TaxTMI 
TaxTMI 
2010 (3) TMI 854
X X X X Extracts X X X X
X X X X Extracts X X X X
....me declaring "nil" income and claiming exemption under section 11 of the Income-tax Act, 1961. The said return was taken up for scrutiny assessment and the Assessing Officer found that the assessee had not maintained proper books of account and that the assessee was receiving cash from unknown sources which was not explained properly and, consequently, held that the trust was not being administered in accordance with law and consequently, denied the exemption under section 11 of the Act. Accordingly, he held that a sum of Rs. 28,30,094 collected towards donations from students were contrary to law and that the trust was acting opposed to public policy and had, failed to comply with the pre-requisite of a charitable organisation. Further, th....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... been done by the appellant in the memorandum of appeal. "1. Whether the Tribunal failed to examine and record a finding as held by the Assessing Officer that the assessee had received donations of Rs. 28,30,094, from the Engineering/MCA students contrary to the Karnataka Educational Institutions (Prohibition of Capitation Fee) Act, 1984 and the principles enunciated by the apex court in a number of judgments which was opposed to law and violative of the public policy and consequently, cannot be treated as a charitable organisation ? 2. Whether the Tribunal was correct in holding that the assessee was entitled to exemption/benefit under section 11 of the Act after having recorded a categorical finding that exemption unde....
X X X X Extracts X X X X
X X X X Extracts X X X X
....reated as a charitable organisation ? 2. Whether a sum of Rs. 14,36,500 which was shown as corpus donation by the assessee is contrary to the provisions of section 11(1)(d) of the Act. Therefore, the Tribunal recorded a perverse finding and hence the assessee is not entitled to exemption ?" 6. Learned counsel for the Revenue submits that the respondent/assessee is an educational trust running professional courses. However, in terms of the Karnataka Educational Institutions (Prohibition of Capitation Fee) Act, 1984, it is barred from receiving any kind of donation from the students and in the instant case the Assessing Officer was justified in holding that the amount collected as donations from the students for the purpos....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cerned, keeping in mind the nature of the organisation and its standing innumerable persons who are acquainted with the trust would make donations and when the said amount is set apart towards the corpus the exemption under section 11(1)(a) has to be given under section 11(1)(d) of the Act. He, therefore, contends that there is no merit in this appeal. 8. Having heard the counsel on both sides and on a perusal of the material on record, it is not in dispute that the respondent-assessee is a social, cultural and educational trust, running educational institutions and having various professional courses. However, the contention of the learned counsel for the Revenue, that the amounts were collected for the purpose of allotment of se....