https://www.taxtmi.com/caselaws?id=462822 ITAT Delhi allowed the appeal, quashing the CIT's revision order under section 263. The CIT had denied exemption under sections 11 and 12, alleging the trust violated section 13(1)(c) by paying stipends to trainees who worked for a related company, claiming this arrangement benefited trustees and reduced the company's tax liability. ITAT held the CIT misunderstood the arrangement. The trust received training fees from the sister concern, not vice versa, so no income was diverted to interested persons. The trust provided vocational training to weaker sections of society, with trainees gaining practical experience at the sister company's factory. The trust recovered stipend amounts from the sister concern, ensuring no benefit to related parties. Both entities maintained accrual-based accounts, with outstanding amounts properly reflected and subsequently paid. The arrangement had operated consistently since 2010-11 without objection. ITAT found no lack of inquiry by the assessing officer and ruled the assessment order was not erroneous. en-us Tue, 09 Jul 2024 00:00:00 +0530 Thu, 17 Jul 2025 13:28:12 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=462822 ITAT Delhi allowed the appeal, quashing the CIT's revision order under section 263. The CIT had denied exemption under sections 11 and 12, alleging the trust violated section 13(1)(c) by paying stipends to trainees who worked for a related company, claiming this arrangement benefited trustees and reduced the company's tax liability. ITAT held the CIT misunderstood the arrangement. The trust received training fees from the sister concern, not vice versa, so no income was diverted to interested persons. The trust provided vocational training to weaker sections of society, with trainees gaining practical experience at the sister company's factory. The trust recovered stipend amounts from the sister concern, ensuring no benefit to related parties. Both entities maintained accrual-based accounts, with outstanding amounts properly reflected and subsequently paid. The arrangement had operated consistently since 2010-11 without objection. ITAT found no lack of inquiry by the assessing officer and ruled the assessment order was not erroneous. Case-Laws Income Tax Tue, 09 Jul 2024 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=462822