TaxTMI 
TaxTMI 
2023 (11) TMI 497
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....similar arguments on the common issues. Accordingly, for the sake of brevity, we dispose all these appeals together. 2. We first take up AY 2015-16 as the lead case. The decision taken in this AY shall apply mutatis mutandis to the other AYs as well. There are cross appeals for AY 2015-16 in ITA Nos. 3049 & 3010/Mum/2022. We first take up the appeal filed by the Revenue. Before we advert to the grounds taken in the appeals, it would first be relevant to cull out the background facts of the case. 3. The assessee is a public trust which was constituted in 1953 under the name and style of 'ShirdiSansthan of Shri Sai Baba', registered under the Bombay Public Trust Act. Vide order dated 18.10.1982 of the Hon'ble Bombay High Court, the administration of the Trust was vested in Board of Management, constituted by the Charity Commissioner, Government of Maharashtra. Thereafter, on 17.08.2004, Shri Sai Baba Sansthan Trust (Shirdi) Act of 2004 [in short 'Sai Baba Trust Act'] was promulgated which reconstituted the public Trust of 'ShirdiSansthan of Shri Sai Baba' as 'Shri Sai Baba Sansthan Trust (Shirdi)' which is the assessee before us. The assessee is also registered under Section 12....
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....Act. 5. In response thereto, the assessee is noted to have filed several explanations on 18.12.2017, 21.12.2017, 26.12.2017 and 28.12.2017. To put it briefly, the assessee submitted that, it was both a religious as well as charitable trust and therefore fell within the exception set out in Section 115BBC(2)(b) of the Act. For this, the assessee relied upon the registration granted u/s 10(23C)(v) of the Act dated 17.03.2008 by the Ld. CCIT, Mumbai which was valid till date. The assessee also referred to its objects set out in the Trust Deed and pointed out that there were several places of worship within its premises, which evidenced that the assessee was a mixed purpose trust i.e. both charitable and religious purpose. As far the certificate held u/s 80G of the Act was concerned, the assessee explained that the term 'charitable purpose', as defined in Explanation 3, excluded only those entities whose purpose wholly or substantially the whole of which, was religious in nature. The assessee claimed that the entities having mixed charitable and religious purposes were not excluded. The assessee explained that, only where the religious purposes contained in the objects were the whol....
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....xpenditure incurred on religious activities has been allowed. The AO observed that the exclusion set out in Section 115BBC(2)(b) of the Act was meant for the trusts established for both religious and charitable purposes which would suggest that at least one of the objectives of the trust was wholly or substantially religious in nature. Therefore, according to the AO, the bar set out in Explanation (3) to Section 80G of the Act would hit such mixed trusts. The AO observed that a charitable organisation registered u/s 80G cannot be permitted to misuse the provisions of Section 115BBC of the Act. The AO further observed that the contention of the assessee, that it was both a charitable and religious trust was untenable, as according to him, the objects of the Trust revealed that it was wholly or substantially a charitable trust. Taking note of the objects of the Trust, the AO observed that the first objective of the assessee trust was to propagate the teaching of Shri Sai Baba. The AO observed that the religion accepted, followed and preached by Sai Baba was the religion of humanity and therefore held that anything linked with Sai Baba cannot be construed as a religion. The AO also no....
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....the assessee Trust, the Ld. CIT(A) held that the assessee was also existing both for charitable as well as religious purpose. The Ld. CIT(A) also laid emphasis on the approval received by the assessee u/s.10(23C)(v) of the Act from CCIT, Mumbai, which had not been withdrawn so far. The Ld. CIT(A) noted that this approval carried immense evidentiary value as it signified that a superior authority had enquired into the objects, constitution and affairs of the assessee trust and found it to be wholly for public, religious and charitable purposes. 8. The Ld. CIT(A) further observed that the AO had dominantly relied on the existing approval u/s 80G of the Act to deny the benefit of exclusion set out in Section 115BBC(2)(b) of the Act. The Ld. CIT(A) noted that the benefit of deduction u/s 80G on donation made to an approved trust is available to the donor and not to the assessee. He noted that, in the present case, it was the taxability of the income in the hands of the assessee trust, which was required to be adjudicated upon. Hence, whether the assessee trust was eligible for approval u/s 80G or not did not have any bearing on the impugned issue involving taxability of anonymous do....
