now well settled as result of decision of this court in Dharmadeepti v CIT 114 ITR 454(SC) that words not involving carrying on of any for profit qualify or govern only last head of charitable purpose and not earlier three heads. Where, therefore, purpose of trust or institution is relief of poor, education or medical relief, requirement of definition of charitable purpose would be satisfied , even if activity for profit is carried on in course of actual carrying out primary purpose of trust or institution . Sree Anjaneya Medical trust v CIT 382 ITR 399(Ker) 12 and 12AA deal with registration only. Tamil nadu Kalvi Arakkatalai v CCIt (2014) 90 CCH 184(Mad) Income received by person on behalf of educational instn exemption allowed. 31/122 http://www.judis.nic.in T.C.A.No.822 of 2018 Summing up of arguments up to this stage 1)In impugned ITAT order and DIT( E ) s order they are reviewing very same Issue once again ignoring case laws cited before them by assessee trust. Thanthi trust case in 137 ITR 735(Mad) has become final as observed in by Hon ble Supreme Court. 2)The lower authorities held that trust is not doing any activity for charitable purpose as there is no educational activity as such was carried on by assessee trust in absence of any scholastic institution or university as such instead assessee only donates to another trust/ institution which carried on educational institution. assessee trust helped other institution to run educational institution. 3)In order to arrive at this observation DIT( E ) strongly relied on Lok Shsiikshana Trust case. Lower authorities misapplied said case. 4)Lok Shikshana Trust in 101 ITR 234 (SC) is not precedent at all as said judgment is disapproved in 121 ITR 1 (SC)as applied in 137 ITR 735 in assessee s own case. Obiter/ratio decidendi 5)Refer Investor Financial Education Academy v ITO TCA 900 of 2018 dt 04.09.2020- which distinguishes Lok shikshana Trust. word education needs to be widely interpreted. If sitgma of Lok shikshana is eliminated there is no ground to ignore accepted precedent of 137 ITR 735 as well as Hon ble Chief Justice of India Baucha s judgment in appellant s own case. 6)(1982)137 ITR 735 (Mad) dt 29.01.1981also refers to provisions of UK Act 360(1) which is in par with Indian provisions which used expression applied . Refer page 73 para 34 IRC v Helen Slater Charitable trust (1980) 3 WLR 157; see also Jadi Trust (1982)133 ITR 494 Refer PG 129 OF PB (Mum) Hon ble Justice M.Chandurker relies 32/122 http://www.judis.nic.in T.C.A.No.822 of 2018 on same decision-PG 134Para 14 dated 21.04.1981. Business undertaking can be Property Held Under Trust for Sec 11(4A)/11(4) 7) Business carried on itself is property held under trust 121 ITR 1 (SC) Surat Art Silk Association v CIT at para 12 Page 13 of typed set Para 12 .Sec 11-sub-section(4) declares that for purpose of S.11 property held under trust shall include business undertaking, and, therefore, business can also be held under trust for charitable purposes where it is so held, its income would be exempt from tax, provided, of course, other requsite conditions for exemption are satisfied. Page 18 last para Lokshikshana Trust case discussed. Court disapproved some observations. Refer para 29 Hon ble Justice Pathak s separate judgement agrees with Hon ble Justice Beg. Refer pg 97-11(4)- Exemption u/s.11 read with Sec 2(15). Education is not core issue in this case. discussion on education is obiter only. Hon ble Justice Beg says education is wider in Sec 2(15); Hon ble Justice H.R. Khanna says narrower . Hon ble Justice Beg compares it with Sec 10(22). -Refer Karnataka Ecumenical -139 ITR 226(Kar)at page 251 of typed set. Business held under trust in Thanthi s case Hon ble Chief Justice Baruch s judgment-247 ITR 785(SC) for AY 79- 80, 80-81,81-82,82-83, 83-84, 84-85, 85-86, 86-87, 87-88, 88-89, 89-90, 90-91 and 91-92. 79-80 to 83-84 trust not entitled to exemption vide Sec 13(1)(bb). 84-85 to 91-92 not entitled to exemption as per Sec 11(4)/4A 33/122 http://www.judis.nic.in T.C.A.No.822 of 2018 New 11(4A) from 01.04.1992 viz A.Y. 92-93 and thereafter trust is eligible for exemption. Also education aspect is dealt with in this judgement. Sec 12AA(3) case law- 8)12AA(3) is not automatically to be invoked. CIT v Mumbai Metropolitan Region Development Authority (2020) 270 Taxmann 21(Mum) Goa Industrial Development Corporation v CIT (2020) 421 ITR 676(Mum) DIT(E) v Seervi Samaj Tambaram Trust 362 ITR 199(Mad) Industrial Infrastructure ltd 403 ITR 1(SC)- retrospective cancellation not proper DIT v. Khar Gymkhana 385 ITR 162(Bom) ACIT v Agra Development Authority (2018)302 CTR 308(All)- retrospective cancellation of Sec 12 AA is not proper-Sec 13(8) and CBDT Circular discussed. Ananda Social & Educational Trust v CIT (2020) 272 Taxmann 7(SC) CIT v Sisters of Our lady of Providence educational society (2014) 89 CCH 132(All)- genuineness and activities of trust should be tested on relevant material. CIT- Kutchi Dass 362 ITR 192(Guj) Donation by one trust to another 9) Donation by one trust to another is application of income. CIT v Matri Seva Trust 242 ITR 20(Mad) CIT v Aurobindo Memorial Fund society ltd 247 ITR 93(Mad) 34/122 http://www.judis.nic.in T.C.A.No.822 of 2018 CIT v Shree Ram Memorial Foundation 269 ITR 35(Del) CIT v Jadi Trust 133 ITR 494(Bom) CIT v Sarala Devi Sarabhai Trust 172 ITR 698(Guj) CIT v J K Charitable Trust 196 ITR 31(All) CIT v Thanthi Trust 137 ITR 735(Mad) CIT v Hindustan Charity Trust 139 ITR 913(Cal) Case law in spiral binding All Thanthi Trust cases- 137 ITR 735 (Mad);239 ITR 502(SC);91 ITR 261(Mad);239 ITR 510(Mad);215 ITR 879(Mad);213 ITR 626(Mad);247ITR 765(SC); 238 ITR 765(Mad); 213 ITR 639(Mad); 238 ITR 635(Mad);213 ITR 639(Mad);239 ITR502 (SC) Repeated; 137 ITR 735(Mad)Repeated Aditanar Educational Trust v ITO (1997) 224 ITR 310(SC) Hamdard laboratories India v ADIT 379 ITR 393(Del) TNCA v DIT -360 ITR 633 (Mad) Case law PB II CIT v Gujarat Cricket 419 ITR 561(Guj)-followed TNCA v DIT 360 ITR 633(Mad) (supra) CBDT Circulars- PB I Genuine trusts are not hit-refer CBDT Circular 11/2008 analysed by this Hon ble Court in Employees Federation of Union v CIT - Tax Case (A) No. 98 of 2018 dated 08.09.2020 Sec 13(8) CBDT Circular is referred to In ACIT v Agra Development Authority (2018) 90 taxmann.com 282(All) at 203- 218 at pg 215 para 49 PB II S. 12AA is applicable with effect from Assessment Year 2011-12 and 35/122 http://www.judis.nic.in T.C.A.No.822 of 2018 subsequent years. Donation by one trust to another trust is valid. CBDT Circular PB-I referred to in Hamdard Laboratories India v ADIT 379 ITR 393(Del). Standing counsel s arguments (i)Written submissions of Respondent does not anywhere mention as to how activities of appellant trust are non genuine or that activities are carried out other than those covered by trust deed or C S No.90 of 1961 being Court decree of this Hon ble Court. (ii)Case law cited by Respondent : Some of case laws contain observations which are helpful to stand taken by assessee trust. (iii)Other case laws are distinguishable on facts. (iv)Each judgment relying on Lok shikshana trust 101 ITR 234 is distinguishable. (v)Judgments in context of Sec 10(22) are not relevant. (vi)Scope of restricted meaning of word education is misplaced. Sec 2(15) is inclusive definition and not exhaustive. (vii)Rule of consistency and judicial discipline ignored. impugned Tribunal order is perverse as lower authorities have mixed up registration of trust u/s 12 with exemption under Sec 11 and judicial discipline is not adhered to by not following jurisdictional High Court decisions in rendered in Assessee s own case. Final arguments 1) Thanthi trust carries on business for carrying out its primary object of education on facts accepted by MDS HC and SC. This judgements have become final. Hence last limb in S 2(15) is not attracted and so proviso. 36/122 http://www.judis.nic.in T.C.A.No.822 of 2018 2) Registration u/s 12 was validly granted as per law that stood at that time and later amendment in S 12AA(3) is not automatic to withdraw registration. Registration u/s 12 is not empty formality . It is fait accompli. 3) Term education needs wider interpretation. Lok shikshana is misapplied. 137 ITR 735 has attained finality even in this aspect . 101 ITR 234 referred to in 137 ITR 735 as also 121 ITR 1(SC) which had disapproved 101 ITR 234(SC). Lok Shikshana is no longer precedent as said judgment is disapproved in 121 ITR 1(SC) observations are obiter dicta and is not ratio decidendi. 4) TNCA v CIT-366 ITR 633 (Mad) and Gujarat Cricket Association 419 ITR 561(Guj)are applicable in full force on issue of proviso to Sec 2(15) . Sec 12 is one-time registration whereas exemption u/s 11 is annual affair. All arguments raised in impugned orders are misplaced in present context. 5) CBDT circulars 0n Sec 2(15), 13(8) and donation aspects and 12AA aspect shows that 12AA cannot be invoked from 01.04.2009 but only from Y 12-13. 6) 12 AA(3) direct case law of Mumbai High Court in Goa Industrial Development Corporation v CIT 421 ITR 676(Mum) and CIT v Mumbai Metropolitan Development Authority are applicable. 7) Donation by one trust to another is permissible in law. 8) Sec 11(4A) is applicable from AY 92-93. 9) All other aspects raised in SCN and DIT( E ) s orders are misplaced as they had totally ignored reply filed to SCN wherein we had invited attention of 137 ITR 735(Mad) and Supreme Court decisions in our own 37/122 http://www.judis.nic.in T.C.A.No.822 of 2018 case. 10)ITAT went on tangent. They had not bothered to consider High Court or Supreme Court decisions in ourown case cited before it forming part of paper book. They have lost sight of CS No 90 of 1961 which is clincher to whole case. 11) All citations given by DIT( E) and standing counsel are distinguishable both on law and on facts. In fact some judgements support our stand. 12)Written submissions given by assessee is in order and written submissions given by respondent is distinguishable on law and facts. 15.It is submitted that in light of decision in assessee's own case pertaining to very same issue, respondent Department is estopped from cancelling registration. Hon'ble Supreme Court in assessee's own case in (1999) 239 ITR 502 (SC) has specifically noticed that educational activity has been carried on by appellant trust through another entity and Court has confirmed decision of Division Bench of this Court in CIT vs. Thanthi Trust [(1982) 137 ITR 735 (Mad)]. Hence, objection raised by respondent no longer survives in eye of law. 38/122 http://www.judis.nic.in T.C.A.No.822 of 2018 16.It is submitted that in decision of Honble Supreme Court in Industrial Infrastructure Development Corporation (Gwalior) M.P Ltd. vs. CIT [(2018) 403 ITR 0001 (SC)] that DIT(E) has held that Commissioner had no power till 01.10.2004 to cancel registration under Income Tax Act 1961 as per relevant provisions that stood at that point of time to cancel registration originally granted in terms of Section 12A. In case before Hon'ble Supreme Court, assessee company State Government undertaking applied to CIT on 10.02.1999 for grant of registration under Section 12 of Income Tax Act, 1961 on basis that assessee is engaged in public utility activity it was for charitable purpose under Section 2(15) of Act. CT granted registration but later issued notice to assessee asking it to file its reply. By order dated 29.02.2002, CIT cancelled certificate. ITAT set aside order of cancellation of registration passed by CIT but High Court restored order of CIT holding that when there is no express power in Act for cancelling registration certificate u/s 12A of Act power to cancel can be restored to Section 21 of General Clauses Act 1897. On appeal, Supreme Court decided issue in favour of assessee holding that 39/122 http://www.judis.nic.in T.C.A.No.822 of 2018 there is no express provision in Act vesting CIT with power to cancel registration certificate granted under Section 12A of Act. However, Supreme Court has held that power was conferred on CIT for first time w.e.f from 01.10.2004 (AY 2004-05) only on and after 01.10.2004 because amendment was prospective. It is submitted that any trust applying for registration after that date alone can be considered for cancellation under Section 12AA(3) of Act and not any trust which has been in existence in past several years. 17.It is submitted that Tribunal committed serious error in law in holding that or claiming exemption under Section 11 and Section 12 of Act, Trust or Institution, should be engaged wholly for charitable or religious purposes to extent to which such income is applied to such purposes. Thus, without charitable activity of Trust or Institution, no registration under Section 12A of Act can be granted. Tribunal failed to note that these facts are not relevant at that point of time, but would be relevant while completing regular assessments for each assessment year, u/s.143(3). 