Dismissing the appeal of the revenue the Court held that in accordance with the provisions of section 13(1)(c)(ii) read with section 13(2) of the Income-tax Act, 1961, if any part of the income or any property of the trust or institution is directly or indirectly used or applied for the bene-fit of any specified person referred to in sub-section (3) of section 13, the disallowance is limited only to the amount which the assessee has diverted. Followed CIT v. Fr. Mullers Charitable Institutions (2014) 363 IITR 230 (Karn.)(HC), CIT (E) v. Audyogik Shikshan Mandal (2019) 261 Taxman 12 (Bom.)(HC). (AY. 2011-12)
CIT(E) v. Rajkot Diocese Trust (2021) 435 ITR 367 (Guj.)(HC)
S. 13 : Denial of exemption-Trust or institution-Investment restrictions-Exemption cannot be denied to entire income-Denial should be confined to amount diverted for benefit of persons mentioned in S. 13. [S. 11, 13(1)(c)(ii), 13(2)]