"Nirmaan Welfare Charitable Trust" is registered under section 12AB and is engaged in providing free medical facilities. During the Previous Year…

(b) Mr. Kunal's status has to be examined with reference to section 13(3)(b), which provides that any person whose contribution during the relevant previous year exceeds ₹ 1 lakh, or whose aggregate contribution up to the end of the relevant previous year exceeds ₹ 10 lakh, shall be treated as a specified person. In the present case, although Mr. Kunal contributed only ₹ 75,000 during the Financial Year 2025-26, his aggregate contribution to the trust amounts to ₹ 10,25,000, which exceeds the prescribed aggregate limit of ₹ 10 lakh. Therefore, he qualifies as a person referred to in section 13(3), and any use or application of the income or property of the trust for his direct or indirect benefit will attract the provisions of section 13(1)(c). During the year, the trust sold hospital furniture to Mr. Kunal for ₹ 1,20,000 against a fair market value of ₹ 2,80,000. Since the property has been sold for inadequate consideration to a specified person, the transaction falls within the scope of section 13(2)(f), which deems such arrangements as application of trust property for the benefit of a specified person. As a result, the provisions of section 13(1)(c) become applicable and such part of income or property would not be eligible for exemption and would be taxed under section 115BBI at 30%. Further, to avoid income of the trusts or institutions to be used for the benefit of specified persons under section 13(3), penalty is leviable under 271AAE on the amount of income provided as a benefit.