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TMI Blog2017 (5) TMI 248X X X X Extracts X X X X X X X X Extracts X X X X ..... VIZ/2014 - - - Dated:- 28-4-2017 - SHRI V. DURGA RAO, HON BLE JUDICIAL MEMBER AND SHRI G. MANJUNATHA, HON BLE ACCOUNTANT MEMBER For The Assessee : Shri G.V.N. Hari Advocate. For The Department : Shri K. Deva Rathna Kumar CIT DR ORDER PER V. DURGA RAO, JUDICIAL MEMBER These are the appeals filed by the same assessee against the separate orders of Commissioner of Income Tax (Appeals), Visakhapatnam, each dated 10/09/2013 for the Assessment Years 1992-93 to 1997-98. Since, facts are identical and issues are same, they are clubbed and heard together and disposed of by way of this common order for the sake of convenience and brevity. ITA No.81/VIZ/2014 2. Facts of the case, in brief, are that the assessee is a society registered under the Societies Registration Act, filed its return of income for the Assessment Year 1992-93 by declaring total income at NIL after claiming donations received as exemption without having registration under section 12A of the Income Tax Act, 1961 (hereinafter referred to as the 'Act'). The assessee has shown that it has received ₹ 5,46,409/- during the year towards corpus fund of the society, out of whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to assess the income of the assessee as an AOP at 75% of the gross receipts for the year. 5. On being aggrieved, assessee carried the matter in appeal before the Tribunal. 6. Learned counsel for the assessee submitted that the assesseesociety has received corpus donations for a specific purpose, which cannot be considered as income of the assessee-society. Learned counsel for the assessee further submitted that the assessee is not able to submit books of account, bills and vouchers due to death of the founder Member Mr. K. David Raju, therefore, he prayed that donations received by the assessee-society has to be treated as corpus donations. 7. Per contra, learned Departmental Representative submitted that assessee has received donations and had not filed any details, the purpose for which donations are received, as to how expenditure has been incurred, therefore, the donations received by the assessee has rightly been treated as income of the assessee submitted that appeal filed by the assessee may be dismissed. 8. We have heard both the sides, perused the material available on record and orders of the authorities below. 9. The assessee is a society registered under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have also considered the case of M/s.Nirmal Agricultural Society (supra), which has no application to the facts of the present case. In this case, the assessee is not able to file any books of account to show that the purpose for which donations are received. The ld. CIT(A) has given a categorical finding that assessee could not produce any evidence to show that the donar had sent the donations for specific purpose. The ld. CIT(A) has also considered the form FC-3 filed under the Foreign Contribution Act and gave a finding that there is no information in these reports that the contribution was received for the purposes specified by the donar. Even before us, the assessee is not able to file any evidence to show that the contributions received by the assessee are corpus in nature and also he is not able to file any evidence to show that he has incurred some expenditure for the purpose of running assessee-society. The ld. CIT(A) by considering all the submissions of the assessee, passed a detailed order. For the sake of convenience, the relevant portion of the order is extracted hereunder:- 5.5 1 have carefully considered the details Fled in the form of paper-book and other subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion Act are evidence to show that the appellant had carded on charitable activities, and that the donations received were utilized for the purpose for which it was received . 53 The principal contention of the AR was that the decision in the case of Nirmal Agricultural Society was squarely applicable to them and on that basis it was argued that AS could not assess the corpus donation to tax. It may be seen that in that case the H n'ble LFAT, Hyderabad took the following view:- . The assessee has not been granted registration under s.12A, as the CIT, thought it fit to refuse to condone the Long delay caused by the assessee in applying for the registration. Therefore, the AO had no other go but to complete the assessments in the status of AOP and also closing his eyes towards S.11 and S.13. To that extent he has acted only according to will of Law. Even when the assessee has been assessed as AOP deprived of s.11 benefits, the AO could assess only net income of the assessee and not gross receipts As far as the assessee is concerned, construction of houses, reclamation of land, etc are part of as regular activities. Houses are built on the land of poor agriculturists. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nch in the case of Nirmal Agricultural Society, (Supra). Accordingly, we set aside the order of the CIT(A) in all these years and restore the matter back to the file of the assessing officer with a direction to examine the expenditure claim of the assessee in the light of decision of Hyderabad bench in the case of Nirmal Agricultural Society (Supra) after affording necessary opportunity of being heard to the assessee. 5.10 In the light of the above observation of the Hon'ble ITAT, the AO is mandated to examine the expenditure claim of the appellant. It has been the contention of the AR throughout that the appellant had received corpus funds and that the funds have been utilized for the specific purposes. But the appellant could not produce any iota of evidence to show that the donor had sent the donation for a specified purpose. What was the specific direction or condition laid down by the donor on the contributions made by it has not been brought on record. Not only that no documentation was filed as to the stated purpose of the donation was received by the donor, the appellant also failed to specify the purpose for which the so called corpus donation was received. It w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... involved in Nirmal Agricultural Society are different and is not squarely applicable to the facts of the case. The society in that case was involved In giving aid to poor agriculturists for house construction and land reclamation. It had also received foreign aid which had to be utilized in the manner suggested by the donor. The AO, noting that society did not have registration u/s 12 assessed it as AOP and has included reign grant also as part of its total income. On the expenses he paid only revenue expenses and has not allowed the expenses incurred for house construction, reclamation of land etc. In this context, the Hon'ble ITAT, Hyderabad gave a factual finding that the society therein was regularly involved in construction of houses, reclamation of land as part of regular charitable activities and they are to be treated as revenue expenses, and therefore there is no basis to hold that the amounts spent in constructing houses, reclamation of [and are of capital expenditure. As regards the foreign aid it was found that the grant was received for a specific purpose and hence it was held to be not in the nature of income. It is to be noted that in that case there was no disp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... form of ht of persons to whom ₹ 100/ has been paid and was said to be contribution to widows. It is seen that these contributions were made in October and November, 2006, and would not constitute proof for the expenditure incurred for the subject assessment years i.e. A.Y. 1992-93 to 1997 98. Besides, the appellant filed certain new paper cutting in support of its activities, and also vouchers for some expenses for payment to N.K. Timothy and one Pratyush Ranjan Sahu of ₹ 19,015/- and ₹ 49,350/- and which related to the year 1991-92. Only some paltry evidence has been furnished for expenses relating to A.Y.1992-93. Thus even during the appellate proceedings the appellant failed to produce any worthwhile evidence as to the expenses claimed by it for all the assessment years in appeal. The AR explained that in view of the death of the founder and other litigations it could not produce any books of account or vouchers. Whatever be the reasons given the fact remains that the appellant faded to produce any evidence to prove its expenses. It is pertinent to note that the society was controlled by two brothers namely Dr.K.A.Paul and Dr. K.David Raju and their brother-in- ..... X X X X Extracts X X X X X X X X Extracts X X X X
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