Assessee is eligible for benefit of section 11 & 12 where property was purchased by the trust for the residence of its chairman and for carrying out charitable activities.

Assessee is eligible for benefit of section 11 & 12 where property was purchased by the trust for the residence of its chairman and for carrying out charitable activities.

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Assessee is eligible for benefit of section 11 & 12 where property was purchased by the trust for the residence of its chairman and for carrying out charitable activities.

ASSISTANT COMMISSIONER OF INCOME TAX vs. THOMAS ORTHODOX CHURCK SOCIETY (REGD.)
(2019) 55 CCH 0096 DelTrib
Charitable Trusts—Income from property held for charitable or religious purposes—Income of trusts or institutions from contributions
1—Assessee filed return of income which was selected for scrutiny
2—During scrutiny proceedings, AO noticed that an amount was accumulated during FY 2009-10 relevant to AY 2010-11 for purchase of residential flat for Chairman of society namely, Sri S
3—AO, by invoking provisions of s. 13(1)(c)(ii), treated application of income for purchase of residential house for Chairman not for charitable purpose, hence disallowed same—AO also held that assessee society was not qualified for exemption u/s 11 & 12 and consequently made addition
4—CIT(A) deleted such addition
5—Held, in order to carry out charitable activities, assessee was also authorized to purchase, lease, hire, exchange or otherwise acquires any movable or immovable property in city or Ghaziabad or suburbs
6—AO in order to deny exemption u/s 11(2) misstated fact that property in question was purchased in name of Sri S, Chairman of Society, whereas it was not case, rather property was purchased in name of society but through its Chairman—In order to carry out charitable activities, Chairman of assessee needed accommodation otherwise; he would have to put in rented accommodation
7—Assessee brought on record evidence to prove that property in question was not only been used for residential purpose of Chairman of Society but was extensibly used for conducting workshop by faculty members, for conducting Hindi workshop, to convene meetings of academy’s core committee and those facts proved that property in question was also being used in order to carry out charitable activities by society
8—CIT(A) had rightly deleted addition by holding that assessee society was eligible for benefit of Ss 11 & 12—Revenue’s ground dismissed.

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