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4. Further, the Assessing Officer rejected the claim of deduction u/s.24(a) of the Act @ 30% stating that the question of allowing statutory deduction will not arise.

5. It is further pointed out by the Assessing Officer that the objects of the Trust fall under the main limbs of charitable purpose being education, medical relief and relief to the poor. The income from Community Hall, Kalyana Mandapam and Gnanavapi are used to offset the cost in maintaining schools run by the Trust and hence proviso to Section 2(15) cannot find an application so as to bring the income from running of Kalyana Mandapam to tax.

18. The first substantial question of law raised by the appellant is that as to whether Section 2(15) of the Act would be attracted to the assessee case where the earned income from letting out of Kalyana Mandapam, Gnanavapi is utilized and the entire revenue derived therefrom is used to offset the cost in maintaining schools run by the Trust, thus, towards charitable objects such as Education and Medical relief to the poor. The contention of the assessee before the CIT (Appeals) is that the surplus income from Community Hall, Kalyana Mandapam and Gnanavapi was utilized only to meet the shortfall in the income of the educational institution and that contention was rejected by the CIT (Appeals).

19. On a perusal of the entire records, it is apparent that even though the appellant trust is running Kalyana Mandapam, Gnanavapi and Community http://www.judis.nic.in  TCA.896 & 899 of 2018 Hall, the income derived therefrom cannot be construed as business income as the very object of the Trust is for charitable purpose and it should be incidental for the Trust.

23. It is to be noted herein that both the CIT (Appeals) and the ITAT have not discussed about the facts in respect of the surplus income having been utilized for the objects of the trust viz., Running educational institution, providing medical relief to the poor etc., Absolutely there is no discussion of http://www.judis.nic.in  TCA.896 & 899 of 2018 the facts relating to the utilization of earned income from letting out of Kalyana Mandapam and Gnanavapi towards charitable objects such as Education and Medical relief to the poor as given in the objects of the trust. Further, the Assessing Officer has not looked into the fact as to whether the entire income from Community Hall, Kalyana Mandapam and Gnanavapi are utilised for fulfilling the objects of the trust that is being education Medical relief and relief to the poor. In such circumstances, the order dated 06.04.2016 passed by the Income Tax Appellate Tribunal, Chennai ‘D’ Bench in ITA.Nos.665 and 664/Mds/2015 for the Assessment year 2010-11 and 2011-12 is set aside. The matter is remitted back to the Assessing Officer for de novo consideration as to whether the entire revenue derived from letting out of Kalyana Mandapam, Gnanavapi and Community Hall are utilized for charitable objects of the Trust and also to consider as to whether the income received from the properties of the Trust namely, Community Hall, Kalyana Mandapam and Gnanavapi to be classified as “income from House Property” or “business income” since the income therefrom is utilized for charitable purpose of the trust. The Assessing Officer shall consider the above said questions and decide the matter on merits.