Subscription to chit amount - violation u/s 13(1)(d) read with section u/s 11(5)

[GOVINDASAMY RADHAKRISHNAN]

One of our client Trust Subscribed Registered chit. The A.O. viewed as violation u/s 13(1)(d) read with section u/s 11(5) of the IT Act,1961.and diallowing exemption claimed under section 11. whether subscription of chit amount to violation and any case law refernce. and advice

AI Summary

Subscription to Chit Fund by Trust Raises Questions on Exemption Eligibility Under Sections 13(1)(d) & 11(5) of Income Tax Act. A client trust subscribed to a registered chit, which the Assessing Officer (AO) viewed as a violation of sections 13(1)(d) and 11(5) of the Income Tax Act, 1961, leading to the disallowance of an exemption claimed under section 11. The query seeks clarification on whether this subscription constitutes a violation and requests case law references. The response indicates that only eligible investments qualify for exemption under the Act, and if the registered chit is deemed an eligible investment, the AO cannot disallow it.