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| The Tax Publishers2020 TaxPub(DT) 2927 (Del-Trib) INCOME TAX ACT, 1961
Section 11 Section 13
Where AO alleged that properties of assessee were held and controlled by someone else indirectly which was in clear violation of section 13(1)(d) and was not entitled to exemption under section 11, following assessee's own case for assessment years 2009-10 to 2013-14, assessee was eligible for exemption under sections 11 and 12 as AO did not bring any specific material on record to indicate any violation of either section 13(1)(b) or section 13(1)(d).
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Charitable trust - Exemption under section 11 - AO alleged that properties of assessee were held and controlled by someone else indirectly - Absence of any specific material on record to indicate any violation of either section 13(1)(b) or section 13(1)(d).
Assessee-association was registered under Societies Registration Act, 1860 and also under section 12AA(1) in July 1974. It was engaged in activities of community development, running of special schools and providing home training programmes. AO alleged that properties of assessee were held and controlled by someone else indirectly which was in clear violation of section 13(1)(d) and was not entitled to exemption under section 11.Held: Following assessee's own case, assessee was eligible for exemption under sections 11 and 12 and activities of assessee were not hit by proviso to section 2(15). Nothing was brought on record by AO to indicate that there was any change in the objectives or the rules and regulations of the association or that the activities as undertaken during the year were not in conformity with the registration conditions. Assessee was held as a charitable entity in the past. AO did not bring any specific material on record to indicate any violation of either section 13(1)(b) or section 13(1)(d). While fees may be charged and there may even be a surplus out of charitable activities, the principle that so long as the surplus funds are redeployed in charitable activities, no objection can be taken as to the chartiable pursuits is inexceptionable.
Followed:Dy.CIT [E] v. New Delhi Young Men's Christian Association Ltd. & Vice-Versa 2017 TaxPub(DT) 5585 (Del-Trib).
REFERRED : Thiagarajar Charities v. Addl.CIT & Anr. (1997) 225 ITR 1010 (SC) : 1997 TaxPub(DT) 1235 (SC), DIT (Exemption) v. National Association of Software & Services Companies (2012) 345 ITR 362 (DEL) : 2012 TaxPub(DT) 2049 (Del-HC) and Young Women's Christian Association of Madras v. Joint Director of Income-tax (OSD) (Exemption) (2014) 41 taxmann.com 142 (Chen-Trib.).
FAVOUR : In assessee's favour.
A.Y. : 2013-14
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