TMI Blog2022 (1) TMI 581X X X X Extracts X X X X X X X X Extracts X X X X ..... d against the order of Ld. CIT(A)-2, Agra dated 28.02.2017. The Revenue has raised following grounds of appeal:- 1. The Ld. Commissioner of Income Tax (Appeal) has erred in law and on facts in deleting the addition of ₹ 7,12,60,000/- on account of the corpus donation and allowed the exemption u/s 11 and 12A. 2. The order of the Ld. Commissioner of Income Tax (Appeals) be cancelled and the order of the A.O. restored. 2. The only effective ground in this appeal is against the deletion of addition of ₹ 7,12,60,000/- made on account of the corpus donation which was treated as the exempt by Ld.CIT(A). 3. Facts giving rise to the present appeal are that this is second round of litigation. In the earlier round, the Tribunal had set aside the issue and restored back to the file of the Assessing Officer ( AO ) to decide it afresh. The AO in pursuance of the order of the Tribunal dated 12.08.2015 passed the impugned order thereby, the AO yet again made an addition of ₹ 7,13,26,199/-. The basis of making addition by the AO is that the assessee trust was under statutory obligation to get its accounts audited and obtain the audit report with the prescribed ti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enumerated in section 12A(1)(b) for obtaining the audit report in prescribed time in prescribed form i.e. Form No. 10B, the benefit of section 11 12 of IT. Act shall not be allowed to it. On this ground also, it is held that the assessee is not entitled for exemption u/s 11 12 in respect of income from its properties and also the deemed income by way of receipts of corpus donation. In view of this, the exemption u/s 11 12 is denied in respect of income/corpus donation of the trust on account of failing to obtain the audit report in prescribed Form No. 10B in prescribed time. Further, income or property of ₹ 8 Lakhs has been used or applied for the benefit of trustees who are the persons to be diverted and retained/ utilized by the for their benefit. The trust therefore, violated provisions of section 13(1)(c)(ii) read with section 13(2)(b) 13(2)(g) of the Act. Therefore, exemption u/s 11 is being denied to the assessee. 9. Further, Ld. CIT(A) deleted the addition by observing as under:- 6.4. I have considered the facts of the case, the written submissions as filed by the Ld AR for the appellant and perused the order of the AO passed in pursuance of the dire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay in furnish such audit report. Therefore it is observed that the AO's action in refusing to admit the report in Form 108 is not justified particularly when the Hon'ble ITAT while setting aside the assessment has clearly observed that filing of audit report along with filing of return was not mandatory, and the same was a curable defect, and thus in view of said observations, the AO was directed by the Hon'ble ITAT to consider the report in Form 10B for framing the assessment de novo in the assessee's case. 6.5. As regards the directions contained in the Hon'ble ITAT's order wherein the matter was remitted to the file of AO with the direction to complete the assessment denovo after affording due opportunity of being heard to the assessee, it is observed that the AO has made the impugned addition on the basis of the non submission of Report in Form 10B along with the original return filed by assessee. The AO without making any inquiry or discussing in requisite details about the assessee's claim of corpus donations received, has proceeded to make the impugned addition of ₹ 7,13,26,199/- with citing the sale reason as non submission of report b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e only after receiving the exemption status, can be brushed aside by the AO with only a single observation that the since the report was not field at the time of filing the return, therefore the assessee's claim was not admissible. Therefore, the additions made by the AO on account of corpus donation does not stem from any sound any specific findings. The corpus donations cannot be form part of the income being capital receipts particularly when the violation of section 13(2)(b) of the Act has not been established during denovo assessment proceedings. The AO has not doubted the genuineness of the corpus donation. It is noted that the particular amount of ₹ 8,00,000/- in respect of which the AO tried to establish violation of provisions of section 13 of the Act, stands deleted by me vide order dated 28.02.2017 passed in relation to assessee trust appeal pertaining to AY 2009-10. As regards this issue, it is relevant here to refer to the decision of Hon'ble ITAT Agra which is rendered in the case of Income tax Officer vs M/s. Gaudiya Granth Anuved Trust, Mathura (ITA No.386/Agra/2012 order dated 02.08.2013) wherein the Hon'ble ITAT has held the corpus donations as c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, which is established by the AO; and hence not maintainable. 6.8. Therefore, the addition which is made by the AO by disallowing the corpus donation only for the reason that report in Form 10B was not filed with the return of income, cannot be sustained without giving any finding by the AO that the corpus donations were not genuine. Therefore, in view of the foregoing, the addition of ₹ 7,12,60,000/ made by the AO for the unexplained corpus donation is accordingly deleted. 6.9. As regards the interest received shown by the appellant itself in the return of income of ₹ 66,199/-, no argument has been advanced by the Ld.AR for the appellant at the time of hearing of appeal. Also the interest received is taxable as income of the trust even the same is received on the amounts invested as corpus donation. Therefore, the addition of ₹ 66,199/- is upheld. Thus, as a result of the above, the Ground No.1 2 are allowed, and Ground No.3 is partly allowed. 10. From the above, it is clear that Ld.CIT(A) has passed a detailed and a well reasoned order. The AO did not point out any specific defects in the account of the assessee. Merely because the accounts wer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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