DARSH KUMAR GOEL, J. - (1.) REVENUE has preferred this appeal under s. 260A of the IT Act, 1961 (for short, "the Act") against the order dt. 25th 601/Chd/2006 for the asst. yr. 2004 -05, proposing to raise following substantial questions of law : "(a) Whether in the facts and circumstances of the case, the Hon'ble Tribunal was right in holding that the interest income derived by the assessee on bank deposits earned by the assessee are exempt under s. 11(1)(a) whereas there is no material evidence on record that there was a 'legal obligation' within the meaning of Expln. 1 to s. 13 of the IT Act, 1961 ? (b) Whether in the facts and circumstances of the case, the Hon'ble Tribunal was right in holding that the interest on bank deposits is exempt under s. 12(1) even though these are not voluntary contributions, as required under s. 12(1) of the IT Act, 1961 -
(2.) THE assessee is a registered society and is also registered under s. 12A of the Act. The AO 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 under s. 11 of the Act was upheld. The said view has been further affirmed by the Tribunal.
(3.) 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. Sec. 11 of the Act clearly exempts income derived from property of assessee wholly for charitable or religious purposes to the extent to which such income is applied for such purposes.;