9911796707
TMI Blog2023 (11) TMI 497X X X X Extracts X X X X X X X X Extracts X X X X ..... cordingly, for the sake of brevity, we dispose all these appeals together. 2. We first take up AY 2015-16 as the lead case. The decision taken in this AY shall apply mutatis mutandis to the other AYs as well. There are cross appeals for AY 2015-16 in ITA Nos. 3049 & 3010/Mum/2022. We first take up the appeal filed by the Revenue. Before we advert to the grounds taken in the appeals, it would first be relevant to cull out the background facts of the case. 3. The assessee is a public trust which was constituted in 1953 under the name and style of 'ShirdiSansthan of Shri Sai Baba', registered under the Bombay Public Trust Act. Vide order dated 18.10.1982 of the Hon'ble Bombay High Court, the administration of the Trust was vested in Board of Management, constituted by the Charity Commissioner, Government of Maharashtra. Thereafter, on 17.08.2004, Shri Sai Baba Sansthan Trust (Shirdi) Act of 2004 [in short 'Sai Baba Trust Act'] was promulgated which reconstituted the public Trust of 'ShirdiSansthan of Shri Sai Baba' as 'Shri Sai Baba Sansthan Trust (Shirdi)' which is the assessee before us. The assessee is also registered under Section 12A and 80G of the Income-tax Act, 1961 [in shor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted to have filed several explanations on 18.12.2017, 21.12.2017, 26.12.2017 and 28.12.2017. To put it briefly, the assessee submitted that, it was both a religious as well as charitable trust and therefore fell within the exception set out in Section 115BBC(2)(b) of the Act. For this, the assessee relied upon the registration granted u/s 10(23C)(v) of the Act dated 17.03.2008 by the Ld. CCIT, Mumbai which was valid till date. The assessee also referred to its objects set out in the Trust Deed and pointed out that there were several places of worship within its premises, which evidenced that the assessee was a mixed purpose trust i.e. both charitable and religious purpose. As far the certificate held u/s 80G of the Act was concerned, the assessee explained that the term 'charitable purpose', as defined in Explanation 3, excluded only those entities whose purpose wholly or substantially the whole of which, was religious in nature. The assessee claimed that the entities having mixed charitable and religious purposes were not excluded. The assessee explained that, only where the religious purposes contained in the objects were the whole or the dominant purpose of the Trust, were hit b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allowed. The AO observed that the exclusion set out in Section 115BBC(2)(b) of the Act was meant for the trusts established for both religious and charitable purposes which would suggest that at least one of the objectives of the trust was wholly or substantially religious in nature. Therefore, according to the AO, the bar set out in Explanation (3) to Section 80G of the Act would hit such mixed trusts. The AO observed that a charitable organisation registered u/s 80G cannot be permitted to misuse the provisions of Section 115BBC of the Act. The AO further observed that the contention of the assessee, that it was both a charitable and religious trust was untenable, as according to him, the objects of the Trust revealed that it was wholly or substantially a charitable trust. Taking note of the objects of the Trust, the AO observed that the first objective of the assessee trust was to propagate the teaching of Shri Sai Baba. The AO observed that the religion accepted, followed and preached by Sai Baba was the religion of humanity and therefore held that anything linked with Sai Baba cannot be construed as a religion. The AO also noted that, one of the other objects was to worship Lo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see was also existing both for charitable as well as religious purpose. The Ld. CIT(A) also laid emphasis on the approval received by the assessee u/s.10(23C)(v) of the Act from CCIT, Mumbai, which had not been withdrawn so far. The Ld. CIT(A) noted that this approval carried immense evidentiary value as it signified that a superior authority had enquired into the objects, constitution and affairs of the assessee trust and found it to be wholly for public, religious and charitable purposes. 8. The Ld. CIT(A) further observed that the AO had dominantly relied on the existing approval u/s 80G of the Act to deny the benefit of exclusion set out in Section 115BBC(2)(b) of the Act. The Ld. CIT(A) noted that the benefit of deduction u/s 80G on donation made to an approved trust is available to the donor and not to the assessee. He noted that, in the present case, it was the taxability of the income in the hands of the assessee trust, which was required to be adjudicated upon. Hence, whether the assessee trust was eligible for approval u/s 80G or not did not have any bearing on the impugned issue involving taxability of anonymous donations u/s.115BBC of the Act. The Ld. CIT(A) however, s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itable activities are a part of religious activities and thus some of the objects of the trust qualify to be of both religious and charitable nature? 4. Whether on the facts and circumstances of the case and in law the Ld. CIT(A) has erred in holding that the activities of assessee trust are charitable and religious in nature considering the objects and in light of the activities conducted by the trust? 