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2013 (11) TMI 1492 - HC - Income TaxReserve fund for educational purposes - Violation of Section 11(3)(d) – Held that:- The funds were created during the assessment year 1996-97; 1997-98; and 1998-99 i.e. prior to 01.04.2003 though it was utilized during the assessment year under consideration – As per the amended provisions - The Assessing Officer shall not allow application of accumulation of income by way of payment or credit made for the purposes referred to in clause (d) of sub-section (3) of Section 11 - This takes away the discretion of the Assessing Officer provided in sub-section (3A) to allow the trusts to apply the accumulated income for payment or credit to other charitable or religious trusts and institutions - The Finance Act, 2003, has amended the proviso to sub-section (3A) of Section 11 so as to empower the Assessing Officer to allow donation to another trust or institution as application of accumulated income for charitable purposes in the year in which the trust or institution claiming exemption is dissolved – Following assessee's own case for the assessment years 1994-95 - The assessee is registered under Section 12AA as well as 80G(5) and also under Section 10(23C)(iv) - The entire income of the assessee remains non-taxable – The issue is restored for fresh adjudication.
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