Ita/93/2008 Of M/S.ideal Publication Trust v. Joint Commissioner Of Income Tax

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT:- THE HONOURABLE THE CHIEF JUSTICE MR.H.L.DATTU & THE HONOURABLE MR. JUSTICE THOMAS P.JOSEPH MONDAY, THE 6TH OCTOBER 2008 / 14TH ASWINA 1930 I.T.A.No.93 of 2008 ------------------------------------ I.T.A.NO.76/Coch/2006 OF THE INCOME TAX APPELLATE TRIBUNAL, COCHIN BENCH, COCHIN [ORDER DATED 29TH JANUARY, 2008] .................... APPELLANT/APPELLANT/ASSESSEE:- -------------------------------------------------------- M/S.IDEAL PUBLICATION TRUST, SILVER HILLS, CALICUT, REPRESENTED BY ITS SECRETARY V.A.ABDUL HAKIM. BY ADV. SRI.M.P.MOHAMMED ASLAM RESPONDENT/RESPONDENT/REVENUE:- ------------------------------------------------------------- THE JOINT COMMISSIONER OF INCOME TAX, SPECIAL RANGE, KOZHIKODE. BY SRI.JOSE JOSEPH, STANDING COUNSEL FOR INCOME TAX THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ON 06/10/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:- H.L.DATTU, C.J. & THOMAS P.JOSEPH, J. ------------------------------------------- I.T.A.No.93 of 2008 ------------------------------------------ Dated, this the 6[th] day of October, 2008 JUDGMENT H.L.Dattu, C.J. Sri.Jose Joseph, learned Standing Counsel for theDepartment, is directed to take notice for the respondent. He is permittedto file his memo of appearance within six weeks. (2) The one and the only question that requires to be considered in this appeal filed by the assessee is, whether the assesseeTrust is entitled for exemption of income derived by it under Section 11 ofthe Income Tax Act ('the Act' for short) as a charitable institution. (3) The Tribunal while disposing of the appeal, hadfollowed its earlier decision in I.T.A.No.199 of 1998 for the assessmentyear 1992-93. (4) The orders passed by the Tribunal in the aforesaid appeal was the subject matter of appeal in I.T.A.No.41 of 2004. ThisCourt by its orders dated 27[th] February, 2008 has come to the conclusionthat the assessee Trust is not a charitable institution and, therefore, notentitled for exemption under Section 11 of the Act. The reasoning andconclusion reached by the learned Judges of this institution is at paragraph5 of the order. The same reads as under: “So far as the position after the amendment ofsub-section 4A of Section 11 is concerned also, we are ofthe view that the appellant is not entitled to exemption,because exemption is available in respect of the incomeonly if the business carried on by the Trust is incidental tothe attainment of the objects of the Trust. Admittedly, theappellant Trust has not utilised or set apart any part of theincome for any of the charitable purposes referred to in theobject clause, viz., education, medical relief or relief of thepoor. The appellant is only engaged in publication of thenewspaper which is run on commercial lines includingcharging of commercial tariff for advertisements andcharging of price for the newspaper at rates comparable toother newspapers run for profit. However, the appellant'scase is that the business of printing and publication ofnewspaper itself is an object of general public utility and somuch so the income therefrom is exempt from tax. We areunable to accept this proposition because we are of theview that in order to qualify for exemption in respect ofincome from profits and gains of business, the business,after the amendment of sub-section (4A) of Section 11,should be carried on as an incidental activity to theattainment of the objects of the Trust and not as an object initself. In other words, the business itself should not be theobject of the Trust, even though the business may advancethe object of general public utility. In fact, if a contrarymeaning is assigned to the section, any business income involving advancement of object of general public utilitywill be exempt from tax. In fact, every business to someextent advances object of general public utility. However,what is intended in sub-section (4A) of Section 11 is that theobject of the Trust should be for charitable purpose whichincludes advancement of object of general public utility andincome from any business carried should be incidental tothe objectives of the Trust. Since the appellant has no otheractivity other than the business of printing and publicationof newspaper on commercial line, we are of the view thatthe business itself cannot be said to be an object of generalpublic utility entitling the appellant for exemption as acharitable institution. The Supreme Court in Thanthi Trust'scase (247 ITR 785) referred above held that publication ofnewspaper is not education and therefore unless thebusiness of publication of newspapers falls under Clause(4A), exemption cannot be granted”. (5) The assessee in this appeal for the assessment year1997-98, was the appellant in I.T.A.No.71 of 2008 also which wasdisposed of by this Court on 22[nd] August, 2008. While disposing of thesaid appeal, this Court had permitted the assessee to approach the Tribunalfor appropriate reliefs, if it so desires. (6) Further, the questions of law raised in I.T.A.No. 71 of 2008 are identical with the legal issues raised in this appeal. (7) In that view of the matter, following the earlier decision rendered by this Court in I.T.A.No.71 of 2008 disposed of on22[nd] August, 2008, this appeal is also disposed of. Liberty is reserved tothe appellant, if it so desires, to approach the Tribunal for appropriatereliefs by making an appropriate application. Ordered accordingly. (H.L.DATTU) CHIEF JUSTICE vns/dk (THOMAS P.JOSEPH) JUDGE