9911796707
TMI Blog2022 (1) TMI 980X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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 amo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceived by the assessee as its income because the assessee is not registered U/s. 12AA of the Act. 3. The brief facts of the case are that the assessee is a registered society engaged in religious activities filed its return of income admitting NIL income for the relevant AY 2012-13 by claiming exemption U/s. 11 of the Act. Initially, the return was processed U/s. 143(1) of the Act and thereafter the case was taken up for scrutiny and the assessment was completed vide order dated 31/03/2015 wherein the Ld. AO made an addition of ₹ 77,96,563/- by treating the donation received as its income along with another disallowance towards depreciation. 4. During the course of scrutiny assessment proceedings, it was observed by the ld. AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y funds are passed on to any person / association, it should be ensured that such recipient is eligible to accept foreign contributions. From the details furnished by the assessee, it is not clear whether such specific requirement is fulfilled by the assessee Society. It is also not clear from the details furnished whether the amounts donated to various persons for the specific purposes were utilised by the persons or not. The authenticity of the copies of donation letters is also not proved by the assessee. In absence of all these details, it is not possible to examine whether the donations made are utilised during the year under consideration. Therefore, I uphold the addition made by the Assessing Officer with regard to the donations made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the attainment of any of the above objects. 6. The ld. AR also referred to page no.4 of the paper book to establish that the assessee had obtained FCRA registration issued by the Govt. of India, Ministry of Home Affairs. It was further submitted that the assessee had not retained the donations received for itself but had expended the same as per the wishes of the donors. It was therefore pleaded that the donation received may not be treated as its income. The Ld. DR on the other hand vehemently argued in support of the orders of the Ld. Revenue Authorities. 7. We have heard the rival submissions and carefully perused the materials on record. From the facts of the case, it is evident that the assessee is not registered U/s. 12A of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... well explained by the Hon ble Karnataka High Court in the case PCIT vs. M/s. Chamundi Winery Distillery in appeal ITA No. 155/2016, dated 25/09/2018 for the AY 2010-11. The relevant portion of the Hon ble Karnataka High Court judgment is extracted herein below for reference: 75. What we further feel is that the diversion of income by transfer of overriding title at source should normally have the support of the statutory requirements or some decretal binding character of Court of law and even though the private contractual obligations can also bring about such diversion of income at source but in this last sphere of private contractual obligations, the Court and the Income Tax Authorities have to examine such aspects carefully in ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
