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TMI Blog2013 (8) TMI 45X X X X Extracts X X X X X X X X Extracts X X X X ..... /Luc/2003 for the Assessment Year - 1994-95; 2. ITA No. 56/Luc/2004 & 239/Luc/2005 for the Assessment Year - 1995-96; 3. ITA No. 57/Luc/2004 & 240/Luc/2005 for the Assessment Year - 1996-97; 4. ITA No. 246/Luc/2003 & 271/Luc/2003 for the Assessment Year - 1997-98; and 5. ITA No. 477/Luc/2002 & 500/Luc/2002 for the Assessment Year - 1998-99. On 03.09.2009, a Coordinate Bench of this Hon'ble Court has admitted the appeals on the following substantial questions of law:- "I. Under the facts and in the circumstances of the case, the Income Tax Appellate Tribunal has erred in law and on the facts in holding that the assessee society is entitled to exemption u/s 11 and is nut hit by the provisions of Section 13 of the I.T. Act, 1961 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ). During the assessment years under consideration, the CIT has not revoked the registration under Section 12AA of the Act. 3. But fact remains that on audit report in Form No. 10 was filed belated. Further, the AO observed in its order that the President, and Treasurer had occupied entire first floor and ground floor of the building "Atithishala" owned by the sister concern Motilal Memoriam Society at a nominal rent of Rs. 700/-; and Rs. 850/- respectively per month. Likewise, the Secretary was enjoying car and telephone facilities at the cost of Motilal Memoriam Society. It was also observed that the assessee is passing on its huge fund to Motilal Memorial Society every year. So, the AO has refused to recognize any exemption and made an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o laid down in the following cases :- (i) Commissioner of Income Tax-II, Lucknow vs. Vijeta Educational Society Lucknow, ITA No. 132 of 2006; (ii) Dr. S.C. Gupta vs. Commissioner of Income-Tax, (2001) ITR 248 Page 782. 6. On the other hand, Sri S.K. Garg, learned counsel for the assessee Sansthan justified the impugned order passed by the Tribunal. He submits that the AO has not specifically made out a case as to under which section, case is covered. The conditions mentioned in Section 13(1)(c) are that income of the trust should have been used or applied directly or indirectly for the benefit of any person falling in prohibited category mentioned in Section 13(3) of the Act. 7. In the instant case, benefit would mean that some exgrat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by observing that the assessee had shown huge expenses on establishment and on passing the money to other organizations and had spent a small sum of Rs. 2 lakhs on charity on the ground that the amounts spent on establishment an amounts passed on two other organizations had no obvious link with charitable purpose and their immediate hidden purpose seeks to benefit the members of the Governing Council of the Sansthan. But in the facts and circumstances of the case, there is no basis for assuming it for the reasons that the amounts passed on to other organizations were in nature of donations/grants to organizations carrying on charitable activities of which the members of the Governing Council of the Sansthan would not be beneficiaries. The e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the instant case, the registration was not cancelled, but the benefit of exemption was not given by the AO, which is not allowable as per the ratio laid down in the case of American Hotel and Lodging Association vs. CBDT, 301 86 SC. 13. On the plain language of Section 11(1)(i) of the Act, the assessee was entitled to accumulate 25% of the donation received should be the income of the trust. Thus, the assessee-society is entitled to accumulate 25% of its income from the property/donation etc. held in the trust as rightly observed by the Tribunal. 14. In the light of above discussion and by considering the totality of facts and circumstances of the case, we do not find any reason to interfere with the impugned order passed by the Tribunal. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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