40/122 http://www.judis.nic.in T.C.A.No.822 of 2018 18.It is submitted that Tribunal confused itself with definition of term ''charitable purposes'' as if it is condition precedent for grant of registration under Section 12A, whereas said definition is relevant for computing income of trust income at time of assessment proceedings under Section 143(3) for each assessment year and it is not condition precedent for grant of registration and his interpretation of Section 2(15) is incorrect. Several decisions of different High Court as well as this Court has held so. Reliance is placed on Tamil Nadu Cricket Association vs. DIT(E) (2014) 265 CTR 277 (Mad), where this Court has held at para 45 ''We do not accept submission of learned Standing counsel appearing for revenue. As rightly observed by learned Senior Counsel for assessee, revenue granted registration under Section 12AA of Act satisfying itself as to objects of association befitting status as charitable purpose as defined in Section 29(15), as it stood in 2003 and after granting registration, if registration is to be cancelled, it must be only on grounds stated under Section 12AA(3) of Act with reference to objects accepted and registered under Section 12AA, as per law then stood under definition of Section 2(15) of Income Tax 41/122 http://www.judis.nic.in T.C.A.No.822 of 2018 Act. Thus if particular activity of institution appears to be commercial in character, and it is dominant, then it is for assessing officer to consider effect of Section 11 of Act in matter of granting exemption on particular head of receipt. mere fact that said income does not fit in with Sec 11 of Act would not, by itself, herein lead to conclusion that registration granted under Section 12AA is bad and hence to be cancelled. Further at para 51, this Hon'ble Court has observed that cancellation of registration, in given case could be done only under stated circumstances under Section 12AA(3) of Act and in background of definition relevant to particular year of registration. 19.It is submitted that Tribunals' further observation was ''that for claiming exemption only Trust is seeking Registration under Act and therefore for purpose Registration of Trust, ''Charitable Purposes'' is essential ingredient; otherwise, registration under Section 12A of Act cannot be accorded to any Trust or Institution'' is misplaced. DIT(E) is limited while granting registration and not exhaustive one when one compares powers of AO who takes up 42/122 http://www.judis.nic.in T.C.A.No.822 of 2018 assessment and denies exemption of income on each year on basis of available materials. 20.It is submitted that order of Tribunal is erroneous in law when it had not appreciated that business carried on by appellant is ''property held under trust'' in terms of Section 11(4A) of Act and cancellation of registration is improper. Hon'ble Supreme Court in Thanthi Trust [(2001) 247 ITR 785(SC)] has held that in view of substituted sub-section (4A) of Section 11 with effect from 01.4.1992, assessee trust was entitled to exemption under Section 11 for assessment year 1992-93 and therefore in respect of its income of news paper business which was employed to achieve its charitable objects. 21.It is submitted that Tribunal in impugned order also glossed over fact that denial of exemption is not automatic without any definite finding as to nature of activity which infringed relevant provisions of Section 2(15) of Income Tax Act, 1961. 43/122 http://www.judis.nic.in T.C.A.No.822 of 2018 22.It is submitted that Tribunal failed to appreciate that even assuming that activity carried on by assessee is of commercial nature, dominant activity is of charitable one, namely, education per se and so that last limb of Section 2(15) of Act is inapplicable and in absence of any amendment in Section 11(A) carrying on commercial activity to feed educational activity is not hit by amended Section 2(15) of Act. 23.It is submitted that Tribunal should have considered principle relating to powers of DIT(E) under Section12AA(3) while denying / cancelling registration already granted under Section 12A and applied judgment of Hon'ble Supreme Court in Industrial Infrastructure Development Corporation (Gwalior) M.P.Ltd. (supra). 24.Mr.J.Narayanasamy, learned Senior Standing Counsel for Revenue took us through order passed by DIT(E) as well as Tribunal and sought to impress upon us that decision of Tribunal is based on findings of fact and this Court would not interfere with such 44/122 http://www.judis.nic.in T.C.A.No.822 of 2018 findings in appeal under Section 260A of Act. Further it is submitted that amendment to Section 2(15) of Act with effect from 01.04.2009 gives importance to attributes of Trust. Therefore, reasons assigned by Tribunal is proper. 25.It is submitted that assessee was originally granted registration under Section 12A of Act in year 1989 and same was in force. During 2011, show cause notice was issued and orders cancelling/withdrawing registration was passed, on 08.12.2011. registration was withdrawn on grounds that (i) Trust activities are not in nature of charitable purpose as defined under Section 2(15) of Act; (ii) business of newspaper is not activity of eduction; (iii) business of newspaper is commercial in nature; (iv) mere diversion of income earned to its related Trust by way of donation does not amount to carrying on educational activity by Trust itself; and (v) activities of Trust were not education, as no activity of charitable in nature was executed by Trust as envisaged in its objects. 45/122 http://www.judis.nic.in T.C.A.No.822 of 2018 26.It is further submitted that as per amended provision of Section 2(15) of Act, activities of relief of poor, education, etc., need to be directly executed by Trust to claim to be activity of charitable purpose. activity of Trust in nature of advancement of any other object of general public utility shall not be charitable, if it is in nature of or in relation to trade, irrespective of nature of application of income from such activity. Therefore, it is submitted that even charitable activity is not for purpose of education, relief for poor cannot be treated as activity of charitable purpose as per Section 2(15) of Act. In assessee's case, they are in business of running newspaper, which does not relate to any of limbs of charitable purpose enumerated in Section 2(15) of Act. Even assuming that proviso to Section 2(15) is made applicable to assessee and, their activity is treated as activity with object of general public utility, then also there is restriction on quantum of benefit. 46/122 http://www.judis.nic.in T.C.A.No.822 of 2018 27.Referring to decision in case of Yogiraj Charity Trust (supra), it is submitted that Hon'ble Supreme Court has held that in spite of all other independent objects, if any of objects cannot be treated as charitable, claim of entire Trust for exemption has to fail, since assessee had carried out activity of trading in newspaper. Further, it is submitted that registration granted to assessee under Section 12A alone was cancelled and registration granted to Aditanar Educational Trust is still in vogue. 28.The decisions rendered by Hon'ble Supreme Court in assessee's own case are distinguishable, because these decisions were rendered before introduction of proviso to Section 2(15) of Act. It is further submitted that Tribunal, which is fact finding authority, has concluded that activity of assessee is in nature of services in relation to trade and, not education. Further, objects of assessee Trust, which have been noted by authorities, clearly show that it does not fall under any of main limbs including education, it does not involve any activities of formal education or running of any educational institutions 47/122 http://www.judis.nic.in T.C.A.No.822 of 2018 approved by Authorities for School or College Education. assessee Trust did not run any formal school or college imparting formal education to be in field of education for purpose of Section 2(15) of Act. 29.Further, it is submitted that decisions in Loka Shikshana Trust (supra), Oxford University Press (supra), Sorabji Nusserwanji Parekh (supra) and Victoria Technical Institute (supra) have held that activities of general trading like that of newspaper or assisting, etc., cannot be treated as education and assessee cannot claim any exemption. With above submissions, learned counsel prayed for sustaining order passed by Tribunal. 30.We have elaborately heard Mr.V.S.Jayakumar, learned counsel for assessee and Mr.J.Narayanaswamy, learned Senior Standing Counsel for Revenue and carefully perused materials placed on record. 31.The substantial question of law to be decided is as to whether cancellation of registration granted to assessee under Section 12A(a) of Act on 30.06.1989, by order dated 08.12.2011 under Section 12AA(3) of Act is right in law. subsidiary question, which falls for 48/122 http://www.judis.nic.in T.C.A.No.822 of 2018 consideration is whether, if order of cancellation/withdrawal of registration is valid, whether can it be cancelled retrospectively with effect from 01.04.2009 (AY 2009-10). DIT(E) held that assessee is not running educational institution, it is only giving donation to Aditanar Educational Trust and word education has been defined in various decisions to mean conventional type of education given in class rooms and, since assessee does not run any schools or colleges, they are not in field of education and that their activity will fall under category of advancement of any other object of general public utility as used in Section 2(15) of Act. This finding was largely based upon decision in case of Loka Shikshanan Trust (supra). Further, by referring to very same decision, DIT(E) held that it is necessary for assessee to run educational institution to qualify under category of word education under Section 2(15) of Act. DIT(E) accepts that objects of Trust as per Supplementary Deed, dated 28.06.1961 have been approved by judgment of this Court in C.S.No.90 of 1961 and it also accepts objects as per Supplementary Deed. However, DIT(E) with view to get over decision of Hon'ble Supreme Court 49/122 http://www.judis.nic.in T.C.A.No.822 of 2018 in assessee's own case, has made observation that decisions of Hon'ble Supreme Court and this Court in assessee's own case, have not dealt with issue that assessee is not running educational institution and when same is undisputed fact, can it be stated that assessee is pursuing objects of education. 32.With regard to binding nature of earlier decisions of this Court and Hon'ble Supreme Court in assessee's own case and regard to plea of promissory estoppel raised by assessee, DIT(E) seeks to get over same by stating that those decisions were rendered prior to insertion of proviso to Section 2(15) of Act. Apart from that, DIT(E) was guided by amount of revenue earned by assessee in their newspaper business. Thus, they brought activity of assessee under head 'objects of general public utility' and not 'education' and conducting business of newspaper having turnover running to crores much more than threshold limit prescribed under said proviso to Section 2(15) of Act. 33.At very outset, it needs to be pointed out that DIT(E) 50/122 http://www.judis.nic.in T.C.A.No.822 of 2018 failed to take note of legal principle of estoppel presumably, not fully aware about effect of such principle with particular reference to facts of case, though not as general proposition in tax law. Admittedly, decisions rendered by this Court and Hon'ble Supreme Court pertain to very same subject matter and parties to litigations were assessee and Income Tax Department. In all these decisions of this Court and Hon'ble Supreme Court in assessee's own case, only issue which fell for consideration, was with regard to objects of assessee as spelt out in Trust Deed dated 01.03.1954, and Supplementary Deed dated 28.06.1981 and it has been held that activity of assessee to be charitable. amendment by way of insertion of proviso to Section 2(15) which itself is definition section, cannot take away or dilute effect of judgment inter-parties and therefore, if such is finding in earlier round of litigations, then undoubtedly, it would bind Department. Therefore, observation made by DIT(E) with regard to applicability of doctrine of estoppel is outcome of wrong understanding of legal principle. While on this issue, we shall refer to as to how activity of assessee was found to be charitable 51/122 http://www.judis.nic.in T.C.A.No.822 of 2018 activity in earlier round of litigations. effect of judgment and decree in C.S.No.90 of 1961, whether assessee though being constituted as Trust and its primary or dominant object being charitable, whether carrying on business for profit and transfer of amounts for charitable purpose is valid application, etc. In assessee's own case in [(1982) 137 ITR 735] (supra), following were substantial questions of law framed for consideration:- "(1) Whether, on facts and circumstances of case, by reason of judgment and decree of Madras High Court in C.S. No. 90 of 1961, objects of trust are only those that are set out in schedule to said decree and not those for which trust was originally founded and that such objects are charitable objects within meaning of section 2(15) of Income-tax Act, 1961 ? (2) Whether, on facts and circumstances of case, trustees are not bound to apply income that is left after meeting lawful and normal expenses for running business for carrying out objects set out in schedule to decree in C.S. No, 90 of 1961 ? (3) Whether, on facts and circumstances of 52/122 http://www.judis.nic.in T.C.A.No.822 of 2018 case, Tribunal was right in holding that trust is in respect of entirety of business for objects mentioned in schedule to decree in C.S. No. 90 of 1961 on file of High Court, Madras, and not merely in respect of income from said business ? (4) Whether, on facts and circumstances of case, mere crediting of 75% of assessee's income to accounts of Adityanar College of Arts and Science in assessee's books will amount to application within meaning of section 11 of Income-tax Act, 1961 ? (5) Whether, on facts and circumstances of case, such application of income should take place during relevant accounting years for claiming exemption under section 11 of Act ? (6) Whether, on facts and circumstances of case, assessee is entitled to exemption in respect of Rs. 3,04,035 only for assessment year 1968-69 ?" 