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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 ..... g it as alleged income of the appellant trust, is bad in law and against the facts and circumstances of the case. 3. That having regard to the facts and circumstances of the case, id. CIT(A) has erred in law and on facts in not reversing the action of Ld. AO in charging interest u/s 234A, 2348 and 234C of Income Tax Act, 1961. 4. That the appellant craves the leave to add, modify, amend or delete any of the grounds of appeal at the time of hearing and all the above grounds are without prejudice to each other." 3. During the course of hearing, the Learned Counsel for the Assessee, at the very outset, drawing our attention towards various Judgments and Orders including the Order of ITAT, Pune Bench, Pune in the case of ITO vs., Serum Institute of India Research Foundation dated 19.02.2018 in ITA.No.621 /Pun/2016 for the A.Y. 2005- 2006 and submitted that the Ld. CIT(A) has grossly erred in confirming the action of A.O. in making addition of Rs.10,42,750/- on account of corpus fund by treating the same as alleged income of the appellant trust. The Learned Counsel for the Assessee vehemently pointed out that in view of Order of ITAT, Pune Bench, Pune in the case of ITO vs., Serum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... crores is also undisputed. 19. Considering the above, we need to examine the nontaxability of the corpus donations in assessee's case despite inapplicability of the provisions of section 12(1)/11(1)(d)/section 35/10(21) etc. On the face of it, we find the provisions of section 2(24)(iia) of the Act apply to the case of the assessee as demonstrated by the Ld. DR before us. However, there exists no favourable decision to the assessee. Further, we find these decisions relate to the period of post-amendments to section 12(1)/11(1)(d) or section 56(2) of the Act etc. One of such decision of the Tribunal of Mumbai Benches, i.e. Chandraprabhu Jain Swetamber Mandir Vs. ACIT (2017) 82 taxmann.com 245 (Mumbai- Trib.), is relevant and it has exclusively dealt with this issue in detail. Of course, this decision has not considered the amended the provisions of section 56(2) of the Act which governs the taxing of certain gifts despite its capital nature. 20. We have perused the said decision of Mumbai Bench of the Tribunal in the case of Chandraprabhu Jain Swetamber Mandir Vs. ACIT (2017) 82 taxmann.com 245 (Mumbai-Trib.). It is also a case of unregistered trust u/s.12A/12AA of the Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en the parties and there is no dispute with respect to this proposition. The details of the corpus donations are as under: 1. Building fund - Rs. 50,000/- 2. Dev Dravya fund - Rs. 2,92,066/- 3. Gyan Fund - Rs. 41,541/- 4. Veya Vacha fund - Rs. 1,809/- 5. Akhand Deepak fund - Rs. 12,951/- 6. Dadawadi fund - Rs. 25,020/- 7. Jiv Daya fund - Rs. 18,063/- 8. Ayambil fund - Rs. 13,996/- Total - Rs. 4,55,446/- These above stated specific donations given by the donors to be utilized for specific purposes cannot be diverted for any other purposes by the assessee and are credited to the respective funds in the Balance Sheet , and utilization thereof is also reflected from these specific funds. We have gone through the case laws relied upon by the assessee as set out above and have observed that the Courts/Tribunals have taken a consistent view that these corpus donations are held to be capital receipts being capital in nature and are not taxable despite the fact that trust is not registered u/s 12A/12AA of the Act. In ITO(E) v. Basanti Devi & Shri Chakhan Lal Garg Education Trust in ITA no. 5082(Del.) 2010 for assessment year 2002-03 vide orders dated 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t donation received towards the corpus of the trust. The Commissioner of Income-tax (Appeals) deleted the addition of Rs. 68,50,000 out of the addition of Rs. 68,70,000 made by the Assessing Officer as under: "I have also examined the term corpus fund and corpus donation as it is being generally used with respect to a trust. A corpus fund denotes a permanent fund kept for the basic expenditures needed for the administration and survival of the organisation. The corpus fund is generally not allowed to be utilised for the attainment of the purposes but the interest/dividend accused on such fund can be utilised as well as accumulated. Such fund can also be used for creation of capital asset or property of the trust from which income can be generated. Corpus fund are generally created out of corpus donation. A donation will be treated as corpus donation only if it is accompanied by a specific written direction of the donor. In the absence of any written direction of the donor, a contribution of grant cannot be transferred to corpus fund. In the present case, the donor, the Bhaktivedanta Book Trust has very categorically in his letter, while providing money to the appellant trust, has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated March 20, 1973 is extracted at page 1277 of Volume I of Sampath Iyengar's Law of Income-tax, 9th edn. In which the inter-relation between section 12 and section 2(24) has been brought out. Gifts made with clear directions that they shall form part of the corpus of the religious endowment can never be considered as income. In the case of R. B. Shreeram Religious & Charitable Trust v. CIT [1988] 172 ITR 373 (SC) it was held by the Bombay High Court that even ignoring the amendment to section 12, which means that even before the words appearing to parenthesis in the present section 12, it cannot be held that voluntary contributors specifically received towards the corpus of the trust may be brought to tax. The aforesaid decision was followed by the Bombay High Court in the case of CIT v. Trustees of Kasturbai Scindia Commission Trust[1991] 189 ITR 5 (Bom). The position after the amendment is a fortiori. In the present cases the Assessing Officer on evidence has accepted the facts that all the donations have been received towards the corpus of the endowments. In view of this clear finding, it is not possible to hold that they are to be assessed as income of the assessees. We ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome-tax Appellate Tribunal in the cases of Shri Shankar Bhagwan Estate v. ITO [1997] 61 ITD 196 (Cal), Society for Integrated Development in Urban & Rural Areas v. Dy. CIT [2004] 90 ITD 493 (Hyd), Sri Dwarkadheesh Charitable Trust v. ITO [1975] 98 ITR 557 (All) and Dy. CIT v. Nasik Gymkhana [2001] 77 ITD 500 (Pune). 6. We have heard the learned representatives of the parties and records perused. The grievance of the Revenue is that the Commissioner of Income-tax (Appeals) has wrongly followed the judgment of the hon'ble Delhi High Court in I. T. A. No. 5082/Del./2010, whereas that order has been challenged before the hon'ble Supreme Court. The Revenue did not dispute the facts. We noticed that the Commissioner of Income-tax (Appeals) after considering the decision of three Tribunals, i.e., Income- tax Appellate Tribunal, Delhi in the case of ITO (Exemption) v. Smt. Basanti Devi & Shri Chakhan Lal Garg Education Trust [IT Appeal No. 5082 (Delhi) of 2010, dated 30-1-2009] the Revenue filed appeal before the hon'ble Delhi High Court. The hon'ble Delhi High Court confirmed the order of the Income-tax Appellate Tribunal, the Revenue filed appeal before the hon'ble ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as they assume the nature of 'Capital receipt' the moment the donations are given to the "Corpus of the Trust". 23. We find the provisions of section (24)(iia)/12(1)/11(1)(d)/35/56(2) are relevant for deciding the current 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 Ld. 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 exists divergent views on the issue. As discussed in the preceding paragraphs above, there are multiple decisions in favour of the assessee. 24. Accordingly, the Corpus-specific-voluntary contributions are outside the taxations in case of an unregistered Trust u/s.12/12A/12AAA of the Act too. From this point of view, and for this reason, the decision of the CIT(A) in granting relief to assessee does not call for any interferences. Accord ..... X X X X Extracts X X X X X X X X Extracts X X X X
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