5. Whether on the facts and circumstances of the case and in law the Ld. CIT(A) has erred in considering the assessee trust created or established wholly for religious and charitable purpose when the assessee has obtained certificate u/s 80G(5) of the Income-tax Act and whether the benefit of exclusion is available to the assessee trust u/s 115BC(2) in light of the certificate u/s 80G(5) of the Income tax Act so obtained ? 6. Whether on the facts and circumstances of the case and in law the Ld. CIT(A) has erred in holdinginhis order in para 5.2.4that anonymous donation of 'trust created and established for mixed purposes are exempt, when the section 115BBC(b) clearly states that only anonymous donation made with specific directions are exempt? 7. Whether on the facts and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... availing the benefit of Section 80G of the Act. According to Ld. DR, the fact that the certificate u/s 80G was still valid and subsisting supported the AO's case that the assessee existed solely for charitable purposes. 10. Assailing the action of the Ld. CIT(A) holding that sub-section (5B) of Section 80G overrides Explanation (3) to Section 80G, the Ld. CIT DR submitted that this proposition laid down by the Ld. CIT(A) was not justified. He placed before us the Board Circular No. 779 of 14.09.1999 explaining the amendment made to Section 80G by way of insertion Clause (5B) by the Finance Act, 1999. Referring to Para 33.2 of the said Circular, the Ld. DR submitted that, prior to the amendment, only those trusts which existed solely for charitable purpose were entitled for registration u/s 80G of the Act. According to him, the Legislature noted that certain charitable trusts would spent miniscule sum towards religious purpose which would result in denial of registration u/s 80G of the Act. Hence, to remove the difficulties faced by such charitable trusts, sub-section (5B) was inserted to allow such charitable trusts to be registered u/s 80G which had less than 5% of their income t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No.7503/Mum/2016. According to him, the objects of the Trust involving preaching the teachings of Sai Baba qualified as object of 'general public utility'. He further submitted that provisions of Section 115BBC of the Act was brought in to curb anonymous donations received by charitable trusts. The Ld. DR explained that the Legislature was aware that certain charitable trusts may receive some donations in cash or anonymously, and had therefore fixed limit of 5% of total donations as permissible anonymous donations to charitable trusts which would not be hit by rigors of Section 115BBC of the Act. According to him, since the assessee Trust had received anonymous donations in excess of the prescribe limit, the AO had rightly invoked the provisions of Section 115BBC of the Act. He thus urged that the order of the Ld. CIT(A) be reversed and the addition made by the AO be restored. 14. Per contra, the Ld.Sr.Counsel for assessee Shri S.Ganesh, supported the order of the Ld. CIT(A) on this issue. And the Ld.Sr.Counsel relied upon the approval received by the assessee Trust u/s 10(23)(v) of the Act which was applicable to institutions existing for both religious and charitable purposes. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Shri Sai Baba Sansthan Trust (Shirdi) Act of 2004 to show that there were several religious objects, duties and obligations on the assessee Trust and thus the assessee Trust was existing both for charitable and religious purpose. 15. The Ld.Sr.Counsel further submitted that, whether Shri Sai Baba was a Hindu or Muslim or whether his preachings were meant for any particular religion or not, was irrelevant to decide whether the assessee Trust was existing for religious purposes or not. He submitted that the judgments cited by the AO in which Hinduism was referred to as a way of life and not a religion was in a different context and not decisive in relation to the provisions of the Income-tax Act, 1961, more particularly Section 115BBC of the Act. Instead, he submitted that the case of the assessee was squarely covered by the decision of the jurisdictional Bombay High Court in the case of Bombay Pinjrapole Trust (supra). The Ld.Sr.Counsel explained that, when the activity of maintaining gaushalas, animals and birds was held to be not merely charitable but religious as well, then having regard to the objects and activities of the assessee, there was no doubt it was existing both for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 147,71,54,875/- was taxed by the AO under Section 115BBC(1) of the Act. The case of the assessee is that, it exists both for charitable and religious purposes and thus the provisions of Section 115BBC(1) does not apply to it, in light of the specific exclusion set out in Section 115BBC(2)(b) of the Act. The Revenue however has disputed the same. The Revenue's case before us is that, the assessee is only a charitable institution having no religious purpose. According to Revenue, the certificate held by the assessee u/s 80G of the Act, which is only issued to charitable trusts, fortifies their position. We are therefore required to ascertain as to whether the anonymous donations received by the assessee Trust is liable to tax u/s 115BBC(1) or is it excluded from the purview of tax by virtue of Section 115BBC(2) of the Act. For doing so, we are first required to ascertain as to whether the assessee Trust is existing solely for charitable purposes or for both charitable and religious purposes. 