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....of the case and in law the Ld. CIT(A) has erred in interpreting that the charitable activities are a part of religious activities and thus some of the objects of the trust qualify to be of both religious and charitable nature? 4. Whether on the facts and circumstances of the case and in law the Ld. CIT(A) has erred in holding that the activities of assessee trust are charitable and religious in nature considering the objects and in light of the activities conducted by the trust? 5. Whether on the facts and circumstances of the case and in law the Ld. CIT(A) has erred in considering the assessee trust created or established wholly for religious and charitable purpose when the assessee has obtained certificate u/s 80G(5) of the Income-tax Act and whether the benefit of exclusion is available to the assessee trust u/s 115BC(2) in light of the certificate u/s 80G(5) of the Income tax Act so obtained ? 6. Whether on the facts and circumstances of the case and in law the Ld. CIT(A) has erred in holdinginhis order in para 5.2.4that anonymous donation of 'trust created and established for mixed purposes are exempt, when the section 115BBC(b) clearly states th....
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....nature, then such trusts would automatically not qualify to be engaged for 'charitable purpose' and thus would be debarred from availing the benefit of Section 80G of the Act. According to Ld. DR, the fact that the certificate u/s 80G was still valid and subsisting supported the AO's case that the assessee existed solely for charitable purposes. 10. Assailing the action of the Ld. CIT(A) holding that sub-section (5B) of Section 80G overrides Explanation (3) to Section 80G, the Ld. CIT DR submitted that this proposition laid down by the Ld. CIT(A) was not justified. He placed before us the Board Circular No. 779 of 14.09.1999 explaining the amendment made to Section 80G by way of insertion Clause (5B) by the Finance Act, 1999. Referring to Para 33.2 of the said Circular, the Ld. DR submitted that, prior to the amendment, only those trusts which existed solely for charitable purpose were entitled for registration u/s 80G of the Act. According to him, the Legislature noted that certain charitable trusts would spent miniscule sum towards religious purpose which would result in denial of registration u/s 80G of the Act. Hence, to remove the difficulties faced by such charitable trust....
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....ligion but a way of life. For this, he relied upon the decision of this Tribunal in the case of Tarehati Charitable Trust Vs CIT in ITA No.7503/Mum/2016. According to him, the objects of the Trust involving preaching the teachings of Sai Baba qualified as object of 'general public utility'. He further submitted that provisions of Section 115BBC of the Act was brought in to curb anonymous donations received by charitable trusts. The Ld. DR explained that the Legislature was aware that certain charitable trusts may receive some donations in cash or anonymously, and had therefore fixed limit of 5% of total donations as permissible anonymous donations to charitable trusts which would not be hit by rigors of Section 115BBC of the Act. According to him, since the assessee Trust had received anonymous donations in excess of the prescribe limit, the AO had rightly invoked the provisions of Section 115BBC of the Act. He thus urged that the order of the Ld. CIT(A) be reversed and the addition made by the AO be restored. 14. Per contra, the Ld.Sr.Counsel for assessee Shri S.Ganesh, supported the order of the Ld. CIT(A) on this issue. And the Ld.Sr.Counsel relied upon the approval received ....
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....on of the said religious and charitable trust. He took us through the relevant Clauses 2(c), 13(2), 17(1), 17(2)(l) & (m), 19, 21(1) of the Shri Sai Baba Sansthan Trust (Shirdi) Act of 2004 to show that there were several religious objects, duties and obligations on the assessee Trust and thus the assessee Trust was existing both for charitable and religious purpose. 15. The Ld.Sr.Counsel further submitted that, whether Shri Sai Baba was a Hindu or Muslim or whether his preachings were meant for any particular religion or not, was irrelevant to decide whether the assessee Trust was existing for religious purposes or not. He submitted that the judgments cited by the AO in which Hinduism was referred to as a way of life and not a religion was in a different context and not decisive in relation to the provisions of the Income-tax Act, 1961, more particularly Section 115BBC of the Act. Instead, he submitted that the case of the assessee was squarely covered by the decision of the jurisdictional Bombay High Court in the case of Bombay Pinjrapole Trust (supra). The Ld.Sr.Counsel explained that, when the activity of maintaining gaushalas, animals and birds was held to be not merely cha....
