Cn exmption u/s10(23c) b revked due 2 salry to membr relativ

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Sushant Mahajan (Querist)
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17 December 2013 If an AOP which is exempt u/s 10(23C) of Income Tax, Act, 1961 gives salary to relatives of a member who are highly qualified and experienced for administrative and teaching jobs,

can this exemption be cancelled on this basis?

Nikhil Kaushik

Nikhil Kaushik (Expert)
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18 December 2013 I believe so yes. The exemption is granted on condition that no payment be made the trustee/member or their relatives.

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Sushant Mahajan

Sushant Mahajan (Querist)
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19 December 2013 But sir, what if the payment is genuine and the members are actually working and have qualifications and the relevant experience required for the job and moreover the relatives also do not have any other source of income?

Nikhil Kaushik

Nikhil Kaushik (Expert)
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19 December 2013 Sushant,

check the approval received and submissions made during the approval process. There is a specific condition with regards to payments made to relatives. And you need to understand one thing: it is prohibited.

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Sushant Mahajan

Sushant Mahajan (Querist)
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19 December 2013 Thank You Sir. Sir, is there any way to save the assessee here?

Sushant Mahajan

Sushant Mahajan (Querist)
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20 December 2013 Sir, i have checked out the certificate issued by the Income Tax Authorities but in the certificate issued by them, there are some conditions mentioned on the basis of which the exemption u/s 10(23C)(vi) shall continue if those conditions are satisfied in each assessment year.

But in those conditions, I could not find any mention of the condition regarding the payments to relatives of a member. Can you please tell me which document should I check so as to know regarding this condition?

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