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TMI Blog2025 (4) TMI 278X X X X Extracts X X X X X X X X Extracts X X X X ..... iating that Chaman Educational & Charitable Trust had not utilized the donations given for my charitable activities but had simply kept them in FDRs and had earned interest income and even this interest income had not been utilised for any charitable activity, and accordingly, the donation could not be held as application of income. iii. That on the facts and circumstances of the case, the Ld. CIT(A) has erred in law in ignoring the observation of the AO that the assessee had regularly been giving donations to Chaman Educational & Charitable Trust which amounted to Rs. 11.7 crores in a span of just 4 years and that this money had not been used for education. iv. That on the facts and circumstances of the case, the Ld. CIT(A) has erred in law in holding that section 13 ( 1)(c) shall not be applicable when both Indo Global Education Foundation and Chaman Educational & Charitable Trust are closely held trusts with common members, hence, the real persons deriving benefit from the transfer of funds/donations are specified persons u/ s 13( 3). v. That on the facts and circumstances of the case, the Ld. CIT(A) has erred in law in holding that no adverse inference has been drawn duri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 012-13 and which have been accepted by the department, both in the hands of Donor and Donee and the assessment order for AY 2012-13 have been passed in the case of the assessee u/s 143(3) similarly, for the Assessment Year 2014-15, donation have been given to 'Chaman Educational & Charitable Trust' and which have been accepted in the case of the assessee vide order dated 14.12.2016 and also in the case of the 'Civman Educational & Charitable Trust' for AY 2014-15, the assessment have been fr med u/s 143(3) vide order dated 04.08.2016 and also accepted in the AY 2013-14 and no adverse have been drawn by the Ld. AO. 6. Before us, it was argued by the Ld.CIT(DR) that 'Chaman Educational & Charitable Trust' is a related trust covered u/s 13(3) and the donation given to it, cannot be treated as application of income and for the other two trusts, it was argued that the 'corpus donation' given to these trusts is without any specific purposes and it was further argued that there was no proper object related to give donation to the other trusts. The main object of the assessee was to provide education and this act of giving donation to the other trusts is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as in the year under consideration and no adverse view have been taken in either of the cases by the Assessing Officer. 8. It was also argued before us by the Counsel of the Assessee that the confirmations by the three recipients of the donation had also been provided and there was no finding in the said case that the said donations had not been utilized by the other Donee Trust. It was also pointed out that the corpus donation to another trust registered u/s 12AA would not be application w.e.f. AY 2018-19 as per Explanation 2 to Section 11 and the said donation had been made out from the current's year income. The AO has not mentioned anywhere that the said donation had been made out of the accumulated funds. Even, it was stressed before us that there is no findings about any direct or indirect benefit given to the person covered under the definition of Section 13(3). Reliance was also placed by the Ld. Counsel on a number of case laws wherein, it was held that the exemption u/s 11 could not be denied merely on the ground that the amount had been donated by the assessee trust, following case laws were brought on record: a) CIT v. Thanthi Trust (1999) 239 ITR 502 (SC) in 199 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee: a) CIT v. Thanthi Trust (1999) 239 ITR 502 (SC) i 1999 Tax Pub (DT) 0051 (SC) Section 11 of the Income-tax Act, 1961 - Charitable or religious trust -Exemption of income from property held under - Assessment years 1968-69 and 1969-70 - Whether benefit of exemption under section 11 could not be denied merely on ground that amount donated by assessee trust was not spent by Donee educational institutional within same financial year - Held, yes (Pg 2) b) All Saints School vs ITO Exemption (Del ITAT) 105 taxmann.com 149dated 29.03.2019 Exemption was available to donor charitable trust in respect of payment of sum to another charitable trust for utilisation towards charitable purpose of Donee trust, such payment could be considered as proper application of income even if not spent in year of receipt itself. (Pg 4) c) CIT v. Trustees of Jadi Trust (1982) 133 ITR 494 (Bom.) in 1982 TaxPub (DT) 0491 (Bom-HC) Section 11 read with section 12 of the Income-tax Act, 1961 - Charitable or religious trust - Exemption of income from property held under -Assessment year 1969-70 and 1970-71 - Whether there is nothing in law to prevent a settlor from creating a trust wholly for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s deviation from its objects as it is nowhere the case of the Department that the donee trust has not applied such sums for charitable purpose by deviating its funds, hence relief granted by Id. CIT (A) needs no interference at the ends of the Tribunal being based upon the findings of the Tribunal pertaining to AY 2009-10. (Pg 22) g) AVM Charities vs ITO(Exemption) (Chennai Bench) 103 t axmann.com345 dated 02.01.2019 Further, assessee had given donations to a trust having section 12A registration which was pursuing an object of medial relief, education or relief to poor - Whether this would be equivalent to using money for charitable purposes - Held, yes (Pg 48) h) St. Jude's Convent School vs ACIT (Amritsar Bench) 77 taxmann.com 173 dated 26.09.2016 Where assessee, an educational society, made payment of education extension services out of its current income to Diocese of Jalandhar, notified under section 10(23C)(vf), as well as registered under section 12A and pursuing object of promoting education through running various schools, said payment was to be allowed as application of income as it duly satisfied provisions of sections 11(1)(a) and 11(3)(d)(Pg 62) i) St. J ..... X X X X Extracts X X X X X X X X Extracts X X X X
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