Case Law Details
In the instant case, the assessee is a charitable trust registered u/s. 12AA of the Act. The assessee trust paid remuneration of Rs 4,80,000/- to Shri Anantbhai K. Shah who is a full time secretary and trustee of the assessee trust. The Assessing Officer disallowed the deduction claimed for above payment on the ground that the services rendered by Shri Anantbhai K. Shah were a duty of him as a trustee and the remuneration paid to him being violative of provisions of section 13(1)(c) and 13(3)(cc). The Assessing Officer also opined that remuneration of Rs 4,80,000/- paid to said Shri Anantbhai K. Shah cannot be treated as application towards objects of the trust and therefore he disallowed the entire amount of Rs 4,80,000/- and treated the same as taxable income in the hands of the assessee charitable trust.
Authorized Representative of the assessee contended that in view of the provisions of section 13(2)(c), no disallowance of remuneration paid to the trustee which is not more than the fair market value can be made, and therefore, the Revenue was not justified in making arbitrary disallowance. He also pointed out that similar remuneration was paid to the same trustee in earlier years also which was accepted and allowed by the Department.
The Authorized Representative of the assessee submitted that Shri Anantbhai K. Shah was qualified in B.A. (Sp.) degree in Sociology passed in 1962 from Gujarat University which was the only specialized degree in field of sociology. He has vast experience of over 45 years in the field of social working and developing institutions in this field. He has been awarded with the following awards for his achievements and his noble services in the field of helping handicapped people particularly children:
· Rajiv Gandhi Manav Seva Award – 1998
· Felicitated by former Prime Minister of India Late Shri Morarji Desai
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