9911796707
TMI Blog2018 (7) TMI 575X X X X Extracts X X X X X X X X Extracts X X X X ..... d 28.03.2013 for the Assessment Year 2010-11. 2. The first issue to be decided in this appeal is as to whether the ld CITA was justified in holding that the assessee trust is entitled for exemption u/s 11 of the Act in the facts and circumstances of the case. 3. The brief facts of this appeal are that the assessee is a society established on 18.9.2000 and registered u/s 12AA of the Act vide order dated 14.10.2008. The society is running an Engineering College known as Hooghly Engineering & Technology College at Vivekananda Road, Pipulpati, Hooghly. The assessee filed its return of income for the Asst Year 2010-11 on 8.10.2010 declaring Nil income after claiming exemption u/s 11 of the Act. The assessee produced the books of accounts and f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty by the assessee trust in the name of other organization is not at all permitted by the objectives of the society. This act of the assessee tantamount to alienation of property which violate the principle of exemption granted u/s 12 of the Act. Moreover the other two trusts are not registered u/s 12AA of the Act. The ld AO observed that Mr Manas Dasgupta is the Secretary of assessee society and at the same time he is the President of PCSD and Lok Kendra Trust. Therefore, it is evident that the funds of the assessee society has been utilized for the benefit of its trustee and for this no security and / or any interest was charged by the assessee trust to either to PCSD or Lok Kendra Trust. Hence it is clear violation of provisions of secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions of section 13(1)(c ) read with section 13(2)(a) of the Act. The ld CITA further observed that since the two independent trusts are not registered u/s 12AA of the Act, therefore Explanation below sub-section (2) of section 11 of the Act is also not attracted . In any case, he held that the assessee trust had only paid advance and not donation. 5.1. With regard to Government Grants received by the assessee in the sum of Rs. 13,00,000/-, the ld CITA observed that they are not in the nature of income specified in section 11(1) of the Act and also held that Government Grants are for specific purposes and the same were utilized during the year itself as is evident from the Balance Sheet. Accordingly, he deleted the addition made in the sum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts have been diverted by the assessee trust for the benefit of interested persons specified in section 13(3) of the Act. Now the short question that arises for our consideration is as to whether the payments made by assessee trust to other two independent trusts would fall under the ambit of 'specified persons' defined u/s 13(3) of the Act. For this purpose, the relevant provisions of section 13 of the Act are reproduced below:- Section 11 not to apply in certain cases. 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- (a) any part of the income from the property held under a trust for private religious purposes which d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ous institution (whenever created or established) 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 or any property of the trust or institution 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 June, 1970; .............................. (3) The persons referred to in clause (c) of sub-section (1) and sub-section (2) are the following, namely :- (a) the author of the trust or the founder of the institution; (b) any person who has made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... those two trusts, would be entitled to share of profits of the said AOP and if the said share is more than 20%, then he would be deemed to be holding substantial interest in that AOPs as per Explanation 3. We find that the details of beneficiaries together with their respective holdings of other two trusts i.e PCSD and Lok Kendra Trust are not available on record. Hence we deem it fit and appropriate , in the interest of justice and fair play, to remand this limited aspect of the issue to the file of ld AO for factual verification , so as to find out the fact whether Mr Manas Dasgupta together with his relatives either individually or collectively is entitled to 20% of profits of the two trusts. If that is found to be correct, then the inte ..... X X X X Extracts X X X X X X X X Extracts X X X X
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