Commissioner Of Income Tax (Exemptions) 3Rd Floor Kailash Heights, Lal Kothi, Tonk Road, Jaipur v. M/S Poddar Sansthan, Sector 7, Mansarovar, Jaipur

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH ATJAIPUR D.B. Income Tax Appeal No. 145 / 2016 Commissioner of Income Tax (Exemptions) 3rd Floor Kailash Heights, Lal Kothi, Tonk Road, Jaipur ----Appellant Versus M/s Poddar Sansthan, Sector 7, Mansarovar, Jaipur ----Respondent _____________________________________________________ For Appellant(s) : Mr. Daksh Pareek on behalf ofMr. Sammer Jain For Respondent(s) : Dr. P. C. Jain with Mr. Gunjan Pathak _____________________________________________________ HON'BLE MR. JUSTICE K. S. JHAVERI HON'BLE MR. JUSTICE VIJAY KUMAR VYAS judgment 23/10/2017 1.By way of this appeal, the appellant has challenged thejudgment and order of the Tribunal whereby the Tribunal hasdismissed the appeal of the department. 2.This court while admitting the appeal on 02.05.2017 framed the following question of law:- “1. Whether the Ld. ITAT was justified in the factsof the case as well as in law in upholding theallowance of exemption u/s 11 to assesseerespondent by ignoring that the assessee hasextended loan to a person specified u/s 13(3) ofthe Act in violation of section 13(1)(c) r.w.s. 13(2)(a)/(b)/(g) of the Act?” 3.Counsel for the appellant has taken us to the order passed by AO wherein while considering the matter the AO has taken intoaccount the provision of Sections 13(1)(c) of the Income Tax Act and observed as under:- “2.1 Provision of section 13(1)(c) are applicable whereany income or property of the trust are used or applieddirectly or indirectly for the benefit of any personreferred to in sub section 3 of section 13. 2.2 Provisions of section 13(2) provide for all thosesituations where income will be deemed to have beenused or applied for the benefit of a person referred toin sub section 3 to section 13. 2.3 At the outset it may be noted that Poddar Trust isnot a person covered under section 13(3). 2.4 In view of the above, giving a loan which isinterest free does not attract the provisions of section13(1)(c)/13(2). Reply of the assessee has been considered. If part ofthe income or property of the trust is lent withouteither adequate security or adequate interest or boththere is violation of section 13(2)(a). In this caseassessee has lentmoney to the related trust withoutinterest as per clause (a) as mentioned above. As percopy of resolution submitted, the documents of theland of the Poddar Trust were obtained as security. Butthere is no mention of charging of interest. As perIncome & Expenditure account also no such interestincome has been shown. This providing of loan is in violation of provisions ofsection 13(2)(b) also as the property/funds were madeavailable to persons covered u/s 13(3) withoutcharging any compensation. This is also violation ofclause (g), since it is diversion of funds in favour ofrelated trust.” 4.He contended that both the authorities have committed anerror in reversing the view taken by the AO. 5. He has relied upon the decision of Delhi High Court in Director of Income Tax (Exemption) V/s Charanjiv Charitable Trust 2014(8) AD (Delhi) 595 wherein it has been held as under:- “21. We may first take up the fundamental questionas to whether the assessee was ineligible for the This providing of loan is in violation of provisions ofsection 13(2)(b) also as the property/funds were madeavailable to persons covered u/s 13(3) withoutcharging any compensation. This is also violation ofclause (g), since it is diversion of funds in favour ofrelated trust.” 4.He contended that both the authorities have committed anerror in reversing the view taken by the AO. 5. He has relied upon the decision of Delhi High Court in Director of Income Tax (Exemption) V/s Charanjiv Charitable Trust 2014(8) AD (Delhi) 595 wherein it has been held as under:- “21. We may first take up the fundamental questionas to whether the assessee was ineligible for the exemption under Section 11 on the ground that therewas contravention of the provisions of Section 13(1)(c)(ii) read with Section 13(3) of the Act. It isnecessary to briefly notice the statutory provisions inthis regard. Section 11 exempts any income derivedfrom property held under trust wholly for charitableor religious purposes to the extent to which it isapplied to such purposes in India, to the extent of85% of such income. Charitable purposes are definedin Section 2(15). There is no dispute that the objectspursued by the assessee fall within the saiddefinition. Even if the objects of a trust satisfies thedefinition of "charitable purpose" as per Section2(15), it does not automatically confer exemption tothe trust; it has to further get itself registered underSection 12A. This condition is also satisfied in thepresent case since the assessee