9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (11) TMI 1443 - AT - Income TaxEligible to claim of deduction u/s 11(1)(d) - assessee was not registered u/s 12AA or u/s 10(23C)(vi) - whether the assessee trust can be held eligible to benefit of registration under section 12AA in terms of non-applicability of section 11 and 12? - Held that - In the present case when the amendment was made in section 12A of the Act by the FA 2014 the appeal was pending before the ld CIT(A). During such pendency the assessee was granted registration u/s 12AA of the Act on 8.8.2014 by CIT-I Jaipur w.e.f. 26.03.2014. Thus in view of the above discussions ld CIT(A) has rightly exercised his power whereby he has considered and taken into consideration the grant of registration to assessee u/s 12AA for the impugned assessment year as appeal was pending before him and an assessment proceeding which is pending in appeal before the appellate authority should be deemed to be assessment proceedings pending before the AO within the meaning of the term as envisaged under the proviso to section 12A(2) of the Act. It is not the case of the Revenue that there is any change in the objects and activities of the assessee trust and these objects/activities are not the same as those on the basis of which registration under section 12AA has been granted. Further it is also not the case of the Revenue that assessee trust was refused registration or registration granted earlier was cancelled at anytime. In our view the assessee trust duly registered under section 12AA of the Act is thus held eligible to claim benefits of section 11 and 12 of the Act for the impunged assessment year. Whether building fund received by the assessee trust can it be held eligible to claim benefit of section 11(1)(d)? - Held that - What is relevant to determine is whether there is a voluntary contribution/donations by the students/parents with a direction to utilise the same towards construction of the building infrastructure and secondly how the same has been accounted for and utilised by the assessee trust. However given the contradictory position taken by the assessee and the Revenue and in absence of any tangible material on record produced by either of the two parties it would be in interest of justice and fair play that the matter is remanded back to the Assessing officer who shall taking into consideration the legal propositions as laid down by the various Courts as discussed above will examine the matter a fresh. We accordingly set-aside the matter relating to eligibility to claim benefit of section 11(1)(d) of the Act to the file of the Assessing officer. As we have held above the assessee trust is held eligible for the benefits of section 11 and 12 as it is duly registered under section12AA of the Act we do not see any infirmity in the order of the ld CIT(A).
Issues Involved:
1. Deletion of addition made on account of corpus donations treated as revenue receipts. 2. Eligibility to claim benefit of section 11(1)(d) without registration under section 12AA. 3. Deletion of addition made on account of disallowance under section 40(a)(ia). 4. Deletion of addition made on account of disallowance of TDS amount. Detailed Analysis: 1. Deletion of Addition Made on Account of Corpus Donations Treated as Revenue Receipts: The Revenue contended that the corpus donations received by the assessee in the form of a building fund should be treated as revenue receipts. The Assessing Officer (AO) argued that the building fund was part of the fee receipt, not voluntary, and lacked the word "corpus," thus it could not be treated as corpus donations under section 11(1)(d). The AO also noted that the funds were not maintained in a separate account and could be used for any purpose, not just building construction. The assessee argued that the donations were voluntary contributions specifically directed towards the building fund, constituting capital receipts. The CIT(A) and various judicial pronouncements supported the assessee's position, indicating that voluntary contributions for specific purposes are capital receipts and cannot be taxed as revenue receipts, even if the trust is not registered under section 12A. The Tribunal held that the voluntary contributions with specific directions towards the building fund are corpus donations and cannot be treated as revenue receipts. The Tribunal relied on various judicial precedents, including CIT vs. Children's Education Society and Director of IT (Exemption) vs. Sri Ramakrishna Seva Ashram, which support the treatment of such contributions as corpus donations exempt under section 11(1)(d). 2. Eligibility to Claim Benefit of Section 11(1)(d) Without Registration Under Section 12AA: The Revenue argued that the assessee was not eligible for the benefit of section 11(1)(d) as it was not registered under section 12AA during the assessment year. The assessee contended that it was eligible for registration from the beginning, but the application was delayed due to improper guidance. The CIT(A) granted registration effective from 26.03.2014, and the appeal was pending during the assessment proceedings. The Tribunal referred to the proviso to section 12A(2) introduced by the Finance Act, 2014, which allows the benefit of sections 11 and 12 for earlier assessment years if the trust is subsequently registered under section 12AA. The Tribunal held that the amendment is retrospective and applies to pending assessments, thus the assessee is eligible for the benefits of sections 11 and 12 for the impugned assessment year. The Tribunal dismissed the Revenue's ground and allowed the assessee's cross objection on this issue. 3. Deletion of Addition Made on Account of Disallowance Under Section 40(a)(ia): The AO disallowed Rs. 11,06,513 under section 40(a)(ia) for non-deduction of TDS. The CIT(A) deleted the addition, stating that the income of the assessee trust is exempt under section 11(1)(i)/10(23C) and any addition made is also exempt if the surplus is not more than 85% of the gross receipt. The Tribunal upheld the CIT(A)'s decision, noting that the assessee trust is eligible for exemption under sections 11 and 12, and the disallowance does not affect the exempt status of the income. The Tribunal dismissed the Revenue's ground on this issue. 4. Deletion of Addition Made on Account of Disallowance of TDS Amount: The AO disallowed Rs. 13,862 on account of TDS. The CIT(A) deleted the addition for the same reasons as the disallowance under section 40(a)(ia). The Tribunal upheld the CIT(A)'s decision, reiterating that the assessee trust is eligible for exemption under sections 11 and 12, and the disallowance does not affect the exempt status of the income. The Tribunal dismissed the Revenue's ground on this issue. Conclusion: The Tribunal partly allowed the appeal by the Revenue and the cross objection by the assessee for statistical purposes, remanding the matter related to the eligibility to claim benefit of section 11(1)(d) back to the AO for fresh examination. The Tribunal upheld the CIT(A)'s deletion of additions made on account of disallowance under section 40(a)(ia) and TDS amount.
|
