April 2022
Charitable purpose — Exemption u/s 11:- (i) Charitable institution engaged in imparting education — Effect of proviso to s. 2(15) and CBDT circular No. 11 of 2008 [1] — Surplus income generated by educational activities — Would not affect entitlement to exemption u/s 11; (ii) Effect of s. 13 — Disqualification for exemption — Charitable institution running educational institution — Alleged excess of remuneration to employees — Revenue has no power to interfere — Exemption could not be denied
By K. B. Bhujle, Advocate
Reading Time 3 mins
3 CIT(Exemption) vs. Krupanidhi Education Trust
[2022] 441 ITR 154 (Kar)
A.Ys.: 2009-10 and 2010-11;
Date of order: 20th September, 2021
Ss. 2(15), 11 & 13 of ITA, 1961
Charitable purpose — Exemption u/s 11:- (i) Charitable institution engaged in imparting education — Effect of proviso to s. 2(15) and CBDT circular No. 11 of 2008 [1] — Surplus income generated by educational activities — Would not affect entitlement to exemption u/s 11; (ii) Effect of s. 13 — Disqualification for exemption — Charitable institution running educational institution — Alleged excess of remuneration to employees — Revenue has no power to interfere — Exemption could not be deniedThe assessee-trust ran various institutions in Bangalore offering degrees and training in various academic courses and was granted registration u/s 12A of the Income-tax Act, 1961. The Assessing Officer held that the assessee had violated the provisions of section 13(1)(c) of the Act and therefore, the assessee was not entitled to claim exemption u/s 11, 12 and 13 of the Act. The two trustees were being paid remuneration or salary not proportionate to the pay scales of a professor and administrative officer, respectively. The Assessing Officer completed the assessment for the A.Ys. 2009-10 and 2010-11 u/s 143(3) of the Act by order dated 30th December, 2011 denying the exemption u/s 11 of the Act and making certain additions.
The Commission
