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TMI Blog1993 (9) TMI 44X X X X Extracts X X X X X X X X Extracts X X X X ..... ent years 1973-74 and 1974-75, respectively, were voluntary contributions and hence income within the meaning of section 12 of the Income-tax Act, and, therefore, liable to be included in the total income of the trust for the two years? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding alternatively that section 11 also applied to the facts of the case and that the subscription amounts received by the assessee for both the years partook of the nature of income even without reference to the provisions of section 12 when the case of the Revenue was that the income was only taxable under section 12?" The trustees of Shri Kot Hindu Stree Mandal are the assessees in this reference. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... counsel for the assessee has submitted that the expression "voluntary contribution" must be interpreted to mean amounts paid in the nature of a gift or a gratuitous payment to the trust without any consideration. Learned counsel for the assessee has criticised the reasoning and observations of the Tribunal when it observed that subscription amounts paid by the members were nothing but donations. It must be stated here and now for the sake of clarity that prior to its substitution by the Finance Act, 1972, with effect from April 1, 1973, section 12(1) of the Act unconditionally exempted any income of a trust for charitable or religious purposes or of a charitable or religious institution derived from voluntary contributions. Section 12 of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation and these tests were satisfied on the facts of the present case." When a person pays membership fee or subscription to a society or a trust, he does not make a gift of the membership fee or subscription amount to the society. The amount of subscription paid by a member to the society can never be considered as gratuitous payment made by the member to the society or as a payment without any consideration. There is considerable merit in the submission of learned counsel for the assessee. In Russel v. Vestry of St. Giles (3 E B 416), Lord Campbell observed "voluntary contributions here do not me an annual subscriptions (or entrance fees) paid for value received or expected to be received by the party paying, but means a gift made f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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