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2017 (5) TMI 197 - AT - Income TaxEntitlement to claim of exemption u/s 11 - excess income over the expenditure - alteration /amendments made to the objects of the trust - Held that:- So long as the amendments in objects is restricted to the such scope expansion in India and large number Indians are roped in to reap the benefits of the charitable objects of the Trust, in our opinion, such amendments, if any, ought not work detrimental to the trust in any way. They merely expand the operational scope geographically to various states in India only.As such, it is on records that the CCIT approved the ‘charitable nature of the Object of the Trust’ during the proceedings u/s 10(23)(vi) of the Act. All the allegations of the AO ie change in name of the trust, and non-utilisation of the 85% of the total receipts, are ill-conceived. As stated earlier, it is a settled legal proposition that the utilization of receipts for ‘capital expenditure’ needs to be considered for the purpose of working out the said 85%. Further also, it is an undisputed fact that, during the year, the assessee has not earned any commercial receipts relatable to the said amendments / alteration of the objects and no new projects of that nature were initiated by the trust in this year for earning such ineligible income for AO to deny the benefits of the provisions of section 11 of the Act. It is very important to note that the AO/DIT(E) have not disturbed the existing Registration granted u/s 12A of the Act. Therefore, while the registration u/s 12A is in force and while the objects and the activities of the trust are genuine, denying the benefits of the provisions of section 11 of the Act constitutes premature and unsustainable. In our view, the CIT(A) as discussed in his order vide para 4.9 extracted above is very categorical that the amendments are inapplicable to the year under consideration. Revenue has not given any contrary arguments or decisions that necessitate the reversal of the finding of the CIT(A) by us. Thus, we confirm the CIT (A)’s findings and order for restoring the claim of deduction in favour of the assessee. - Decided against revenue
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