ITO(E), WARD-2(3), NEW DELHI vs. THE INCLEN TRUST INTERNATIONAL, NEW DELHI

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ITA 7445/DEL/2017Status: DisposedITAT Delhi28 July 2021AY 2013-149 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that Dr. N.K. Arora, as the Executive Director appointed by the trust and paid remuneration, did not fall under the definition of a 'specified person' under Section 13(3). Therefore, the denial of exemption under Section 13(1)(c)(ii) was incorrect.

What were the facts?

The Assessing Officer denied exemption under Section 11 to a trust, treating its Executive Director, Dr. N.K. Arora, as a specified person under Section 13(3) due to his high salary. The CIT(A) partly allowed the appeal, holding Dr. Arora was not a specified person.

What were the issues?

Whether the Executive Director of a trust, paid remuneration, can be considered a 'specified person' under Section 13(3) of the Income Tax Act, thereby disentitling the trust from exemption.

Which sections of the Income-tax Act were involved?

Section 13(3),Section 13(1)(c)(ii),Section 11,Section 12A

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Income Tax Appellate Tribunal, DELHI BENCH ‘G’ : NEW DELHI

Before: SHRI O.P. KANT & SHRI KULDIP SINGH

For Appellant: Shri K.V.S.R. Krishna, Advocate
For Respondent: Shri Prakash Dubey, Senior DR
Hearing: 08.07.2021

specified person under the garb of self created principle of “de facto trustee” merely on the ground that he is supervising the substantial activities of the trust.

14.

In view of what has been discussed above, we are of the considered view that ld. CIT (A) has rightly reached the conclusion that provisions contained u/s 13(1)(cc)(ii) of the Act are not applicable to the case of the assessee trust. So, finding no illegality or perversity in the impugned order, appeal filed by the Revenue is dismissed. Order pronounced in open court on this 28th day of July, 2021.

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