18. Before dwelling into the facts of the case, let us first have a look at the relevant provisions of Section 115BBC of the Act, which reads as follows :- "(1) Where the total income of an a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing non-profit educational or medical institutions 25.1 Income of wholly charitable or religious trusts or institutions as well as partly charitable or religious trusts or institutions is exempt from income-tax under sections 11 and 12, subject to the fulfilment, inter alia, of certain conditions of application of income and investment in specified modes. Similarly, income of any university or other educational institution referred to in sub-clause (iiiad) or sub-clause (via) or any hospital or other medical institution referred to in sub-clause (iiiae) or sub-clause (via) or any fund or institution referred to in sub-clause (iv) or any trust or institution referred to in sub-clause (v) of clause (23C) of section 10, is exempt from income-tax subject to the fulfilment of conditions specified in the said clause. 25.2 With a view to prevent channelisation of unaccounted money to these institutions by way of anonymous donations, a new section 115BBC has been inserted to provide that any income of a wholly charitable trust or institution by way of anonymous donation shall be included in its total income and taxed at the rate of 30 per cent. Anonymous donation made to wholly charita ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de by them is not a donation but a way of giving it back to the deity to whom it always belonged. It is for these reasons that, the trusts / institutions which are existing for religious purposes or both religious & charitable purpose, have been kept out of the ambit of Section 115BBC of the Act. The intent of the Legislature is thus clear that such anonymous donations received in hundis/ donation boxes etc. at the aforesaid trusts/ institutions from their devotees is not to be taxed u/s 115BBC of the Act. 21. We now come back to the facts involved in the present case. It is not in doubt that Shri Sai Baba had a large number of devotees and was accorded the status of 'Saint' upon his demise on 15th October 1918. The place i.e. Shirdi from where he left for his heavenly abode was converted into a shrine and thousands of devotees would visit his shrine to pay their respects, spread his teachings and celebrate the festivals etc. His devotees are noted to have originally started a trust namely 'Shirdi Sansthan of Shri Sai Baba' which was registered under the Bombay Public Trusts Act, 1950. Having regard to the enormous increase in asset base and number of devotees visiting his shrine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ive necessary assistance inclusive of financial help to the poor and deserving institute at Shirdi elsewhere" 22. It is noted that amongst the several objects of the assessee Trust, one of the objects has been associated with activities associated with worshiping Shri Sai Baba, spreading spirituality, his teachings, offering prayers, celebrating religious festivals and ceremonies taking care of devotees etc. It is noted that Section 21 of the said Sai Baba Trust Act also provides for maintenance of temple, conduct and performance of rituals & ceremonies therein and providing facilities for darshan of deity, offering of prayers and performing any religious service. The relevant extract of this Section is set out below:- "21(1) The Trust Fund shall be utilized by the Committee for all or any of the following purposes:- a. the maintenance, management administration of the Temple and the properties of the Trust, b. the conduct and performance of the rituals, worship ceremonies and festivals in the Temple according to the customs and usages; c. providing facilities and amenities to the devotees for darshan of the deity and for offering prayers or performing any religious servic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lace by whatever designation known and used as a place of public religious worship and dedicated to or for the benefit of or used as of right by the Hindu community or any section thereof as a place of public religious worship." 25. It is further noted that the website of the assessee Trust, extracts of which are available at Pages 5 to 6 of Paper-book, mentions the details of the temples located within the shrine at Shirdi. The website also gives details of the rituals, poojas, ceremonies etc., which are being performed throughout the day along with timings etc. for the information, and knowledge of the devotees. We also note that the assessee Trust is also regarded as a must visit religious place in Maharashtra for tourists and public at large. 26. It is noted that the Revenue has deep-dived into the meaning of the term 'religion' to aver that Hinduism is not a religion but a way of life and therefore any activities associated with worshipping Hindu Gods, maintaining temples etc. cannot be regarded as 'religious purposes'. The Revenue has further claimed that because the assessee Trust is devoted to the teachings of Shri Sai Baba who treated all religions equally and did not pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evenue is wholly inconceivable, fallacious and untenable. 