34.The following was finding rendered by Hon'ble Division Bench:- 18. .......... supplementary deed as well as decree in C.S. No. 90 of 1961 proceed on basis 53/122 http://www.judis.nic.in T.C.A.No.822 of 2018 that as original objects had since been achieved, new objects had been substituted for them. new objects are purely charitable. If new objects have been substituted for original objects set out in original trust deed, then property held for original objects should be taken to have been held for new objects. As matter of fact decree in C.S. No. 90 of 1961 specifically states that trustees are bound to carry out objects set out in Schedule to decree with income from Thanthi Trust. Therefore, it is not possible to say that no property is held under trust or other legal obligation for new objects set out in supplementary deed. 19. .......... as per decree of this court in C.S. No. 90 of 1961, trustees are bound to spend entire income after defraying expenses in connection with newspaper business for one or other of objects referred to in schedule to decree, all of which are admittedly charitable and no discretion had been left to trustees to spend income for any non- charitable purposes. .......... question of claiming exemption will arise only when there is surplus income after defraying normal expenses connected with newspaper business. Once there is surplus, there is no 54/122 http://www.judis.nic.in T.C.A.No.822 of 2018 discretion left in trustees to spend same for any non-charitable purpose and they are bound to spend same for any of charitable purposes referred to in schedule to decree, all of which are admittedly charitable objects. 35.In said decision, Court considered decision in case of Surat Art Silk Cloth Manufacturers' Association (supra), which while considering same issue, by majority, disapproved view taken in Loka Shikshana Trust (supra) and Court proceeds to analyse law laid down in Surat Art Silk Cloth Manufacturers' Association (supra) and held as follows:- 22. ............ Supreme Court held that dominant and primary purpose of assessee was to promote commerce and trade in art silk yearn etc., and other objects specified in cls (b) to (e) of its memorandum of association were merely powers incidental to carrying out of that dominant and primary purpose, that dominant or primary purpose of promotion of commerce and trade in art silk, etc., was object of public utility not involving carrying 55/122 http://www.judis.nic.in T.C.A.No.822 of 2018 on of any activity for profit within meaning of s. 2(15) and that, therefore, assessee was entitled to exemption under s. 11(1)(a). Supreme Court also held that as words "not involving carrying on of any activity for profit" qualify or govern only last head of charitable purpose of trust or institution is relief of poor, education or medical relief, requirement of definition of "charitable purpose" would be fully satisfied, even if activity for profit is carried on in course of actual carrying out of primary purpose of trust or institution. principle laid down by Supreme Court in said decision seems to squarely apply to facts of this case. In this case property held under trust or under legal obligation is business itself and entire income from business has to be utilised for various charitable objects set out in schedule to decree in C.S. No. 90 of 1961. Thus, objects will clearly fall under head "relief of poor, education, medical relief, etc.", and merely because trust is carrying on activity for profit for purpose of carrying on charitable objects referred to in schedule to decree, it cannot be deprived of benefit of section 11. 56/122 http://www.judis.nic.in T.C.A.No.822 of 2018 36.With regard to property held under Trust, business activities and exclusivity of carrying on charitable purpose etc., it was held as follows:- 25.In case on hand property held under trust is business itself and business is carried on only, and exclusively, for carrying out charitable objects set out in schedule to decree in C.S. No. 90 of 1961. As pointed out by Supreme Court, if contention of Revenue that once trust carries on business activity, it does benefit of s. 11 is accepted, no trust can carry on any business even for fulfilment of charitable objects, such as, relief of poor, education and medical relief and, therefore, such contention cannot be accepted. If intention of Legislature were to prohibit trust or institution established for charitable purpose or for promotion of object of general public utility from carrying on any activity for profit, it would have provided in clearest terms that no such trust or institution should carry on any activity for profit. On other hand Legislature by enacting s. 11(4) under which business may also be 57/122 http://www.judis.nic.in T.C.A.No.822 of 2018 property held under trust appears to contemplate trust actually carrying on business for charitable purposes or for general public utility. 37.Ultimately, Court held that objects of assessee Trust fall within first two categories referred to in Section 2(15) of Act, by giving following reasoning. 26.In this case founder of trust has clearly evinced intention to create public charitable trust as seen from preamble and cl 3(k) of original trust deed and charitable objects referred to in schedule to decree in C.S. No. 90 of 1961 have to be fulfilled from and out of income from business which is directed to be held under trust or other legal obligation. Those charitable objects fall within first 2 categories referred to in s. 2(15), viz., relief of poor and education. It is to carry out and fulfil those objects business is being carried on. Thus, primary purpose is to carry out charitable objects and business is carried on as means in course of actual carrying out of that primary purpose and not as end in itself. While predominant object of trust is 58/122 http://www.judis.nic.in T.C.A.No.822 of 2018 carrying out of charitable objects referred to in two of three categories of charitable purposes referred to in s. 2(15), carrying on of business which is actually property held under trust or other legal obligation is incidental, and profit resulting from business can be taken to be by-product. In view of said decision of Supreme Court in Addl. CIT v. Surat Art Silk Cloth Mfs. Assn. , it is not possible to accept case of Revenue that trust in this case cannot claim benefit of exemption under s. 11 merely because it carries on commercial activity for profit. We have to, therefore, agree with conclusion of Tribunal that trust in this case can claim benefit of s. 11, if 75% of its income has been applied for charitable purposes and answer questions Nos. 1 to 3 in affirmative and against Revenue. 38.Next, Court proceeded to consider as to whether there has been application of income of Trust for charitable purposes and after referring to earlier decisions, it was held as follows:- 34. .............. conduct of educational institution in drawing from assessee trust larger sums 59/122 http://www.judis.nic.in T.C.A.No.822 of 2018 that what was been credited by trust in its favour in 1969-70 shows that it was fully aware of its credit with assessee-trust and funds that had been made available to it by trust. If amounts had been actually handed over to Adityanar College during assessment years in question assessee could claim benefit of exemption under s. 11 as college has been established only for educational purposes and no part of its fund can be utilised for non-charitable purposes, and Revenue cannot insist that unless educational institution expands amount donated by assessee within assessment year, assessee cannot claim benefit of exemption under s. 11. In this connection it is pertinent to refer to decision in IRC v. Helen Slater Charitable Trust Ltd. [1980] 3 WLR 157; 1 All ER 785, wherein while considering assessee's claim for exemption under s. 360(1)(c) of Income and Corporation Taxes Act, 1970, and s. 35(1) of Finance Act, 1965, court held that charitable institution which makes outright transfer of money applicable for charitable purposes to any other charity in such manner as to pass to transferee full title to money, must be said, by transfer itself, to have applied such money for charitable purposes, within meaning of s. 360(1) of 60/122 http://www.judis.nic.in T.C.A.No.822 of 2018 1970 Act and s. 35(1) of 1965 Act, unless transferor knew or ought to have known that money would be misapplied by transferee and that trust which has applied the money for charitable purposes was entitled to exemption without having to show how money hadp been dealt with by transferee- institution........... 35. ............ In our view, credit entries in this case, when taken along with conduct of donee institution of drawing he amounts later, would amount to gift of money in favour of educational institution and as such is proper "application" as contemplated by s. 11. It is not case of mere credit entry which could be reversed at any time; nor is it case where credit entry has been made without there being any cash on hand, so that it could be said that assessee was not in position to physically handover money on dates of credit entries. We cannot agree with view of Tribunal that amounts which had been credited in favour of educational institution for assessment years in question had not been applied for charitable purposes as contemplated by s. 11. ............. 39.The above findings are binding on Department and 61/122 http://www.judis.nic.in T.C.A.No.822 of 2018 argument that on ground of insertion of proviso to definition of 'charitable purpose' as defined under Section 2(15), would nullify effect of judmgment, which considered conditions in Deed of Trust, Supplementary Deed, which was affirmed by judgment and decree of this Court in C.S.No.90 of 1961, cannot be taken away or diluted. In fact, DIT(E) candidly admits that judgment and decree in C.S.No.90 of 1961 has given stamp of approval to Deed of Trust and Supplementary Deed. Having accepted so, observations made by DIT(E) to get over decisions in assessee's own case are utterly perverse. 40.In (2009) 239 ITR 0502, view taken by this Court was affirmed in assessee's own case by Hon'ble Supreme Court by holding as hereunder:- 2.It appears that Adityanar College was run, not by assessee-trust, but by another registered charitable society. In circumstances, High Court was right in conclusion which it arrived at. It may also be mentioned that it is no part of Revenue's case at any point of time that credit entries made in 62/122 http://www.judis.nic.in T.C.A.No.822 of 2018 assessee's books of account were not genuine or true or that they were mere make-believe or bogus. It is also not brought to our notice that ITO doubted said entries and called upon assessee to produce accounts of college and that assessee failed to produce same. 41.The Trust to which, entire income earned by assessee after defraying expenses viz., Aditanar Educational Trust's case was dealt with by Hon'ble Supreme Court in Aditanar Educational Institution (supra). Revenue contended that plea of exemption under Section 10(22) of Act would apply only to educational institution as such and not to assessee which might be financing for running educational institution, but it not being educational institution itself. Hon'ble Supreme Court while considering question, held as follows:- 7. ............ It will be rather unreal and hyper- technical to hold that assessee-society is only financing body and will not come within scope of other educational institution as specified in s.10(22) of Act. object of society is to establish, run, 63/122 http://www.judis.nic.in T.C.A.No.822 of 2018 manage or assist colleges or schools or other educational institutions solely for educational purposes and in that regard to raise or collect funds, donations, gifts, etc. Colleges and schools are media through which assessee imparts education and effectuates its objects. In substance and reality, sole purpose for which assessee has come into existence is to impart education at levels of colleges and schools and so, such educational society should be regarded as 'educational institution' coming within s. 10(22) of Act. We hold accordingly. In our view, judgment of High Court does not merit interference. plea of Revenue to contrary is untenable and we repel same. ........... 