ITA No. 5298/MUM/2025 (AY: 2020-21)

Parties Involved

Facts Summary

The Indian Rugby Football Union filed its return of income on 24.12.2020 showing Nil income. The case was selected for limited scrutiny. The main objects of the trust were to promote rugby in India. During the assessment proceedings, the Assessing Officer found that the trust had paid an unreasonably high salary of Rs. 46,50,000/- to Mr. Nasser Husain, a relative of the trustee, and disallowed Rs. 21,50,000/- of this salary, denying exemption under section 11 of the Act. Aggrieved by this order, the assessee appealed to the Commissioner of Income-Tax (Appeals) who allowed the salary and granted exemption under section 11. The revenue then appealed to the Income-Tax Appellate Tribunal.…

Legal Issues

• 1. Whether the disallowance of Rs. 21,50,000/- from the salary paid to Mr. Nasser Husain was justified.
• 2. Whether the salary paid to Mr. Nasser Husain was conferred as an undue benefit under section 13(3) of the Act.
• 3. Whether the increase in salary of Mr. Nasser Husain was unreasonable.
• 4. Whether the salary paid to Mr. Nasser Husain was disproportionate to the salaries of other employees.
• 5. Whether the doctrine of res judicata or consistency should apply given the increase in salary.

Judgment Outcome

Decided in favour of Revenue.

Precedents Relied Upon

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