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Tax Publishers Thanthi Trust v. DIT [TCA No. 822 of 2018, dt. 29-10-2020] : 2020 TaxPub(DT) 4769 (Madras-HC) Cancellation of registration of Trust alleging business activity being pursued *Facts:* Assessee was a registered Trust since 1954 with supplementary amended deed in 1961 where in education was the prime object. It was in the business of publishing a newspaper; the surplus of which was to be applied to the Trust objects. The Trust achieved its objects by applying its income by contributions to an educational Trust without it directly carrying the Trust objects. The registration was cancelled with retrospective effect by the DIT(E) 1-4-2009 (with the introduction of proviso to section 2(15) on 8-12-2011 alleging that the Trust was not applying its objects directly besides was into carrying on business activity thus hit by the proviso to section 2(15). There was no change in the entire modus operandi of the Trust or the manner in which application of its was made for pursuance of educational activity nor was there any change in the source of income being the business of running a newspaper. The ITAT upheld the action of the revenue. On higher appeal -- Held in favour of the assessee that their dominant intent has been educational activity as its key objects. This being so, and also upheld by the High Court and then supported by the Supreme Court cannot be questioned in the guise of amendment of the legislation via proviso to section 2(15) as the said proviso does not change the intent of the section. The activity of the Trust remained and remains a charitable one for the pursuance of education and it need not carry the activity of the objects on its own which is not envisaged by law. The source of income having been from running a news paper since the formation cannot be now questioned that the same was a business activity when the dominant intent in all eventuality was of charitable in nature. The department cannot question the promissory estoppel claimed by the assessee rather they are erroneous in not granting the promissory estoppel in favour of the assessee on an established and long decided fact. The retrospective cancellation was done without authority of law and the cancellation was also held to be incorrect. *Applied:* Assessee's own case CIT v. Thanthi Trust (1982) 137 ITR 735 (Madras-HC) : 1982 TaxPub(DT) 0369 (Mad-HC) affirmed in (1999) 239 ITR 502 (SC) : 1999 TaxPub(DT) 0051 (SC)

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Thanthi Trust v. DIT [TCA No. 822 of 2018, dt. 29-10-2020] : 2020 TaxPub(DT) 4769 (Madras-HC)

Cancellation of registration of Trust alleging business activity being pursued

Facts:

Assessee was a registered Trust since 1954 with supplementary amended deed in 1961 where in education was the prime object. It was in the business of publishing a newspaper; the surplus of which was to be applied to the Trust objects. The Trust achieved its objects by applying its income by contributions to an educational Trust without it directly carrying the Trust objects. The registration was cancelled with retrospective effect by the DIT(E) 1-4-2009 (with the introduction of proviso to section 2(15) on 8-12-2011 alleging that the Trust was not applying its objects directly besides was into carrying on business activity thus hit by the proviso to section 2(15). There was no change in the entire modus operandi of the Trust or the manner in which application of its was made for pursuance of educational activity nor was there any change in the source of income being the business of running a newspaper. The ITAT upheld the action of the revenue. On higher appeal --

Held in favour of the assessee that their dominant intent has been educational activity as its key objects. This being so, and also upheld by the High Court and then supported by the Supreme Court cannot be questioned in the guise of amendment of the legislation via proviso to section 2(15) as the said proviso does not change the intent of the section. The activity of the Trust remained and remains a charitable one for the pursuance of education and it need not carry the activity of the objects on its own which is not envisaged by law. The source of income having been from running a news paper since the formation cannot be now questioned that the same was a business activity when the dominant intent in all eventuality was of charitable in nature. The department cannot question the promissory estoppel claimed by the assessee rather they are erroneous in not granting the promissory estoppel in favour of the assessee on an established and long decided fact. The retrospective cancellation was done without authority of law and the cancellation was also held to be incorrect.

Applied: Assessee's own case CIT v. Thanthi Trust (1982) 137 ITR 735 (Madras-HC) : 1982 TaxPub(DT) 0369 (Mad-HC) affirmed in (1999) 239 ITR 502 (SC) : 1999 TaxPub(DT) 0051 (SC)