Income from Trust used Directly or Indirectly for benefit of any prohibited Person is not entitled to Exemption u/s 11: ITAT [Read Order]
![Income from Trust used Directly or Indirectly for benefit of any prohibited Person is not entitled to Exemption u/s 11: ITAT [Read Order]](https://www.taxscan.in/wp-content/uploads/2022/05/Income-trust-benefit-prohibited-Person-Exemption-ITAT-Taxscan.jpeg "Income from Trust used Directly or Indirectly for benefit of any prohibited Person is not entitled to Exemption u/s 11: ITAT [Read Order]")
The Cuttack bench of the Income Tax Appellate Tribunal ( ITAT ) held that income from the trust used directly or indirectly for the benefit of any prohibited person is not entitled to exemption u/s11 of the Income Tax Act ,1961 and upheld the order passed by the Commissioner of Income Tax (Appeals) The appellant is a trust registered u/s.12A and 80G of the Income Tax Act, 1961 for which...
The Cuttack bench of the Income Tax Appellate Tribunal ( ITAT ) held that income from the trust used directly or indirectly for the benefit of any prohibited person is not entitled to exemption u/s11 of the Income Tax Act ,1961 and upheld the order passed by the Commissioner of Income Tax (Appeals)
The appellant is a trust registered u/s.12A and 80G of the Income Tax Act, 1961 for which the assessment order u/s.143(3) of the Act was passed on 30.12.2011. The appellant claimed exemption u/s.11 & 12 of the Act. The AO doubted the genuineness of the activities of the trust and invoked section 13 of the Act and denied benefit u/s.11 of the Act by taxing the total surplus as per the Income & Expenditure Account of the Trust as income chargeable to tax
The appellant contended that the Commissioner of Income Tax (Appeals), erred by upholding the action of the Assessing officer for invoking Section 13of the Act. The CIT(A) held that the deposit of the amount is in violation of Section 13(1)(d) of the Act and the trust is not entitled to exemption u/s.11 & 12 of the Act. Ld.
It was observed that the profits/surplus cannot be diverted for any other use or purpose and cannot be used for personal gain or benefit of the persons specified in section 13(3) of the Act or for any other business enterprise or entity which comes within the scope of this said provision.
The Coram consists of Shri C M Garg, JM & Shri Arun Khodpia, AM observed that violation of several provisions of Section 13(1) & 13(2) of the Act and held the of CIT(A) confirming the findings of the AO in denying exemption u/s.11 of the Act as correct. The appeal filed by the assessee was dismissed. The appellant was represented by Shri B R Pattnaik and the respondent was represented by Shri M K Goutam.
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