Exemption u/s 11 denied as surplus utilized in violation of section 13

Nabadigant Educational Trust Vs ITO (ITAT Cuttack)

Held that the assesee’s funds/surplus has been utilised and diverted in violation of several provisions of Section 13(1) & 13(2) of the Act. Exemption u/s 11 denied.

Facts-

The appellant is a trust registered u/s.12A and 80G of the Income Tax Act, 1961. Assessment order u/s.143(3) of the Act was passed on 30.12.2011. The appellant claimed exemption u/s.11 & 12 of the Act. The AO doubted the genuineness of the activities of the trust and invoked section 13 of the Act and denied benefit u/s.11 of the Act by taxing the total surplus as per the Income & Expenditure Account of the Trust as income chargeable to tax.

CIT(A) upheld the assessment order by concluding that the AO was right in bringing to tax the surplus income over expenditure and the first appeal was dismissed. Now, the assessee is before this Tribunal

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