Case Law Details
Kalumal Shorimal Nathumal Rangwala Pvt Vs CIT (Exemptions) (ITAT Amritsar)
Rejection of registration u/s 12AB unsustainable as payment of remuneration to full-time trustee doesn’t violate section 13
ITAT Amritsar held that rejection of application for registration u/s 12AB of the Income Tax Act unsustainable as there is no violation of section 13(1)(c) by paying remuneration to the full-time working trustee.
Facts- The assessee is a charitable trust registered on 21.09.1942. After the amendment of Finance Act 2020 the assessee made an application for registration u/s 12A(1)(ac)(iii) before the ld. CIT(E). The ld. CIT(E) rejected the application applied for registration on the basis that one of the trust members is withdrawing salary Rs.12,60,000/- as allowance which contravening the section 13(1) (c) of the Act and also the main object of the trust works to member which is not the general public at large this is a benefit of the family and future generation. The assessee filed the submission but without considering the same the registration was cancelled which was covered u/s 12AB or 12AA of the Act. Being aggrieved assessee filed an appeal before us.
Conclusion- Held that the assessee had not violated section 13 by paying of the remuneration to the trustee for his full-time work for the trust. During passing the order ld. PCIT had not considered the certificate of renunciation letter executed by the beneficiaries of the trust. The ld. DR had not able to submit any contrary fact or any judgment against the submission of the assessee. We dismiss the order of the ld. PCIT. It is directed that the registration of the trust should be restored.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
Author Bio
