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2015 (11) TMI 115 - AT - Income TaxDenial exemption U/s.11 & U/s.12 - one of the trustees was a minor and not competent to hold the post of trustee - Held that:- A trustee may also disclaim to be a trustee and shall prevent the trust property from vesting in him. A disclaimer by one or two or more co-trustees vests the trust property in the others and makes him or them sole trustee or trustees from the date of the creation of the trust. Thus, if one of the trustees appointed is not competent to contract, he cannot be made as a trustee as rightly pointed out by the Revenue. However, in this given case, there are other trustees on whom the property in the trust can be legally vested. Therefore, it cannot be said that the creation of the trust is void ab initio as held by the Revenue. Further, there are no provisions in the Indian Trusts Act,1882, to debar the trustees if they reside outside India. Section-11(1)(a) of the Act only provides that the income of the trust has to be applied in India and in the case of the assessee that is not disputed. Moreover, there are no statutory provisions in any Act to debar the family members of the author of the trust to be the trustees of a charitable trust. As long as the objects of the Trust are charitable and for the benefit of the general public at large the charitable nature of the trust cannot be denied. Therefore, we hereby direct the Ld. Assessing Officer to treat the trust as a charitable trust recognized U/s.12AA of the Act since the registration granted by the Ld.DITE is not withdrawn and assess the income of the Trust, if any, in accordance with the provisions of the Act and on merits. - Decided in favour of assessee.
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