TaxTMI 
TaxTMI 
2014 (1) TMI 240
X X X X Extracts X X X X
X X X X Extracts X X X X
.... to have sustained amount spent for support to women of Rs.12,69,629/-." 3. Briefly the facts are, the assessee is a charitable trust registered u/s 12A of the Act. It is engaged in activities of helping the dalits, women empowerment, uplifting the street children etc. In the impugned assessment year, the assessee filed its return of income declaring 'nil' income after claiming exemption u/s 11 of the Act. In course of scrutiny assessment proceedings, the Assessing Officer after examining the information submitted by the assessee found that the assessee has incurred expenditure of an amount of Rs.2,90,154/- for international conference or training. He considered this amount spent was not for the purpose of charitable activities u/s 11(1)(a) of the Act as it is not supported by special or general order of CBDT. He therefore held that the said amount cannot be treated as exempt u/s 11 of the Act. 4. The Assessing Officer noticed that there is refund of loan to the assessee namely SIDDUR of Rs.10,49,458/-. When asked to explain by the Assessing Officer, the assessee submitted that the assessee is engaged in implementing project relating to prevention and control of HIV/Aids amongst ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....assessee had mentioned that repair of 109 houses was completed and 352 women were given livelihood support in Nellore District, 113 women were given livelihood support in Krishna District, repair of 102 houses was completed and 50 women were given livelihood support in East Godavari District. The Assessing Officer further noted that the expenditure incurred by the assessee could be broadly categorised in the following three types:- i) Uniform distribution of cash ii) Cost of materials iii) Individual housing beneficiaries for carrying amounts. 6. The Assessing Officer on going through the facts available before him opined that the assessee instead of implementing the scheme of housing for victims of Tsunami 2004 had implemented the scheme of Indiramma. He therefore was of the view the expenditure incurred by the assessee cannot come under the terms and conditions laid down in MOU between the assessee and MISEREOR. The Assessing Officer further observed that though the assessee furnished E-mail/correspondence in support of its claim that the deviations if any, for carrying out the programme was approved by the donor but the perusal of the correspondence indicates that the assess....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... it was held that the grants which are for specific purpose do not belong to the society and hence do not form corpus of the assessee or its income and that those are not even donations to the assessee, so as to bring them under the purview of sec. 12 of the Act. The Tribunal making a distinction between the voluntary contributions covered u/s 12 of the Act held that voluntary contributions are those which are freely available to the assessee, without any stipulation, and which the assessee can utilise towards u its objectives according to its discretion and judgment. 8. The CIT (A) therefore taking a note of the aforesaid finding of the Income-tax Appellate Tribunal held that since the donors had provide the funds to the assessee with specific purposes only and the assessee was not supposed to utilise those at its own discretion and judgment, it cannot be disputed that the funds received by the assessee during the year were indeed in the nature of tied up grants. The CIT (A) after considering the details of supply of materials and cash distribution for houses and providing livelihood support in four districts of Andhra Pradesh, was of the view that all the deviations and digressi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ence, the amount of Rs.10,33,000/- received from HLFPPT could not have been considered as additional grants received by the assessee. 10. So far as the observation made by the Assessing Officer to the effect that since the assessee is not registered under AP Charitable and Hindu Religious Institutions and Endowments Act, 1987 and therefore is not eligible for exemption u/s 11 of the Act is concerned, the CIT (A) relying upon the decision of Income-tax Appellate Tribunal, Hyderabad Bench in case of M/s Kamalakar Memorial Charitable Trust vs. DIT (Exemptions) Hyderabad in ITA No.1145/Hyd/09 held that merely because the assessee-trust is not registered under the provisions of the said Act, would not render the assessee a non charitable one. On the aforesaid basis, the CIT (A) allowed the appeal of the assessee. 11. We have considered the submissions of the parties and perused the material on record as well as the order of the authorities below. In ground No.1, the department has challenged the deletion of Rs.2,90,154/- by the CIT (A). As already stated, the aforesaid amount is expenditure incurred towards attendance of international conferences and training. As can be seen from para....
X X X X Extracts X X X X
X X X X Extracts X X X X
....brouchers, supply of good quality condoms, etc and it also includes the payment of remuneration to the peers and the peer educators. It was submitted that in the ordinary course generally sums are expended out of the monies received from APSACS. However, when there is delay in receipt of monies, then the funds from other agencies are utilised for the said purpose and on receipt of the same from the government, the amount is refunded to the agency from which the money has been borrowed. It was submitted that it is purely an internal matter of the assessee and at the end of the year, the account is squared up and no amount is carried forward to the subsequent financial year. It was submitted that National Aids Control Society (NACO) is a national funder for HIV/Aids programme and it was submitted that for a better and effective implementation of the project, NACO utilises the services of all state units (APSACS) for the required activities. It was submitted that the assessee during the year had incurred certain expenditure on peer educators by borrowing some amounts from outside agencies. On receipt of amount from HLFPPT, it was adjusted by refunding the said amounts borrowed to the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... The last issue raised in ground Nos. 4 and 5 is with regard to grants received from donor agencies spent for repairs to the houses (Tsunami affected) and support to women at Rs.50,65,125/- and Rs.12,69,629/- respectively. 18. The learned DR submitted before us that as per the terms of the memorandum of understanding (MOU), the assessee was required to supply relief materials to the affected persons i.e., poorest of poor, selected on the basis of wealth ranking. However, the assessee has made cash distribution which is not at all transparent as the selection of beneficiaries have not been made by considering the wealth ranking indicator. It was submitted by the learned Departmental Representative that as per the scheme the assessee was required to repair damaged houses and supply of material to the beneficiaries and not to distribute cash. The learned Departmental Representative further submitted that the assessee having not acted as per the terms of MOU in the approved project but having participated in another project i.e., Indiramma Housing Project, it has violated the terms of the MOU and therefore has not utilised the tied-up grants for the specified purposes. In the circums....