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2013 (9) TMI 487 - AT - Income TaxExemption u/s 11 - Violation of section 13 - Surplus fund not applied for charitable purpose - accumulation of funds - Held that:- CIT(A) was not justified in sitting in Judgment over the order passed by the DIT (Exemption) in condoning the delay and approving the accumulation and setting apart of the surplus fund by the assessee as per section 11 (2) of the Act. From para 7.2 of the CIT(A)'s order, it is very much clear that the Assessing Officer, in his remand report, has also very clearly submitted that after condonation of delay in accepting revised Form No. 10, the assessee is eligible for deduction under section 11 of the Act. That being the case, the CIT(A) was not justified in denying exemption under section 11 of the Act. Denial of exemption on the ground that persons specified u/s 13 are benefited - Held that:- Section 13(2)(h) of the Act provides that the income or the property of the trust be deemed to have been used or applied for the benefit of a person referred to in sub-section (3), if any funds of the trust or institution are continue to remain invested during the previous year in any concern in which such person as referred to in sub-section (3) has a substantial interest. The person referred to in sub-section (3) are the Author of the Trust or founder of the Institution, any person who has made a substantial contribution to the trust or institution where his contribution up to the end of the relevant previous year exceeds ₹ 50,000/-, any trustee of the trust or manager of the institution any relief of such other founder person, Member, Trustee or Manager any concern in which any of the persons referred to hereinabove has a substantial interest - The person who has shareholding in Matrix Laboratories of only 17.09% which cannot be considered as substantial for the purpose of section 13(2)(h) - Therefore, exemption to the assessee under section 11 is granted - Decided in favour of assessee. AO directed to o grant exemption to the assessee under section 11 of the Act. - Decided in favor of assessee.
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