TaxTMI 
TaxTMI 
2022 (7) TMI 397
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....ated order. 02. We first state the facts for AY 2016-17. For that year revisionary order u/s 263 of the Act says that the order passed under Section 143(3) of the Income-tax Act, 1961 (the Act) on 31st December, 2017, by the Dy. Commissioner of Income-tax, Circle 2(1), Mumbai (The Learned AO) is erroneous and so far prejudicial to the interest of the Revenue. 03. Assessee has raised following grounds of appeal:- "1. That the order under section 263 is without jurisdiction unwarranted and bad in law Tax effect-Nil 2. That assumption of jurisdiction by CIT under section 263 is based on misinterpretation of the order of the Assessing Officer Tax effect-Nil 3. That CIT has misdirected himself by treating the reasons given by AO as conclusions and by substituting his opinion to that of the Assessing Officer- Tax effect - Nil 4. That the CIT has passed the order under section 263 in violation of principles of natural justice and liable to be quashed.- Tax effect-Nil 5. That in the absence of reasons as to how the order of the AO is erroneous and prejudicial to the interests of revenue the order U/S 263 is bad in law and liable to be quas....
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.... Rs.140,62,55,570/-. Thus, the deficit of Rs.140 Cr. was carried forward by the assessee. The learned Assessing Officer denied the same stating that assessee is getting unusual high corpus donation with specific direction and also raising use loans, utilizing the above sum and showing application of income of huge sum and claiming huge deficit. He tabulated a chart at page no. 26 of his order and stated that for A.Y. 2010-11 to 2016-17, assessee has applied funds towards the object of the trust of Rs.1090 Cr, and has meager income but corpus donations of Rs.758 Cr and loans of Rs.417 Cr. Thus, trust has carried forward deficit of Rs.1087 Cr. 06. With respect to corpus donation received by the assessee trust, AO noted that major portion of the corpus donation was received from Dawat E Hadiyahh, USA - a non-profit organization registered at Cyprus, United States, and Dawat E Hadyahh, UK at trust registered at Northolt, United Kingdom. He found that the donation is been received from the trust which are under the same management and control as that of the assessee trust. He found that from assessment year 2010 - 11 to 2016 - 17 a total donation of Rs. 7,584,762,652/- was received o....
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....he held that the entire donation by way of a foreign contribution is actually in the nature of regular voluntary contribution rather than corpus donation, which is evident for the purpose for which it has been received as an specified in FC-4 as well as its utilization. In the end in paragraph number 5.1.4 he reached at a conclusion that corpus donation claimed exempt u/s 11 (1) (d) is actually regularly voluntary contribution and does not qualify for exemption under that Section. 07. With respect to the loan received by the assessee trust, he held that the amount received by the assessee trust shown as a loan are also quite unusual because (1,) these are interest free loans taken without any security, (2) borrowing is from a related party Under unified control from year to year but not a single rupee has been repaid. Therefore, according to him the loan is also in the nature of voluntary contribution or assistance. The learned assessing officer also enquired about the statutory permission obtained. He therefore held by the showing transaction in the aforesaid manner as a loan and the nature of loan and the parties involved he held that this transaction is not of loan but part o....
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.... donation there would be nil income. Therefore, he submitted that the order is not sustainable in law. He also submitted two different paper books wherein identical 20 pages submission was attached therein. Therefore, he submitted that the order is not sustainable in law. He also submitted two different paper books wherein identical 20 pages submission was attached therein. Therefore, he submitted that the order deserves to be set aside. 015. The learned CIT Departmental Representative vehemently supported the order of the learned CIT. It was stated that before CIT, despite proper notice the assessee did not submit anything and neither perused his adjournment request and therefore, now assessee does not have any say to contest the order of the CIT. Even on the merits, he submitted that assessee is taking huge donations from persons who are controlled the above trusts. All these donations are claimed as exemption under Section 11(1) (d) of the Act. He submitted that for A.Y. 2016-17, the income of the assessee is merely Rs. 72,000 where, the assessee has claimed application of income of Rs.140 Crs. He further stated that the corpus donation in that year is Rs.101 crores. Though t....
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....nding that the learned assessing officer based on his own finding in the assessment order should have denied the exemption u/s 11 (1) (d) of the act with respect to the corpus donation and should have included the loan amount as voluntary contribution for the reason that these are received from entities controlled by same authority. We find that after giving the conclusive decision by the learned assessing officer that the corpus donation as well as the loan is voluntary contribution, allowing the exemption u/s 11 (1) (d) of the act with respect to the corpus donation and not including the loan amount as income derived from the property, makes the order passed by the learned assessing officer erroneous and prejudicial to the interest of the revenue. 018. The learned authorised representative has submitted that even if, the corpus donation is taken as voluntary contribution, thereafter also the computation of the trust results into a deficit and hence it cannot be said that any prejudice is caused to the revenue. We do not find any force in this argument because the movement the corpus donation is taken as a voluntary contribution, the quantum of deficit will definitely come down....