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TMI Blog2022 (9) TMI 1086X X X X Extracts X X X X X X X X Extracts X X X X ..... t issue. It is a settled legal proposition, in case of a registered Trust under the Income-Tax Act, the corpus specific Voluntary Contributions are outside the scope of income as defined in section 2(24)(iia) of the Act due to their Capital nature . But it is a case of un-registered Trust. Despite the detailed deliberations made by the DR, we find the principles relating to judicial discipline assume significance and the priority. It is also decided issue that there is need for upholding the favourable view if there exist divergent views on the issue. As discussed in the preceding paragraphs above, there are multiple decisions in favour of the assessee. The two issues must be settled during registration u/s 12AA which are genuinity o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeal before or at the time of hearing. 3. The brief fact of the case is that the assesseeis running a charitable trust with operation since 22.10.2018. The object of the trust is to provide financial help/assistance by way of scholarship stipend to the poor and needy irrespective of their caste language or religion for their education, academic, technical or vocational or of any other kind and also to improve their skills in the field of sports. The assessee filed an application for registration before the ld. PCIT u/s 12AA of the Act. After completion of hearing the ld. CIT(E) had rejected the application of registration by raising the following observation. i. On construction of structure for generation of income by way of rent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... society are charitable in nature being an objective of general public utility within the meaning of section 2(15) of the Act as detailed herein above. 7. Keeping in view of the facts and circumstances of the case as explained above and respectfully following the legal position as discussed above, we are of the considered opinion that the assessee is entitled for registration u/s. 12A of the Act. Therefore, we set aside the impugned order passed by the Ld. CIT(Exemptions), Lucknow and accordingly, direct the Ld. CIT(E), Lucknow to grant registration under section 12A of the Act to the applicant. 4.1 Mr. Gupta further argued that the ld. CIT(E) will only verify about the genuineness of the trust and object of the trust is related to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been held as under : 'So far as section 2(24)(iia) is concerned, this section has to be read in the context of the introduction of the present section 12 it is significant that section 2(24)(iia) was inserted with effect from April 1, 1973 simultaneously with the present section 12, both of which were introduced from the said date by the Finance Act, 1972. Section 12 makes it clear by the words appearing in parenthesis that contributions made with a specific direction that they shall form part of the corpus of the trust or institution shall not be considered as income of the trust. The Board's Circular No. 108 dated March 20, 1973 is extracted at page 1277 of Volume I of Sampath Iyengar's Law of Income-tax, 9th edn. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which is commercial in nature. Moreover, these are no such aims objects of trust as per deed. Hence, there is inherent contradiction in the trust deed whereby assessee is willing to pursue commercial activities by way of earning rental income, which is beyond the scope of aims objects of trust. In this regard applicant was asked to furnish detailed explanation which is submitted by applicant. 6. We have heard both the parties, perused material available on record and gone through orders of the authorities below. Our observation is that the Corpus donations received by the Trusts, which is not registered u/s.12A/12AA of the Act, are not taxable as they assume the nature of 'Capital receipt' the moment the donations are give ..... X X X X Extracts X X X X X X X X Extracts X X X X
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