2025 (6) TMI 624 - AT - Income Tax

Tax Appeal: Charitable Trust Donations Scrutinized, Delay Condoned, Evidence Remanded for Deeper Examination

In a tax appeal involving a charitable trust, the Tribunal addressed voluntary contributions' tax treatment. Despite a 27-day appeal delay, the court ... Exemption u/s 11 - whether the donations were received through corpus fund or not? - HELD THAT:- There is no doubt that the donations received towards corpus fund cannot form part of the income of the trust. Therefore, the moot question is whether the donations received were towards corpus fund, unless the donors give the donations with a specific direction that the donation is towards corpus fund, the same does not constitute part of corpus fund. Therefore, it is a question of fact which is required to be determined by examining evidence and receipts of the donations received. Therefore, the matter is restored back to the file of the AO to examine the evidence and reach a conclusion whether the donations are corpus fund or not. Appeal filed by the assessee stands partly allowed. Summary:The assessee, a charitable trust registered under section 12A of the Income Tax Act, 1961, appealed against the CIT(A)'s order confirming the AO's addition of Rs. 17,88,144/- voluntary contributions as taxable income for AY 2017-18, rejecting the claim that these were corpus donations exempt under section 11. The Tribunal noted a 27-day delay in filing the appeal but condoned it due to reasonable cause. The key issue was whether the donations were received as corpus fund contributions, which are not includible in income. The Tribunal emphasized that 'unless the donors give the donations with a specific direction that the donation is towards corpus fund, the same does not constitute part of corpus fund,' making it a question of fact. Consequently, the matter was remanded to the AO for re-examination of evidence and receipts to determine the true nature of the donations. The appeal was 'partly allowed.'