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TMI Blog2024 (7) TMI 637X X X X Extracts X X X X X X X X Extracts X X X X ..... the Ld, CIT(A) was right in allowing relief on the basis of the judgement in the case Hon'ble Supreme Court in Hon'ble Supreme Court of India in Commissioner of Income tax(Exemption), Kochi V. Mata Amrithananadamayi Math Amritapuri (2018] 94 taxmann.com 82 (SC), wherein the issue involved was about "interest on FD's but in the instant case the AO bas clearly distinguished the fact that the issue pertains to 'dividend received on shares' ?. 2. Briefly stated, facts of the case are that the assessee is a registered charitable institution and filed its return of income on 04.01.2022 declaring total income at Rs. Nil. The return of income filed by the assessee was selected for scrutiny assessment for verification of the large corpus donation received by the assessee. The statutory notices under the Income-tax Act, 1961 (in short 'the Act') were issued and complied with. In the assessment completed u/s 143(3) of the Act dated 28.12.2022, the Assessing Officer disallowed the benefit of dividend income for exemption u/s 11 of the Act and made addition of Rs. 48,70,00,000/- to the returned income of the assessee. 3. On further appeal, the Ld. CIT(A) deleted the addition. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T(A) in view of the decision of the Hon'ble Kerala High Court(supra), which has been further affirmed by the Hon'ble Apex Court, rejected the contention of the Assessing Officer. Further, the Ld. CIT(A) observed that while dealing the application of the assessee u/s 197 of the Act for lower or Nil deduction of tax at source in respect of income from corpus, the TDS Assessing Officer had examined the computation of the income for financial year 2020-21 to financial year 2022-23 and accepted the claim of exemption of dividend of Rs. 48,70,00,000/- u/s 11(1)(d) of the Act. The Ld. CIT(A) further observed that the income received by way of dividend was further invested in fixed deposits with HDFC Ltd. as well as saving bank account maintained with HDFC Bank. The relevant finding of the Ld. CIT(A) is reproduced as under: "7.4 During the course of appellate proceedings, the appellant also submitted that the appellant furnished applications for certificate u/s 197 of the Act (LDC) for the FY 2021-22 and FY 2022-23 with the jurisdictional TDS Assessing Officer with a request of NIL withholding of tax in respect of income from corpus. During the course of LDC processing, the TDS AO had ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ank of India Act, 1955 (23 of 1955), a subsidiary bank as defined in the State Bank of India (Subsidiary Banks) Act, 1959 (38 of 1959*), a corresponding new bank constituted under section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970), or under section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 (40 of 1980), or any other bank being a bank included in the Second Schedule to the Reserve Bank of India Act, 1934 (2 of 1934); ............................... (ix) deposits with or investment in any bonds issued by a public company formed and registered in India with the main object of carrying on the business of providing long-term finance for construction or purchase of houses in India for residential purposes and which is eligible for deduction under clause (viii) of sub-section (1) of section 36;" It is pertinent that receipt of shares as corpus donation is in accordance with the section 11 of the Act read with section 13(1)(d) of the Act. In this regard, section 13(1)(d) of the Act is reproduced hereunder: "13. (1) Nothing contained in section 11 or section 12 shall operate so as to exclude from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 020-21 as corpus donation and the appellant had time limit till 31.03.2022 to comply with the provisions of section 11(5) of the Act read with section 13(1)(d) of the Act. Accordingly the appellant disinvested the equity shares in Majesco Limited on 23.06.2021, i.e., during the FY 2021-22 and thus, duly invested as per modes specified u/s 11(5) of the Act and the appellant complied with the provisions of section 13(1)(d) of the Act with respect to acceptance, holding and disposal of the aforesaid shares received. 7.6 It is further observed from the record that the AO stated in the assessment order that TDS was deducted on the dividend distributed and the dividend amount was shown in the balance sheet of the appellant as income from investment of corpus donation under the same head 'Corpus Fund" and the entire amount along with interest from FD and SB account was claimed exempt u/s 11(4) of the Act and the TDS deducted was claimed as refund u/s 237 of the Act in its ITR for Rs. 3,65,25,000/-. The AO further stated in assessment order that dividend cannot be treated as corpus and donor had no right as to how the income from the corpus had to be utilized whether as corpus or o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igh Court in the case of Mata Amrithanandamayi Math (supra) held that when a corpus donation in the form of fixed deposit has been given to the assessee with the specific direction that said asset along with any interest earned thereon shall also to be added to the corpus of the trust, then said interest partake character of the income in the form of voluntary contribution mode with the corpus of the trust and therefore, the dividend income received also forms part of the corpus donation. Thus, same is not liable to be considered for application of income under the provisions of section 11(5) of the Act. The relevant provisions of section 11 of the Act, excluding the corpus donation for the purpose section 11(5) is reproduced as under: "11(1)(d) 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 [,subject to the condition that such voluntary contributions are invested or deposited in one or more of the forms or modes specified in sub-section (5) maintained specifically for such corpus]." 5.3 Since, the assessee has already invested the dividend received in the form of fixed deposits and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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