Estate Of M.m.isphani v. The Assistant Director Of Income-Tax(Exemptions) – Ii, Chennai – 600 034

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED : 12.11.2018 THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAMandTHE HONOURABLE MR. JUSTICE N.SATHISHKUMAR Tax Case Appeal No.156 of 2009 Estate of M.M.Isphani,C/o. The Official Trustee of Tamil Nadu, High Court Campus,Chennai – 600 104. -vs- .... Appellant The Assistant Director of Income-tax(Exemptions) – II, Chennai – 600 034. ...Respondent Tax Case Appeal filed under Section 260A of the Income TaxAct, 1961 against the order of the Income Tax Appellate Tribunal'A' Bench, Chennai dated 14.07.2008 in ITA No.1465/Mds/2006, forthe Assessment year 2002-03, against the order of theCommissioner of Income Tax(Appeals)-XI, Chennai dated 02/02/2006and made in ITA.Nos.361 & 365/2004-05 for the Assessment year1997-98 & 2002-03. against the order of the Assistant Director of Income Tax(Examption)-II, chennai-34 dated 16/02/98 and made inPAN/GIR.2612-E for the Assessment year 2002-03. For Appellant:Mr.R.Venkat Narayanan for Subbaraya Aiyar Padmanabhan [Judgement of the Court was delivered by T.S.Sivagnanam, J.] This appeal by the assessee is directed against theorder of the Income Tax Appellate Tribunal 'A' Bench, dated14.07.2008 in ITA No.1465/Mds/2006, for the Assessment year2002-03. https://hcservices.ecourts.gov.in/hcservices/ 2.Heard Mr.R.Venkat Narayan, for Subbaraya AiyarPadmanabhan, for the appellant and Mr.Karhick Ranganathan forthe respondent. 3.This Appeal has been admitted on 13.03.2009, on thefollowing Substantial Questions of Law:"1.Whether on the facts and in thecircumstances of the case, the Tribunal wasright in law in holding that the conditionsstipulated for availing the benefit ofaccumulation of income under Section 11(2) arenot satisfied? 2.Whether on the facts and in thecircumstances of the case, the Tribunal isjustified in law in holding that for thepurpose of accumulation of the income asprovided under Section 11(2) of the Income TaxAct requires specification of the purposes?” 4.The learned counsel for the assessee as well as thelearned Standing Counsel for the Revenue submitted that theSubstantial Questions of Law framed for consideration wereconsidered by this Court in the case of Estate of MKA CharitiesVs. The Assistant Director of Income-tax in TCA No. 1009 of 2008dated 01.08.2018. In the said case, this Court took note of thejudgement in TCA No. 1588/2005. The operative portion of thedecision reads as follows: “6.For better appreciation, the operative portionsof the judgment in the case of Estate of KadapakamCharities (supra) are quoted herein below:- “3.The learned counsel appearing for theappellant as well as the counsel for the respondentsubmits that the issue involved in this appeal iscovered by the decision of this Court in the case ofEstate of Kadapakam Charities Vs. The Asst. Directorof Income Tax (Exemptions) II, Chennai – 34 (T.C.(A).No.281 of 2004) dated 15.12.2008, wherein it wasobserved as follows:“............8.The decision of the CalcuttaHigh Court will not strictly apply to thiscase, since in that case in Form 10, all theobjects of the trust had been enumerated andtherefore, rejection of Form 10 was notjustified. In this case, the purpose has “6.For better appreciation, the operative portionsof the judgment in the case of Estate of KadapakamCharities (supra) are quoted herein below:- “3.The learned counsel appearing for theappellant as well as the counsel for the respondentsubmits that the issue involved in this appeal iscovered by the decision of this Court in the case ofEstate of Kadapakam Charities Vs. The Asst. Directorof Income Tax (Exemptions) II, Chennai – 34 (T.C.(A).No.281 of 2004) dated 15.12.2008, wherein it wasobserved as follows:“............8.The decision of the CalcuttaHigh Court will not strictly apply to thiscase, since in that case in Form 10, all theobjects of the trust had been enumerated andtherefore, rejection of Form 10 was notjustified. In this case, the purpose has been specified viz., repair and renovationof the building, and the difficulties inimmediately starting the renovation havealso been brought to the notice of theauthorities. But at the same time, we alsosee that Form 10 has not been duly filledup. Even in the matter decided by theCalcutta High Court, the assessee wasallowed to adduce fresh evidence to show thespecific purpose for which the trustrequires accumulation of the income. In thiscase too, especially in view of the factthat it is AG & OT who is administering thetrust, we feel that the same indulgencecould be shown. We are not answering thequestions of law raised, however, weremanded the matter to the Assessing Officerand the assessee shall specify the purposein addition to renovation and repair of thebuilding and also the amount and the periodfor which accumulation is required, and theAssessing Officer shall consider the same inaccordance with law. ..........”4. Having regard to the submission made by thecounsel on either side, the order of the Tribunal ishereby set aside and the matter is remitted back tothe Assessing Officer in terms of the directiongiven in the order dated 15.12.2008 made in T.C.(A).No.281 of 2004 and the tax case is disposed ofaccordingly.Consequently,theconnectedmiscellaneous petition is closed.” 5.Thus, following the above decision, the appeal filed by heassessee is allowed and the order passed by the Tribunal is setaside and the matter is remitted back to the Assessing Officerin terms of directions given in the order dated 15.12.2008 inTCA No.281 of 2004. No costs. Sd/- Assistant Registrar //True Copy// Sub Assistant Registrar https://hcservices.ecourts.gov.in/hcservices/ To 1. The Assistant Director of Income-tax (Exemptions) – II, Chennai – 600 034. 2.The Income Tax Appellate Tribunal Madras 'A' Bench. 3.The Commissioner of Income(Appeals)-XI,Chennai. 4.The Assistant Director of Income-Tax(Exemption)-II,Chennai-34. +1cc to Mr.Karthick Ranganathan, Advocate sr.no.77926 +1cc to Subbaraya Aiyar Padmanabhan, Advocate sr.no.772081 T.C.A.No.156 of 2009 sv(co)nr 07/12/2018