was registered underSection 12A on 28.05.1976. There are furtherconditions for being eligible to the exemption. Section13(1) enumerates instances under which theprovisions of Section 11 granting exemption will notoperate. One such instance is furnished by clause (c)(ii) which says that if any part of the income or anyproperty of the trust is, during the relevant previousyear, used or applied directly or indirectly for thebenefit of any person referred to any sub-section (3),the exemption will not be allowed. Sub-section (3)enumerates the prohibited persons and there is nodispute that the assessee's case falls within clause(e) of sub-section (3). There is another provisionwhich we have to notice and that is Section 13(2)which in clauses (a) to (h) thereof sets out illustrativeinstances where the income or property of the trustmay be deemed to have been used or applied for thebenefit of a prohibited person.” 6. Ms. Parinitoo Jain has taken us to observation made by CIT(A) which reads as under:- “In the cited case, the issue before the Hon'bleBombay High Court was whether a trust could be aperson or not for the purpose of deciding theapplicability of section 13(1)(c). The Hon'bleBombay High Court held that the definition of"person" occurring in section 2(31) was applicableto the word "person" occurring is section 13 of theAct. The controversy before the Bombay High Courtwas whether the trust could be a "person" or not.” 7. She has also relied upon the observation made by theTribunal which reads as under:- “5.4 The contention of the assessee thattransaction like current account was going onbetween both the trusts and both the trusts werelending money to each other, in fact goes againstthe assessee in view of the judgment of Hon’bleDelhi High Court in the matter of DCIT vs.Charanjiv Charitable Trust in ITA No. 321 to 323 of2013, (2014) 233 Taxman 071 (Delhi) wherein inpara 25 the identical contentions have been dealtwith by the Hon’ble High Court and afterconsidering the identical contention, theexemption under section 11 was held to be notavailable to the assessee, for the purpose ofconvenience, we are hereby reproducing thefinding of the Hon’ble Delhi High Court in theabove said matter :- “5.4 The contention of the assessee thattransaction like current account was going onbetween both the trusts and both the trusts werelending money to each other, in fact goes againstthe assessee in view of the judgment of Hon’bleDelhi High Court in the matter of DCIT vs.Charanjiv Charitable Trust in ITA No. 321 to 323 of2013, (2014) 233 Taxman 071 (Delhi) wherein inpara 25 the identical contentions have been dealtwith by the Hon’ble High Court and afterconsidering the identical contention, theexemption under section 11 was held to be notavailable to the assessee, for the purpose ofconvenience, we are hereby reproducing thefinding of the Hon’ble Delhi High Court in theabove said matter :- “25. Counsel for the assessee would, however,contend that the chart set out in the order of theTribunal would show that the account between theassessee and the APIL is a running account and ifthe entries are taken as a whole it would be seenthat it is APIL which is funding the assessee andnot the other way round. It was again submittedthat in the 12 month period ended on 31.03.2006,no monies flowed out from the assessee to anyprohibited person. This latter submission hasalready been dealt with by us supra. As to thecontention that it is only a running accountbetween the assessee and the APIL, we are unableto give effect to the submission since Section13(1)(c)(ii) read with Section 13(2) does notappear to make any distinction between a runningaccount where there is inter-flow of funds and acase of pure advance. Section 13(2) makes it clearthat the instances listed in its clauses (a) to (h)are only illustrative and without prejudice to thegenerality of the provisions of Section 13(1)(c).The prohibition is on the use or application of anypart of the income or property of the trust, duringthe relevant previous year, for the direct orindirect benefit of any prohibited person. Whenfunds of assessee trust are lying with APIL – eventhough they were not advanced in the relevantaccounting year – and no interest or security istaken, it is a case of direct use of the funds for thebenefit of a prohibited person. Clause (a) ofSection 13(2) says that even if the income or property of the trust continues to remain lent toany prohibited person for any period during therelevant previous year without security or interest,it would be a case of deemed misapplication. Thisshows that it is not necessary that there should beany advance payment to the prohibited person inthe relevant accounting year. At this juncture it isrelevant to point out a crucial aspect. Theprovision makes reference to income or propertyof the trust being "lent" or continued to be "lent"to any prohibited person. If the funds of theassessee had been given to APIL without anyagreement to sell being entered into there wouldhave been no defence to the assessee as thatwould have been a clear case of monies lent orcontinue to be lent without interest or security. Itis only in order to get out of the clutches of thesaid clause that the assessee appears to haveconceived of a device and entered intodocumentation with APIL to make it appear as ifthe monies were not "lent" to APIL, but were givenfor the purpose of acquiring lands underagreements to sell, for the objects of the trust.This explains why the assessee admitted beforethe assessing officer in its first letter that it hadnot taken possession of the lands, but resiled fromthat position in its second letter, realising its fauxpar, citing some clauses in the agreements. Takingpossession of the lands has not been establishedas a fact by adducing evidence. 26. The argument of the counsel for the assesseethat the CIT (Appeals) and the Tribunal haveentered concurrent findings of fact which shouldnot normally be disturbed unless they are perverseis technically correct; however, we are inagreement with the submission of the counsel forthe revenue that the findings of the CIT (Appeals)(for the assessment year 2006-07) and theTribunal are superficial and have not taken note ofthe normal course of human conduct andprobabilities. A little probing or scratching of thesurface was all that was required on the part ofthe Tribunal to find out the truth about the claim ofthe assessee. The Tribunal has chosen,erroneously – this we say with respect – to ignorethe normal course of human conduct andprobabilities of the case and has preferred to beled simply by the documentation presented by theassessee. Each and every objection taken by theassessing officer has been attempted to beexplained away by the assessee and the Tribunaloverlooked that the facts have to be looked atcumulatively and as a whole; it failed to realise that and the real transaction between the assesseeand APIL is not just an aggregate of the severalcomponent parts thereof; the authenticity of thetransaction has to be examined by keeping in viewthe conspectus of the facts without missing thewoods for the trees. 27. In the aforesaid view of the matter, we holdthat the findings of the Tribunal on this aspectcannot be upheld. We uphold the findings of theassessing officer and hold that in advancing theamount of Rs.8,60,16,000/- to APIL the assesseecommitted a violation of the provisions of Section13(1)(c)(ii) read with Section 13(2) and section13(3) of the Act. The trust was accordingly noteligible for the exemption under Section 11 of theAct for both the years. “ The reliance placed by ld. CIT (A) on the judgmentof Acme Educational Society is ill founded. Ourreading shows that the issue of applicability ofsection 13(3) was not an issue in the judgment inthe case of Director of Income-tax vs. AcmeEducational Society , so far as prohibited person isconcerned. The discussion in the said judgment,on the question involved in the IT Appeal, wasmentioned in para 12 to 15, as under :- “12. This court in the case of Director of Income-tax (Exemption) v. Alarippu [2000] 244 ITR 358has pointed out that the words "investment","deposit", and "loan" have different meanings. Therelevant observations in the said judgment arereproduced hereinbelow (headnote): "The expressions used in both the provisionsquoted above, are 'investment' and 'deposit'. Theformer expression means to lay out money inbusiness with a view to obtain an income or profit.Deposit, on the other hand, means that which isplaced anywhere, as in any one's hands for safe-keeping, something entrusted to the care ofanother. These two expressions have been used ina cognate sense and have to be understood assuch. In order to constitute an investment theamount laid down should be capable of any resultof any income, return or profit to the investor andin every case of investment, the intention andpositive act on the part of the investor should beto earn such income, returns, profit in order toconstitute an investment, the monies shall be laidout in such a manner as to acquire some speciesof property which would bring in an income to theinvestor. A loan, on the other hand, is grantingtemporary use of money, or temporary accommodation. The words 'investment', 'deposit'and 'loan' are certainly different. Section 11(5)refers to pattern of investment by the assessee.Section 11(5) was introduced by the Finance Act,1983, with effect from April 1, 1983, i.e., for andfrom the assessment year 1983-84. It prescribesthe forms and modes of investing and depositingmoney referred to in section 11(2)(b).Subsequently, new forms and modes have beenadded. Section 13(1)(d) as amended by theFinance Act, 