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2018 (12) TMI 1344 - HC - Income TaxDenial of benefit u/s 11 - diversion of income - restriction of denial to income of the Trust which was used/applied directly or indirectly for the benefit of the prohibited persons by tribunal - Held that:- The decision of the Karnartaka High Court in Fr. Mullers Charitable Institutions [2015 (9) TMI 395 - SUPREME COURT OF INDIA], dealt with the very issue herein viz. the denial of exemption of entire income under Section 11 of the Act, or is the denial restricted only to the quantum of diverted funds. This, as it is hit by Section 13 of the Act. The Court held that the benefit of Section 11 of the Act will not be available only in respect of the diverted income. On a plain reading of Sections 11 and 13 of the Act, it is clear that the legislature did not contemplate the denial the benefit of Section 11 of the Act to the entire income of the Trust. If the interpretation sought to be advanced by the Revenue is accepted, it would lead to grave injustice as any mistake minor and/or misdemnour involving a small amount takes place by the Trust, the consequence would be denial of the benefit of exemption to the entire income otherwise admittedly used for charitable purposes. In the above view, the view taken by the Tribunal in the impugned order is in accord with the view of the Karnataka High Court in Fr. Mullers Charitable Institutions (supra), Delhi High Court in Agrim Charan Foundation [2015 (9) TMI 395 - SUPREME COURT OF INDIA] and this Court in Sheth Mafatlal Gagalbahai Foundation Trust [2000 (10) TMI 26 - BOMBAY HIGH COURT]. Hence, the proposed question does not give rise to any substantial question of law. Thus, not entertained.
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