CIT cannot deny exemption U/s. 11 for violation of provisions of Section 13(1)(c)

These are cross-appeals filed by the assessee-society and the Department against the order of the CIT(A) dt. 30th Nov., 1999, for the asst. yr. 1996-97, wherein ‘he held, inter alia, that the income of the assessee-society is not entitled for exemption under Section 11, because it is hit by the provisions of Section 13(1)(c) of the IT Act.

It was held that while granting registration under section 12A of the Act where the objects of the assessee society were genuine, merely because it had incurred certain expenditure, which fell within the category of benefit to a person under section 13(3) of the Act and hence, the assessee society was held to be hit by the provisions of section 13(1) (c) of the Act, does not entitle the CIT to deny the exemption of income claimed under section 11 of the Act.