DCIT Vs Pardada Pardadi Educational Society (ITAT Delhi)
ITAT Delhi held that denial of exemption u/s. 11 of the Income Tax Act by invoking provisions of section 13(1)(c) without any material brought on record to substantiate that salary paid to members were excessive. Accordingly, exemption u/s. 11 allowed and appeal of revenue dismissed.
Facts- The assessee was incorporated on July 12, 2002 as a Society, and was registered u/s. 12AA and 80G of the Income-tax Act, 1961. During the year under consideration, the assessee filed its return of income on October 31, 2018 declaring ‘NIL’ taxable income. In the ROI, the assessee claimed exemption u/s. 11 of the Act for eligible amount and refund of credit of tax deducted/collected at source aggregating to Rs. 1,97,370/-. The return was selected for limited scrutiny assessment and statutory notices were issued and served upon the assessee.
Thereafter, assessment order was passed by AO wherein, AO denied the exemption claimed by the assessee u/s. 11 of the Act and made the additions totaling to Rs.6,22,62,017 by invoking the provisions of Section 13(1)(c)(ii) r.w.s. 13(2)(c) by stating that the remuneration paid to Mrs. Renuka Gupta, a specified person, was unreasonable and excessive in the facts of the present case.