8. ............ After meeting expenditure, if any surplus results incidentally from activity lawfully carried on by educational institution, it will not cease to be non existing solely for educational purposes since object is not one to make profit. decisive or acid test is whether on overall view of matter, object is to make profit. In evaluating or appraising above, one should also bear in mind distinction/difference between corpus, objects and powers of concerned entity. ......... 64/122 http://www.judis.nic.in T.C.A.No.822 of 2018 42.In assessee's own case in [(2001) 247 ITR 0785 (SC)], Hon'ble Supreme Court examined claim of assessee Trust for exemption for assessment years 1979-80 to 1983-84, which was rejected having regard to provisions of Section 13(1)(bb) of Act. rejection was challenged by assessee by filing writ petition before this Court, which was allowed vide decision reported in (1995) 213 ITR 626 (Madras). Court while allowing writ petition, took note of decision in assessee's case in (1981) 23 CTR 153 (Madras) = (1982) 137 ITR 735, which had become final and binding on Revenue that primary purpose of Trust was to carry out its charitable objects and that business is carried on only as means in course of actual carrying on purpose of Trust. Revenue challenged said order before Hon'ble Supreme Court and it was held that assessee Trust is entitled to benefit of Section 11 for assessment year 1992-93 and thereafter, it was specifically mentioned that it is not in dispute that income of its newspaper business has been employed to achieve its objects of education and relief to poor and it has maintained separate books of accounts in respect of thereof. Therefore, Hon'ble Supreme Court had categorically 65/122 http://www.judis.nic.in T.C.A.No.822 of 2018 held that primary purpose of assessee Trust was to carry out charitable objects and business of newspaper was only as means in course of actual carrying on purpose of Trust. 43.In assessee's own case, [(1999) 238 ITR 0635], writ petition was filed challenging action of Revenue in attempting to levy tax on income derived from newspaper business by relying upon provision, which was introduced under Section 11(4A). Hon'ble Court after taking note of decisions in assessee's case in 137 ITR 735 (Madras) and 213 ITR 626 (Madras), held that business of assessee Trust continued to be outside purview of sub-Section (4A) of Section 11, even after amendment. 44.In case of Thanthi Trust vs. CBDT & Ors. [(1995) 213 ITR 0639], assessee filed bunch of writ petitions to quash Circular No.372, dated 08.12.1983 issued by CBDT and orders of Department denying exemption under Section 11 of Act to assessee Trust for assessment years 1984-85 to 1991-92 and, to direct 66/122 http://www.judis.nic.in T.C.A.No.822 of 2018 Department to consider assessee's claim for exemption under Section 11, independent of Circular No.372, dated 08.12.1983. It was held that inasmuch as business carried on by assessee is itself held under 'Trust for public charitable purposes' and business is carried on only for purposes of carrying on charitable objects as found by Hon'ble Division Bench in 137 ITR 735 (Madras), provisions of sub-Section (4A) of Section 11 cannot have any application. appeal filed by Revenue against decision in 137 ITR 735 (Madras), in case of CIT vs. Thanthi Trust [(1999) 239 ITR 0502] was considered by Hon'ble Supreme Court wherein, it was held that Aditanar College was run, not by assessee Trust, but by another registered charitable society and in such circumstances, High Court was right in its conclusion which it had arrived at holding that no part of Revenue's case, at any point of time that credit entries made in assessee's books of account were not genuine or true or that they were mere make-believe or bogus. Further, it was observed that it was also not brought to notice of Hon'ble Supreme Court that ITO doubted said entries and called upon assessee to produce accounts of College and that assessee failed 67/122 http://www.judis.nic.in T.C.A.No.822 of 2018 to produce same. With these observations, appeal filed by Revenue was dismissed. Thus, in light of above decisions in assessee's own case, it will be too late in day for Revenue to now contend that activities of assessee are not charitable purposes. attempt of Revenue is to rake up settled issue with attempt to reopen entire matter under guise of introduction of provision of Section 2(15), which defines 'charitable purpose'. Such attempt is wholly unsustainable and impermissible under law. Revenue is estopped both on law as well as on facts from raising any contention as mentioned by DIT(E) in its order dated 08.12.2011. said order is outcome of wrong understanding of legal provisions, effect of judgment in C.S.No.90 of 1961 and series of litigations between Department and assessee Trust all of which were in favour of assessee. Thus, on facts of case, principle of estoppel will hit Revenue and they are not entitled to state that assessee Trust is not carrying on charitable activity and thus, it is not in field of education, etc. 45.Having steered clear of this issue based on decisions 68/122 http://www.judis.nic.in T.C.A.No.822 of 2018 rendered by Hon'ble Supreme Court in assessee's own case, we now move on to consider other decisions on what is meaning of 'education'. We have seen that DIT(E) in its order dated 08.12.2011, has made observation that word 'education' has not been defined under Act and therefore, he would refer to decision in case of Victoria Technical Institute (supra), Oxford University Press (supra), Sorabji Nusserwanji Parekh (supra) and Loka Shikshana Trust. 46.The argument of Mr.V.S.Jayakumar, is that decision in Loka Shikshana Trust (supra) was rendered by Three Judge Bench of Hon'ble Supreme Court. As per observation of Hon'ble Mr.Justice M.H.Beg, as could be seen from paragraph 32 of judgment, it has been observed that although term 'education', as used in Section 2(15) of Act, seems wider and more comprehensive than education through educational institutions, such as universities, whose income is given exemption from income tax separately under Section 10(22) provided educational institution concerned does not insist for purpose of profit , yet it seems that educational effects of newspaper or publishing business 69/122 http://www.judis.nic.in T.C.A.No.822 of 2018 are only indirect, problematical and quite incidental so that, without imposing any condition or qualification upon nature of information to disseminate or material to be published, mere publication of news or views cannot be set to serve purely or even predominantly education purposes in its ordinary usual sense. Hon'ble Mr.Justice H.R.Khanna in paragraph 41 of judgment has held that what education connotes in clause (15) of Section 2 is process of training and developing knowledge, skill, mind and character of student by normal schooling. It is submitted that there is no separate view recorded by Hon'ble Mr.Justice A.C.Gupta, who was third Hon'ble Judge in Three Judge Bench. Therefore, it is submitted that one of Hon'ble Judges of Three Judge Bench has given wider meaning to word 'education' occurring in clause (15) of Section 2 whereas, other Hon'ble Judge has given narrower meaning to word 'education' to mean normal schooling. 47.In Surat Art Silk Cloth Manufacturers' Association (supra), Hon'ble Supreme Court considered decision in Loka Shikshana Trust (supra) and observed that while they agree with decision that 70/122 http://www.judis.nic.in T.C.A.No.822 of 2018 activity involved in carrying out charitable purpose must not be motivated by profit objective, but it must be undertaken for purpose of advancement or carrying out of charitable purpose, observed that it will be difficult to accept views in Loka Shikshana Trust (supra) that whenever activity is carried on which yields profit, inference must necessarily be drawn in absence of some indication to contrary that activity is for profit and charitable purpose involves carrying on activity for profit. It was further pointed out that Court would not be justified in drawing any such inference merely because, activity results in profit. Further, it was observed that there is no necessity for provision in constitution of Trust that activity shall be carried on 'no profit no loss' basis or profit shall be prescribed. It was observed that even if there is no such express provision, nature of charitable purpose, manner in which activity for advancing charitable purpose is being carried on and surrounding circumstances may clearly indicate that activity is not propelled by dominant profit motive. Therefore, it is held that what is necessary to be considered is whether having regard to all facts and circumstances of case, dominant object of activity is 71/122 http://www.judis.nic.in T.C.A.No.822 of 2018 profit making or carrying out charitable purpose. If it is former, purpose would not be charitable purpose, but if it is latter, charitable character of purpose would not be lost. In paragraph 29 of judgment, Court expressed its view of disagreement with views expressed by Hon'ble Mr.Justice H.R.Khanna and Hon'ble Mr.Justice A.C.Gupta in Loka Shikshana Trust (supra). observation is as follows:- quantum of income is no test in itself. It may be result of activity permissible under truly charitable purpose for, as has been observed, profitable activity in working out charitable purpose is not excluded. I am unable to agree, with respect, with all that has fallen from H. R. Khanna and A. C. Gupta, JJ. In Sole Trustee, Loka Shikshana Trust v. Commissioner of Income-tax, Mysore that terms of trust must impose restrictions on making profits otherwise purpose of trust must be regarded as involving carrying on of profit making activity. On contrary, 1 find myself in agreement with Beg, J. to extent that he says, in same case, that it is genuineness of purpose, that it is truly charitable, which determines 72/122 http://www.judis.nic.in T.C.A.No.822 of 2018 issue. It seems necessary to me that distinction must constantly be maintained between what is merely definition of "charitable purpose" and powers conferred for working out or fulfilling that purpose. While purpose and powers must correlate, they cannot be identified with each other. Reference may, of course, be made to nature and width of powers as evidence of charitable or non-charitable nature of purpose. For same reason, I a.m compelled, with respect, to hold that observations of Krishna Iyer, J. speaking for Court in Indian Chamber of Commerce v. Commissioner of Income-tax, West Bengal-ll(1) do not accord with what I believe to be true construction of s. 2(15). If that decision can be justified, it can be only on basis that in opinion of court true purpose of trust or institution was not essentially charitable. I am unable to accept proposition that if purpose is truly charitable,, attainment of purpose must rigorously exclude any activity for profit. I am also unable to endorse position that by permitting, trust or institution to carry on activity which brings in profit, although that activity is carried on in course of working out of purpose of trust or institution, "business men have high road to tax avoidance". It was 73/122 http://www.judis.nic.in T.C.A.No.822 of 2018 apparently not brought to notice of learned judges that carefully enacted scheme has been incorporated in Act which closely controls utilisation of trust income, and that tax exemption is conditional on observance of statutory conditions stipulated in that schedule. 48.Thus, it is argued that in light of observations in Surat Art Silk Cloth Manufacturers' Association (supra), observations made by Hon'ble Supreme Court in Loka Shikshana Trust (supra) giving narrower and restricted meaning to word 'education' is obiter dicta. While on this issue, it would be worthwhile to refer to few decisions of High Courts which had dealt with aspect as to whether word 'education' should be given restrictive meaning. 