1983, provides that the income of anycharitable or religious trust or institution will notbe entitled to exemption under sections 11 and12, if certain conditions stipulated therein are notcomplied with. The word 'deposit' does not covertransaction of loan which can be moreappropriately described as direct bailment. Theessence of deposit is that there must be a liabilityto return it to the party by whom or on whosebehalf has been made on fulfilment of certainconditions. In the commercial sense, the term isused to indicate the aforesaid transaction asdeposit of money for employment, in business,deposits for value to initiate security for deposit oftitle deeds, similar documents as security for loan,deposit of money bills in a bank in the ordinarycourse of business of current account and depositsof a sum at interest at a fixed deposit in a bank." 13. In Baidya Nath Plastic Industries (P) Ltd. v. K.LAnand, ITO [1998] 230 ITR 522 (Delhi) a learnedsingle judge of this court pointed out that thedistinction between "loan" and "deposit" is that inthe case of the former it is ordinarily the duty ofthe debtor to seek out the creditor and to repaythe money according to the agreement, while inthe case of the latter it is generally the duty of thedepositor to go to the banker or to the depositee,as the case may be, and make a demand for it. 14. A Division Bench of this court in case ofDirector of Income-tax (Exemption) v. PariwarSewa Sansthan [2002] 254 ITR 268 (Delhi) hasheld that no question of law arises from the orderof the Income-tax Appellate Tribunal holding thatthere was no violation of the provision of section13(1)(d) of the Act, 1961 where loan had beengiven by one society to another society havingsimilar objects. 15. Keeping in view the aforesaid exposition oflaw, we are of the opinion that interest free loan ofRs. 90,50,000 given by the assessee-society toNav Bharti Educational Society does not violatesection 13(1)(d) read with section 11(5) of the Act, 1961 as the said loan was neither an"investment" nor a "deposit". This is more so asboth the societies had similar objects and wereregistered under section 12A of the Act, 1961 andhad approvals under section 80G of the Act, 1961.The fact that the loan was interest free and hadbeen subsequently returned is also significant. Inview of the order passed by the Commissioner ofIncome-tax (Appeals) in the case of Nav BharatiEducational Society, Ms. Bansal's allegation withregard to "entry scam" also does not survive.Consequently, there is no substantial question oflaw involved in the present appeal and accordingly,the appeal is dismissed but with no order as tocosts.” 8. She has relied the following decisions:- Commissioner of Income Tax vs. Thanthi Trust(14.03.1996 – SC), (1999) 239 ITR 0502 1. The question arising herein is essentially aquestion of fact. After considering all the facts andcircumstances of these cases, the High Court (seeMANU/TN/0061/1981MANU/TN/0061/1981 : [1982]137 ITR 735) has recorded the following finding(page 773) : 8. She has relied the following decisions:- Commissioner of Income Tax vs. Thanthi Trust(14.03.1996 – SC), (1999) 239 ITR 0502 1. The question arising herein is essentially aquestion of fact. After considering all the facts andcircumstances of these cases, the High Court (seeMANU/TN/0061/1981MANU/TN/0061/1981 : [1982]137 ITR 735) has recorded the following finding(page 773) : Thus, on the material on record, we are not in aposition to say that after making the credit entries,the assessee retained any control over the monies orany beneficial ownership therein. For the accountingyear 1966-67 corresponding to the assessment year1968-69, a sum of Rs. 10,41,689.47 had beencredited by the assessee in favour of the educationalinstitution out of which Rs. 3,04,035 had been drawnby the said institution, and for the accounting year1967-68 corresponding to the assessment year1969-70, a sum of Rs. 8,99,535 has been credited infavour of the educational institution and theeducational institution has drawn Rs. 16,71,500during that year. The conduct of the educationalinstitution in drawing from the asses-see-trust largersums than what has been credited by the trust in itsfavour in 1969-70 shows that it was fully aware ofits credit with the assessee-trust and the funds thathad been made available to it by the trust. If theamounts had been actually handed over to theAditanar College during the assessment years inquestion, the assessee could claim the benefit of exemption under Section 11 as the college has beenestablished only for the educational purposes and nopart of its fund can be utilised for non-charitablepurposes, and the Revenue cannot insist that unlessthe educational institution expends the amountdonated by the assessee within the assessment year,the assessee cannot claim the benefit of exemptionunder Section 11. 