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TMI Blog2022 (10) TMI 168X X X X Extracts X X X X X X X X Extracts X X X X ..... ee in absence of such registration. Therefore, Allow the claim of assessee and direct the A.O. to delete the addition. Accordingly, appeal of the assessee is allowed. - ITA.No.308/Del./2020 - - - Dated:- 30-9-2022 - Shri Chandra Mohan Garg, Judicial Member For the Assessee : Shri Somil Agarwal Shri Deepesh Garg, Advocates For the Revenue : Shri Mithalesh Kumar Pandey, Sr. DR ORDER This appeal by Assessee-Trust has been directed against the Order of the Ld. CIT(A)-2, Gurgaon, dated 03.10.2019 relating to A.Y. 2014-15. 2. The grounds raised by the assessee read as under: 1. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of ld. AO in bringing to tax corpus donation of Rs.10,42,750/- as alleged income of the appellant trust and that too without any basis, material or evidence available on record and by recording incorrect facts and findings and without observing the principles of natural justice. 2. That in any case and in any view of the matter, action of Ld. CIT(A) in confirming the action of Ld. AO in making addition of Rs.10,42,750/- on account of corpus donation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... if the assessee is not enjoying the registration under section 12A of the I.T. Act, 1961 for the relevant assessment year, then also the corpus funds received by the assessee-trust cannot be taxed in the hands of the assessee-trust for want of registration under section 12A of the I.T. Act, 1961. 6. On careful consideration of rival submissions from the order of ITAT, Pune Bench, Pune in the case of ITO vs., Serum Institute of India Research Foundation dated 19.02.2018 (supra), an identical issue was raised before me for adjudication which was decided in favour of assessee with the following observations and findings : 18. We have heard the parties and perused the details/facts, submissions and case laws furnished by the Assessee and the Revenue. There is no dispute on the basic facts that the assessee is registered Trust under the Bombay Public Trust Act, 1950 and however, it is unapproved by the CBDT as required u/s.35(1)(ii) of the Act. Further, it is also not registered u/s.12A/12AA of the Act and therefore, the immunity provided under section 11(1)(d) of the Act or the exemption and 10(21) of the Act is not available to the assessee Trust. The fact relating to Corpus- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the discussion, the Tribunal held that Voluntary Contributions received by the assessee towards the Corpus cannot be brought to tax in view of their capital nature. 21. For the sake of completeness of the order, we proceed to extract the operational paragraphs of the order of the Tribunal here as under : 9. We have considered the rival contentions and also perused the material available on record including the case laws relied on. We have observed that the assessee is a religious charitable trust duly registered under the Bombay Public Trust Act,1950. The assessee could not produce registration u/s12A/12AA of the Act and hence it could be presumed that the assessee is not registered u/s 12A/12AA of the Act as the onus was on the assessee to bring on record the evidences to prove its contentions which it want court to believe and consequently to seek immunities and protections granted to a registered trust. The assessee has received corpus donations to the tune of Rs.4,55,446/- during previous year relevant to the assessment year which are being given with specific directions by the donors to be applied towards specific purpose for which the respective funds were creat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s taken by ITAT, Agra in the case of ITO v. Gaudiya Granth Anuved Trust reported in (2014) 48 taxmann.com 348 (Agra-Trib) whereby Tribunal held as under: This is an appeal filed by the Revenue against the order dated February 24, 2012 passed by the learned Commissioner of Income-tax (Appeals)-I, Agra for the assessment year 2007-08. 2. The Revenue has raised the following grounds of appeal : ' 1. The learned Commissioner of Income-tax (Appeals) has erred in law and on facts in failing to appreciate that voluntary contributions (whether corpus donations or general donations) received by a charitable trust are income as defined vide section 2(24)(iia) of the Act and corpus donations are exempt from tax under section 11(1)(d) only if assessee is registered under section 12A/12AA of the Act. 2. The learned Commissioner of Income-tax (Appeals) has erred in placing reliance upon the appellate decision of the hon'ble Delhi High Court in I.T.A. No. 5082/Del/2010 in the case of ITO (Exemption) v Smt. Basanti Devi and Shri Chakhan Lal Garg Education Trust for the assessment year 2003-04, which in turn is now under challenge in the hon'ble Supreme Court. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its taxability is required to be decided with reference to the scheme of the Act as held in the decision of Pentafour Software Employees Welfare Foundation v. Asst. CIT (supra). In both the decisions referred by the learned authorised representative, in case of Pentafour Software Employees Welfare Foundation v. Asst. CIT, it has been held that corpus donation being in the nature of capital receipt are not chargeable to income-tax. The decision of the Income-tax Appellate Tribunal, Delhi in the case of Basanti Devi and Sri Chakhan Lal Garg Education Trust for both assessment years 2002-03 and 2003A-04 are annexed with this order as annexure A-1 in which reference to the decision in the case of Pentafour Software Employees Welfare Foundation is also given. I have also come across another decision of the hon'ble Income-tax Appellate Tribunal, Kolkata in the case of Shri Shankar Bhagwan Estate v. ITO [1997] 61 ITD 196 (Cal) in which, the taxability of corpus donation has been examined in the light of section 12 read section 2(24)(iia) of the Income-tax Act and in this decision, it has been held as under : So far as section 2(24)(iia) is concerned, this section has to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Kolkata arrived to the conclusion that the voluntary contribution in the nature of corpus donation raised by the appellant cannot be brought to tax. In this case also, the trust under appeal was a private religious trust not registered under section 12AA and hence, corpus donation received by it should not be taxable as its income. 6.6 After considering the position of law as it is prevailing at present on the basis of the decision of three Tribunals, i.e., Income-tax Appellate Tribunal, Chennai, Income-tax Appellate Tribunal, Delhi and Income-tax Appellate Tribunal, Kolkata and further confirmed by the Delhi High Court, the corpus donation is in the nature of a capital receipt and are not taxable, irrespective of the fact whether the trust is registered under section 12AA or not. Therefore, I agree with the learned authorised representative that the amount of Rs. 68,50,000 being in the nature of corpus donation is not taxable under the Income-tax Act being in the nature of capital receipt and therefore, addition of Rs. 68,50,000 made by the Assessing Officer towards the taxable income of the assessee is hereby deleted and accordingly, Ground No. 2 is allowed. 4. The lea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i Devi and Shri Chakhan Lal Garg Education Trust and other orders of the Income-tax Appellate Tribunal. Since facts are identical, therefore, to maintain consistency, we follow the above orders of the Income-tax Appellate Tribunal and the light of facts we do not find any infirmity in the order of the Commissioner of Income- tax (Appeals). The order of the Commissioner of Income-tax (Appeals) is confirmed. 7. In the result, the appeal of the Revenue is dismissed. The ITAT, Chennai in Indian Society of Anaesthesiologists v. ITO in decision reported in (2014) 47 taxmann.com 183(Chennai-Trib.) held that specific funds created for fulfilling specific objectives for which these separate funds are constituted remain as capital funds as the funds can be used for fulfilling specific objectives for which these funds are constituted and hence to be treated as corpus funds and to be excluded from computation of Income. The ITAT , Bangalore in ITO v. Vokkaligara Sangha in a decision reported in (2015) 44 CCH 0509 (Bang. Trib.) whereby the Tribunal held that voluntary contributions received for a specific purposes cannot be regarded as income u/s 2(24)(iia) of the Act since they ..... X X X X Extracts X X X X X X X X Extracts X X X X
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