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Issues Involved:
The judgment involves issues related to the entitlement of exemption under sections 11 and 13(1)(c)(ii) of the Income-tax Act, 1961 for a society registered under the Societies Registration Act, regarding payments made to office bearers and expenses incurred for charitable and religious purposes. Entitlement to Exemption under Section 11: The society, registered before April 1, 1962, claimed exemption under section 11 for the assessment year 1982-83, citing expenses for educational, medical, and charitable purposes. The Commissioner of Income-tax granted exemption based on expenses incurred for religious ceremonies and charitable activities, which was upheld by the Tribunal. However, the High Court held that the society's payments to office bearers and other interested persons did not meet the requirements of section 13(1)(c)(ii), denying exemption under section 11. Interpretation of Section 13(1)(c)(ii): The society argued that all payments made were approved by resolutions passed by the board of directors, seeking exemption under the first proviso of section 13(1)(c). The High Court, following the decision in CIT v. Rattan Trust [1997] 227 ITR 356, emphasized that the trust deed must contain mandatory provisions before April 1, 1962, for payments to interested persons. As the society's mandate for payments was made after this date, the High Court upheld the Income-tax Officer's decision to invoke section 13(1)(c) and deny exemption under section 11. Conclusion: The High Court ruled against the society, stating that the Income-tax Officer correctly applied section 13(1)(c) regarding payments to office bearers, thereby rejecting the claim for exemption under section 11. The Tribunal's decision in favor of the society was deemed unjustified, leading to both questions of law being answered against the assessee and in favor of the Revenue.
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