TaxTMI 
TaxTMI 
2019 (12) TMI 151
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.... is that the ld. CIT(A) erroneously allowed the exemption under section 11 of the Income Tax Act, 1961 [" Act" in short]. 2. Brief facts of the case are that the assessee is a public charitable trust registered under section 12AA of the Act filed its return of income on 12.09.2011 for the assessment year 2011-12 declaring NIL income. The case was selected for scrutiny and the assessee filed particulars and records as called under statutory notices. On verification of details filed by the assessee and considering the submissions, by denying the exemption under section 11 of the Act, the Assessing Officer held that the assessee has violated the provisions of section 13(1)(c) of the Act and accordingly completed the assessment by assessing ....
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....y observing that some extraneous expenditure incurred by the managing trustee in the transport business has also been claimed by the assessee in their books of accounts, the Assessing Officer invoked the provisions of section 13(1)(c) of the Act and denied the exemption claimed under section 11 of the Act. It was the submission before the ld. CIT(A) that the assessee had not claimed any expenditure pertaining to M/s. Sri Renugambal Travels. It was further submission that the trust is operating buses to transport the students at free of cost. In case of breakdown, the Managing Trustee offers the vehicles of his own transport business to ferry the students. Further, it was submitted that the Managing Trustee never utilized the transport servi....
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....of the Act and accordingly directed the Assessing Officer to compute the value of the benefits extended to the trustee to the extent of violation and the same may be brought to tax at the maximum marginal rate. 7. The Department has contended that while directing to allow the exemption under section 11 of the Act, the ld. CIT(A) has failed to consider the decision of the ITAT, Chennai in the case of DDIT(E) v. Paramasiva Naidu Muthuvel Raj Education Trust (supra), wherein the Tribunal has considered the decision in the case of CIT v. Fr. Mullers Charitable Institutions [2014] 363 ITR 230 (Kar.) and in the case of CIT v. Working Women Forum [2014] 363 ITR 353 (Mad.). We have gone through the case law relied on by the Department in the gro....
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....e assessee trust alone cannot be held to be endured benefit to the trustee indirectly/directly and thereby the Assessing Officer invoked the provisions of section 13(1)(c) of the Act is not correct. 8. Further, the decision in the case of DIT v. Bharat Diamond Bourse (supra) is also similar to that of the case of DDIT(E) v. Paramasiva Naidu Muthuvel Raj Education Trust (supra). In the case of DIT v. Bharat Diamond Bourse (supra), in the previous year relevant to the assessment year 1989- 90, the assessee had advanced an amount of Rs.. 70 lakhs to one Bharat Shah without interest and security and even without entering into a written agreement with the said Bharat Shah. The said Bharat Shah was one of the signatories to the Memorandum of A....