TMI Blog2014 (8) TMI 115X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,08,80,765 as corpus donation and when the CIT(A) accepted the contention on behalf of the assessee to the extent of ₹ 60,25,000 as corpus donation and with respect to ₹ 38,07,354, out of the amount, was considered as income u/s 12 of the Act, Tribunal has rightly cancelled the penalty imposed on the assessee u/s 271(1)(c) of the Act – the order of the Tribunal is upheld for deleting / canceling the penalty imposed u/s 271(1)(c) of the Act – Decided against Revenue. - Tax Appeal No. 580 of 2014 - - - Dated:- 14-7-2014 - M. R. Shah And K. J. Thaker,JJ. For the Appellant : Mr. Pranav G. Desai ORDER (Per : Honourable Mr. Justice M. R. Shah) 1. Feeling aggrieved and dissatisfied with the judgment and order pas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee has failed to substantiate its claim for the voluntary contributions amounting to ₹ 98,32,354 was donations to corpus fund. Accordingly, the amount of ₹ 98,32,354 was treated by the AO as income under Section 12 of the Act. It is required to be noted that against the assessment order passed under Section 143(3) of the Act, the assessee filed appeal before the learned CIT(A), Jamnagar, and the learned CIT(A) confirmed the addition of ₹ 38,07,354 out of total ₹ 98,32,354, treating the remaining amount of ₹ 60,25,000 as voluntary contribution with specific direction to form part of the corpus donations. Therefore the assessee was directed to show-cause as to why penalty under Section 271(1) (c) of the Act sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 of the Act. In appeal, the ld. CIT(A), Jamnagar accepted the donation of the assessee to the extent of ₹ 60,25,000/- as voluntary contributions with a specific direction that they shall form part of the corpus fund and in respect of the balance amount of ₹ 38,07,354/-, he levied penalty u/s 271(1)(c) of the Income-tax Act, 1961. The conspicuous facts of the case, as narrated by the assessee, clearly indicate that the assessee was of the bonafide belief that he is legally and factually correct in treating the entire donation of ₹ 98,32,354 as corpus donation. Therefore, we are of the view that on part of the donation, which is considered as income u/s 12 of the Act, penalty u/s 271(1)(c) is not leviable as the assessee ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee to the extent of ₹ 60,25,000, as voluntary contribution with a specific direction that they shall form part of corpus fund and confirmed the disallowance of balance amount of ₹ 38,07,354. Thus, learned Tribunal has rightly observed that the assessee was under the bona fide belief that amount of ₹ 1,08,80,765 received by it from different donors could be treated as corpus donation. As stated herein above, even the learned CIT(A) also granted partial relief and accepted the contention of the assessee to the extent of ₹ 60,25,000, with a specific direction that they shall form part of corpus fund. 6. Considering the aforesaid facts and circumstances and when it has been found that the assessee was under bona fide ..... X X X X Extracts X X X X X X X X Extracts X X X X
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