49.In Gujarat State Cooperative Union vs. CIT [(1992) 195 ITR 0279 (Guj.)], question which fell for consideration was whether Tribunal was right in law in holding that applicant therein was not entitled for exemption under Section 10(22) of Act for assessment 74/122 http://www.judis.nic.in T.C.A.No.822 of 2018 years 1972-73 to 1977-78. In said case, State Cooperative Union claimed that activities carried on by it were covered by provisions of Section 10(22), as it was educational institution existing solely for educational purposes and therefore, they are entitled to exemption from income tax. Division Bench noted decision in Loka Shikshana Trust (supra) and held that observations of Hon'ble Supreme Court do not confine word 'education' only when scholastic instructions, but other form of education also are included in word 'education'. operative portion of judgment reads as follows:- Supreme Court has observed that word "education" also connotes whole course of scholastic instruction which person has received. This clearly indicates that observations of Supreme Court were not intended to give narrow or pedantic sense to word "education". By giving further illustrations of traveller gaining knowledge, victims of swindlers and thieves becoming wiser, visitors to night clubs adding to their knowledge hidden mysteries of life, supreme Court has indicated that word "education" is not used in loose sense so as to include 75/122 http://www.judis.nic.in T.C.A.No.822 of 2018 acquisition of even such knowledge. observations of Supreme Court only indicate proper confines of word "education" in context of provisions of section 2(15) of Act. It will not be proper to construe these observations in manner in which they are construed by Tribunal when it infers from these observations, in para 17 of its judgment, that word "education" is limited to schools, colleges and similar institutions and does not extend to any other media for such acquisition of knowledge. observations of Supreme Court do not confine word "education" only to scholastic instructions but other forms of education also are included in word "education". As noticed above, word "schooling" also means instructing or educating. It, therefore, cannot be said that word "education" has been given unduly restricted meaning by Supreme Court in said decision. Though, in context of provisions of section 10(22), concept of education need not be given any wide or extended meaning, it surely would encompass systematic dissemination of knowledge and training in specialised subjects as is done by assessee. changing times and ever widening horizons of knowledge may bring in changes in methodology of teaching shift for 76/122 http://www.judis.nic.in T.C.A.No.822 of 2018 better in institution set up. Advancement of knowledge brings within its fold suitable methods of its dissemination and though primary methods of sitting in classroom may remain ideal for most of initial education, it may become necessary to have different outlook for further education. It is not necessary to nail down concept of education to particular formula or to flow it only through defined channel. Its progress lies in acceptance of new ideas and development of appropriate means to reach them to recipients. 50.The above decision recognises modern trend of education, which is not solely confined to class room teaching, in fact, pandemic has shown that online teaching and virtual classes are order of day and found to be new normal. 51.The above decision was noted by us in Investor Financial Education Academy vs. ITO in T.C.A.No.900 of 2018 dated 04.09.2020, wherein it was held as follows:- 12.The CIT and Tribunal were guided by 77/122 http://www.judis.nic.in T.C.A.No.822 of 2018 decision of Hon'ble Supreme Court in Loka Shikshana Trust (supra). This judgment has held field since 1975. judgment is heavily relied on by Mr.J.Narayanasamy, learned Senior Standing Counsel to state that nature of activity done by assessee cannot be educational activity. We need not labour much to decide this issue, as we are benefited by decision of High Court of Gujarat in case of DIT (Exemption) vs. Ahmedabad Management Association [(2014) 47 taxmann.com 162 (Guj.)]. Court considered decision in Loka Shikshana Trust (supra), as it was argued by Revenue as is done before us that activity is not education as explained in Loka Shikshana Trust (supra) .............. 13. ........ Court has pointed out that observations of Hon'ble Supreme Court in Loka Shikshana Trust (supra) only indicate proper conscience of word education in context of provisions of Section 2(15) of Act and it will not be proper to infer that word education is limited to schools, colleges and similar institutions and does not explain to any other media for such acquisition of knowledge. It has been further pointed out that it cannot 78/122 http://www.judis.nic.in T.C.A.No.822 of 2018 be said that word education has been given unduly restricted meaning by Supreme Court in said decision. above position will apply with full force to case on hand. 14.In case of DIT(E), Chartered Accountants Study Circle [(2012) 23 taxmann.com 444 (Madras)], while considering activities of assessee therein, which was society called Chartered Accountants Study Circle, after analysing objective, it was held that activities of assessee- trust cannot be construed to be one of trade or commerce or business and it would only be charitable in nature and merely because they were selling books and books of professional interest and other reference materials to general public, it would not term their activity as commercial . 15.In Gujarat State Co-operative Union vs. CIT [(1992) 195 ITR 279], Court considered as to whether co-operative union was entitled for exemption under Section 10(22) of Act and one such activity being publication of journal on subject of 'co-operative movement' and held in favour of assessee. 79/122 http://www.judis.nic.in T.C.A.No.822 of 2018 52.While on this issue, it is beneficial to refer to decision in case of Ecumenical Christian Centre vs. CIT [(1983) 139 ITR 0226]. Court while considering writ petition, filed challenging order refusing recognition and issuance of certificate under Section 80G of Act, took note of decision in Loka Shikshana Trust (supra) and held as follows:- 9. .......... Commissioner observed that it was not necessary to consider these facts as, in his opinion, matter was concluded by decision of this court in case of CIT v. Sole Trustee,Lokashikshana Trust [1970] 77 ITR 61. In my opinion, Commissioner was in error in brushing aside material that had been placed before him by company as irrelevant. view had taken by him on basis of decision above mentioned cannot also be said to be accurate. facts in that case lay in narrow compass. matter had been taken up in further appeal to Supreme Court and decision thereof is . Actually in memorandum of association express "Education" had been used. One of judges, Justice Beg, was of opinion that use 80/122 http://www.judis.nic.in T.C.A.No.822 of 2018 of that expression was only camouflage and only object was of commercial nature. Mr. Justice Khanna and Justice Gupta delivered separate judgment. They were also unable to uphold contention on behalf of trust that its main object was education. After discussing what education would comprise, learned judges stated thus : "What education connotes in that clause is process of training and developing knowledge, skill, mind and character of students by normal schooling." Justice Beg stated as follows : "Although term 'education', as used in section 2(15) of Act. Seems wider and more comprehensive than education through educational institutions, such as universities, whose income is given exemption from income-tax separately under section 10(22) provided educational institution concerned does not exist 'for purposes of profit'. Yet it seems to me that educational effects of newspaper or publishing business are only indirect, problematical, and quite incidental so that, without imposing any condition or qualification upon nature of information to be disseminated or material to be published. mere publication of news or views cannot be said to serve 81/122 http://www.judis.nic.in T.C.A.No.822 of 2018 purely or even predominantly educational purpose in its ordinary and usual sense." 53.In ICAI Accounting Research Foundation & Anr. vs. DGIT(E) & Ors. [(2010) 321 ITR 0073 (Delhi)], imparting of education in field of accountancy was held to be charitable purpose and assessee foundation was held to be entitled to exemption under Section 10(23C)(iv) wherein, Court after taking note of decision in ACIT vs. Hamdard Dawakhana (Wakf) [(1986) 157 ITR 637 (Delhi)] where unamended definition of charitable purposes contained in Section 2(15) was considered, it was held that dedication is of business because, dedicated property is neither any building nor trade mark, but business of Hamdard Dawakhana. It was urged that it is not charitable purpose at all and hence, no exemption can be granted. In said case, out of business of Trust, income is being earned by Mutawalli, if this is so, there is no scope for showing that it is charitable purpose. This argument by Revenue was held to be incorrect and not proper construction of Act and that is not meaning to be given to definition. It was held that in order to have charity, you must have source of income, income may 82/122 http://www.judis.nic.in T.C.A.No.822 of 2018 come from gifts, or it may come from running business. In said case, Trust is of portion of income of Hamdard Dawakhana. Although source of income is business, object of Trust is not to run business, but to utilise income of that business for charitable purpose. Further, Court taking note of decision in case of Surat Art Silk Cloth Manufacturers' Association (supra), held that merely because some remuneration was taken by petitioner Foundation for undertaking of such action would not alter character of projects which remained research and consultancy work and test is application of amounts received from those projects. Court also considered amended definition of charitable purpose as it stood at relevant point of time and it was held as follows:- 21. amended definition of charitable purpose" would not alter this position. No doubt, proviso to this definition clarifies that advancement of any other object of general public utility will not be treated as charitable purpose if it involves carrying on of any activity in nature of trade, commerce or business or any activity of rendering service in relation to trade, 83/122 http://www.judis.nic.in T.C.A.No.822 of 2018 commerce or business. However, what is not appreciated by respondent No.1 is that merely on undertaking those three research projects at instance of Government/local bodies. essential character of Petitioner Foundation cannot be converted into one which carries on , cannot be treated as activity which carries on trade, commerce or business or activity of rendering any service in relation to trade, commerce or business. 54.In Alembic Chemical Works Co. Ltd. vs. CIT [(1989) 177 ITR 0377], Hon'ble Supreme Court noted rapid advances in research while considering case whether sum of money was revenue expenditure admissible to assessee for purpose of computation of its total income wherein, assessee entered into agreement with manufacture of antibiotics in Japan, it agreed to supply to assessee requisite technical know-how for manufacture of quantities of penicillin. amount paid by assessee to Japanees company was claimed as deduction, revenue expenditure. ITO held it to be capital outlay, as it amounted to acquisition of asset or advantage of enduring 84/122 http://www.judis.nic.in T.C.A.No.822 of 2018 benefit. Tribunal held it to be acquisition of capital asset. On question being referred to High Court, same was answered against assessee. This order was challenged before Hon'ble Supreme Court. While deciding case in favour of assessee, Hon'ble Supreme Court observed that it would be unrealistic to ignore rapid advances in research in antibiotic medical microbiology and to attribute decree of endurability and permanence to technical know-how at any particular stage in fast-changing area of medical science. It was further observed that rapid strides in science and technology in field should make Court little slow and circumspect in too readily pigeon-holing outlay such as said case as capital. Thus, in above decision, modern development was judicially noticed and case on hand itself is example of rapid strides in science and technology, as entire hearing of this appeal was virtual. 55.The assessee in their arguments before Tribunal raised ground contending that DIT(E) failed to appreciate that principle of overriding title will apply to resultant income of newspaper activity 85/122 http://www.judis.nic.in T.C.A.No.822 of 2018 and as per that principle, such amounts are bound to be applied only for charitable purposes and hence, activities of Trust are genuine. 