TaxTMI 
TaxTMI 
2020 (12) TMI 176
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....s as corpus donation stating that corpus donation of one charitable trust to another charitable trust is not prohibited until the amendment to sec. 11(1)(d) by inserting an Explanation in the Finance Act, 2017 w.e.f. 01.04.2018, without any basis of law. The CIT(A) has misunderstood the fact that the amendment brought in to sec. 11(1)(d) refers to the treatment of corpus donation in the hands of the donor and the amendment cannot be relied upon in the case of a donee. 4. The CIT(A) has erred in directing the Assessing Officer to treat the donations as corpus donations without substantiating the reasons for the same. 5. Any other grounds to be raised at the time of hearing of the appeal. 3. The facts of the case are that during the year under consideration, the Assessing Officer noticed that the assessee trust received corpus donation of Rs. 41,92,32,911/- out of which Rs. 36,16,88,341/- was from the assessee's group Trusts. In the assessment order, the Assessing Officer disallowed the claim of corpus nature and treated Rs. 36,16,88,341/- as regular income of the assessee trust. The Assessing Officer was of the view that all such donations from other trusts are to be treated as....
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....considering the meaning provided in clause (d) of section 11(1) of the I.T. Act. According to the Ld. AR, the provisions of section 112(24)(iia) are not applicable since the donations received by the assessee were directed towards corpus donations. He drew our attention to the provisions of section 2(24)(iia) of the I.T. Act. The Ld. AR relied on the following judgments: 1) Trustees of Khilachand Devchand vs. CIT (172 ITR 382) (Bom.) 2) CIT vs. Trustees of Kasturbai Scindia Commission Trust (189 ITR 5) (Bom.) 3) M/s. Santhwanan, Trichur vs. ITO (357 ITR 731) (ITAT, Kochi) 7. We have heard the rival contentions and perused the material on record. We need to examine the non-taxability of the corpus donations in assessee's case despite inapplicability of the provisions of section 12(1)/11(1)(d)/section 35/10(21) etc. The Mumbai Bench of the Tribunal in the case of Chandraprabhu Jain Swetamber Mandir Vs. ACIT (2017) 82 taxmann.com 245 wherein the Tribunal has exclusively dealt with this issue in detail. Of course, this decision has not considered the amended provisions of section 56(2) of the Act which governs the taxing of certain gifts despite its capital nature. In the said o....
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....d other orders of the Incometax Appellate Tribunal. Since facts are identical, therefore, to maintain consistency, we follow the above orders of the Income-tax Appellate Tribunal and the light of facts we do not find any infirmity in the order of the Commissioner of Income-tax (Appeals). The order of the Commissioner of Income-tax (Appeals) is confirmed. 7. In the result, the appeal of the Revenue is dismissed." 7.1 We shall deal with similar decisions of various Tribunals on this issue. In the case of ITO(E) v. Basanti Devi & Shri Chakhan Lal Garg Education Trust, the Tribunal in ITA No. 5082(Del.) 2010 dated 19-01-2011 held that the amount received by the tax-payer trust from its settler, towards infrastructure fund, was not taxable in the hands of the tax-payer trust, despite the fact that the tax-payer trust is not registered u/s 12A of the Act, and consequently the Tribunal dismissed the Revenue appeal. Similar view was taken by ITAT, Agra in the case of ITO v. Gaudiya Granth Anuved Trust reported in (2014) 48 taxmann.com 348 (Agra-Trib.) wherein Tribunal held as follows: "Now, the question arises whether such corpus donation is taxable as income or not even in the cases ....
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.... to section 12, which means that even before the words appearing to parenthesis in the present section 12, it cannot be held that voluntary contributors specifically received towards the corpus of the trust may be brought to tax. The aforesaid decision was followed by the Bombay High Court in the case of CIT v. Trustees of Kasturbai Scindia Commission Trust[1991] 189 ITR 5 (Bom). The position after the amendment is a fortiori. In the present cases the Assessing Officer on evidence has accepted the facts that all the donations have been received towards the corpus of the endowments. In view of this clear finding, it is not possible to hold that they are to be assessed as income of the assessees. We, therefore, hold that the assessment of the corpus donations cannot be supported. 12. For the above reasons, we hold as under : 1. The religious endowments are not invalid on the ground that neither the temple nor the image had been consecrated at the time of creating the endowments. 2. The assessees have to be assessed in the status of "individual" since they are artificial juridical entities and 3. The voluntary contributions received by the assessee towards the corpus cannot be....
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....ccounts. In the receipts issued, it shows that the donations are paid towards building fund. It is a voluntary contribution as the assessee is running educational institution. Probably these donations are received for the purpose of putting up buildings to carry out the purpose of the trust. 9. The order of the Tribunal discloses that, earlier the assessee was issuing receipts for the donations received in excess of Rs. 1,000/- and subsequently, they are issuing receipts for the amounts received above Rs. 5,000/-. This procedure has been accepted by the department. Now in the order of the assessment, the assessing officer has denied exemption on the ground that there is no specific direction from the donor to the donee to utilize the amounts given for the building purpose, i.e., it was given towards the corpus of the trust. The reasons given are that the particulars of the donors are not mentioned and hence, the assessee is not able to give the full particulars of the donors. There is nothing to show that these donors have given any specific directions to utilize the fund as a part of the corpus of the trust. The amount involved is few lakhs for each year. The assessee is running....
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....fund and made requisite entries in the books and deposited the same in the bank, if the court is satisfied with the genuineness of the transaction, it is well within the power of judicial authority to hold that the requirement of Section 11(1)(d) of the Act is fulfilled and the asseseee is entitled to be exempted. 10. Thus, the two appellate authorities have taken this view in the present case. No hard and fast rule can be laid down. The legal position cannot be expressed in a straight jacket form. In the facts of the case, we are satisfied from the material on record that these voluntary contribution made by the public to the assessee was with a specific direction to use the same for building purpose and therefore, the said donations shall form part of the corpus of the trust and assessee is entitled to the benefit under Section 11 of the Act. That is, precisely what both the appellate authorities have concurrently held and it being a pure question of fact, we do not see any justification to interfere in the said question of fact. In the light of the aforesaid discussions, we do not find any error committed by the authorities. Thus, the substantial question of law is answered ....