2. The High Court also took into account the factualsituation regarding the amounts credited to theaccount of the college from year to year and thewithdrawals by the college. They are the following : 3. It appears that the Adityanar College was run,not by the assessed-trust, but by another registeredcharitable society. In the circumstances, the HighCourt was right in the conclusion which it arrived at.It may also be mentioned that it is no part of theRevenue's case at any point of time that the creditentries made in the assessee's books of accountwere not genuine or true or that they were meremake-believe or bogus. It is also not brought to ournotice that the Income-tax Officer doubted the saidentries and called upon the assessee to produce theaccounts of the college and that the assessee failedto produce the same. Director of Income Tax vs. ACME EducationalSociety (28.07.2010 – DELHC), (2010) 326 ITR0146 Keeping in view the aforesaid exposition of law, weare of the opinion that interest free loan of Rs.90,50,000 given by the assessee-society to NavBharti Educational Society does not violate section13(1)(d) read with section 11(5) of the Act, 1961 asthe said loan was neither an "investment" nor a"deposit". This is more so as both the societies had similar objects and were registered under section12A of the Act, 1961 and had approvals undersection 80G of the Act, 1961. The fact that the loanwas interest free and had been subsequentlyreturned is also significant. In view of the orderpassed by the Commissioner of Income-tax(Appeals) in the case of Nav Bharati EducationalSociety, Ms. Bansal's allegation with regard to"entry scam" also does not survive. Consequently,there is no substantial question of law involved inthe present appeal and accordingly, the appeal isdismissed but with no order as to costs. Champa Charitable Trust vs. Commissioner ofIncome Tax (05.12.1994 - BOMHC) (1995)214 ITR 0764 similar objects and were registered under section12A of the Act, 1961 and had approvals undersection 80G of the Act, 1961. The fact that the loanwas interest free and had been subsequentlyreturned is also significant. In view of the orderpassed by the Commissioner of Income-tax(Appeals) in the case of Nav Bharati EducationalSociety, Ms. Bansal's allegation with regard to"entry scam" also does not survive. Consequently,there is no substantial question of law involved inthe present appeal and accordingly, the appeal isdismissed but with no order as to costs. Champa Charitable Trust vs. Commissioner ofIncome Tax (05.12.1994 - BOMHC) (1995)214 ITR 0764 3. Section 11 of the Act exempts from tax certainincome from property held for charitable or religiouspurposes. This exemption does not apply in certaincases specified in section 13 of the Act. Section 13,so far as relevant, at the material time read asunder : "13. Section 11 not to apply in certain cases. - (1)Nothing contained in section 11 or section 12 shalloperate so as to exclude from the total income ofthe previous year of the person in receipt thereof -… (c) in the case of a trust for charitable orreligious purposes or a charitable or religiousinstitution, any income thereof - . . . . (ii) if any part of such income or any property ofthe trust or institution (whenever created orestablished) is during the previous year used orapplied, directly or indirectly for the benefit of anyperson referred to in sub-section (3) : Provided that in the case of a trust or institutioncreated or established before the commencement ofthis Act, the provisions of sub-clause (ii) shall notapply to any use or application, whether directly orindirectly, of any part of such income or anyproperty of the trust or institution for the benefit ofany person referred to in sub-section (3), if suchuse or application is by way of compliance with a mandatory term of the trust or a mandatory rulegoverning the institution : . . . . (2) Without prejudice to the generality of theprovisions of clause (c) of sub-section (1), theincome or the property of the trust or institution orany part of such income or property shall, for thepurposes of that clause, be deemed to have beenused or applied for the benefit of a person referredto in sub-section (3), - . . . . (g) if any income or property of the trust orinstitution is diverted during the previous year infavour of any person referred to in sub-section (3) : Provided that this clause shall not apply where theincome, or the value of the property or, as the casemay be, the aggregate of the income and the valueof the property so diverted does not exceed onethousand rupees; (h) if any funds of the trust or institution are, orcontinue to remain, invested for any period duringthe previous year (not being a period before the 1stday of January, 1971) in any concern in which anyperson referred to in sub-section (3) has asubstantial