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....7/- during the year, which comprised of anonymous donations (hundi collections) of Rs. 159,12,82,169/-. After allowing benefit of 5%, sum of Rs. 147,71,54,875/- was taxed by the AO under Section 115BBC(1) of the Act. The case of the assessee is that, it exists both for charitable and religious purposes and thus the provisions of Section 115BBC(1) does not apply to it, in light of the specific exclusion set out in Section 115BBC(2)(b) of the Act. The Revenue however has disputed the same. The Revenue's case before us is that, the assessee is only a charitable institution having no religious purpose. According to Revenue, the certificate held by the assessee u/s 80G of the Act, which is only issued to charitable trusts, fortifies their position. We are therefore required to ascertain as to whether the anonymous donations received by the assessee Trust is liable to tax u/s 115BBC(1) or is it excluded from the purview of tax by virtue of Section 115BBC(2) of the Act. For doing so, we are first required to ascertain as to whether the assessee Trust is existing solely for charitable purposes or for both charitable and religious purposes. 18. Before dwelling into the facts of the case,....
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....he same was explained the CBDT in their Circular No. 14/2006 dated 28.12.2006 wherein it was stated as follows:- "25. Taxation of anonymous donations received by wholly charitable trusts or institutions including non-profit educational or medical institutions 25.1 Income of wholly charitable or religious trusts or institutions as well as partly charitable or religious trusts or institutions is exempt from income-tax under sections 11 and 12, subject to the fulfilment, inter alia, of certain conditions of application of income and investment in specified modes. Similarly, income of any university or other educational institution referred to in sub-clause (iiiad) or sub-clause (via) or any hospital or other medical institution referred to in sub-clause (iiiae) or sub-clause (via) or any fund or institution referred to in sub-clause (iv) or any trust or institution referred to in sub-clause (v) of clause (23C) of section 10, is exempt from income-tax subject to the fulfilment of conditions specified in the said clause. 25.2 With a view to prevent channelisation of unaccounted money to these institutions by way of anonymous donations, a new section 115BBC has....
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...., love and regard which they have for the deity or out of selflessness. It may also be because of their ingrained belief that the deity is the ultimate giver, because of whom they have what they are offering, and that the offerings made by them is not a donation but a way of giving it back to the deity to whom it always belonged. It is for these reasons that, the trusts / institutions which are existing for religious purposes or both religious & charitable purpose, have been kept out of the ambit of Section 115BBC of the Act. The intent of the Legislature is thus clear that such anonymous donations received in hundis/ donation boxes etc. at the aforesaid trusts/ institutions from their devotees is not to be taxed u/s 115BBC of the Act. 21. We now come back to the facts involved in the present case. It is not in doubt that Shri Sai Baba had a large number of devotees and was accorded the status of 'Saint' upon his demise on 15th October 1918. The place i.e. Shirdi from where he left for his heavenly abode was converted into a shrine and thousands of devotees would visit his shrine to pay their respects, spread his teachings and celebrate the festivals etc. His devotees are noted ....
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....he fund established for the purpose. iii) to perform such other functions and festivals as may be decided by the Board of Management. iv) to give aids to the poor and deserving at Shirdi provided donations are received" Specifically in that behalf (and for no other purpose) and also to give necessary assistance inclusive of financial help to the poor and deserving institute at Shirdi elsewhere" 22. It is noted that amongst the several objects of the assessee Trust, one of the objects has been associated with activities associated with worshiping Shri Sai Baba, spreading spirituality, his teachings, offering prayers, celebrating religious festivals and ceremonies taking care of devotees etc. It is noted that Section 21 of the said Sai Baba Trust Act also provides for maintenance of temple, conduct and performance of rituals & ceremonies therein and providing facilities for darshan of deity, offering of prayers and performing any religious service. The relevant extract of this Section is set out below:- "21(1) The Trust Fund shall be utilized by the Committee for all or any of the following purposes:- a. the maintenance, management administratio....
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.... had pointed out to us that, Section 2(m) of the Sai Baba Trust Act provided that any words or expression, not expressly defined, shall have the meaning as assigned in Bombay Public Trusts Act, 1950. It is noted that, the word 'Temple' is not defined in the Trust Act, but the same is defined in Section 2(17) of the Bombay Public Trusts Act, 1950 as follows :- "temple" means a place by whatever designation known and used as a place of public religious worship and dedicated to or for the benefit of or used as of right by the Hindu community or any section thereof as a place of public religious worship." 25. It is further noted that the website of the assessee Trust, extracts of which are available at Pages 5 to 6 of Paper-book, mentions the details of the temples located within the shrine at Shirdi. The website also gives details of the rituals, poojas, ceremonies etc., which are being performed throughout the day along with timings etc. for the information, and knowledge of the devotees. We also note that the assessee Trust is also regarded as a must visit religious place in Maharashtra for tourists and public at large. 26. It is noted that the Revenue has deep-dived ....