27. Instead, we find that the Ld. CIT(A) had rightly relied on the decision of the Hon'ble jurisdictional Bombay High Court in the case of DIT(E) Vs Bombay Panjrapole Trust (supra). In the decided case also, the assessee trust which was maintaining gaushalas and protecting animals was in receipt of anonymous donations in their hundis/ boxes, which was taxed by the AO u/s 115BBC of the Act. The stand taken by the AO was identical to the present case, as it was contended that maintaining and protecting animals does not tantamount to 'religious purpose'. The Hon'ble High Court however held that, the supply of fodder to cattle and animals is a good religious trust for Hindus and may be a good charitable trust for others. The Hon'ble High Court thus explained that religious and charitable purposes may overlap as charitable activities arise out of compassion, while religion treat compassion as a religious attribute. The Hon'ble High Court thus upheld the order of this Tribunal deleting the addition made u/s 115BBC of the Act by observing as under:- "7. We find that the Commissioner of Income Tax (Appeals) has inter alia recorde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g gaushalas, panjarapoles and other similar institutions for animals, would be considered to be a charitable and religious purpose..... In fact at times religious and charitable purposes may overlap. Charitable activities in all cases arise out of compassion while most religion treat compassion as a religious attribute. 8. In view of the fact that the Tribunal has dismissed the Revenue's appeal by following the binding decision of this Court in the case of "VallabhdasKarsondasNatha" (supra)", no substantial questions of law arise for our consideration. Accordingly, the appeal stands dismissed." 28. At this juncture, we may also gainfully refer to the decision of the Hon'ble Supreme Court in the case of Dawoodi Bohra Jamat (supra), wherein after analysing the objects of the Trust in that case, the Hon'ble Apex Court held that they were "not indicative of a wholly religious purpose but were collective indicative of both charitable and religious purposes." The Hon'ble Court held that in certain cases, the activities of the Trust may contain elements of both religious and charitable and thus, both the purposes may be overlapping. The religious activity carried on by a particul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s much as it consequently is barred to claim exemption vis-a-vis the anonymous donation." The ITAT held that the "said aim has to be understood in the context of and read along with the other objects of the trust whose target groups are widows, orphans, old and infirm people, destitute, illiterate, handicapped, mentally retarded, providing food and shelter to poor and needy, night shelter, nari-niketan, mahila ashram, weaker sections and all other groups who can be included in the phrase 'in need of physical, mental and financial help." Further the ITAT held that the "objects of the Trust and the context in which spiritual lectures espousing the philosophy, i.e, the spirituality of the major and predominant religious of the country needs to be considered in the light of the well-accepted and well- known fact that all the major religious of the world with one voice eulogise the importance of taking care of the old, infirm, disabled. . . ." Accordingly, it was held that the Revenue had incorrectly applied Section 115BBC to the facts of the Assessee's case. ..... 9. The question posed arises in the context of the anonymous donations received by the Assessee Trust and the v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l. 16. For the aforementioned reasons, the Court finds no legal infirmity in the conclusion of the ITAT that for the purpose of Section 115 BBC (2) (a) anonymous donations received by the Assessee would qualify for deduction and it cannot be included in its assessable income." 30. We further note that somewhat identical issue was considered by the Bangalore Bench of this Tribunal in the case of ITO Vs Sri Shirdi Sai Samaj in ITA No. 1044/Bang/2015 dated 11.05.2016. In this case also, the assessee was both charitable and religious trust inter alia involved in propagating teachings & preachings of Sai Baba, pooja offerings, temple worship etc. The AO taxed the hundi collections of the assessee Trust u/s 115BBC of the Act. On appeal this Tribunal is noted to have deleted the impugned addition holding that the assessee trust was existing both for charitable and religious purposes and therefore the anonymous donations received by them was not liable to tax in terms of the exclusion set out in Section 115BBC(2)(b) of the Act. 31. Hence, having regard to the facts of the case as discussed in preceding paragraphs and in light of the above judgements (supra), we countenance the action o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om the Bench, the Revenue was unable to show that this approval granted u/s 10(23C)(v) of the Act has been withdrawn or rescinded by the Ld. CCIT. We further note that this approval u/s 10(23C)(v) of the Act was available on record, when the CIT(E) accorded registration u/s 80G of the Act vide order dated 25.03.2009. This supports the contention put forth by the assessee that, at that material time even the