AJAY KUMAR MITTAL, J. - (1.) THIS order shall dispose of a bunch of ten appeals bearing ITA Nos. 75 to 77 of 2004,426, 427, 636 of 2005, 495 of 2007, 550, 551 of 2008 and 422 of 2010 as learned counsel for the parties are agreed that the facts and law involved therein are identical. For brevity, the facts are being taken from ITA No. 75 of 2004.
(2.) THIS appeal has been filed by the revenue under Section 260A of the Income Tax Act, 1961 (in short "the Act") against the order dated 29.9.2003 passed by the Income Tax Appellate Tribunal, Amritsar Bench, Amritsar (hereinafter referred to as "the Tribunal") in ITA No. 184 (ASR)/2001 for the assessment year 1993 -94 claiming the following substantial question of law: - "Whether, the Tribunal was right in law in allowing the benefit under section 11 of the Income -tax Act, 1961 without appreciating that the object of the trust was not within the ambit of section 2(15) and there was violation of section 11(4A) as well as Section 13(3) of the Income -tax Act, 1961?" The appeal was admitted on 26.4.2004. An application bearing CM No. 7614 -CII of 2009 was filed which was allowed on 1.4.2009 whereby the following substantial questions of law were ordered to be included in the original appeal: - (a) Whether in the facts and circumstances of the case, the Ld. ITAT is right in law in holding that the assessee trust is entitled to exemption u/s. 11 to 13 of I.T. Act ignoring the fact that the activities carried out by the trust are not in accordance with the aims and objects of the trust? (b) Whether in the facts and circumstances of the case the Ld. ITAT is right in law in concluding that the activities carried out by the assessee trust within the meaning of Section 2(15) of the I.T. Act, 1961? (c) Whether in the facts and circumstances of the case the Ld. ITAT is right in holding that the assessee trust is eligible for exemption u/s. 11 to 13 of the I.T. Act, 1961 ignoring the fact that the conditions laid down u/s 11 (4A) of the I.T. Act have not been fulfilled i.e. the assessee trust did not carry out the activities incidental to the attainment of the objectives of the trust, which is a condition precedent for grant of exemption? (d) Whether in the facts and circumstances of the case the Ld. ITAT is right in law as the findings recorded by the Ld. ITAT are perverse and contrary to the evidence/material available on record and duly considered by the Assessing Officer which in turn was confirmed by CIT(A)?
(3.) PUT shortly, the facts necessary for the disposal as narrated in the appeal are that the assessee filed its return of income on 29.10.1993 for the assessment year 1993 -94 at 'nil' income. During the assessment proceedings, the Assessing Officer noticed that the assessee had shown income from printing and publishing of newspapers under the name 'Daily Ajit', Tasvir (monthly) and also income from Daily Ajit Printers. The assessee had also shown income from other sources of Rs.77,282/ -. The total income computed by the assessee after claiming depreciation to the tune of Rs.3,30,377/ - was at Rs.12,64,032/ -. The assessee claimed deduction under Section 11 of the Act on the total amount claiming that the nature of the trust was 'Public Charitable Trust' with the objective of promotion of Punjab, Punjabi and Punjabiat. The Assessing Officer noticed that for claiming exemption, two conditions should be fulfilled, i.e. (i) purpose of trust must be advancement of object of general public utility and (ii) purpose must not involve carrying on of any activity for profit. The Assessing Officer observed that the exemption could be allowed on fulfilment of conditions specified in Sections 12, 12A and 13 of the Act as provisions of Section 11 did not have automatic effect. According to him under clause (a) or (b) of Section 11(1), income from property wholly or in part held in trust actually applied or set apart for application for future spending for religious or charitable trust in India was exempt to the extent and under the conditions specified in Sections 11 to 13 of the Act. It was recorded by the Assessing Officer that the assessee had made payments to persons specified under Section 40A(2)(b) of the Act which were covered under Section 13(3) of the Act as the payees were either the trustees or relatives of the author of the trust. It was concluded that the activity of running business of publication of newspapers and journals carried out by the assessee -trust was pervaded by a profit motive and the charitable purpose was, in fact, submerged by profit making motive. The purpose of the trust must be essentially charitable in nature and not cover for carrying on activity which had profit making motive as a predominant object. The trust deed described the objectives as under: - - Promotion and propagation of Punjab, Punjabi and Punjabiat. - Establishment of a chair in any University. - Establishment of Punjab Bhawan. - Prizes on the best books in Punjabi. - Holiday homes for writers/poets etc. ;