9911796707
TMI Blog2010 (1) TMI 699X X X X Extracts X X X X X X X X Extracts X X X X ..... was claimed as exempt being a charitable institution. The return of income filed was subject to a scrutiny assessment under s. 143(3) of the Act whereby the total income has been assessed at Rs. 41,19,985 by making an addition of Rs. 40,55,480, which is the issue in appeal before us. The said amount represented donations received by the assessee with a specific direction from the donors that the same be utilized for construction of the building. Accordingly, the said amount was not treated as voluntary contributions and not credited in the income and expenditure account. On the contrary, the amount was shown in the balance sheet under the head 'Donation for building construction with specified direction from individuals'. The AO, however held that the said amount was liable to be treated as a voluntary donation and not as a receipt towards corpus and therefore included the same in the total income liable to tax. The reason advanced was that the assessee did not possess any evidence to show that the donation credited under the 'building fund' has been donated by the donors with a specific direction to utilize the same for building construction only. Apart from the aforesaid reason, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out that in the Mandir premises, the donation boxes are kept with different objectives and demonstrated the same with the help of photographs. Donation box amount for 'construction of building' was identified separately. Similarly, separate boxes were kept for collection of donations meant for Langar and general purposes. In this regard, our attention has been invited to a copy of resolution of the society dt. 11th March, 2002 whereby the different boxes were decided to be kept in the Mandir premises for enabling the devotees to make donations according to their direction. This included keeping of a box for collection of donations, which were to be used for undertaking 'construction of building'. Any devotee/donor desirous of making a donation 'towards construction of building', would put the money in the said box. It was pointed out that certificates from the Councilor, Nagar Parishad, Kullu, an ex-President, Zila Parishad, Kullu and the local Gram Panchayat are enclosed at pp. 16, 17 and 18 of the paper book. It is pointed out that the said certificates testify the system evolved by the assessee since earlier years for collection of donations towards construction of building. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... donation. 6. We have considered the rival, submissions carefully. Before we proceed to deal with the aspect as to whether or not the impugned donations have been received by the assessee with specific directions, it would be appropriate to touch upon the first objection of the AO that the assessee was not entitled to the benefits of ss. 11 and 12 of the Act as the registration under s. 12AA of the Act was granted by the CIT w.e.f. 1st April, 2007. In this connection, we find that initially the assessee was granted registration w.e.f. 1st April, 2007 but consequent to an application made by the assessee under s. 154 of the Act dt. 21st Jan., 2009, the CIT passed an order on 29th Jan., 2009 whereby the registration under s. 12AA of the Act was granted w.e.f. 28th Feb., 2002. The aforesaid factual matrix is uncontroverted by the Revenue. In fact, we find that said position was explained by the assessee before the CIT(A), as noted by her in para 3.2 of the impugned order. However, inexplicably in the operative portion of her order in para 4, the CIT(A) notes that the assessee has been granted registration under s. 12AA of the Act w.e.f. 1st April, 2007. Be that as it may, havin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... impugned donations have been made by the donors with specific directions that they shall be spent on building construction and accordingly such amount of Rs. 40,55,480 is exempt and cannot be deemed as income. 8. We have carefully considered the pleas set up by the assessee. It is an undisputed position that the assessee is managing a temple and there is also no dispute that the institution is being maintained mainly by way of public donations. During the year under consideration, the appellant institution received donations of Rs. 19,53,094, bank interest-Rs. 4,17,366 and proceeds from sale of books and cassettes-Rs. 1,75,530, totalling to Rs. 25,45,990, which have been credited in the income and expenditure account. Apart from the above, the assessee has received donations of Rs. 40,55,480, it has claimed that the same were made with specific direction that they shall be spent on construction of building. The dispute revolves around the assertion of the assessee that such donations have been received with specific directions. Before we adjudicate this, it would be appropriate to refer to s. 12(1) of the Act, which reads as under:- "12. Income of trusts or institu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... school building. Such donations received were held to be donation towards corpus of the trust and held entitled to exemption. From the aforesaid decisions of the Tribunal, it can be deduced that in the absence of any prescribed mode of giving directions, the same are to be evaluated from the facts and circumstances of the case. In the present case, the resolution of the society, dt. 11th March, 2002 clearly shows that a donation box was kept in the temple premises with the appeal that the amounts collected would be spent for building construction. The devotees visiting the temple or other donors were depositing money in the donation box which was to be utilized for construction of building only. The manner in which such donations have been collected by the assessee is not disputed by the AO. The only dispute is that the assessee could not provide the names and addresses of individual donors who have contributed towards 'building construction fund'. Quite clearly, the donations are being collected from the devotees at large and the insistence of the AO of production of individual names and addresses is not justified. Moreover, the bona fides of such practice being carried out by th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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