Revenue itself did not consider holding of certificate u/s 80G to be contradictory or inconsistent with certificate held u/s 10(23C)(v) of the Act. 34. Moreover, according to us, the provisions of Section 115BBC(2)(b) are independent of the provisions of Section 80G of the Act. Merely because an assessee is registered u/s 80G of the Act will not automatically mean that such Trust cannot have any religious purpose and therefore cannot avail benefit of Section 115BBC(2)(b) of the Act. As rightly pointed out by Ld.Sr.Advocate, Shri Ganesh, the provisions of Section 80G lays down quantum test i.e., the amount spent for religious purposes to ascertain whether the charitable trust is eligible for registration or not, whereas for the purposes of Section 115BBC(2)(b) what is relevant i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deduction." 36. In view of the above, the position which emerges is that, there may be instances where a trust which is existing both for charitable and religious purpose, has incurred religious expenditure which is less than 5% of the total expenses of the Trust. In such a case, the trust may be eligible for certificate u/s 80G of the Act and at the same time would not be liable to be taxed for the anonymous donations received by virtue of Section 115BBC(2)(b) of the Act. We thus find merit in the submission of the Ld.Sr.Counsel for assessee that, the exclusion set out in Section 115BBC(2)(b) of the Act can co-exist with Section 80G of the Act. Hence, the proposition put forth by the Revenue placing reliance on 80G registration to ipso facto deny the exclusion set out in Section 115BBC(2)(b) of the Act is held to be untenable. 37. In light of the above reasons, we thus do not find any reason to interfere with the order of Ld. CIT(A) deleting the addition of Rs. 147,71,54,875/- made u/s 115BBC of the Act. Accordingly, all the grounds taken by the Revenue stands dismissed. 38. We now take up the appeal filed by the assessee for AY 2015-16. Ground Nos. 1 & 2 of the appeal reads as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wherein, the Ld. CIT(Exemption) has since condoned the delay in filing of Form 10 by the assessee for AY 2015-16. The Ld.Sr.Counsel accordingly prayed that, since the delay in filing the Form No. 10 has now been condoned by the competent authority, the AO may be directed to allow the benefit of exemption in relation to the accumulation of income u/s 11(2) of the Act. The Ld. CIT DR appearing for the Revenue did not dispute the same. Considering the foregoing factual position, the AO is directed re-compute the total income of the assessee and allow the admissible exemption u/s 11(2) of the Act as claimed by the assessee in the return of income, since the delay in filing of Form 10 has since been condoned by the Ld. CIT(Exemptions). Ground Nos. 1 & 2 of the assessee's appeal therefore stands allowed. 41. Ground No. 3 raised by the assessee is as under:- "3. On the facts and under the circumstances of the case and in law, the Commissioner of Income Tax Appeals, National Faceless Appeal Centre, erred in not deciding/allowing the claim of the appellant that exemption under section 11(1)(a) is allowable on Gross Receipts without reducing expenditure amounting to Rs. 83,42,02,880/-." ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... extent to which such income is applied to such purposes in India. It is thereafter the statutory provision proceeds further that such income is not to be understood to be in excess of 25 per cent of the income from such properties. In other words, the very language of the statutory provision under consideration sets apart 25 per cent of the income from the source of property with reference to the extent to which such income is applied for such purposes, charitable or religious. In other words, for the purpose of s. 11(1)(a) of the Act, the income in terms of relevance would be the income of the trust from and out of which 25 per cent is set apart in accordance with the spirit of the statutory provision." This means that, when it is established that trust is entitled to full benefit of exemption under s. 11(1), the said trust is to get the benefit of twenty-five per cent and this twenty- five per cent has to be understood as income of the trust under the relevant head of s. 11(1). In other words, income that is not to be included for the purpose of computing the total income would be the amount expended for purposes of trust in India. Their Lordships in the above case have emphasi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ideration in ITA No.1515/Bang/2016 for AY 2011-12 is as to whether 15% accumulation for application in future has to be calculated on gross receipts or net receipts after deduction of revenue expenditure. The Assessee claimed accumulation of income for application for charitable purpose at 15% of the gross receipts. The AO was of the view that accumulation will be allowed only to the extent of 15% of the income after revenue expenditure. In other words income to be set apart u/s.11(1)(a) of the Act has to be computed at 15% of the net income i.e., gross receipts minus revenue expenditure and not on the gross receipts as claimed by the Assessee. Since in the case of the Assessee, the gross receipts after revenue expenditure was nil, the AO denied the benefit of accumulation to the Assessee. 