56.We find that though such ground was specifically raised by assessee, Tribunal did not consider same. In earlier paragraphs, following decision in assessee's own case, we have held that activity of assessee is charitable in nature. In fact, in earlier round of litigations, Revenue raised very same contention as raised before us that assessee does not run school or college, but runs newspaper earning huge revenue and same is given to only one Trust and not to other Trusts or education institutions and therefore, it cannot be construed to be genuine charitable activity. decisions in assessee's case had considered very issue and rejected stand of Revenue and we had, following those decisions, rejected stand of Revenue. However, ground with regard to diversion of income from newspaper business to Trust is contended as diversion by overriding. To understand this concept, it will be beneficial to refer to decision of Hon'ble Supreme Court in CIT vs. Tollygunge Club Ltd. [(1977) 107 ITR 0776 86/122 http://www.judis.nic.in T.C.A.No.822 of 2018 (SC)]. question was whether, receipts from surcharge levied on admission tickets for purposes of charity could not be included in assessee's taxable income for assessment year 1960-61. assessee Club, company limited, by guarantee charges for admission into enclosures of club, at time of horse race, admission fee to guests introduced by members of club as well as to members of public. There was no dispute between parties that admission fee received by assessee constitutes trading receipt and exigible to tax. Pursuant to decision taken in general body of said assessee, it levied surcharge of eight annas over and above admission fee, proceeds of which were to give to Red Cross Fund. receipts from surcharge were not credited to profit and loss account, but they were carried directly to separate account styled charity account and accordingly, not brought to tax as income of assessee. ITO did not agree with assessee, held it to be revenue receipts, they could not be excluded from total income of assessee merely on ground that they were applied for charitable purposes. ITO did not dispute that surcharge was disbursed to local charities, but treated disbursement 87/122 http://www.judis.nic.in T.C.A.No.822 of 2018 as application of income belonging to assessee. On appeal before AAC, order of ITO was confirmed. On further appeal to Tribunal, it held that surcharge levied on admission tickets for purpose of charity and receipts in respect of surcharge were not income of assessee at point of time when they reached its hands and being earmarked for charity, they never belong to assessee and were not includible in taxable income of assessee. Revenue moved Tribunal for referring question formulated to High Court for being answered. High Court agreed with view taken by Tribunal, since surcharge on admission tickets was charged for specific purpose of being applied to local charities and stood diverted to local charities before they reach assessee. 57.The correctness of said decision was challenged before Hon'ble Supreme Court, which dismissed appeal filed by Revenue. Court applied test laid down by Hon'ble Supreme Court in CIT vs. Sitaldas Tirathdas [(1961) 41 ITR 367 (SC)] and held that surcharge, being impressed with obligation in nature of trust for 88/122 http://www.judis.nic.in T.C.A.No.822 of 2018 being applied to local charities, was by this obligation diverted before it reaches hands of assessee and, at no stage, it became part of income of assessee. Accordingly, it was held that surcharge received by assessee therein was not regarded as income assessable. While on this issue, it will be beneficial to refer to decision in CIT vs. Bijli Cotton Mills (P) Ltd. [(1979) 116 ITR 0060 (SC)]. assessee therein was private limited company engaged in business of manufacturing and selling yarn. From its inception, it used to realise certain amounts on account of charity from its customers on sales of yarn and bales of cotton and these amounts were shown in separate column headed 'charity' and assessee did not credit in its trading account, but maintained separate charity account. Board of Directors of assessee passed resolution that monies standing in charity account be treated as trust fund of which, two Directors of company were to be Trustees and all monies realised in future from purchase of yarn at one anna per bale or at such rate as may be decided in future, be handed over to two Trustees for being used for charitable basis, as they may be decided upon by them and in particular, utilise such funds for advancement of education and 89/122 http://www.judis.nic.in T.C.A.No.822 of 2018 alleviation of misery and sickness of public in general as they think fit. During course of assessment, assessee took stand that amounts earmarked for charity were not its income from business and not liable to be taxed. This was rejected by ITO and confirmed by AAC as well as Tribunal. High Court held in favour of assessee by holding that charity receipts on account of charity were never treated as trading receipts or as surcharge on sale price and never credited to trading account, nor shown in profit and loss account for any year and following decision in case of Agra Bullion Exchange vs. CIT [(1961) 41 ITR 472 (Allahabad)], allowed assessee's appeal. correctness of judgment of High Court was challenged before Hon'ble Supreme Court wherein, it was held that amounts received by assessee were held by assessee under obligation to spend same for charitable purposes only with result that receipts cannot be regarded as forming any income of assessee. 58.The above referred decisions will be squarely applicable to case of assessee. In fact, DIT(E) accepts this position with regard to 90/122 http://www.judis.nic.in T.C.A.No.822 of 2018 finality of judgment and decree in C.S.No.90 of 1961. In paragraph 7(b) of its order dated 08.12.2011, DIT(E) accepts objects as per Supplementary Deed as ratified in C.S.No.90 of 1961. If such be admitted factual position, then Revenue cannot dispute fact that amounts, which were earned by assessee Trust, have to be necessarily spent for charitable purpose as per mandate under Supplementary Deed as confirmed in C.S.No.90 of 1961 and therefore, it is case of diversion of income by overriding title. Therefore, it goes without saying that Department should be consistent in their approach and change of officers cannot change legal position which stood concluded in assessee's case. argument that Revenue can take re-look because of amendment to Section 2(15) by amended proviso is argument which has to be outrightly rejected especially, when Department has accepted finality of judgment in C.S.No.90 of 1961. (To be noted, Department has no other option, or else they may be liable for contempt of Court.) 59.The Hon'ble Supreme Court in Radhasoami Satsang vs. CIT 91/122 http://www.judis.nic.in T.C.A.No.822 of 2018 [(1992) 193 ITR 0321 (SC)], while considering question whether, income derived by assessee therein, religious institution, is entitled to exemption under Sections 11 and 12 of Act, noted contention raised by assessee that in absence of any change in circumstances, Revenue should have felt bound by previous decisions and no attempt should have been made to reopen question. In support of such contention, assessee relied upon decision of Full Bench of this Court in case of T.M.M.Sankaralinga Nadar & Bros. vs. CIT [(1929) 4 ITC 226 (Madras)] and decision of Hon'ble Supreme Court in case of Parashuram Pottery Works Co. Ltd. vs. ITO [(1977) 106 ITR 1 (SC)] wherein, it was held that policy of law is that there must be point of finality in all legal proceedings, that stale issues should not be reactivated beyond particular stage and that lapse of time must induce repose in and set at rest judicial and quasi-judicial controversies as it must in other spheres of human activity and that assessments are certainly quasi-judicial and these observations equally apply. Hon'ble Supreme Court held that strictly speaking res judicata does not apply to income tax proceedings, each assessment year being unit, what is decided in one year may not 92/122 http://www.judis.nic.in T.C.A.No.822 of 2018 apply in following year where fundamental aspect permeating through different assessment years has been found as fact one way or other and parties have allowed position to be sustained, it would not be appropriate to allow position to be changed in subsequent year. 60.In Surat City Gymkhana (supra) question was whether appeals filed were covered by earlier decision of same High Court, which has not been challenged by Revenue and has attained finality, therefore, appeal is not maintainable before Hon'ble Supreme Court. Hon'ble Supreme Court held that decision of High Court having not been challenged by Revenue and attained finality, assessee was entitled to registration under Section 12A of Act. 61.The above mentioned two decisions explain rule of consistency. As referred to and pointed out in Radhasoami Satsang (supra), there must be point of finality in all legal proceedings and stale issues should not be reactivated beyond particular stage and this would apply to quasi-judicial matters as well income tax assessment being quasi- 93/122 http://www.judis.nic.in T.C.A.No.822 of 2018 judicial, theory of finality is equally applicable. To say least, assessee cannot be harassed. This principle has to be necessarily transposed to facts of instant case on account of various decisions of Hon'ble Supreme Court in assessee's own case, viz., 137 ITR 735, 239 ITR 503 and others wherein, Hon'ble Supreme Court and this Court had considered objects as spelt out in Deed of Trust, as spelt out in Supplementary Deed, judgment and decree in C.S.No.90 of 1961, finding rendered by Division Bench in 137 ITR 735, which was affirmed and all other subsequent decisions have clearly and consistently held that activity done by assessee Trust is charitable activity and they are entitled for registration/exemption. This issue cannot be reopened by Revenue, that too, by perverse interpretation of amendment to proviso to Section 2(15) of Act. 62.Moving step further, we hasten to add that even such argument is remotely possible, is not available to Revenue on account of earlier decisions of this Court and Hon'ble Supreme Court which has attained finality and therefore, issue cannot be reactivated and there can 94/122 http://www.judis.nic.in T.C.A.No.822 of 2018 be no re-look by Revenue on aspect of charitable nature of assessee Trust and therefore, curtain has to be drawn and finality should prevail. While on this issue, we would have been well justified in imposing exemplary cost on Revenue for their unsustainable interpretation. 63.In light of above finding, we are not required to proceed any further to examine other contentions raised by Revenue which largely rest upon observations in Loka Shikshana Trust (supra). We have explained as to how case of Revenue cannot be sustained with reference to said decision. Nevertheless we also note other arguments, which were submitted by learned counsel for appellant, which would go in way to strengthen our conclusion. 64.In Sree Anjaneya Medical Trust vs. CIT [(2016) 382 ITR 0399 (Ker)], it was held that from plain reading of Sections 12A and 12AA of Act, what is intended thereby is only registration simpliciter of entity of trust. This has been made condition precedent for claiming of benefits of provisions of Act regarding exemption of 95/122 http://www.judis.nic.in T.C.A.No.822 of 2018 income, contribution, etc. No examination of modus of application of funds of trust or examination of ethical background of its settlers is called for while considering application for registration. stage for consideration of relevance of object of Trust and application of its funds arise at time of assessment. Where benefits are claimed by assessee in terms of Sections 11 and 12 of Act, question as to nature of such contribution and income can be looked into. At time of registration of Trust, going by binding judgments of Hon'ble Supreme Court, what is to be looked into is whether Trust is genuine one and whether it is sham institution floated only to avail benefits of exemption under Act. Thus, legal principle which is deducible from above decision, which has been rendered following several decisions of Hon'ble Supreme Court including that of Surat Art Silk Cloth Manufacturers' Association case, CIT vs. Dharmadeepti [(1978) 114 ITR 454 (SC)], is that DIT(E) while considering application under Section 12AA of Act is not expected to examine modus of application of funds of Trust or ethical background of settlers and stage for examining such issues will arise 96/122 http://www.judis.nic.in T.C.A.No.822 of 2018 only at time of assessment when assessee claims benefits under Sections 11 and 12 of Act. Thus, in instant case, DIT(E) while passing impugned order dated 08.12.2011 cancelling assessee's registration, applied wrong test and examined with regard to application of funds, which authority is not expected to do while considering application for registration. Therefore, very issuance of show cause notice dated 25.10.2011, proposing to cancel registration on examination of modus of application of funds of Trust is without jurisdiction. 65.In Tamil Nadu Kalvi Kapu Arakkattalai vs. CIT [(2014) 90 CCH 0184 ChenHC], it was held that while considering claim for exemption, substance of claim would be more relevant than form. In other words, authority should not be solely guided by objects set out in various clauses in Instrument of Trust, rather should be guided by activities of Trust, as to how funds are employed, since exemption sought for is under Chapter III of Act, which deals with incomes which do not form part of total income. Thus, under Chapter III, 97/122 http://www.judis.nic.in T.C.A.No.822 of 2018 more particularly, Sections 10 to 13A, Act brings certain categories of exemption and incomes falling within those categories are completely exempt from purview of Act as they are not at all to be included in total income of assessee. Therefore, such type of exemption/s has/have to be distinguished from certain types of income which are included in total income of assessee, but in respect of which, statute provides relief by way of deduction in computing total income, by granting rebate of tax and by granting certain other reliefs to tax payers. 