TMI Blog2020 (10) TMI 302X X X X Extracts X X X X X X X X Extracts X X X X ..... This exclusion from immunity, which has been granted by Section 11 has to be confined to the real income of the trust. The application or accumulation can only be of real income which has actually been received by an assessee. It is pertinent to note that Central Board of Direct Taxes has issued a Circular No.5-P dated 19.05.1968, which provides that the word income in Section 11(1a) of the Act must be understood in commercial sense and the entire income of the trust in the commercial sense has been spent for the purpose of charity. The real income of the trust is exempt to the extent to which some income is applied to such purposes in India. The aforesaid view has been taken by in JAYASHREE CHARITY TRUST [ 1984 (12) TMI 30 - CAL ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plication towards charity, for the purpose of levying tax in considering the applicability of Section 11 to a public charitable trust as was done in the assessment order? (ii) Without prejudice and in the alternative whether even in the case of a public charitable trust tax could be levied on a public charitable trust only on its to total income computed after taking into account all deductions including those available under Section 24(a) as well as what is to be excluded under Section 11 of the Act? 2. Facts leading to filing of the appeal briefly stated are that the assessee is a religious and charitable trust. The assessee filed return of income on 06.09.2007 for Assessment Year 2007-08 declaring NIL income. The assessee had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Learned counsel for the assessee has referred to the expression income , and total income as defined under Section 2(24) and Section 2(45) of the Act. Our attention has also been invited to Section 139(4A) of the Act as well as Rule 12(g) of the Rules. It is submitted that the Rules, the form and provisions provide for deduction under Section 24 of the Act and therefore, the assessee is entitled to deduction under Section 24(a) of the Act. It is further submitted that under the Act, tax, if any, can be levied only on total income as computed under the Act after excluding from such total income the amounts, which are not includible under Chapter III of the Act. It is further submitted that total income of the trust has to be computed as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot attracted. It is also submitted that the charging provision should provide for deduction and not the form or the Rules. It is also urged that decision relied upon by the learned counsel for the assessee have no application to the fact situation of the case. 5. We have considered the submissions made by learned counsel for the parties and have perused the record. Before proceeding further, it is apposite to take note of relevant statutory provisions: 2(24) income includes- (i) profits and gains; (ii) dividend; (iia) voluntary contributions received by a trust created wholly or partly for charitable or religious purposes or by an institution established wholly or partly for such purposes or by an association or i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ving effect to the provisions of Sections 11 and 12) exceeds the maximum amount which is not chargeable to income- tax, furnish a return of such income of the Previous year in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be, prescribed and all the provisions of this Act shall, so far as may be, apply as if it were a return required to be furnished under sub-Section (1). 6. The object of Section 11 of the Act is to grant immunity to the income of a charitable trust from income tax. The immunity however, is confined to the extent to which such income is applied to such purposes in India. The exemption will be denied if the income is not actually applied for charitable purposes. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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