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2011 (10) TMI 369 - HC - Income TaxDeduction under 80G - Assessee charitable and religious trust - Exemption denied under Sec 11(1) as 85% amount set aside not used for purpose of accumulation - Tribunal: Donation collected from Rural Project Fund is in nature of capital receipt directly forming part of Corpus Fund , non-spending of 85% of such capital fund cannot be said to be non-spending of 85% of the income of the trust - Held That:- Donation were received with a specific direction that it is meant to use for the Leprosy patients - even for contributions in cash oral directions has been received which is in compliance with Section (1) (b) of the Act. It is too late in the day for the Commissioner for Directorate of Income Tax (exemptions) to ignore all these undisputed facts which are available in the record and to refuse to renew the registration. Decided in favour of assessee. Unfortunate litigation - held that:- Unfortunately, the persons who took a decision to file an appeal, before this Court are wasting the precious time of the trust which could have been used in the social service. Public money and the time of this Court is also wasted. This attitude on the part of the department cannot be countenanced. Therefore, we feel it appropriate to impose cost incurred by the assessee for fighting litigation so that the department would be more careful in future in taking decision to file appeal in such frivolous cases by ignoring the policy of the Government, viz., National Litigation Policy, 2011. - Cost of Rs. 1,00,000/- - Department to deposit the amount in favour of the Rural Project Fund of the assessee-trust.
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