Section 13(3) : ITAT upheld exemption to trust who received grant from ABN AMRO Foundation & RBS Bank India

ADIT Vs. M/s. RBS Foundation India (ITAT Mumbai)

Assessee is a limited share registered company under section 25 of the Act and is a separate and independent legal entity wherein RBS Bank India or ABN AMRO Foundation, Netherlands are neither the shareholders nor the promoters of the assessee. The assessee company has been formed with the primary objective of carrying out not for profit charitable activities involving interventions around the theme of financial inclusion, financial literacy and employee engagement. The assessee is governed by an independent board and is working with different objects than that of the RBS Bank India and ABN AMRO Foundation, Netherlands. The Ld. A.R. further submitted that the founders i.e. the signatories to the memorandum of the assessee do not hold any shares in the ABN AMRO Bank, India. This means that the founders do not have any substantial interest whatsoever in the ABN AMRO Bank during this year.

We find that during the year assessee has provided grants to 3 NGOs revolving around the theme of promoting relief programs in under served districts/state, promoting sustainable livelihood through micro-enterprise promotion and improving the socio- economic conditions of the poor in such regions. The assessee has three directors Ms. Meera Sanyal and others and RBS Bank has no Board of Directors in India. The founder of the trust has no sufficient interest. We find that the assessee has received grant of Rs. 50,000/- from RBS Bank and balance of money of Rs. 17,63,21,464/- has been received from ABN AMRO Foundation, Netherlands. Therefore, we find that section 13(3) of the Act is not applicable and the Ld. CIT(A) has rightly granted the exemption. Therefore, our interference is not required.

Full Text of the ITAT Order is as follows:-

The present appeal has been preferred by the Revenue against the order dated 21.07.2011 of the Commissioner of Income Tax (Appeals) [hereinafter referred to as the CIT(A)] relevant to assessment year 2008-09.

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