The assesse is a charitable institution registered u/s 12AA (1) of the IT Act. It earned dividend income, other than income eligible for exemption u/s 11. The AO denied benefit of exemption u/s 11(1) for the entire income for violation ofprovision of S. 13(1)(d) read with S. 11(5) pertaining to mode of investment. CIT (A) held that benefit of exemption for entire income could not have been denied and at best AO could have denied exemption to extent of dividend income earned. Tribunal affirmed the order of CIT(A).( AY.2010-11)
ITO v.The Times Centre For Media And Management Studies. (2018) 168 DTR 14/194 TTJ 715 (Delhi) ( Trib)
S. 11: Property held for charitable purposes-Dividend income – Income can be taxed if the investment is in violation of the provision -Exemption cannot be denied to the Trust in respect of other income .[ S. 11(5), 12AA,13(1)(d)]