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2022 (11) TMI 672 - HC - Income TaxExemption u/s 11 - donations received by the Appellant - whether Only voluntary contributions can be considered to give exemption under Section 11 and not involuntary contributions? - HELD THAT:- Section 11(1)(d) of the Act relied upon by Shri. Sanmathi, makes it clear that the voluntary donation made with a specific direction shall form a part of the corpus. The person who makes a contribution can make such contribution either with a specific direction or without any direction. Section 11(1)(d) of the Act refers to only such contribution which are made for a specific purpose. For example, the donor may desire that his donation be used for construction of a building. If no direction is given by the donor, the money received by the assessee shall be taxable subject to such exemption which may be claimed u/s 11 of the Act. In the instant case, it is not in dispute that the entire amount received as 'contribution' has been shown in the Income and Expenditure account. The denial of benefit u/s 11 of the Act is on the premise that the donations received are not voluntary in nature. AO under the Income Tax Act cannot deny the exemption u/s 11 on the assumption that there is violation of any other statutory provision. He also adverted to Section 12(AA) (4) (b) and contended that the said provision has been substituted with effect from 01.09.2019, giving power to the Principal Commissioner or the Commissioner of Income Tax to cancel the registration of a trust or institution. Thus, it is clear that should there be any violation with regard to receipt of capitation fee, the AO could not have denied the benefit under Section 11 of the Act so long as the certificate is in force. - Decided in favour of the assessee.
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