interest. (3) The persons referred to in clause (c) of sub-section (1) and sub-section (2) are the following,namely :- (a) the author of the trust or the founder of theinstitution; (b) any person who has made a substantialcontribution to the trust or institution, [that is tosay, any person whose total contribution up to theend of the relevant previous year exceeds fivethousand rupees]; . . . . ." The bracketed part in clause (b) of section 13(3)was inserted by the Taxation Laws (Amendment)Act, 1975, with effect from April 1, 1977, andhence, applies to assessments for the assessmentyear 1977-78 only. This amendment is, however,not relevant for the purposes of the present casewhere the contribution of Shri LaherchandUttamchand Trust Fund was Rs. 1,00,000, far in (3) The persons referred to in clause (c) of sub-section (1) and sub-section (2) are the following,namely :- (a) the author of the trust or the founder of theinstitution; (b) any person who has made a substantialcontribution to the trust or institution, [that is tosay, any person whose total contribution up to theend of the relevant previous year exceeds fivethousand rupees]; . . . . ." The bracketed part in clause (b) of section 13(3)was inserted by the Taxation Laws (Amendment)Act, 1975, with effect from April 1, 1977, andhence, applies to assessments for the assessmentyear 1977-78 only. This amendment is, however,not relevant for the purposes of the present casewhere the contribution of Shri LaherchandUttamchand Trust Fund was Rs. 1,00,000, far in excess of the above amount. It is clear from areading of section 13, which opens with the nonobstante clause "Nothing contained in section 11 orsection 12 shall operate so as to exclude from thetotal income of a person" that this section has anoverriding effect over sections 11 and 12 and oncontravention of any of the provisions thereof or onthe happening of any of the contingencies specifiedtherein, the income of the person would not beexcluded from the total income of such persondespite fulfilment of the conditions of section 11 or12 of the Act. There is no dispute about the factthat Laherchand Uttamchand Trust Fund had madea substantial contribution to the assessee-trust andthe contribution so made up to the end of theprevious years relevant to the assessment yearsunder consideration being Rs. 1,00,000 far exceedRs. 5,000. There is also no dispute about the factthat sums of Rs. 50,000 and Rs. 56,001 were usedor applied by the assessee-trust for the benefit ofthe said Laherchand Uttamchand Trust in theprevious years relevant to the assessment years1976-77 and 1977-78, respectively. Apparently, insuch a situation, sub-section (3) of section 13 isattracted. This position is not disputed by counselfor the assessee also. The only contention of theassessee is that the expression "person" appearingin section 13(1) does not include a "trust" and thatthe said Laherchand Uttamchand Trust being acharitable trust, the question of applying the saidmounts directly or indirectly for the benefit of suchtrust cannot arise. The term "person" has beendefined in clause (31) of section 2 of the Act toinclude : (i) an individual, (ii) a Hindu undividedfamily, (iii) a company, (iv) a firm, (v) anassociation of persons or a body of individuals,whether incorporated or not, (vi) a local authority,and (vii) every artificial juridical person, not fallingwithin any of the preceding sub-clauses. It is notdisputed before us that a "trust" is also a "person"within the meaning of section 2(31) of the Act. Ifthat is so, we fail to understand how a differentmeaning can be ascribed to the same expression"person" appearing in the various sub-sections andclauses of section 13 of the Act. That being so, theassessee-trust having applied a substantial part ofits income or property (even more than the total contribution of Laherchand Uttamchand Trust to it),the provisions of section 13(1)(c)(ii) of the Act areclearly attracted as the said trust is a "person"falling under clause (b) of section 13(3) of the Act.Any other construction of the expression "person"appearing in section 13(3) of the Act will defeat thevery purpose of section 13(1)(c)(ii) of the Act,because it would be possible for the assessees inthat event to circumvent the provisions of section13(1)(c)(ii) by channelising the donations throughtrusts. 