Charitable Trust - question of adequacy of rent charged for tenanted properties of the Trust

Querist : Anonymous (Querist) 15 March 2011 This query is : Resolved
Charitable Trust A has rented some properties to Charitable Trust B. Charitable Trust B has been transferring its entire net income to Charitable Trust A over many years, and continues to do so. A question has arisen regarding adequacy of rent charged by Charitable Trust A to Charitable Trust B, the latter being a tenant of Charitable Trust A. Is there any case law on this point? Can charitable status of Charitable Trust A be challenged by the I. T. authorities, on the ground of inadequacy of rent charged to Charitable Trust B?

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Gulshan Tanwar (Expert) 15 March 2011
You can make an application regarding the same in Court under S.92 CPC and the doctrine will come to your rescue, the account can audited for the same lapses and enquiries can launched in this regard by the Court and also for the same purpose you just require two persons to file an application in this regard, whether you the member of the said Trust or not.

DEFENSE ADVOCATE.-firmaction@g (Expert) 21 March 2011
In the circumstances no legal action possible since income is accounted.

soumitra basu (Expert) 09 April 2011
The income tax department has no authority to challenge.

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