9911796707
TMI Blog2022 (2) TMI 641X X X X Extracts X X X X X X X X Extracts X X X X ..... ons prescribed u/s 12(3) of the Act after the application was accepted by the competent authority. The submission the assessee society is already registered under FCRA and is entitled to receive the foreign contribution for charitable activities and, therefore, it is out of the purview of section 2(7)/12(3) of the IT Act, 1961 could not be controverted by the ld. DR. Assessee has filed Form No.FC-III-FCRA-2010 which has been duly assessed with the Ministry of Home Affairs, Government of India. Under these circumstances and considering the fact that since the assessee, during the course of assessment proceedings, has produced the relevant details and produced the books of account which have been gone through by the AO and no other defects were pointed out, therefore, considering the totality of the facts of the case and this being a very old matter relating to AY 2004-05, the argument of the ld. DR that the matter should be remanded back to the AO for verification, in our opinion, is not justified. We, therefore, set aside the order of the CIT(A) and direct the AO to allow the exemption. - Decided in favour of assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... of donation received by a trust or institution in terms of clause (d) of sub-section (2) of section 80G shall be deemed to be the income in certain circumstances notwithstanding the provisions of section 11. He noted that section 80G(2)(d) shows that the amount of donation referred to in section 12(3) is any sum paid by an assessee, during the period beginning on the 26th day of January, 2001 and ending on the 30th day of September, 2001, to any trust, institution or fund to which section 80G applies for providing relief to the victims of earthquake in Gujarat 5. The AO analysed the circumstances laid down by section 12(3) according to which any amount of donation received by the Trust or institution in terms of clause (d) of sub-section (2) of section 80G as deemed to be income. Since during the period 26.01.2001 to 30.9.2001 the assessee had received donations of ₹ 8,17,015/- from Local Donors and ₹ 24,43,41,176/-/- from foreign donors for relief of victims of Gujarat Earthquake but accounts in Form 10AA were filed before the DGIT(E) only on 27th March, 2006, i.e not on or before 30.06.2004, he asked the assessee to explain as to why the donation of Rs. ₹ 8,17 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of ₹ 24,51,58,191/- as deemed taxable income of the assessee u/s 12(3) of the Act for the AY 2004-05. 7. In appeal, the ld.CIT(A) upheld the action of the AO by observing as under:- "5 The second, third, forth and fifth ground of appeal are against the facts that the Assessing Officer has treated an amount of ₹ 24,45,15,405/- as the deemed income of the appellant. 5.1 The appellant has received an amount of ₹ 24,43,41,176/- as mentioned from foreign parties and an amount of ₹ 8,17,015/- as donation from local parties. However the appellant failed to furnished the accounts in From 10AA by 30th June 2004. The contention of the appellant was that the donations were received from foreign parties and the donation received from foreign parties amounting to ₹ 24,43,41,176/- does not fall under clause (d) of sub section (2) of section 80G. Since the foreign parties are not assessee, therefore this addition was uncalled for. However the Assessing Officer was of the view that though donation were received from foreign parties it need nor necessarily mean that the foreign parties are not assesses with in the meaning of the Income Tax Act. 5.2 The submiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2001 to 30th September 2001. Again, there is no dispute that the petitioner maintained separate accounts of income and expenditure for providing relief to the victims of earthquake in Gujarat. It is also claimed that the entire amount was spent only for providing relief to the earthquake victims of Gujarat by the specified date i.e. 31s' March 2004. However, it could not render the accounts of income and expenditure to the prescribed authority by 30th June 2004. Because of this failure on the part of the petitioner, in the income-tax return filed by the petitioner for the assessment year 2003-04 entire donation of ₹ 24,51,58,192.08 has been treated as taxable income of the petitioner society, i.e. deemed taxable income under section 12(3) of the Act vide assessment order dated 20th December 2006. " 5.5 Till today the assesse has not communicated the decision of Director General of Income Tax(Exemption). Hence it cannot be presumed that the DGIT(Exemption) has accepted the account in Form 10AA. As the appellant has failed to furnish the order of Director General of Income Tax(Exemption) the issue is decided against the appellant and the action of the Assessing Officer i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt wherein their lordship observed that the time limit is only directory and not mandatory and also ignoring the compliance Application Pending before CCIT (E). The assessee craves leave to add/alter any grounds of appeal on or before or either at the time of hearing." 