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2022 (1) TMI 980 - ITAT HYDERABADExemption u/s 11 denied - Addition of donation received as the income of the assessee because the assessee was not registered under section 12AA - AR argued stating that the assessee received the money from various institutions which was handed over to various parties who expended the money according to the wishes of the donor - HELD THAT:- From the facts of the case, it is evident that the assessee is not registered U/s. 12A of the Act. In such circumstances, the assessee would be disentitled to enjoy the benefit of section 11 of the Act. From the first page of the FCRA certificate itself it is evident that the assessee is bound to file a return disclosing the particulars of foreign donation received and how it was applied and even when there is no transaction a nil return is to be filed. There are also various other statutory compliances that has to be fulfilled by the assessee in order to enjoy the benefit of FCRA Certificate and those compliances are not produced before us. The current status of the FCRA registration is also not disclosed before us. The activity of the assessee cannot be treated as business because the assessee had not rendered to any services to the entities from whom the payments are received. The concept of “diversion of income by overriding title” will also not be applicable in the case of the assessee because the amount collected by the assessee is for the purpose of the religious activities of the assessee and for such fund registration U/s. 12A is mandatory to claim the benefit U/s.11 of the Act. Further, the concept of “diversion of income by overriding title” is well explained in M/S. CHAMUNDI WINERY AND DISTILLERY [2018 (10) TMI 65 - KARNATAKA HIGH COURT] stating that if those principles are not adhered the provisions of section 11, 12, 12A and 12AA of the Act will become redundant. Considering these facts and the decisions of the Hon’ble Higher Judiciaries, we are of the view that the action taken by the Ld. Revenue Authorities are as per the provisions of the Act and therefore we do not find it necessary to interfere with their orders. - Decided against assessee.
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