TaxTMI 
TaxTMI 
2021 (7) TMI 1143
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....that :- "1. On the facts and in the circumstances of the case whether the Ld. CIT (A) has erred in holding that Sh. N.K. Arora, the Executive Director was not a Manager or a de facto trustee and therefore a specified person within the meaning of section 13 (3) of the Income Tax Act. 2. On the facts and in the circumstances of the case whether the Ld. CIT (A) has erred in holding that Sh. N.K. Arora was not a specified person despite the fact that the assessee itself in audit report in Form 10B for AY 2013-14 had shown him as specified person and reported the transaction with him." 2. Briefly stated the facts necessary for adjudication of the controversy at hand are : Assessee, M/s. Inclen Trust International, being a tr....
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....zed Representatives of the parties to the appeal, gone through the documents relied upon and orders passed by the revenue authorities below in the light of the facts and circumstances of the case. 5. Ld. DR for the Revenue challenging the impugned order contended that Dr. N.K. Arora being Manager of the trust was a "de facto trustee" and has been rightly considered as a specified person by the AO u/s 13(3) of the Act. Ld. CIT DR referred to Item 3 in Part 2 of Audit Report wherein payment of Rs. 90,00,000/- as remuneration has been paid to Dr. N.K. Arora, Executive Director for the services rendered by him during the year and as such, he is a specified person u/s 13(3) of the Act. Ld. DR also filed written submissions which are made part....
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.... The issue for consideration is whether a manager of the institution can be read as the manager of the trust also. In the case of Asstt. CIT vs. Thanthi Trust [(2001) 247 ITR 785 (SC)] it has been held that both expressions are different in the context of section 13(3). The observation of the Hon'ble Court is as follows: "Trusts and institutions are separately dealt within the Act (Section 11 itself and Sections 12, 12A and 13, for example). The expressions referred to entities differently constituted." 4.1.5 This finding has also been given by the Hon'ble Calcutta High Court in the case of CIT vs. Rai Bahadur Biseswarlal Motilal Halwasiya Trust (supra), also relied upon by the appellant, in which case the Hon'....
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....rovisions of section 13(1)(c}(ii) and consequently denying exemption to the assessee. As regards the other contentions of the Assessing Officer, it is clear that the Executive Director is a professional who has been hired by the appellant to manage the affairs of the trust. He is an employee of the trust and not a trustee. His previous credentials are impeccable and no adverse inference has been drawn by the Assessing Officer with regard to his credentials. Therefore, the objection of the Assessing Officer that the salary paid to him is in excess of the normal salary paid to his juniors is not factually and legally sustainable. Further, it is only in the context of section 13 that the Assessing Officer has held that the salary paid is not r....
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.... extracted above, goes to prove that Dr. N.K. Arora, Executive Director of the trust does not fall under any head of the specified person. AO has used the word that Dr. N.K. Arora is a de facto trustee and there is no such category in the name of de facto trustee under section 13(3) of the Act. When we examine Trust Deed of the assessee trust, available at pages 1 to 47 of the paper book, it shows at page 7 that the trust shall have the following bodies :- (i) The Governing Body (ii) The Board of Trustees (iii) The Management Committee 10. Again, Dr. N.K. Arora is neither a trustee nor in the Governing Body nor in the Managing Committee of the assessee trust, rather he has been performing duties as per directio....