9911796707
TMI Blog2002 (9) TMI 92X X X X Extracts X X X X X X X X Extracts X X X X ..... ble purposes which enables the donor to claim exemption from tax up to 50 per cent. of the donation. The petitioner is contesting exhibit P-9 order whereunder section 80G benefit was denied to the petitioner by the Commissioner on the ground that an amount of Rs. 25,000 received as donation was invested in a private company which disentitles the petitioner for exemption under section 13(1)(d) read with section 11(5) of the Income-tax Act. I heard Sri P. Balachandran, counsel for the petitioner, and Sri P.K.R. Menon, senior counsel for the respondent. The petitioner's contention is that even after admitting that the petitioner has spent 75 per cent., of the income during the year 1999-2000 for charitable purpose, the respondents have denie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Income-tax (Exemption) v. Agrim Charan Foundation [2002] 253 ITR 593 and contended that even if there is violation of section 11 or section 13, the petitioner is entitled to registration under section 80G(5) of the Act. It is admitted and there is finding to the effect that an amount of Rs. 25,000 was deposited by the petitioner with Integrated Finance Company up to March 31, 1999, the previous year relevant to the assessment year for which renewal of exemption was claimed by the petitioner under section 80G. This is admittedly not a permissible investment provided under clauses (i) to (xii) of section 11 (5) of the Income-tax Act. The contention of the petitioner is that section 11 (5) directly refers to section 11(2)(b) which provides ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 11(5) of the Act. So much so, so far as the petitioner is concerned, the argument that there is no violation of section 11(2) is correct because the petitioner spent 75 per cent. of the income for charity during the year. However, the matter does not end here because section 13 introduces a further condition which is as follows: "13. (1) Nothing contained in section 11 or section 12 shall operate so as to exclude from the total income of the previous year of the person in receipt thereof--... (d) in the case of a trust for charitable or religious purposes or a charitable or religious institution, any income thereof, if for any period during the previous year (i) any funds of the trust or institution are invested or deposited after ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the authorised securities provided under section 11(5). In fact after introduction of section 13(1)(d), section 11(2)(b) has become redundant and unnecessary because section 13(1)(d) speaks about any funds of the trust or institution that takes in not only the remaining 25 per cent. but the unspent amount below 75 per cent. also. In other words, there is an absolute prohibition by virtue of section 13(1)(d) against any charitable institution investing any amount at any point of time in any investments or mode of investments other than those narrated in section 11(5). The petitioner admittedly having kept Rs. 25,000 in deposit in a private company till March 31, 1999, after which it has shifted it to one of the investments under section 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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