On appeal to the High Court dismissing the appeal of the Revenue the Court held that the AO 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. SLP of Revenue was dismissed. (AY.2009-10, 2010-11)
CIT(E) v. Krupanidhi Education Trust (2023)453 ITR 750/ 293 Taxman 2 (SC) Editorial : CIT (E). v. Krupanidhi Education Trust (2022) 441 ITR 154 (Karn)(HC), affirmed.
S. 11 : Property held for charitable purposes-Imparting education-Surplus in educational activities-Alleged excess remuneration to trustee employees-Revenue has no power to interfere-Exemption cannot be denied -Order of High Court affirmed. [S. 2(15), 12A, 13, Art. 136]