Use or application of funds or assets for the benefit of interested person.
97. (1) The funds or the assets of the non-profit organisation shall not be used or applied, directly or indirectly, for the benefit of an interested person.
(2) Without prejudice to sub-section (1), the funds or the assets of the non-profit organisation shall be deemed to have been used or applied for the benefit of an interested person, if—
(a) the funds or the assets of the non-profit organisation are, or continue to be, lent to any interested person, for any period during the financial year, without either adequate security or adequate interest or both;
(b) the land, building or other asset of the non-profit organisation is, or continues to be, made available for the use of any interested person, for any period during the financial year, without charging adequate rent or other compensation;
(c) any amount is paid by way of salary, allowance or otherwise during the financial year to any interested person, out of the resources of the non-profit organisation for services rendered by that person to such organisation and the amount so paid is in excess of what may be reasonably paid for such services;
(d) the services of the non-profit organisation are made available to any interested person, during the financial year, without adequate remuneration or other compensation;
(e) any share, security or other property is purchased by or on behalf of the non-profit organisation from any interested person, during the financial year, for consideration which is more than adequate;
(f) any share, security or other property is sold by or on behalf of the non-profit organisation to any interested person, during the financial year, for consideration which is less than adequate;
(g) any fund or asset of the non-profit organisation is diverted during the financial year in favour of any interested person where the fund or the value of the asset, as the case may be, or the aggregate of the funds and the value of the assets so diverted exceeds one thousand rupees; or
(h) any funds of the non-profit organisation are, or continue to remain, invested for any period during the financial year (not being a period before the 1st day of January, 1971), in any concern in which any interested person has a substantial interest and such investment exceeds five per cent. of the capital of that concern.
