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2010 (10) TMI 153 - MADRAS HIGH COURTCharitable purpose – Exemption – Assessee-Trust engaged in renting building owned – Business income of utilized towards achievement of object – AO to decide as to whether such Business income used for attainment of object – Matter remanded. A perusal of the provisions contained in section 11(4A) of the Act would make it clear that it contains two separate elements. The first one being if the Assessing Officer is convinced on enquiry about the genuineness of the trust on a consideration of the relevant materials then he can decide and declare the eligibility of exemption. The second one being the entitlement of the income as eligible for exemption. In order to satisfy himself the Assessing Officer has to necessarily go through the relevant records like the application, accumulation, deployment of income in specified assets, utilization of income, etc. Therefore, it is the duty of the Assessing Officer to find out that the income is wholly and exclusively applied to the object of the trust. In other words, if the Assessing Officer finds that the income as shown in the return is not actually utilized for a charitable purpose as claimed by the assessee then the exemption claimed for the said income goes. It would also mean that in such a case the profit making is the real object and therefore the doctrine of "feeding the charity" would have no application whatsoever.
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