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e) The payments to Trustees in case of assessee Trust are governed by the trust deed. The relevant clause are clauses 9, 13 and 16(c) of Trust which are as under

:
"Clause para 9: The management and control of the property and affairs of the trusts aforesaid shall be vested in the Trustees with full power and authority at their discretion at any time to appoint or make provision for the appointment of any persons (including all or any of the trustees) as committee-men or otherwise for the purpose of the administration of the trusts aforesaid in such manner and subject to such rules and regulations as the Trustees may prescribe and may also at any time appoint or provide for the appointment of separate trustees to hold any land or hereditaments acquired or any fund or any other properties or investments at any time subject to the trusts of these presents in such manner and subject to such rules and regulations as the trustees may from time to time think fit. The Trustees are hereby empowered to appoint one of themselves as Managing Trustee and fix his remuneration. Each of the Trustees if he or she shall act and as long as he or she shall act in the Trusts of these presents shall be entitled to be paid a sum of Rupees 1000/- (one thousand) per year.
a) Payment of Rs.1,000/- per year only:
b) The Trustees are empowered to appoint one of themselves as "Managing Trustee" and fix his remuneration.
c) If the Trustees, who is otherwise a professional or doing some business, and gives some services having relations with such profession or business, he may be made reasonable payment for such services.

From the Trust Deed, it is clear that only one Managing Trustee is allowed to be paid more than Rs. 1000/- per year for their services to the Trust, under normal circumstances that too after following due procedure prescribed in clause 9 of the trust deed. In this case, from the details for the period from February 2014, two Trustees are seemingly paid more than Rs.1,000/- per year. This itself shows that the payments to atleast One Trustee is in violation of the Trust Deed. Any benefit given to a Trustee beyond what is permitted in the Trust Deed itself is direct or indirect benefit which may attract the provisions of Section 13(1)(c), the application of which results into denial of exemption u/s.11 of the I.T. Act. The Assessment year: 2014-15 Assessing Officer, therefore, was expected to examine the terms of appointment of both the Trustees their remuneration, and violation of Trust Deed.

26. So far as the payments which are permitted to be made to the trustees, we have noted that the trust deed, a copy of which was admittedly available to the Assessing Officer, inter alia, provides as follows:

9. The arrangement and control of the property and affairs of the trusts aforesaid shall be vested in the trustees with full power and authority at their discretion at any time to appoint or make provisions for appointment of any persons (including all or any of the trustees) as committee man or otherwise for the purpose of the administration of the trusts aforesaid in such manner and subject to such rules and regulations as the trustee may prescribe and may also at any time appoint or provide for the appointment of separate trustees to hold any land or hereditaments acquired or any fund or any other properties or investments at any time subject to the trusts of these presents in such manner and subject to such rules and regulations as the trustees may from time to time think fit. The trustees are hereby empowered to appoint one of themselves as managing trustees and fix his remuneration. Each of the trustees, if he or she act, and as long as Assessment year: 2014-15 he or she act, in the Trusts of these presents shall be entitled to be paid Rs 1,000 (One thousand) per year.

27. What therefore follows is that while each of the trustees, as long as he acts as a trustee, is entitled to the remuneration of Rs 1,000 per year, one of them, who is appointed as managing trustee to manage the day to day affairs of the trust, is entitled to such remuneration as may be decided by the trustees. In other words, there are no restrictions on the remuneration for the managing trustee. Of course, in terms of the provisions of Section 13(2)(c) when a trustee is paid any amount out of the resources of the trust or institution for services rendered by that person to such trust or institution and the amount so paid "is in excess of what may be reasonably paid for such services" such income or property shall, for the purposes of that clause, be deemed to have been used or applied for the benefit of the trustee, and, accordingly, tax exemption will be lost to that extent.