ITO EXEMPTION 2 4 MUMBAI, MUMBAI vs. VAIBHAV MEDICAL AND EDUCATION FOUNDATION, MUMBAI

ITA 5494/MUM/2024Status: DisposedITAT Mumbai24 February 2025AY 2011-12Bench: SHRI AMARJIT SINGH, ACCOUNTANT MEMBER SHRI SANDEEP SINGH KARHAIL (Judicial Member)1 pages
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What did the Tribunal hold?

The Tribunal upheld the CIT(A)'s decision, finding that the diversion of funds to ABET, another charitable trust, did not violate Section 13(3) as it was for charitable activities. The Tribunal also ruled that the assessee's consistent use of the cash system for 'Income from Other Sources' was permissible under Section 145.

What were the facts?

The Revenue appealed against the CIT(A)'s order allowing exemption under Section 11 to the assessee, a charitable trust. The core issue was whether funds diverted to a related trust (ABET) for educational purposes violated Section 13(3) and thus disentitled the assessee to exemption.

What were the issues?

Whether diversion of funds to a related charitable trust for charitable purposes violates Section 13(3) and disentitles exemption, and whether the assessee's accounting method for 'Income from Other Sources' is compliant with Section 145.

Which sections of the Income-tax Act were involved?

Section 11,Section 13(3),Section 13(2)(a),Section 13(2)(b),Section 13(2)(g),Section 145

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Income Tax Appellate Tribunal, “F” BENCH, MUMBAI

Before: SHRI AMARJIT SINGHSHRI SANDEEP SINGH KARHAIL

For Appellant: Shri Ronal Doshi a/w Deep Chouhan
For Respondent: Shri Ashish Heliwal, CIT-DR

PER SANDEEP SINGH KARHAIL, J.M.

The Revenue has filed the present appeal against the impugned order dated 23.08.2024 passed under section 250 of the Income Tax Act, 1961 (“the Act”) by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [“learned CIT(A)”], for the Assessment Year 2011-12. 2. In this appeal, the Revenue has raised the following grounds: – “1. Whether on the facts and circumstances of the case and in law the Ld. CIT(A) is right in allowing exemption us 11 of the Act without appreciating the fact that the diversion of funds for the benefit of the related pa

The order continues below.

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