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Section 11 of the Income-tax Act, 1961 - Charitable or religious trust - Exemption of income from property held under - Whether where assessee-trust had incurred expenses from charity fund and they were in excess of income earned, it was not entitled to exemption under section 11(1)(a) - Held, yes FACTS The assessee-trust was constituted by one 'J' who was the manager of certain religious and charitable funds. By the deed of indenture, it was declared that the respective assets of the religious and charitable funds would be in favour of the trustees who would hold the management and operate the respective assets of those funds for the purposes stated in the trust deed. Thus, the assessee claimed exemption on that ground. The Assessing Officer held that since the expenses incurred were in excess than the income derived from various funds, the trustee was not entitled to exemption under section 11(1)(a). The AAC, however, allowed the appeal. On further appeal, the Tribunal restored the view taken by the ITO. On reference : HELD The assessee had incurred expenses from the charity fund and had incurred excess expenses than the income earned. Thus, the assessee was not entitled to exemption under section 11(1)(a). [Para 8] The reference so made stood disposed of accordingly. [Para 10] CASE REFERRED TO Mohanlal Hargonvind Das Public Charitable Trust v. CIT [1980] 122 ITR 130/ 4 Taxman 14 (MP) [Para 6]. A. Kasliwal for the Applicant. Anuroop Singhi and J.K. Singhi for the Respondent. ORDER 1. Heard learned counsel for the revenue. On an application filed under section 256(1) of the Income-tax Act, 1961, the Tribunal has referred the following question for our opinion :- "Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the income of the assessee-trust was not entitled to exemption under section 11(1)(a) of the Income-tax Act ?" 2. The assessee is a trust. It was constituted by Shri Jeewanmal Tapadia, who was the Manager of certain religious and charitable funds. A formal declaration for creating trust in respect of the religious and charitable funds was made by the aforesaid Shri Jeewanmal Tapadia on 26-8-1957. 3.…

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