1. Commissioner
of Income Tax Vs. Fr. Mullers Charitable Institutions, IT Appeal Nos.
588 & 589 of 2007, Date of Order: 10.02.2014, High Court of
Karnataka
Only
income from investment or deposit which has been made in violation of
section 11(5) that is liable to be taxed and that violation under
section 13(1)(d) does not attracts denial of exemption to trust
Delhi High
Court in a judgment DIT Vs. Agrim Charan Foundation [2002] 253 ITR 593,
has held that a reading of the proviso to section 142 (sic- section 164)
is very clear that the legislature has clearly contemplated that in a
case, where the whole or part of the relevant income is not exempted
under section 11 by virtue of violation of section 13(1)(d), tax shall
be levied on the relevant income or a part of the relevant income at the
maximum marginal rate. The said analogy is applicable to the facts of
the present case.
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2. CIT Vs. Shambhubhai Mahadev Ahir, Tax Appeal No. 2213 of 2010, Date of Order : 25.03.2014, High Court of Gujarat
Instruction No. 3 of 2011 dated 9.2.2011 issued by CBDT has prospective effect.
The department
filed an appeal in the High Court in 2008, the tax effect of which was
more than Rs. 4 lakhs but less than Rs. 10 lakhs. The assessee claimed,
relying on Sureshchandra Durgaprasad Khatod (HUF) & Madhukar K.
Inamdar 318 ITR 149 (Bom), that as Instruction No. 3 of 2011 dated
9.2.2011 issued by the CBDT applied to pending appeals and as the tax
effect was lower than the sum of Rs. 10 lakhs prescribed therein, the
appeal was not maintainable. The department argued that the
maintainability of the appeal had to be decided on the basis of the CBDT
Instruction dated 15.5.2008 which was in force at the time of filing
the appeal. The matter was referred to the Full Bench of the High Court.
HELD by the
Full Bench: Clause 11 of Instruction No. 3/2011 dated 9.2.2011
specifically states that “this instruction will apply to appeals filed
on or after 9.02.2011. However, the cases where appeals have been filed
before 9.02.2011 will be governed by the instructions on this subject,
operative at the time when such appeal was filed.” Similarly, clause 11
of instruction No. 5/2008 dated 15.5.2008 specifically provides that
“this instruction will apply to appeals filed on or after 15.05.2008.
However, the cases where appeals have been filed before 15.05.2008 will
be governed by the instructions on this subject, operative at the time
when such appeal was filed”. There is, thus, no ambiguity in the
instructions of either 2011 or 2008 as regards the applicability of
those instructions in respect of the appeals.
(Please click here for judgment)
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