9911796707
TMI Blog2016 (8) TMI 1532X X X X Extracts X X X X X X X X Extracts X X X X ..... t can be brought to tax and not treated as capital receipt. 3. Ground No.3: Without prejudice to the above, the Ld CIT ought to have adopted the general principles of taxation and accounting in determining the income for the relevant assessment year after allowing deductions for corresponding expenditure necessary to carry on activities of the Appellant. 3. The issue arising in the present appeal filed by the assessee is against assessability of Voluntary Corpus Donations received by the assessee during the year under consideration. The assessee is aggrieved by the order of CIT(A) in computing the total income in the hands of assessee at Rs. 5,28,86,710/- as against the total income of Rs. 28,56,705/- declared by the assessee in the revised return of income. 4. Briefly, in the facts of the case, the assessee trust had furnished original return of income on 27.09.2011 declaring taxable income at Nil after claiming exemption under sections 11 and 12 of the Act for its entire income. The case of the assessee was picked up for scrutiny. During the course of assessment proceedings, the assessee was asked to establish its claim of exemption under sections 11 and 12 of the Act. The As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Officer brought the corpus donations of Rs. 5,00,30,000/- to tax and treated the same as income of the assessee for the year under consideration. 5. In appeal, the contention of the assessee was that it was public charitable trust registered under the relevant provisions of the Bombay Public Trust Act, 1950 and was engaged in public charitable work, in imparting education, healthcare activities, relief to the poor, etc. The assessee further pointed out that during the year under consideration, it had set up an old age home for senior citizens and was providing boarding, lodging, healthcare and recreation. The assessee pointed out that it had received the corpus donations from its parent body totaling Rs. 5,00,30,000/- which in turn, have been utilized towards purchase of land at Gat No.1155, Keshnan Theur Road, Kolwadi, Haveli, Pune. The plea of the assessee was that the said corpus donation was a permanent fund kept for specific expenditure needed for administration and survival of the organization and was not utilized for attaining of objects of the trust but towards creation of capital asset or property of the trust. The assessee further pointed out that the Legislative int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , registration under section 12A of the Act was not available to the trust, which was one of the essential requirement to avail the benefits under sections 11 and 12 of the Act, therefore, no question of reasonable or liberal construction of exemption provisions arose in the present case. In view thereof, the order of Assessing Officer in including the voluntary donations to tax was upheld by the CIT(A). The alternate plea of the assessee that while taxing corpus donation, corresponding expenditure should have been allowed, was also rejected since the assessee had utilized the said donations for purchase of land at Rs. 3.23 crores, which was capital expenditure, as per CIT(A). The remaining donations were available in cash at Bank as on 31.03.2011, therefore, the alternate plea raised by the assessee was rejected by the CIT(A). 6. The assessee is in appeal against the order of CIT(A) before us. 7. The learned Authorized Representative for the assessee after taking us through the factual aspects of the case pointed out that proviso under section 12A(2) of the Act has been inserted w.e.f. 01.10.2014 and in view of the said proviso, the assessee is entitled to claim exemption u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce was placed on the ratio laid down by Cochin Bench of Tribunal in Al- Madeena Charitable Trust Vs. ACIT (2001) 76 ITD 214 (Cochin). 9. The learned Authorized Representative for the assessee in rejoinder pointed out that the CIT(A) vide para 5.6.7 has made entire discussion on nonregistration of assessee trust which has now been granted by the Tribunal vide its order dated 27.04.2016. He further referred to the reliance placed upon by the learned Departmental Representative for the Revenue on Cochin Bench of Tribunal in Al-Madeena Charitable Trust Vs. ACIT (supra) and pointed out that in the facts of the said case, the corpus donations were diverted to the sister concern and hence, the denial of exemption. He stressed that the facts of the said case were completely different and not applicable. With regard to facts of Al-Madeena Charitable Trust Vs. ACIT (supra), it was also pointed out that the assessee was running newspaper which was not incidental to the activities of trust and hence, denial of exemption under section 11 of the Act. 10. We have heard the rival contentions and perused the record. The assessee is a trust which was set up vide Trust Deed dated 20.10.2010. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee was in appeal before the Tribunal, which in ITA No.1482/PN/2014, vide order dated 27.04.2016 held that the assessee was entitled to the claim of registration under section 12A of the Act. In view of grant of registration under section 12A of the Act to the assessee, which was pursuant to the application moved by the assessee on 12.11.2013, the question which arises before us is whether the assessee is entitled to the claim of deduction under sections 11 and 12 of the Act for the captioned assessment year i.e. 2011-12. 11. During the year under appeal, the assessee had received corpus donations to the tune of Rs. 5,00,30,000/- from its parent body for the purpose of construction of old age home. The assessee claimed that since the corpus donations received by it was for a specific purpose, then even despite the registration being not granted under section 12AA of the Act, the said corpus donations were not taxable in its hands. Both before the Assessing Officer and CIT(A), similar plea was raised and the said plea of the assessee was rejected in the absence of any registration being granted under section 12A of the Act. We have already referred to the observations of bot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry notes very clearly provided that insertion by way of proviso has been made in order to remove hardship in genuine cases and to provide relief to such trusts, wherein registration under section 12A of the Act was still pending and the issue arose as to the assessability of donations and / or corpus donations received by such trusts. Under the proviso, if an application has been moved for registration and where the same has not been refused to the assessee, then and meanwhile the assessment proceedings were pending, then subject to the condition that the assessee gets registration under section 12A of the Act, then the income arising to the assessee for the captioned assessment year for which assessment proceedings were pending would make it eligible to claim exemption under sections 11 and 12 of the Act. Merely because, the Commissioner has passed an order under section 12AA(1)(d) of the Act rejecting the application moved for registration which in turn, has been allowed by the Tribunal or the higher forum, it cannot be said that as on date of assessment proceedings, when the Commissioner had already denied registration, it cannot be said that the application for registratio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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