TMI BlogSection 11 not to apply in certain casesX X X X Extracts X X X X X X X X Extracts X X X X ..... art of such income or any property of the trust or the institution (whenever created or established) is during the previous year used or applied, directly or indirectly for the benefit of any person referred to in 28 [ sub-section (3), such part of income as referred to in sub-clauses (i) and (ii) ] : Provided that in the case of a trust or institution created or established before the commencement of this Act, the provisions of sub-clause ( ii ) shall not apply to any use or application, whether directly or indirectly, of any part of such income or any property of the trust or institution for the benefit of any person referred to in sub-section (3), if such use or application is by way of compliance with a mandatory term of the trust or a mandatory rule governing the institution : Provided further that in the case of a trust for religious pur poses or a religious institution (whenever created or estab lished) or a trust for charitable purposes or a charitable institution created or established before the commencement of this Act, the provisions of sub-clause ( ii ) shall not apply to any use or application, whether directly or indirectly, of any part of such income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evant to the assessment year commencing on the 1st day of April, 1984 or any subsequent assessment year. Explanation . -Where the trust or institution has any other income in addition to profits and gains of business, the provisions of clause ( iii ) of this proviso shall not apply unless the trust or institution maintains separate books of account in respect of such business .] 10 [ Explanation. - For the purposes of sub-clause ( ii ) of clause ( c ), in determining whether any part of the income or any property of any trust or institution is during the previous year used or applied, directly or indirectly, for the benefit of any person referred to in sub-section (3), in so far as such use or application relates to any period before the 1st day of July, 1972, no regard shall be had to the amendments made to this section by section 7 [other than sub-clause ( ii ) of clause ( a ) thereof] of the Finance Act, 1972 .] (2) Without prejudice to the generality of the provisions of clause ( c ) 11 [ and clause ( d ) ] of sub-section (1), the income or the property of the trust or institution or any part of such income or property shall, for the purposes of that clause, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he author of the trust or the founder of the institution; ( b ) any person who has made a substantial contribution to the trust or institution, 13 [ that is to say, any person whose total contribution up to the end of the relevant previous year exceeds 14 [ fifty ] thousand rupees ]; ( c ) where such author, founder or person is a Hindu undivided family, a member of the family; 15 [ ( cc ) any trustee of the trust or manager (by whatever name called) of the institution ;] ( d ) any relative of any such author, founder, person, 16 [ member, trustee or manager ] as aforesaid; ( e ) any concern in which any of the persons referred to in clauses ( a ), ( b ), ( c ) 17 [ , ( cc ) ] and ( d ) has a substantial interest. (4) Notwithstanding anything contained in clause ( c ) of sub-section (1) 18 [ but without prejudice to the provisions contained in clause ( d ) of that sub-section ] , in a case where the aggregate of the funds of the trust or institution invested in a concern in which any person referred to in sub-section (3) has a substantial interest, does not exceed five per cent of the capital of that concern, the exemption under section 11 19 [ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on in receipt thereof, if- (i) the statement referred to in clause (a) of the said sub-section in respect of such income is not furnished on or before the due date specified under sub-section (1) of section 139 for furnishing the return of income for the previous year; or (ii) the return of income for the previous year is not furnished by such person on or before the due date specified under sub-section (1) of section 139 for furnishing the return of income for the said previous year. ] 30 [ (10) Where the provisions of sub-section (8) are applicable to any trust or institution or it violates the conditions specified under clause (b) or clause (ba) of sub-section (1) of section 12A, its income chargeable to tax shall be computed after allowing deduction for the expenditure (other than capital expenditure) incurred in India, for the objects of the trust or institution, subject to fulfilment of the following conditions, namely:- (a) such expenditure is not from the corpus standing to the credit of the trust or institution as on the end of the financial year immediately preceding the previous year relevant to the assessment year for which income is being computed; (b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... during the previous year, owned beneficially by such person or partly by such person and partly by one or more of the other persons referred to in sub-section (3); ( ii ) in the case of any other concern, if such person is entitled, or such person and one or more of the other persons referred to in sub-section (3) are entitled in the aggregate, at any time during the previous year, to not less than twenty per cent of the profits of such concern. ] ----------------------------- Notes :- 1. Reintroduced by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989. Earlier, it was omitted by the Direct Tax Laws (Amendment) Act, 1987, with effect from the same date. Original section 13 was substituted by the Finance Act, 1970, w.e.f. 1-4-1971 and prior to its substitution, it was amended by the Finance Act, 1966, w.e.f. 1-4-1966 and the Finance Act, 1963, w.r.e.f. 1-4-1962. 2. Inserted by the Finance Act, 1972, w.e.f. 1-4-1973. 3. Omitted by the Finance Act, 1983, w.e.f. 1-4-1984. Original clause (bb), was inserted by the Taxation Laws (Amendment) Act, 1975, w.e.f. 1-4-1977. 4. Substituted by the Finance Act, 1983, w.e.f. 1-4-1983. Orig ..... X X X X Extracts X X X X X X X X Extracts X X X X
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