9. The ld. counsel for the assessee, at the outset, filed the copy of the order dated 04.09.2018 passed u/s 119(2)(b) of the Income-tax Act, 1961 in pursuance of the direction of Hon'ble Delhi High Court vide order dated 22.01.2010 in WP. No.1791 of 2007 wherein the CBDT has directed the DGIT(E) to admit Form No.10AA in the case of the assessee for AY 2004-05 as the form filed by the due date u/s 80G(5C)(v) r.w. section 80G(2)(d) of the Act and to deal with the return for that assessment year on merit in accordance with the provisions of law. 10. The ld. Counsel further submitted that the appeal filed by the Revenue against the decision of the Hon'ble High Court was dismissed by the Hon'ble Supreme Court vide SLP No.6686, order dated 15th April, 2011. He submitted that after the order u/s 119(2)(b) of the IT Act passed by the CBDT, the PCIT (E), New Delhi has passed the order u/s 119(2)(b) of the IT Act condoning ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t emergency relief make for the victims of flood, famine, earthquake and other disasters, assist in resettlement and rehabilitation, of displaced persons and repatriates. We find, the assessee, during the impugned assessment year received donation from local and foreign donors for relief of the Gujarat earth quake victims. Since the assessee trust filed form No.10AA belatedly i.e., on 27th March, 2006, but, not on or before 30th June, 2004 and further, the assessee filed the sworn affidavit of one Mr. Michael Masih, who is the Head of Finance of the assessee Trust stating that foreign donors are not assessees instead of any of the trustees of the trust, the AO determined the total income of the assessee at ₹ 24,45,15,405/- by treating the donation of ₹ 24,51,58,191/- as deemed taxable income of the assessee u/s 12(3) of the IT Act. We find, the ld.CIT(A) upheld the action of the AO, the reasons of which have already been reproduced in the preceding paragraph. It is the submission of the ld. Counsel that the delay in furnishing Form No.10AA has already been condoned by the competent authority after the matter travelled upto the Hon'ble Supreme Court and since the AO, dur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as an application or claim for any exemption, deduction, refund or any other relief and that the case does not come under the purview of section 119(2)(b) of the Act. 6. Aggrieved with the above orders, the assessee filed a Writ Petition before the Hon'ble High Court of Delhi in WP(C) No. 1791/2007 challenging the rejection letter d08.08.2006 and CM Application No.2192/2011 challenging the rejection order dated 13.02.2008 passed by the Board. Hon'ble High Court vide order dated 22.01.2010 held that the application for condonation of delay should not have been rejected on the ground that there is no power to condone. The rejection order dated 08.08.2008 was set aside and the case was remitted back to the Competent Authority to decide the application on merits after giving an opportunity of being heard to the petitioner. Similarly, in CM Application, 2192/2011, Hon'ble High Court vide order dated 18.02.2011 set aside the order passed by the Board and held that the matter is now to be considered afresh on the merits. SLP filed by department against the order of the Hon'ble High Court dated 18.02.2011 was dismissed by the Hon'ble Supreme Court in combined order dated 15.04.2011 in S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No.10AA and (b) the sworn affidavit filed by Mr. Michael Masih, Head of Finance of the assessee Trust stating that foreign donors are not assessees instead of any of the trustees. Other than the above two objections, there is no other objection by the AO regarding any defect or any diversion of funds by the trust for the benefit of the trustees. As mentioned earlier, the trust is functioning in accordance with the aims and objectives as per its Memorandum of Association. The provisions of section 12(3) which has been invoked by the AO for denying the exemption reads as under:- "Section 12 [(3) Notwithstanding anything contained in section 11, any amount of donation received by the trust or institution in terms of clause (d) of sub-section (2) of section 80G in respect of which accounts of income and expenditure have not been rendered to the authority prescribed under clause (v) of sub-section (5C) of that section, in the manner specified in that clause, or which has been utilised for purposes other than providing relief to the victims of earthquake in Gujarat or which remains unutilised in terms of subsection (5C) of section 80G and not transferred to the Prime Minister's Na ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
