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Judgment
Adarsh Kumar Goel, J.—The Revenue has preferred this appeal u/s 260A of the Income Tax Act, 1961 (for short, "the Act"), against the order dated April 25, 2007, of the Income Tax Appellate Tribunal (ITAT), Chandigarh Bench "B", Chandigarh, passed in I. T. A. No. 601/Chandi/ 2006 for the assessment year 2004-05, proposing to raise the following substantial questions of law:
(a) Whether, in the facts and circumstances of the case, the hon''ble Income Tax Appellate Tribunal was right in holding that the interest income derived by the assessee on bank deposits earned by the assessee are exempt u/s 11(1)(a) whereas there is no material evidence on record that there was a legal obligation'' within the meaning of the Explanation to Section 13(1) of the Income Tax Act, 1961 ?
(b) Whether, in the facts and circumstances of the case, the hon''ble Income Tax Appellate Tribunal was right in holding that the interest on bank deposits is exempt u/s 12(1) even though these are not voluntary contributions, as required u/s 12(1) of the Income Tax Act, 1961 ?
The assessee is a registered society and is also registered u/s 12A of the Act. The Assessing Officer sought to tax interest income received by the assessee from the deposit in the bank. On appeal, the plea of the assessee that the income was exempt u/s 11 of the Act was upheld. The said view has been further affirmed by the Tribunal.
We have heard learned Counsel for the parties and perused the record.
It is not disputed that the interest has been earned on a deposit which is property of the assessee. Section 11 of the Act clearly exempts income derived from property of the assessee wholly for charitable or religious purposes to the extent to which such income is applied for such purposes.
Learned Counsel for the Revenue submits that the assessee is not a trust. We cannot accept the submission in view of the Explanation to Section 13(1) of the Act, which defines the term "trust", inter alia, for purposes of Section 11, to include any other legal obligation.
It was also submitted that the income was not from voluntary contributions u/s 12(1) of the Act. This question does not arise as the assessee does not seek to be exempted on account of contributions but on account of the interest income from property u/s 11(1)(a) of the Act. Accordingly, we are unable to find any substantial question of law. The appeal is dismissed.