TaxTMI 
TaxTMI 
2019 (2) TMI 787
X X X X Extracts X X X X
X X X X Extracts X X X X
....y observing that assessee has not qualified for exemption u/s ll(l)(d) and that too by recording incorrect facts and findings and without observing the principles of natural justice. 3. That in any case and in any view of the matter, action of Ld. CIT(A) in confirming the action of Ld. AO in making addition of Rs. 1,63,00,000/- on account of corpus donation by observing that assessee has not qualified for exemption u/s 11(1)(d), is bad in law and against the facts and circumstances of the case. 4. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in making addition of Rs. 1,61,20,000/- on account of loan received and that too by recording incorrect facts and findings and without observing the principles of natural justice. 5. That in any case and in any view of the matter, action of Ld. CIT(A) in confirming the action of Ld. AO in making addition of Rs. 1,61,20,000/- on account of loan received, is bad in law and against the facts and circumstances of the case. 6. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....order passed by CIT, dated 16.07.2013 in which registration has been granted w.e.f. 21.04.2011. Ld. Counsel for the assessee submitted that proviso to section 12AA(2) was inserted w.e.f. 01.04.2014 but which should be read as retrospective as it is clarificatory in nature. Ld. Counsel for the assessee drew our attention to page 159 to 161, 166- 168 of the paper book explaining the case of the appellant and relied upon the following judicial decisions in support of his contention:- * Sree Sree Ram Krishna Samity vs. DCIT, (2016) 156 ITD 0646 (Kol.) * SNDP Yogam vs. Asstt. DIT (Exemption), (2016) 161 ITD 0001 (Cochin.) * ITO vs. Shri Vishwakalyan Jivraksha, ITA No. 2013/Pune/ 2014, dated 22.07.2016. 3. On the other hand, Ld. Sr. DR opposed the contention made on behalf of the assessee and submitted that benefit of section 11 and 12 was granted w.e.f. 01.04.2011, whereas the case of the assessee relates to A.Y. 2010-11. Ld. Sr. DR further argued that proviso to section 12A(2) is not retrospective and the case laws relied upon by Ld. Counsel are distinguishable and registration was not granted during the period when assessment was pending of the present as....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... shall apply in respect of any income derived from property held under trust of any assessment year preceding the aforesaid assessment year, for which assessment proceedings are pending before the Assessing Officer as on the date of such registration and the objects and activities of such trust or institution remain the same for such preceding assessment year: Provided further that no action under section 147 shall be taken by the Assessing Officer in case of such trust or institution for any assessment year preceding the aforesaid assessment year only for non-registration of such trust or institution for the said assessment year: Provided also that provisions contained in the first and second proviso shall not apply in case of any trust or institution which was refused registration or the registration granted to it was cancelled at any time under section 12AA. 4.1 The above proviso was added by Finance Act, 2014 w.e.f 01.10.2014, according to which, if registration has been granted to the trust then the provision of section 11 arid 12 shall apply in respect of any income derived from property held under trust of any assessment year preceding the aforesaid assessment ye....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ch pendency, the assessee was granted registration u/s 12AA of the Act on 29.07.2013 w.e.f. the assessment year 2013-14. Those appeals were the continuation of the original proceedings and that the power of the Commissioner of Income-tax was coterminus with that of the assessing officer [ADIT (Exemption) in the present case] were two well established principles of law. In view of the above and going by the principle of purposive interpretation of statues, an assessment proceeding which is pending in appeal before the appellate authority should be deemed to be 'assessment proceedings pending before the assessing officer' within the meaning of that term as envisaged under the proviso. It follows there-from that the assessee which obtained registration u/s I2AA of the Act during the pendency of appeal was entitled for exemption claimed u/s 11 of the Act. 4.3 Therefore, in view of the above discussion we hold that assessee is entitled to the benefit of registration & section 11 & 12 of the Act in the present assessment year i.e. AY 2010-11 also and it is directed to Ld. A.O. to grant benefit of section 11 and 12 to the assesee. Accordingly, this ground of appeal is decided in fa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the assessee in view of the arguments made in Ground No. 1, benefit of section ll(l)(d) may also be allowed in respect of such corpus donations aggregating to Rs. 1,63,00,000/-. It was further submitted by Ld. Counsel for the assessee on a without prejudice basis that even if benefit of section 11 and 12 is not granted to the assessee yet such corpus donations are capital receipts and are not taxable in view of several judicial decisions mentioned at page-6 of the synopsis filed by the Ld. Counsel. Regarding the decision of Hon'ble Supreme Court, it was argued by Ld. Counsel for the assessee that facts of that case and proposition of the law are different from the fact & case of the assessee. 5.4 Regarding the decision of Chennai Bench of Tribunal in the case Rasipuram Rotary Club Trust vs. ITO ITA No. 45/MDS/2015 (supra), it was argued that decision is of single member bench whereas assessee seeks to rely upon the decisions of the Tribunal rendered by division benches and also by Hon'blc Delhi High Court decision in the case of DCIT vs. Basanti Devi GBP& Shri Chukhan Lai Garg Education Trust and Sh. Chakhan Lai Garg Education Trust, dated 23.09.2009, Copy of which was placed at....
X X X X Extracts X X X X
X X X X Extracts X X X X
....making addition of Rs. 1,63,00,000/- covered by Ground No. 2 fit 3 cannot be approved and therefore, the addition is directed to be deleted. Accordingly Ground No. 2-3 are decided in favour of appellant. 5.7 We have gone through the decisions of Hon'ble Supreme Court in the case of U.P. Forest Corporation vs. DCIT 297 ITR 1 (Supra) and in our considered opinion the said decision is not applicable to the fact of the present case in as much as in the present case the benefit of section 11 and section 12 is deemed to be granted in view of the retrospective operation of the proviso to section 12A(2) and in any case even if it is taken that such benefit of section 11 and section 12 is not applicable yet corpus donations being in the nature of capital receipts cannot be brought to tax. Regarding Chennai Bench decision in the case of Rasipuram Rotary Club Trust vs. ITO ITA No. 45/MDS/2015 (supra), we find that the said decision is a single member Bench decision and therefore, we are inclined to follow the decisions of various division Bench, Supra and also the decision of Hon'ble Delhi High Court in the case DIT vs. Basanti Devi & Shri Chakhan Lai Garg Education Trust, ITA No. 927/2009....
X X X X Extracts X X X X
X X X X Extracts X X X X
....icient material on record to prove that lenders have confirmed the amount of loans, which have been given through banking channel and the lenders were assessed to tax and that the loans have substantially been repaid back through banking channel. We would like to refer to various pages of the paper book relied upon by Ld. Counsel in the synopsis at page 8-9-10. We have gone through the various pages of the paper book as referred by Ld. Counsel and we are of the considered opinion that not only the identity and creditworthiness of the lenders stand proved but also the genuineness of the loans stands proved. The decisions relied upon by Ld. Counsel support the case of the assessee. The pages of the paper book referred by Ld. Counsel which we have also perused are as under: PB 169-171 are submissions to Ld. CIT(A). PB 173 is the details of repayment of loan of Rs. 38,70,000/- to Shri Vasudev Iron P. Ltd. PB 174, 175-176 arc the copies of bank statement / bank advice showing the repayment of Rs. 38,70,000/- through M/s Shri Vasudev Iron P. Ltd. PB 177-178, 179 are the evidences of repayment of loans of Singhal Enterprises aggregating to Rs. 48,00,000....