9911796707
Advanced Search 
TMI Blog2012 (11) TMI 348X X X X Extracts X X X X X X X X Extracts X X X X ..... appeals is with regard to non-granting of exemption u/s. 11 of the Income-tax Act, 1961 in both the years. In addition to this, in assessment year 2003-04 the assessee also has a grievance for considering the alternate claim u/s. 10(23C)(vi) of the Act. We will consider the facts of assessment year 2003-04. 3. Brief facts of the case are that the assessee is a society engaged in running educational institutions. During the course of assessment proceedings for the A.Y. 2003-04, the Assessing Officer noticed that an amount of Rs. 1.80 lakhs had been paid to Shri V. Srinivas Reddy, a founder member, out of the corpus fund. Similarly, Shri P.V. Ranganath, son of another founder member was also paid Rs. 1,57,217 from out of the corpus fund. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e donor. The assessee made a plea before the lower authorities that a sum of Rs. 3,32,217 which was refunded to the respective donors i.e., to Sri V. Srinivas Reddy and Sri P.V. Ramana is not part of the corpus fund and wrongly taken into corpus fund and the same was refunded. However, the CIT(A) not agreed with the assessee and observed that the assessee is not entitled for exemption u/s. 11 as well as exemption u/s. 10(23C) of the Act for the A.Y. 2003-04. Similarly for the A.Y. 2004-05, there is a transfer of Rs. 12,42,515 out of corpus fund to three members of the society through journal entry and paid to Sri V. Srinivas Reddy through their individual ledger account. The assessee taken same plea before the lower authorities that it is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ear. The details of the corpus fund would clearly indicate that these two persons have introduced corpus fund even during the year and they did not withdraw any existing corpus fund. 6. The AR submitted that with regard to Sri P.V. Ramana, it can be seen that on 13.7.2002, he introduced Rs. 3,71,327 but only an amount of Rs. 2,14,110 is credited to the Corpus fund account and the balance is returned. Similarly, in the case of Srinivas Reddy on 10.4.2002 he introduced Rs. 2,78,497 - and only an amount of Rs. 98,497 is credited to the corpus fund out of this amount and the balance amount was not credited to the corpus fund. The only place where repayment was noted is in the details submitted before the Assessing Officer, a copy of which is p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bearers are the founder members of the assessee trust or not has to examined. If they have no managerial power and payment to these defaulting office bearers is thrust upon the assessee due to circumstances beyond the control of the assessee and that payment itself cannot be considered to cancel the benefit u/s. 11 or 10(23C) of the Act. For the wrong doings of some office bearers, the assessee cannot be blamed or penalised. If the payment was made to the defaulting officer bearers on good and sufficient reason it cannot be said that there is a violation of provisions of section 13(1)(c) of the Act. 9. The person referred to in sub-section (2) of section 13 is the founder member of the trust. The condition mentioned in section 13(1)(c)(ii ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ipients of the amount within the committee of office bearers and the situation so warranted that had the assessee not paid this amount, the society could not have continued and non-continuation of the society would affect the interest of larger number of students of the assessee society thereby creating bigger problem than this. Being so, the assessee refunded this portion of money contributed by these two persons, viz., Sri V. Srinivas Reddy and Sri P.V. Ramana and that refund of money cannot be considered as a benefit given to these persons and rather benefit to the society itself and it resulted in perpetual existence of assessee society. Being so, the Assessing Officer is directed to examine the practical situation which warranted the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