66.While on this issue, it would be useful to refer to decision of Division Bench of this Court, to which, one of us (TSSJ), was party in case of Tamil Nadu Cricket Association vs. DIT(E) [(2013) 40 taxmann.com 250 (Madras)]. substantial questions of law which fell for consideration were whether cancellation of registration under Section 12AA(3) on ground that activities of assessee therein could not be genuine after amendment to definition of charitable purpose; whether activities of said assessee could be set to be not genuine when assessee was carrying on activities in accordance with its 98/122 http://www.judis.nic.in T.C.A.No.822 of 2018 objects and similar to its activities in earlier years merely on account of amendment to definition of charitable purpose in Act. 67.The amendment which was subject matter in said case was amendment by Finance Act, 2008 with effect from 01.04.2009. It does not make much of difference while considering case on hand because, legal issue as to whether amendment to definition of charitable purpose under Section 2(15) can be result in Trust which was enjoying registration under Section 12AA to be held to be carrying on activity which is not genuine and therefore, not entitled to registration. This question was answered in favour of assessee in said case in following terms:- 45. We do not accept submission of learned Standing counsel appearing for Revenue. As rightly observed by learned Senior counsel appearing for assessee, Revenue granted registration under Section 12AA of Act satisfying itself as to objects of association befitting status as charitable purpose as defined under Section 2(15), as it stood in 2003 and after granting registration, if registration is to be cancelled, it must be only on grounds stated under 99/122 http://www.judis.nic.in T.C.A.No.822 of 2018 Section 12AA(3) of Act with reference to objects accepted and registered under Section 12AA, as per law then stood under definition of Section 2(15) of Income Tax Act. Even therein, Courts have defined as to when institution could be held as one for advancement of any other object of general public utility. Thus, if particular activity of institution appeared to be commercial in character, and it is not dominant, then it is for Assessing Officer to consider effect of Section 11 of Act in matter of granting exemption on particular head of receipt. mere fact that said income does not fit in with Section 11 of Act would not, by itself, herein lead to conclusion that registration granted under Section 12AAis bad and hence, to be cancelled. 46. It may be of relevance to note language used in definition "charitable purpose" in Section 2(15) of Act, which states that charitable purpose includes relief of poor, education, medical relief and advancement of any other object of general public utility. assessee's case falls within phrase of definition general public utility . In decision reported in (2000) 246 ITR 188 in case of Hiralal Bhagwati Vs. Commissioner of Income Tax, Gujarat High court 100/122 http://www.judis.nic.in T.C.A.No.822 of 2018 considered said phrase in context of Section 12AA registration and held that registration of charitable trust under Section 12AA of Act is not idle or empty formality; Commissioner of Income-tax has to examine objects of trust as well as empirical study of past activities of applicant; Commissioner of Income-tax has to examine that it is really charitable trust or institution eligible for registration; object beneficial to section of public is object of "general public utility". Gujarat High Court held that to serve as charitable purpose, it is not necessary that object must be to serve whole of mankind or all persons living in country or province; it is required to be noted that if section of public alone are given benefit, it cannot be said that it is not trust for charitable purpose in interest of public; it is not necessary that public at large must get benefit; criteria here is objects of general public utility. Thus, Gujarat High Court held that in order to be charitable, purpose must be directed to benefit of community or section of community; expression "object of general public utility", however, is not restricted to objects beneficial to whole of mankind; object beneficial to section of public is 101/122 http://www.judis.nic.in T.C.A.No.822 of 2018 object of general public utility; section of community sought to be benefited must undoubtedly be sufficiently defined and identifiable by some common quality of public or impersonal nature. 47. above said decision (2000) 246 ITR 188 - Hiralal Bhagwati Vs. Commissioner of Income Tax) came up on April 18, 2000. Evidently, Revenue has not gone on appeal as against this judgment. In decision reported in (2008) 300 ITR 214(SC) in case of Assistant Commissioner of Income Tax Vs. Surat City Gymkhana, reference was made about this decision and Apex Court pointed out that Revenue did not challenge this case and it attained finality. 68.The Revenue filed appeal to Hon'ble Supreme Court against above decision and leave has been granted [2015] 57 taxmann.com 136 (SC). 69.The above decision was followed in Director of Income Tax (E) vs. Gujarat Cricket Association [(2019) 419 ITR 561 (Guj.)]. 70.The last aspect to be considered is under what circumstances, power under Section 12AA(3) can be invoked. said provision states that where trust or institution has been granted registration under clause 102/122 http://www.judis.nic.in T.C.A.No.822 of 2018 (b) of sub-Section (1) or has obtained registration at any time under Section 12A and subsequently, Commissioner is satisfied that activities of such trust or institution are not genuine or are not being carried out in accordance with objects of trust or institution, as case may be, he shall pass order in writing cancelling registration of such trust or registration. In terms of proviso, no order under sub-Section (3) shall be passed, unless such trust or institution has been given reasonable opportunity of being heard. Thus, power under sub-Section (3) of Section 12AA would be invokable under two circumstances mentioned in provision and upon Commissioner being satisfied that activities of trust are not genuine or activities are not in accordance with objects of Trust. 71.In case on hand, there is no allegation that assessee Trust has not carried on its activities in accordance with objects of Trust as set out in Deed of Trust and Supplementary Deed. Revenue has accepted said fact and also acceded to finality of judgment and decree in C.S.No.90 of 1961. DIT(E) seeks to bring 103/122 http://www.judis.nic.in T.C.A.No.822 of 2018 assessee's case in first limb of sub-Section (3) by stating that activities of Trust are not genuine. 72.We find that except for stating that activities are not genuine because of amendment to proviso to Section 2(15), there is no other allegation, with regard to genuineness of Trust. We have referred to decisions to show that amendment to Section 2(15) cannot make activity of trust not genuine, which was hither to genuine while enjoying registration under Section 12AA prior to amendment. Therefore, we are of view that DIT(E) failed to record his satisfaction as required to be done under sub-Section (3) of Section 12AA. satisfaction should be on activities of Trust and finding should be rendered as to how such activities are not genuine. activities of assessee Trust have not been disputed, nor there is any allegation of non genuine activities. Therefore, by referring to amendment to proviso to Section 2(15) and referring to meaning of word 'education' as spelt out in certain decisions, cannot be construed to be satisfaction, which is contemplated under sub-Section (3) of Section 12AA. 104/122 http://www.judis.nic.in T.C.A.No.822 of 2018 73.This very issue was considered in case of CIT(E) vs. Mumbai Metropolitan Region Development Authority ([2020] 115 taxmann.com 71 (Bombay)) wherein, it was held that competent authority under Section 12AA(3) must be satisfied that activities of Trust are not genuine or that activities are not being carried out in accordance with objects of Trust or institution and such satisfaction must be recorded as matter of fact on basis of specific materials on record. Merely saying that activities of Trust are hit by proviso to Section 2(15) would not lead to automatic cancellation of registration, as that is not ground provided under Section 12AA(3) for cancellation of registration. In said case, DIT(E) took view that assessee was hit by proviso to Section 2(15) and therefore, it was deemed that Trust had become non-genuine. Such view was held to be wholly untenable, being contrary to mandate of Section 12AA(3) and liable to be set aside. 74.On same point, is decision in case of Goa Industrial Development Corporation vs. CIT ([2020] 116 taxmann.com 42 105/122 http://www.judis.nic.in T.C.A.No.822 of 2018 (Bombay)), wherein, it was held that Section 2(15) that by itself would not render activities of assessee as non-genuine activities so as to enttile Commissioner to exercise powers under Section 12AA(3) to cancel registration. In said case, similar question arose where also, registration was cancelled, as assessee was hit by proviso to Section 2(15). Court referred to Circular No.21/2016 dated 27.05.2016, issued by CBDT, which states that cancellation of registration has to be initiated strictly in accordance with provisions under Section 12AA(3) and after carefully examining application of said provision. Further, merely because in particular year, limits may be exceeded, is not good ground to cancel registration itself. 75.In DIT(E) vs. Khar Gymkhana [(2016) 385 ITR 0162 (Bom)], Court considered Circular No.21/2016 and held that registration granted under Section 12AA could not be cancelled merely on ground receipts on account of business exceeded cut-off specified in proviso to Section 2(15) of Act. jurisdiction to cancel registration only arises if there is change in activity of institution or activities of 106/122 http://www.judis.nic.in T.C.A.No.822 of 2018 institution are not genuine. It was further held that Circular No.21 of 2016 directs officer of Revenue not to cancel registration only because receipts on account of business are in excess of limits in proviso to Section 2(15) of Act. 76.In DITE vs. Seervi Samaj Tambaram Trust [(2014) 362 ITR 0199 (Madras)] to which, one of us (TSSJ) was party, Court considered as to what is nature of satisfaction that has to be recorded under Section 12AA of Act in following terms:- 9.In present case also, Revenue only questions trust not having commenced its activity for grant of registration. provision under Section 12AA of Income Tax Act does not stipulate such condition for grant of registration. On other hand, Section 12AA (1) contemplates satisfaction of Commissioner about objects of Trust and genuineness of activities and make such enquiry as may be necessary for purpose of grant of registration. In so considering application, Commissioner has to give opportunity to assessee 107/122 http://www.judis.nic.in T.C.A.No.822 of 2018 as provided for under proviso to sub-section (1) of Section 12AA. Under sub-section (3) of Section 12AA, Commissioner is given power to cancel registration, if he satisfies that objects of such trust are not genuine or not being carried on in accordance with objects of trust. When such authority is vested with Commissioner to cancel registration in event of trust not being carried on in accordance with objects of trust, we do not find any ground to say that merely on date of application, assessee trust had not commenced its activities, hence, registration could not be granted. It is not denied by assessee that on date of application under Section 12AA, it was yet to commence its operation. But nevertheless genuineness of objects of trust were not questioned by Commissioner. Considering fact that continuance of registration is further subject matter of scrutiny by Commissioner as contemplated under Section 12AA(3) of Income Tax Act, we do not think that Revenue would be justified in refusing registration at threshold. Tribunal had followed decision of Gujarat High Court in case of CIT V. Kutchi Dasa Oswal Moto Pariwar Ambama Trust reported in 108/122 http://www.judis.nic.in T.C.A.No.822 of 2018 29 Taxman 228. We respectfully agree with decision of Gujarat High Court. 77.In recent decision of Hon'ble Supreme Court in Ananda Social & Educational Trust vs. CIT ([2020] 114 taxmann.com 693 (SC)), Hon'ble Supreme Court explained as to duties cast upon Commissioner under Section 12AA while considering application for registration in following lines:- 9.Section 12AA undoubtedly requires Commissioner to satisfy himself about objects of trust or institution and genuineness of its activities and grant registration only if he is so satisfied. said section requires Commissioner to be so satisfied in order to ensure that object of trust and its activities are charitable since consequence of such registration is that trust is entitled to claim benefits under sections 11 and 12 of Act. In other words, if it appears that objects of trust and its activities are not genuine that is to say not charitable Commissioner is entitled to refuse and in fact, bound to refuse such registration. 