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2022 (6) TMI 1444 - AT - Income TaxExemption u/s 10(23C) - Violation of provisions of sections 13(1)(c), 13(2)(a), 13(2)(b), 13(2)(d) and 13(2)(g) - assessee trust made advances [interest free] to two persons who were trustees and settlers - HELD THAT:- In instant case the assessee is imparting education and has set up a College for Bachelor in Education and is duly recognized by the Jammu University. All its income is routed through the said University where the students are allotted by the said University. All the expenses have been incurred on the objects of the institution for education and no part thereof has been incurred on any other object whatsoever. In the present case, the AO while rejecting the exemption claimed by the trust u/s 10(23C) (iiiad) has invoked the provisions of sections 13(1)(c), 13(2)(a), 13(2)(b), 13(2)(d) and 13(2)(g) of the Act. In this connection it is pertinent mention that section 13 starts with the words, ‘Nothing contained in section 11 or section 12 shall operate as to’. This shows and makes it clear that the provisions contained in section 13 govern section 11 and section 12 of the Act and not section 10. These provisions are contradictory to each other. Section 13(1)(c) applies to application of income and property to specified persons. Sections 13(2)(a), 13(2)(b), 13(2)(d) and 13(2)(g) govern the provisions of lending, property made available for use, any service is made available and if any income is diverted respectively. The AO and the Ld. CIT(A) has not come to any conclusive finding as to what particular clause has been violated and as to how the same has been violated. In the absence of any such findings by the AO, the withdrawing of exemption was not in accordance with law. In the above view, we hold that the Ld. CIT (Appeals), was not justified, in confirming the finding of the AO against law, regarding rejecting the exemption claimed of the Assessee Trust under section u/s 10(23C) (iiiad) - Decided in favour of assessee.
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