TMI Blog2002 (9) TMI 92X X X X Extracts X X X X X X X X Extracts X X X X ..... etitioner was concerned, the technical breach ought not to have weighed with the Commissioner is the finding of the court. In any case going by the wording of section 80G, it makes it clear that unless a charitable trust or society qualifies for exemption under section 11 during the relevant year, it is not entitled to renewal of registration under section 80G. - In the circumstances, there is no ground to interfere. The original petition is dismissed. - - - - - Dated:- 5-9-2002 - Judge(s) : C. N. RAMACHANDRAN NAIR. JUDGMENT C.N. RAMACHANDRAN NAIR J.-The petitioner is a charitable society which was enjoying exemption under section 80G of the Income-tax Act, 1961, until the year 1998-99. However, the facility was denied for the year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Supreme Court in S. RM. M. CT. M. Tiruppani Trust v. CIT [1998] 230 ITR 636 and in Addl. CIT v. A. L. N. Rao Charitable Trust [1995] 216 ITR 697 and contended that section 11(2)(b) read with section 11(5) applies only to unspent amount below 75 per cent. of the income. According to the petitioner, since it has admittedly spent 75 per cent. of the income during the year, sections 11(2)(b) and 11(5) have no application at all. On the other hand standing counsel for the Department pointed out that the decisions pertain to assessment prior to the amendment to section 13 and, therefore, those decisions have no application. Obviously the decisions only refer to section 11 and not to section 13, whereas the decision of the Commissioner under chall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 11(5) does not arise at all. In other words, Rs. 25,000 being part of the balance 25 per cent. of income which remained invested in investments other than those referred to in section 11(5) it does not disentitle the petitioner to the exemption is the contention of the petitioner. The scheme of section 11 provides for exemption of the income to the extent it is spent for charitable purposes during the relevant previous year. Though the eligibility for exemption is available only if 75 per cent. of the income is spent for charity, there is an exception provided in sub-section (2) of section 11 which enables the petitioner to get exemption by carrying over any shortage in the expenditure below 75 per cent. to the next year after issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 617 of the Companies Act, 1956 (1 of 1956), or a corporation established by or under a Central, State or Provincial Act) are held by the trust or institution after the 30th day of November, 1983..." Therefore, section 13(1)(d) which has overriding effect makes it mandatory for the trust to invest the entire left over funds after meeting the expenditure in any of the modes of investments provided under section 11(5) of the Act. Even in a case where 75 per cent. is spent by the trust and balance 25 per cent. is carried over, such 25 per cent. should be invested only in any of the modes provided under section 11(5) of the Act and if there is a violation, then section 13 puts a bar on exemption under section 11. In other words, while ..... X X X X Extracts X X X X X X X X Extracts X X X X
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