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Sh. Makhan Singh Versus Income Tax Officer, Ward 2 (1) , Amritsar and another

2015 (12) TMI 1064 - PUNJAB AND HARYANA HIGH COURT

Donation of gold chhabba - whether in light of explanation to Section 2(24) (iia) of the Act, the Dera is not a deemed trust? - Held that:- There is no force in the argument of learned counsel for the appellant that entire activities done by the appellant were of charitable and religious in nature and were being done in the name of Dera. It is completely devoid of any merit, because the Dera, Sant Amir Singh Ji, of whom, the appellant-assessee is claiming himself to be a Mukh Sevadar, is admitte .....

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e donations/collections were solely managed and controlled by the appellant-assessee, according to his own whims and fancies in his individual capacity.

The Tribunal has rightly observed that the collection certificates were also stereo-typed without any PAN etc. Even no effort was made to produce any so called donation affirming the same. Bank accounts were found in the sole name of the appellant-assessee without indicating any adverse eventuality. The nomination of his son by him in .....

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appellantassessee had purchased LIC policy, gas connection, cylinder etc. from the so called funds of the Dera, which were indicative of the fact that the bank account was being operated by him for his personal use. The cumulative effect of all these factors shows that all the transactions done by the appellant-assessee, were in his individual capacity and thus, no case to differ with any of the findings of the Tribunal upholding the decision of the CIT(A) and that of the Assessing Officer has b .....

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he Tribunal') in ITA No. 440/ASR/2012 for the assessment year 2009-10 claiming the following substantial questions of law:- i. Whether in the facts and circumstances of the case the donation collected for specific project could have been added to the personal income of the appellant? ii. Whether in the facts and circumstances of the case in light of explanation to Section 2(24) (iia) of the Act, the Dera is not a deemed trust? iii. Whether in the facts and circumstances of the case the corpu .....

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ble in law? 2. Brief facts of the case are that the appellant filed return of his income for the Assessment Year 2009-10 on 31.3.2010 declaring income of ₹ 2,10,870/-. The said return was processed under Section 143(1)(a) of the Act. Subsequently, the case was selected for scrutiny. Accordingly, notice under Section 143(2) of the Act was issued to the appellant, besides a notice under Section 139C(1)/139D(c) of the Act, requiring to file certain documents. In compliance thereto, the appell .....

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e was residing in Dera of Sant Amir Singh Ji, Bazaar Satto Wala, Amritsar. Expenses towards electricity, telephone and water were being borne by aforesaid Dera. Some mobile phone expenses were incurred by him in 2008-09, details of which were furnished in the Income & Expenditure Account etc. The Assessing Officer vide assessment order dated 17.11.2011 (Annexure A-1) made an addition of ₹ 1,21,67,653/- by treating the bank deposits as his income from profession and vocation while, inte .....

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e the Commissioner of Income Tax (Appeals), Amritsar [for brevity the CIT(A) ], who dismissed the same vide order dated 18.10.2012 (Annexure A-2). Still dissatisfied, the assessee filed an appeal before the Tribunal. The Tribunal vide order dated 28.1.2014 (Annexure A-3) dismissed the appeal. Hence, the present appeal by the assessee. 3. Learned counsel for the appellant argued that the authorities below have failed to appreciate the dual capacity of the appellant, first as Preacher and other as .....

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he same. The authorities below have miserably failed to appreciate that the appellant was only operating the bank account and doing his duty as care taker. The authorities below have erred in not appreciating the fact that the donations received from general public cannot be treated as income from business of the appellant, more particularly, when the same were 'corpus' donations. The Assessing Officer, the CIT(A) and the Tribunal have wrongly ignored the certificate issued by Takhat Sac .....

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1984 ) 149 ITR 470 (Raj); Commissioner of Income Tax (Central), New Delhi v. Bijli Cotton Mills (P) Ltd., AIR 1979 SC 346; CIT, West Bengal v. Tollygunge Club Ltd., AIR 1979 SC 1343; CIT, Kanpur v. Sant Baba Mohan Singh, (1979) 118 ITR 1015 (All.); and CIT v. Baba Avtar Singh, (1972) 83 ITR 738 (Del.). 4. On the other hand, learned counsel for the respondents pleaded the legality and validity of the impugned order passed by the Tribunal. 5. We have heard learned counsel for the parties. 6. It is .....

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nominee in case of his death. Upon being asked from the appellant-assessee that when the account was in the name of Dera and not his personal account, then in what capacity, he could nominate his son as his nominee, he could not submit any satisfactory reply. In these circumstances, the Assessing Officer treated the aforesaid bank account as individual account of the appellantassessee. 7. There is no force in the argument of learned counsel for the appellant that entire activities done by the ap .....

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(23C) (iv) of the Act. Its account were never audited under any law. Even no approval under Section 80G(5) of the Act was ever obtained from any prescribed authority. It was evident before the Revenue Authorities that the entire affairs of the Dera, i.e donations/collections were solely managed and controlled by the appellant-assessee, according to his own whims and fancies in his individual capacity. 8. The Tribunal has rightly observed that the collection certificates were also stereo-typed wi .....

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by him as prescribed under Section 2(15) of the Act. Its affiliation with any other charitable institution was also not proved. The Assessing Officer, the CIT(A) and the Tribunal as well have found on the basis of material before them that the appellantassessee had purchased LIC policy, gas connection, cylinder etc. from the so called funds of the Dera, which were indicative of the fact that the bank account was being operated by him for his personal use. The cumulative effect of all these facto .....

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des under Section 12AA of the Act. Its object was to promote the implementation of EGovernance using information technology in the State of Punjab. It received many grants from the State Government and interest from the banks on the deposits. The Assessing Officer assessed those grants as its taxable income, being failed to spent 85% out of it, as required under Section 111 of the Act, besides interests thereon as taxable income, being separate from the grants-in-aid. The CIT (A) set aside the a .....

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considered by the assessee as income in its Income Expenditure Account, but has been shown in the balance sheet. The other types of grants received by the assessee as general grants, do not carry such restrictions, has been credited by the assessee as income in the Income Expenditure Account. A Coordinate Bench of this Court upholding the decision of the Tribunal held that grants-in-aid received from the Government for specific purpose, cannot be treated as voluntary contributions of the society .....

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ves' case (supra), the respondent was again a registered society. It was undertaking the activities related to research, development and dissemination. Whereas, in the instant case, the appellant has miserably failed to prove any of its activities as of religious or charitable nature. 11. In Sukhdeo Charity Estate's case (supra), it was held that the voluntary contributions received from another trust were not assessable as income. It is intention of the donor and donee at the initial st .....

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