https://www.taxtmi.com/css/info/rss_sitemap/rss_feed.css?v=1746094055 https://www.taxtmi.com Business/Tax/Law/GST/India/Taxation/Policies/Legal/Corporate Tax/Personal Tax/Vat Law/Legal Information/Tax Information/Legal Services/Tax Services Tax Management India. Com / MS Knowledge Processing Pvt. Ltd. All rights reserved. One stop solution for Direct Taxes and Indirect Taxes https://www.taxtmi.com/caselaws?id=461930 https://www.taxtmi.com/caselaws?id=461930 Denial of exemption u/s 11 & 12 - school being run by the assessee society is not recognized by Directorate of Education, Government of NCT, Delhi - receipt of corpus donations - HELD THAT:- Revenue's ground that the assessee is not recognized by the Directorate of Education, Government of NCT, Delhi has no relevance on the facts of the case. The assessee has been granted Registration u/s 12AA of the Income Tax Act where the CIT granting registration has examined the genuineness of activities of the Trust and its compliance with any requirements of any law as are material for the purpose of achieving its objects. It is settled position of law that once the society/trust/institution is registered u/s 12A, the Assessing Officer has no loco-standi to decide as to whether it is 'charitable' or otherwise. Once the trust is registered by the CIT under a particular category, the process of definition and classification of the activity ceases. It was held in the case of ACIT vs. Surat City Gymkhana[2008 (4) TMI 16 - SUPREME COURT] that the registration of a trust once done u/s 12A is a fait accompli and the Assessing Officer cannot thereafter make further probe in to the objects of the trust. It was similarly held in the case of Hiralal Bhagwati v [2000 (4) TMI 14 - GUJARAT HIGH COURT] where held that once the registration under section 12A(a) was granted, the grant of benefit and exemptions could not be denied. Receipt of corpus donation - We find that the contribution received have been utilized for the purposes of building the school which is in furtherance of the Trust's objective of imparting education. We are also of the opinion that the Revenue has not established that the contributions received as corpus donation was utilized for purposes other than charitable purposes or there is a violation of provisions of section 13(1) or 13(2) of the I T Act. We are in agreement with the findings of the ld. CIT(A)that the contributions cannot but be treated as voluntary in nature towards corpus donation u/s 11(1)(d). Capitation fee being in the nature of contributions which are voluntary in nature and exempted u/s 11(1)(d), the decision of the Hon'ble Karnataka High Court in the case of Kammavari Sangham, on which the assessee has relied, squarely applies [2022 (11) TMI 672 - KARNATAKA HIGH COURT] CIT(A) was justified in allowing the benefit of exemption u/s 11(1) of the Act and deleting the addition. We also note that the ld DR has not controverted the fact that proposal sent by the AO to the DIT(Exemption) for cancellation of registration, has not been acted upon or the Department itself has not accepted the charitable nature of the assessee and has denied grant of exemption u/s 11 and 12 in subsequent AYs. Considering all the facts in totality and the legal principle of consistency, both the ground raised by the Revenue are dismissed. Case-Laws Income Tax Thu, 13 Jun 2024 00:00:00 +0530