The assessee-trust is running various institutions in Bangalore offering degrees and training in various academic courses and was granted registration under section 12A. 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 under sections 11, 12 and 13 of the Act. The two trustees were being paid remuneration or salary not in proportionate to the pay scales of a professor and administrative officer respectively.  The exemption was denied.  The Commissioner (Appeals) and the Tribunal held that the assessee was entitled to exemption. On appeal to the High Court dismissing the appeal the Court held that the Assessing Officer merely on surmises and conjectures had come to the conclusion that the salary and remuneration paid to the two trustees was highly excessive and not proportionate to the services rendered by them. The Department cannot regulate the management of the assessee-trust. Indeed, the salary or remuneration paid to the trustees were duly accounted and reflected in their returns as income. Merely on imagination, exemption under section 11 of the Act could not be denied. (AY.2009-10, 2010-11)