INCOME TAX ACT, 1961

Section 11

Charitable trust - Exemption under section 11 - Misappropriation of trust funds - No violation of section 13(1)(c) in remand report

In the instant case, AO denied exemption under section 11 and made the addition towards surplus income. During the appeal proceedings, assessee furnished the details and CIT(A) called for the remand report. During the remand proceedings, the assessee furnished complete details, i.e., ledger accounts and expenses which were examined by AO and discussed by CIT(A) head-wise in his appeal order. The AO at no point of time, made any adverse comments with regard to the exemption claimed by the assessee. CIT(A) granted exemption under section 11 on the basis of the remand report submitted by the AO. Held: CIT(A) had observed that AO did not make any adverse observation against Manager of the Trustee or Society in the remand report with regard to misappropriation of the funds of the Society. Further, Tribunal found from the order of the CIT(A) that no violation under section 13(1)(c) was brought on record by the AO in the remand report. Therefore, there was no reason to interfere with the order of the CIT(A) and the same was upeld. Thus, CIT(A) directed AO to grant exemption under section 11.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2013-14

INCOME TAX ACT, 1961

Section 143(3)

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