TMI Blog2011 (7) TMI 580X X X X Extracts X X X X X X X X Extracts X X X X ..... to the effect that they have given the impugned corpus donations for the development of the institution. As the AO has failed to examine all these evidences to prove the point that the impugned donations were not given voluntarily & did not examine the concerned donors also in that regard the view entertained by the Assessing Officer becomes base less. Hence the said voluntary contributions shall remain as "Corpus donations" exempt under section 11(1)(d) and the Assessing Officer is not correct in changing the character of Corpus donations as ordinary receipts in the facts and circumstances of the case - in favour of assessee. - IT APPEAL NOS. 171 & 172 (VIZAG.) OF 2011 - - - Dated:- 27-7-2011 - SUNIL KUMAR YADAV, B.R. BASKARAN, JJ. B. Babu Rao for the Appellant. C. Subramanyam for the Respondent. ORDER B.R. Baskaran, Accountant Member. The appeals of the revenue are directed against the common order dated 25-11-2010 passed by ld. CIT(A), Guntur and they relate to the assessment years 2001-02 and 2006-07. Since the issue urged in these two appeals is identical in nature, they were heard together and are being disposed of by this common order. 2. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TAT in the case of Vodithala Education Society v. Asstt. DIT (Exemptions) II [2008] 20 SOT 353. The Assessing Officer also took note of the decision of Hon'ble Supreme Court in the case of Islamic Academy of Education v. State of Karnataka [2003] 6 SCC 697, wherein the Hon'ble Apex Court had directed all the State Governments to constitute a committee headed by a Hon'ble retired High Court Judge for prescribing fee structure for professional colleges. It was further held in that case that, if any amount is charged over and above the fee prescribed by the committee under any head or guise, the same would amount to capitation fee. Accordingly the Assessing Officer formed belief that the assessee has collected capitation fee in the guise of donation/corpus fund from the students under the forced circumstances, in which case the assessee cannot said to be carrying chartable activities. Accordingly he issued notice under section 148 for reopening the assessment for the assessment year 2001-02. 3.1 During the assessment proceeding, the assessee submitted detailed explanations about the "Corpus donations" received by it and accordingly contended that it did not collect any capitation fe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed fee and hence the said donations were treated as normal receipts of the assessee society. Accordingly he contended that the ld. CIT(A) has wrongly deleted the said additions without appreciating the facts of the case. 3.5 On the contrary, the ld. A.R submitted that the impugned donations have been received not only from the students but also from other persons. He further submitted that these donations have been received voluntarily from them as "Corpus donations" and the same is not connected with the admission of the students. He submitted that the assessee has furnished the names and addresses of all the donors before the Assessing Officer along with the copies of receipts given to the donors. The assessee has also furnished confirmation letters obtained from some of the donors. He further submitted that all the impugned donations have been given with a specific direction that they shall form part of Corpus of the assessee society. However, the Assessing Officer has treated the impugned "Corpus donations" as normal receipts without assigning any reason and also with out any basis or any adverse material. Accordingly he contended that the impugned addition made by the Assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e income tax. For the sake of convenience, we extract below clause (iia) of sub-section (24) of section 2, discussed above. "(iia) voluntary contributions received by a trust created wholly or partly for charitable or religious purposes or by an institution established wholly or partly for such purposes or by an association or institution referred to in clause (21) or clause (23), or by a fund or trust or institution referred to in sub-clause (iv) or sub-clause (v) or by any university or other educational institution referred to in sub-clause (iiiad) or sub-clause (vi) or by any hospital or other institution referred to in sub-clause (iiiae) or sub-clause (via) of clause (23C) of section 10 or by an electoral trust". Under sections 11 to 13 of the Act, the income from property held for charitable or religious purposes is exempted subject to the conditions prescribed therein. Section 12A of the Act prescribes conditions for applicability of sections 11 and 12 and the primary condition is that the trust/institution should get registration from the concerned Commissioner of Income-tax under section 12A or as the case may be under section 12AA of the Act. 5.1 Now the question ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de with a specific direction that they shall form part of the corpus of the trust or institution". The Voluntary contributions received with a specific direction as stated above, i.e., Corpus donations, enjoy exemption under section 11(1)(d) of the Act, however the said exemption is subject to the provisions of section 12A and section 13 of the Act. That is, the corpus donations are not required to be compulsorily applied or accumulated as in the case of other income of the charitable trust/institution. However, the Voluntary contributions received without any such direction shall be deemed to be income derived from property held under the trust under section 12 of the Act and accordingly the conditions prescribed under section 11(1)(a) of the Act regarding accumulation and application of income shall apply to it 6. Now the questions that arise are (a) How the "Voluntary contributions" are classified into two categories? and (b) Whether the assessee or the Assessing Officer is authorized to change the classification. The first question can be answered if we carefully read sub-section (1) of section 12, as per which the "Voluntary contributions made with a specific direction tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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