TaxTMI 
TaxTMI 
2013 (5) TMI 635
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....s relate to a solitary issue, namely, ''that the authorities below have erred in not considering that the 'programme advance' received cannot be equated with the 'income' and, thus, such income cannot be subjected to the provisions of sections 11, 12 and 13 of the Act." 3. During the course of hearing, the learned A R sought the permission of this Bench under rule 29 of Income-tax (Appellate Tribunal) Rules, 1963 to raise the common additional grounds for both the AYs under dispute, namely:- "(i) that the assessee is one of the Society (sic) Societies formed by the Government of Karnataka under the directions of the Government of India for implementing Government of India's flagship scheme known as National Rural Health Mission (NRHM); (....
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....ndia and allot funds and advances to the assessee to implement the above programmes on its behalf. 3.2.2. During the year under consideration, the assessee had furnished its returns of income on 22.3.2010 for both the assessment years under consideration, admitting a net taxable income at Rs. Nil which was, initially, processed u/s 143(1) of the Act and, subsequently, taken up for scrutiny. 3.2.3. During the course of assessment proceedings, the AO had noticed from the statements of income that the assessee had received grants of Rs.5.07 crores from the Government of Karnataka. In addition, the assessee had an opening balance of unspent grant for the FY 2006-07 of Rs.1.58 crores etc., thus, the total grants in the possession of the assess....
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....ugh the facts of the case, contents in the assessment order and assessee's submissions, I am of the opinion that the assessee cannot claim the unspent grant to be exempted as the assessee has not filed the registration u/s 12A and the question of exemption u/s 11 won't arise and the case laws relied by the assessee are distinguishable. AO has rightly treated the unspent grant as income of the assessee in the status of AOP." 4. Aggrieved, the assessee has come up before us with the present appeals. The arguments put-forth by the learned AR are summed up as under: - -that the appellate authority erred in upholding the findings of the AO that the 'program advance' received by the assessee from the Government of India under its scheme of NRHM....
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....income' and, accordingly, such income cannot be subjected to the provisions of sections 11, 12 and 13 of the Act; - that the 'programme advance' received by the assessee from the Government of India does not partake the character of 'income' as understood u/s 2(24) of the Act and cannot be assessed under any of the heads of income as propounded under the Act; - that the appellate authority had failed to notice that the assessee was discharging its obligation under the Government of India's programme by utilizing the programme advance placed by the Government of India through State in its hands and that it had no right to use such funds in any manner other than the directions issued by the Government of India; - that without prejudice, in....
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....te and District level health societies as per NRHM norms was to act as nodal agency for implementation of the Central Government's programme of NRHM and, thus, in our considered view, there can be no profit motivation. The Health & FW Secretary, Government of India in his communication dated 20.6.2005 prevailed on the Chief Secretary of the State Government for the constitution of State and District Health Missions and integration of societies (Source: P 3 and 4 of PB AR}. As recently as in the month of March, 2012, the Finance Secretary, Ministry of Finance, Government of India, in his communication to the Chief Secretary of the Government of Karnataka, had explicitly clarified that "the provisions of s. 10(23C) (iiiac) of the Act, 1961 (r....