1984 (11) TMI 130

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....ust is not registered with the Commissioner of Income-tax as required under section 12A of the Income-tax Act, 1961 (' the 1961 Act '). He rejected the assessee's contention that it is a charitable institution and, hence, its wealth should be exempted from tax. 3. The assessee appealed to the AAC. The AAC held that the assessee-trust would be entitled to exemption under section 5(1)(i) of the Wealth-tax Act, 1957 (' the Act ') up to 1972-73 but thereafter the assessee will not be entitled to exemption in view of the introduction of section 21A in the Act, wherein exemption under section 5(1)(i) is available subject to the provisions of section 21A only. He held that as the funds of the trust were invested in a firm in which the trustees w....

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.... deposits, which is less than 5 per cent, cannot be considered as adequate interest. Thus, the assessee is clearly hit by the provisions of section 13(2)(a). He also urged that the assessee is hit by section 13(2)(h) as the funds of the trust continued to remain invested in the concern in which the trustees have substantial interest. He also urged that the assessee is not entitled for the exemption under section 5(1)(xxiii). 6. Under section 5(1)(i), the property held under the trust or other legal obligation for any public purpose of a charitable or religious nature in India is exempt from wealth-tax. But this exemption is not available under section 21A with effect from the assessment year 1973-74, where the trust violates the conditions....