10. ............. 109/122 http://www.judis.nic.in T.C.A.No.822 of 2018 11. ........... purpose of section 12AA of Act is to enable registration only of such trust or institution whose objects and activities are genuine. In other words, Commissioner is bound to satisfy himself that object of Trust are genuine and that its activities are in furtherance of objects of Trust, that is equally genuine. 12.Since section 12AA pertains to registration of Trust and not to assess of what trust has actually done, we are of view that term activities in provision includes proposed activities . That is to say, Commissioner is bound to consider whether objects of Trust are genuinely charitable in nature and whether activities which Trust proposed to carry on are genuine in sense that they are in line with objects of Trust. In contrast, position would be different where Commissioner proposes to cancel registration of Trust under sub- section (3) of section 12AA of Act. There Commissioner would be bound to record finding that activity or activities actually carried on by Trust are not genuine being not in accordance with objects of Trust. Similarly, situation would be different where trust has before applying for registration found 110/122 http://www.judis.nic.in T.C.A.No.822 of 2018 to have undertaken activities contrary to objects of Trust. 78.The decision in CIT vs. Sisters of Our Lady of Providence Education Society [(2015) 122 DTR 0194 (Allahabad)], Court has explained as to nature of satisfaction that has to be recorded and held that merely because exemption under Section 10(23C)(vi) is declined, it does not amount to refusal of registration under Section 12AA, nor registration can be cancelled on that ground. 79.In CIT vs. J.K.Charitable Trust ([1991] 59 Taxman 602 (Allahabad)), it was held that contribution to another charitable trust is application for charitable purposes, in other words, such contribution to another charitable Trust by assessee Trust cannot be treated as income of assessee Trust in year of contribution. To same effect is decision in case of CIT vs. Sarladevi Sarabhai Trust [(1988) 172 ITR 0698 (Guj.)] and also judgment in case of CIT vs. Trustees of Jadi Trust [(1982) 133 ITR 0494 (Bom.)] and decision in CIT vs. Shri Ram Memorial Foundation [(2004) 269 ITR 0035 (Delhi)]. 111/122 http://www.judis.nic.in T.C.A.No.822 of 2018 80.In CIT vs. Kutchi Dasa Oswal Moto Pariwar Ambama Trust [(2014) 362 ITR 0192 (Guj.)], Revenue's appeal was dismissed holding that CIT(A) was not justified in rejecting registration to Trust under Section 12A merely on ground that activities of Trust had not commenced. CIT had also made comment upon activities of assessee by stating that they are contributing only to one Trust and not to other Trust with similar objects. question is whether this can be reason for cancellation of registration. answer to same should be in negative because, this aspect was dealt with in earlier round of litigation and held against Revenue. While on this issue, it would be useful to refer to decision in case of CIT vs. Hindusthan Charity Trust [(1983) 139 ITR 0913 (Cal.)]. In said case, donation was made by assessee Trust to another Trust and question was whether assessee was entitled for exemption under Section 4(3)(i). It was held that donation made to another Trust, which was charitable or eligible was entitled for exemption under Section 4(3)(i). 81.In Director of Income Tax (E) vs. Chartered Accountants 112/122 http://www.judis.nic.in T.C.A.No.822 of 2018 Study Circle [(2012) 347 ITR 0321], activities of Trust in publishing and selling books of professional interest meant to be used as reference materials by general public as well as by professionals in respect of bank audit, tax audit, etc., was held to be not commercial in nature. 82.In case of CIT vs. Shri Aurobindo Memorial Fund Society [(2001) 247 ITR 0093 (Madras)], it was held that donation by charitable Trust to another charitable Trust would amount to application of income for charitable purposes and requirements of Section 11 are satisfied. In said decision, judgment of assessee Trust in 137 ITR 735 was relied on. 83.In CIT vs. Matriseva Trust [(2000) 242 ITR 0020], following decision in assessee's case in 137 ITR 735, it was held that donation to another charitable Trust would be application of income for charitable purposes. 84.Finally, we have to consider as to whether retrospective 113/122 http://www.judis.nic.in T.C.A.No.822 of 2018 cancellation of registration with effect from 01.04.2009 would be valid. This issue is no longer res integra, as it has been held against Revenue in decision in Industrial Infrastructure Development Corporation (Gwaliar) M.P Ltd. (supra) wherein, it has been held as hereunder:- 21. In our considered opinion, CIT had no express power of cancellation of registration certificate once granted by him to assessee under Section 12A till 01.10.2004. It is for reasons that, first, there was no express provision in Act vesting CIT with power to cancel registration certificate granted under Section 12A of Act. Second, order passed under Section 12A by CIT is quasi judicial order and being quasi judicial in nature, it could be withdrawn/recalled by CIT only when there was express power vested in him under Act to do so. In this case there was no such express power. 22. Indeed, functions exercisable by CIT under Section 12A are neither legislative and nor executive but as mentioned above they are essentially quasi judicial in nature. 23. ............. 24. ............. 25. ............. 114/122 http://www.judis.nic.in T.C.A.No.822 of 2018 26. ............. 27. It is not in dispute that express power was conferred on CIT to cancel registration for first time by enacting sub-Section (3) in Section 12AA only with effect from 01.10.2004 by Finance (No.2) Act 2004 (23 of 2004) and hence such power could be exercised by CIT only on and after 01.10.2004, i.e., (assessment year 2004-2005) because amendment in question was not retrospective but was prospective in nature. 28. issue involved in this appeal had also come up for consideration before three High Courts, namely, Delhi High Court in case of Director of Income Tax (Exemptions) vs. Mool Chand Kairati Ram Trust, (2011) 243 CTR(Del) 245, Uttaranchal High Court in case of Welham Boys School Society vs. CBDT, (2006) 285 ITR 74(Uttaranchal) and Allahabad High Court in case of Oxford Academy for Career Development vs. Chief Commissioner of Income Tax & Ors. (2009) 315 ITR 382 (All). 29. All three High Courts after examining issue, in light of object of Section 12A of Act and Section 21 of General Clauses Act held that order of CIT passed under Section 12A is quasi 115/122 http://www.judis.nic.in T.C.A.No.822 of 2018 judicial in nature. Second, there was no express provision in Act vesting CIT with power of cancellation of registration till 01.10.2004; and lastly, Section 21of General Clauses Act has no application to order passed by CIT under Section 12A because order is quasi judicial in nature and it is for all these reasons CIT had no jurisdiction to cancel registration certificate once granted by him under Section 12A till power was expressly conferred on CIT by Section 12AA(3) of Act w.e.f. 01.10.2004. 85.In ACIT vs. Agra Dev Authority ([2018)] 90 taxmann.com 282 (Allahabad)), it was held that Commissioner was not authorized under Section 12AA(3) to cancel registration of charitable Trust retrospectively. In said decision, CBDT Circulars in Circular No.762 dated 18.02.1998 and Circular No.21 of 2016 dated 27.05.2016 were referred to. 86.The learned Senior Standing Counsel referred to decision in Yogiraj Charity Trust (supra), in support of his contention that business conducted by assessee Trust in newspaper is non-charitable 116/122 http://www.judis.nic.in T.C.A.No.822 of 2018 activity and therefore, assessee is not entitled for registration. In this regard, learned counsel referred to paragraph 12 of judgment. However, on reading of judgment in its entirety, we find that it supports case of assessee, rather Revenue. 87.Before we conclude, it would be relevant to take note of CBDT instruction No.1132, dated 05.01.1978 with regard to availability of exemption in hands of charitable Trusts of amounts paid as donation to other charitable Trusts. CBDT has instructed as follows:- issue has been considered by Board and it has been decided that as law stands at present, payment of sum by one charitable trust to another for utilisation by donee trust towards its charitable objects is proper application of income for charitable purpose in hands of donee trust; and donor trust will not lose exemption under Section 11 of Income-tax Act, 1961, merely because donee trust did not spend donation during year of receipt itself. above position may kindly be brought to notice of all officers working your charge. 117/122 http://www.judis.nic.in T.C.A.No.822 of 2018 88.Circular No.1 of 2011 dated 06.04.2011 issued by CBDT deals with various aspects and clause 7 of circular deals with 'cancellation of registration obtained under Section 12A of Act', which reads as follows:- 7.Cancellation of registration obtained under Section 12A 7.1. Section 12AA provides procedure relating to registration of trust or institution engaged in charitable activities. Section 12AA(3) previously provided that if activities of trust or institution are found to be non-genuine or its activities are not in accordance with objects for which such trust or institution was established, registration granted under Section 12AA can be cancelled by Commissioner after providing trust or institution opportunity of being heard. 7.2. power of cancellation of registration is inherent and flows from authority of granting registration. However, judicial rulings in some cases have held that Commissioner does not have power to cancel registration which was obtained 118/122 http://www.judis.nic.in T.C.A.No.822 of 2018 earlier by any trust or institution under provisions of Section 12A as it is not specifically mentioned in Section 12AA. 7.3. Therefore, Section 12AA has been amended to provide that Commissioner can also cancel registration obtained under Section 12A as it stood before amendment by Finance (No.2) Act, 1996. 7.4. Applicability This amendment has been made applicable with effect from 1st June, 2010 and shall accordingly apply for assessment year 2011-12 and subsequent assessment years. 89.Circular No.1 of 2011 will clearly show that amendment brought out in Section 12AA is applicable with effect from 1st June, 2010, i.e., from assessment year 2011-12 and subsequent years. Therefore, retrospective cancellation of registration of assessee is wholly without jurisdiction and assessee cannot be vexed repeatedly on same issue and reason for invoking power under sub-Section (3) of Section 12AA is wholly unsustainable, without any basis and suffers from perversity writ large on face of order. Unfortunately, Tribunal misdirected itself by addressing wrong question without taking note of 119/122 http://www.judis.nic.in T.C.A.No.822 of 2018 earlier decisions rendered in assessee's own case. DIT(E) has not recorded his satisfaction that activities of assessee Trust are not genuine, nor he has made any observation that assessee had carried out activities which are not covered in Trust Deed or in judgment and decree in C.S.No.90 of 1961. decisions relied on by Revenue, in fact, would go to assist case of assessee, rather Revenue. DIT(E) committed gross error in restricting meaning of word 'education' and did not appreciate effect of decision in Loka Shikshana Trust (supra), which was considered in several other subsequent decisions. Above all, DIT(E) and Tribunal violated rule of consistency by showing utter disregard to judgments of Hon'ble Supreme Court and this Court in assessee's own case on very same subject and orders of DIT(E) and Tribunal have to be termed to be 'utterly perverse'. Tribunal lost sight of distinction between claim for registration under Section 12AA and claim for exemption under Section 11 of Act. To say least, Tribunal's justification would amount to judicial indiscipline for not following decision of Hon'ble Supreme Court and this Court in assessee's own case. DIT(E) failed 120/122 http://www.judis.nic.in T.C.A.No.822 of 2018 to adhere to instructions issued by CBDT which is binding on DIT(E). As observed earlier, recent pandemic has taught very many lessons and one of which is that, mode and method of education cannot be in any manner restricted, but should be given widest meaning that is possible. 90.Thus, for all above reasons, we hold that assessee is entitled to succeed. 91.In result, this tax case appeal is allowed, impugned order of Tribunal dated 08.05.2018 is set aside and substantial question of law is answered in favour of assessee. No costs. (T.S.S.,J) (V.B.S.,J) 29.10.2020 Index: Yes / No Speaking Order/Non-Speaking Order sk/abr 121/122 http://www.judis.nic.in T.C.A.No.822 of 2018 T.S.Sivagnanam, J. and V.Bhavani Subbaroyan, J. sk/abr T.C.A.No.822 of 2018 29.10.2020 122/122 http://www.judis.nic.in Thanthi Trust v. Director of Income-tax (Exemptions), Chennai
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