4. In that view of the matter. we do not find anyinfirmity in the finding of the Tribunal. We,therefore, answer the question referred to us in theaffirmative and in favour of the Revenue. The Commissioner of Income Tax, Bhopal vs.Maa Vaishnav Education Society (19.06.2013 –MPHC), (2013) 91 DTR 0166 4. In that view of the matter. we do not find anyinfirmity in the finding of the Tribunal. We,therefore, answer the question referred to us in theaffirmative and in favour of the Revenue. The Commissioner of Income Tax, Bhopal vs.Maa Vaishnav Education Society (19.06.2013 –MPHC), (2013) 91 DTR 0166 6. Aggrieved by the order passed by theCommissioner of Income Tax (Appeals), therespondent had preferred an appeal before theIncome Tax Appellate Tribunal. The Tribunalconsidered the matter and have found that thematter of the assessee for assessment year 2004-2005 was examined by the Tribunal vide orderdated 27.11.2009 and recorded findings that theassessee was imparting education by runningColleges. The assessing officer had declineddeductions under sections 11 and 12 of the Act onthe ground that there was infringement of theprovisions of Section 13 of the Act on account ofinterest free loans given to three associates namelyPyramid Education Society, Shefali EducationSociety and RKDF Education Society. The Tribunalhad found that the Shefali Education Society andRKDF Education Society were registered underSection 12AA of the Act of which registrationcertificates were placed before the assessing officer.These were charitable societies engaged inproviding education. The similar loans were givenby the assessee society in the year 2004-2005 andthe same issue was raised before the Tribunal andthe Tribunal vide order dated 27.11.2009 haddecided the same in favour of the assessee. TheTribunal have further found that M/s. Pyramid Education Society was not registered under Section12AA of the Act but was a charitable societyregistered with the Registrar of Societies under theM.P. Societies Registration Act, 1973 with the sameobject of education. The amount of loan lent to theSociety was Rs. 69,370/-. The Commissioner ofIncome Tax (Appeals) had applied the provisions ofsection 13(3) read with section 13(2)(a) of the Act.For application of the aforesaid provision, share inprofit was required to be 20% but there was nosuch profit in the society. On the aforesaid ground,the Tribunal have found that there was noinfringement of the provisions as contained inSection 13(3) of the Act for lending amount of Rs.69,370/- to M/s. Pyramid Education Society. On theaforesaid ground, the appeal was allowed and theorder of Assessing Officer was set aside. This orderis under challenge in this appeal. 7. We have considered the contention of theappellant and find that merely the respondentsociety had given interest free loan to anothersociety, so the loan was neither investment nordeposit. The provisions as contained in Section13(3) of the Act were not applicable. The aforesaidis a finding of fact recorded by Tribunal in which wedo not find any error or substantial question of law.Apart from this, the question was already decidedby the Tribunal for the assessment year 2004-2005,against which no appeal was preferred. 8. In view of the aforesaid factual position involvedin these cases, we find that the present appeals donot involve any substantial questions of law for ourconsideration. Apart from this, Delhi High Court inDirector of Income-Tax (Exemption) vs. AcmeEducationalSocietyreportedinMANU/DE/4491/2010MANU/DE/4491/2010 : (2010)326 ITR 146 (Delhi) have examined the similarissue and decided the matter in favour of theassessee. In the light of the aforesaid discussion,we find that these appeals do not involve anysubstantial question of law for our consideration andare dismissed at admission stage, with no order asto costs. Director of Income Tax (Exemption) vs. Pariwar Sewa Sansthan (29.05.2001 –DELHC), (2002) 254 ITR 0268 8. In view of the aforesaid factual position involvedin these cases, we find that the present appeals donot involve any substantial questions of law for ourconsideration. Apart from this, Delhi High Court inDirector of Income-Tax (Exemption) vs. AcmeEducationalSocietyreportedinMANU/DE/4491/2010MANU/DE/4491/2010 : (2010)326 ITR 146 (Delhi) have examined the similarissue and decided the matter in favour of theassessee. In the light of the aforesaid discussion,we find that these appeals do not involve anysubstantial question of law for our consideration andare dismissed at admission stage, with no order asto costs. Director of Income Tax (Exemption) vs. Pariwar Sewa Sansthan (29.05.2001 –DELHC), (2002) 254 ITR 0268 3. For the assessment year 1996-97, the assessedprimarily challenged the question as to thereasonableness of salary. That plea was accepted inview of the conclusions for 1995-96. As theextracted portion of the order passed by theTribunal goes to show the conclusions areessentially factual giving rise to no question of law.Accordingly, we do not entertain this appeal.Dismissed. “ 9. Taking into account the view taken by both the authorities,we are of the opinion that the conclusion raised by the Tribunal isjust and proper. 10. The issue is answered in favour of the assessee against the department. 11. The appeal stands dismissed. (VIJAY KUMAR VYAS),J. (K.S.JHAVERI),J. B.M.G/Gourav/28