17. On appeal by the Assessee, the CIT(A) allowed the claim of the Assessee. Aggrieved by the order of the CIT(A), the Revenue has raised the aforesaid ground of appeal before the Tribunal. 18. The issue to be decided is therefore as to whether for the purpose of computing accumulation of income of 15% under Sec.11(1)((a) of the Act, one has to take the gross receipts or gross receipts after ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Expenses on Other Objects Rs. 19,37,850/- Expenditure Building Fund Rs. 12,15,87,500/- and Expenditure 35AC Fund Rs. 9,20,04,557/- when relevant information was available on record." 47. Ground No. 4 relates to the Ld. CIT(A)'s action of confirming the order of the AO denying the benefit of exemption u/s 11(1)(d) of the Act in relation to the interest earned on corpus funds. Ground No. 5 raised by the assessee, is noted to be without prejudice to Ground No. 4, wherein the assessee has claimed that the AO be directed to allow deduction for the expenses incurred out of the interest earned from such corpus funds. 48. The facts in brief are that, in the course of assessment, the AO observed that, the assessee had shown corpus donation which was exempt u/s 11(1)(d) of the Act. Upon perusal of details, the AO further noted that the interest of Rs. 25,50,98,981/- was earned on corpus funds, which were invested as per provisions u/s 11(5) of the Act, and the same was also claimed by the assessee as exempt u/s 11(1)(d) of the Act. The AO required the assessee to explain as to why the exemption u/s 11(1)(d) on this interest should not be disallowed. In response, the assessee is noted to h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the exemption claimed by the assessee u/s 11(1)(d) of the Act in relation to the interest income of Rs. 25,50,98,980/- derived from investment of corpus funds. The findings of the Ld. CIT(A) upholding the action of the AO is found to be relevant and is therefore extracted below:- "7.4 A careful reading of section 12 would reveal that the voluntary contributions ('Donations" under common parlance) are divided into two categories under the Act. viz.. (a) Voluntary contributions made with a specific direction that they shall form part of the corpus of the trust or institution. (b) Voluntary contributions made without any such direction. The first category of voluntary contributions, i.e., those referred in (a) above are called 'corpus donations. Voluntary contributions received with a specific direction as stated above, ie, corpus donations enjoy exemption under section 11(1)(d); However, the voluntary contributions received without any such direction shall be deemed to be income derived from property held under the trust and accordingly, the conditions prescribed under section 11(1)(a) regarding its accumulation and application of income shall apply to it. 7.5 Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad made specific direction that the interest earned on the corpus donation shall also be treated as corpus donation. The court have made the following observation before making the interest Income eligible for exemption u/s 11(1)(d). 5. Having considered the submissions made, we are of the view that the question that is framed has to be answered in the light of Section 11(1)(d) of the Act. A reading of Section 11 shows that subject to the provisions of Sections 62 and 63, the incomes enumerated therein shall not be included in the total income of the previous year of the person in receipt of the income. The person in receipt of the income, insofar as these cases are concerned, is the respondent assessee. One of the income that is enumerated in clause (d) of sub-Section (1) of the Section is the income in the form of voluntary contributions made with a specific direction that they shall form part of the corpus of the trust or institution. The fact that the donors had instructed that the interest earned shall be added to the corpus of the trust is undisputed. If that be so, the interest earned on the contributions already made by the donors would also partake the character of incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not see any substance in the said contention" From the facts of the case above we can appreciate that the amount in question here in this case was the voluntary donation, Secondly the courts have observed existence of written direction on the donation received by cheque and existence of oral instruction in case of donations received in cash. What has also been observed by the court that the instruction received orally has been acted upon by the assessee. In the present lis, we are not concerning ourselves with any voluntary donation and the assessee has not lead us to any evidence to suggest existence of any instruction in whatsoever manner or form by the donors to lead to the conclusion that this amount is to be treated as corpus donation. 7.8 Therefore none of the case laws relied upon by the assessee lead the undersigned to conclude that the amount Rs. 25,50,98,980 earned as interest from the property of the trust can be treated either as voluntary donation and much less a voluntary donation with a specific instruction. Accordingly, it is decided that the said amount shall not be eligible for exemption u/s 11(1)(d). As a result the ground of appeal No. 3 is dismissed." 51. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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