TMI Blog2018 (12) TMI 1344X X X X Extracts X X X X X X X X Extracts X X X X ..... will not be available only in respect of the diverted income. On a plain reading of Sections 11 and 13 of the Act, it is clear that the legislature did not contemplate the denial the benefit of Section 11 of the Act to the entire income of the Trust. If the interpretation sought to be advanced by the Revenue is accepted, it would lead to grave injustice as any mistake minor and/or misdemnour involving a small amount takes place by the Trust, the consequence would be denial of the benefit of exemption to the entire income otherwise admittedly used for charitable purposes. In the above view, the view taken by the Tribunal in the impugned order is in accord with the view of the Karnataka High Court in Fr. Mullers Charitable Institutio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the Assessment Proceedings, the Assessing Officer noted that on 29th March, 2004, the Respondent-Asssessee had purchased one Skoda car valued at ₹ 11.38 lakhs in the name of one of its Trustee Mr. Sandeep Pachpande i.e. person specified in Section 13(3) of the Act. In the above circumstances, the Assessing Officer in its order dated 23rd December, 2006 passed under Section 143(3) of the Act, denied the benefit of exemption to the entire income under Section 11 of the Act. Thus bringing to tax its entire income of ₹ 5.14 Crores in view of Section 13(2)(b) read with Section 13(3) of the Act. 4. Being aggrieved, the Respondent filed an appeal to the Commissioner of Income Tax (Appeals) [CIT(A)]. However, without success. Thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... places reliance upon the decision of the Apex Court in Bharat Diamond Bourse (supra). This, to support the view of the Revenue that the benefit of exemption should be denied to entire income of the trust and not restricted only to the extent of income diverted in breach of Section 13 of the Act. 7. We find that the impugned order of the Tribunal has placed reliance upon the decision of the Karnataka High Court in Fr. Mullers Charitable Institutions (supra), after having noted that the the decision of the Supreme Court in Bharat Diamond Bourse (supra) does not very clearly specify whether it is only the income diverted as loans to a person specified under Section 13 of the Act, which was denied the benefit of Section 11 of the Act or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 253 ITR 593 . Moreover, on a plain reading of Sections 11 and 13 of the Act, it is clear that the legislature did not contemplate the denial the benefit of Section 11 of the Act to the entire income of the Trust. If the interpretation sought to be advanced by the Revenue is accepted, it would lead to grave injustice as any mistake minor and/or misdemnour involving a small amount takes place by the Trust, the consequence would be denial of the benefit of exemption to the entire income otherwise admittedly used for charitable purposes. It is pointed out to us that the decision of the Karnataka High Court in Fr. Mullers Charitable Institutions (supra) was carried by the Revenue to the Supreme Court and its SLP was dismissed on 19th Septembe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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