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The Appellate Tribunal addressed the issue of exemption u/s 11 for income from property held for charitable purposes. It held that the provision of section 11(1)(a) applies, limiting the allowance to 15% of the income from trust property if no application of income is made for charitable purposes. The Tribunal clarified that in the absence of the assessee exercising the option to accumulate income, 85% of the income must be applied for charitable purposes. The Tribunal rejected the Revenue's adjustment u/s 143(1)(a) and assessed the income at Rs. 87,430. It also discussed the incorrect application of section 167B for tax rate computation, stating that it should follow normal rates for Associations of Persons. The Tribunal allowed the assessee's appeal.
The Appellate Tribunal addressed the issue of exemption u/s 11 for income from property held for charitable purposes. It held that the provision of section 11(1)(a) applies, limiting the allowance to 15% of the income from trust property if no application of income is made for charitable purposes. The Tribunal clarified that in the absence of the assessee exercising the option to accumulate income, 85% of the income must be applied for charitable purposes. The Tribunal rejected the Revenue's adjustment u/s 143(1)(a) and assessed the income at Rs. 87,430. It also discussed the incorrect application of section 167B for tax rate computation, stating that it should follow normal rates for Associations of Persons. The Tribunal allowed the assessee's appeal.
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