INCOME TAX ACT, 1961

Section 11

Charitable trust - Exemption under section 11 - Denial of exemption without establishing that assessee-educational society was not a charitable institution -

Assessee was running a school affiliated with CBSE and upgraded to Senior Secondary level. CIT(E) alleged that while getting benefit of section 10(23C)(iiiad), assessee had shown its net receipts from use of school van lower than actual receipt. On that basis, he held that activities of assessee were not genuine. Held: Tribunal faulted CIT(E) for coming to conclusion that salary structure which was put in place by assessee was not as per salary structure of CBSE and at such low salaries good education could not be given. Tribunal correctly held that this was not job of CIT(E) to comment on quality of education and found that in kind of area where school was located, and kind of fee it could generate, and salaries which were paid, were proportionate. Apart from this anomaly in accounting of money, CIT(E) did not hold that assessee was either diverting any money or was generating any cash income (beyond that which was prescribed in prospectus) or any other thing which would impinge on its character as a charitable institution.

REFERRED :

FAVOUR : In assessee's favour

A.Y. :

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