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....igion, worshipping Hindu deities and maintaining temples cannot be regarded as religious purpose for the purposes of Section 115BBC of the Act. In such a scenario, the hundi collections / anonymous donations received by almost all the revered temples of India, without naming any, shall be liable to be taxed u/s 115BBC of the Act. In our considered view, such a proposition put forth by the Revenue is wholly inconceivable, fallacious and untenable. 27. Instead, we find that the Ld. CIT(A) had rightly relied on the decision of the Hon'ble jurisdictional Bombay High Court in the case of DIT(E) Vs Bombay Panjrapole Trust (supra). In the decided case also, the assessee trust which was maintaining gaushalas and protecting animals was in receipt of anonymous donations in their hundis/ boxes, which was taxed by the AO u/s 115BBC of the Act. The stand taken by the AO was identical to the present case, as it was contended that maintaining and protecting animals does not tantamount to 'religious purpose'. The Hon'ble High Court however held that, the supply of fodder to cattle and animals is a good religious trust for Hindus and may be a good charitable trust for others. The Hon'ble High Co....
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....re, the submissions of the Revenue is in the face of the decision of this Court in "VallabhdasKarsondasNatha" (supra) wherein taking care of animals is considered to be a charitable as well as religious activity. We may also refer to the decision of Gujarat High Court in the case of Swastik Textile Trading Co. (P.) Ltd. (supra) wherein the issue for consideration was whether establishing, maintaining, running and helping gaushalas, panjarapoles and other similar institutions for animals, would be considered to be a charitable and religious purpose..... In fact at times religious and charitable purposes may overlap. Charitable activities in all cases arise out of compassion while most religion treat compassion as a religious attribute. 8. In view of the fact that the Tribunal has dismissed the Revenue's appeal by following the binding decision of this Court in the case of "VallabhdasKarsondasNatha" (supra)", no substantial questions of law arise for our consideration. Accordingly, the appeal stands dismissed." 28. At this juncture, we may also gainfully refer to the decision of the Hon'ble Supreme Court in the case of Dawoodi Bohra Jamat (supra), wherein aft....
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....e decision of the Supreme Court in CIT v. Dawoodi Bohra Jamat [2014] 364 ITR 31/222 Taxman 228 (Mag.)/43 taxmann.com 243, that the AO and CIT had proceeded "on a very narrow and incorrect understanding in holding that the Assessee Trust was engaged in spreading spirituality and since Section 115BBC only exempts religious trust, a trust allegedly imparting spiritual knowledge was consequently not contemplated as an exception by the Legislature as much as it consequently is barred to claim exemption vis-a-vis the anonymous donation." The ITAT held that the "said aim has to be understood in the context of and read along with the other objects of the trust whose target groups are widows, orphans, old and infirm people, destitute, illiterate, handicapped, mentally retarded, providing food and shelter to poor and needy, night shelter, nari-niketan, mahila ashram, weaker sections and all other groups who can be included in the phrase 'in need of physical, mental and financial help." Further the ITAT held that the "objects of the Trust and the context in which spiritual lectures espousing the philosophy, i.e, the spirituality of the major and predominant religious of the country needs ....
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....titution like the Assessee is also engaged in charitable activities which are very much part of religious activity. In carrying on charitable activities along with organising of spiritual lectures, the Assessee by no means ceases to be a religious institution. The activities described by the Assessee as having been undertaken by it during the AY in question can be included in the broad conspectus of Hindu religious activity when viewed in the context of the objects of the Trust and its activities in general. 16. For the aforementioned reasons, the Court finds no legal infirmity in the conclusion of the ITAT that for the purpose of Section 115 BBC (2) (a) anonymous donations received by the Assessee would qualify for deduction and it cannot be included in its assessable income." 30. We further note that somewhat identical issue was considered by the Bangalore Bench of this Tribunal in the case of ITO Vs Sri Shirdi Sai Samaj in ITA No. 1044/Bang/2015 dated 11.05.2016. In this case also, the assessee was both charitable and religious trust inter alia involved in propagating teachings & preachings of Sai Baba, pooja offerings, temple worship etc. The AO taxed the hundi coll....
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.... the Ld. Chief Commissioner of Income-tax, Mumbai under Section 10(23C)(v) of the Act vide order dated 17.03.2008. Undisputedly, the approval u/s 10(23C)(v) is accorded to those trusts which are wholly for public religious purposes and charitable purposes. We agree with the Ld. CIT(A) that this approval carries significant evidentiary value as it shows that the affairs of the assessee Trust had been verified by a superior authority and the assessee was found to exist for both religious and charitable purpose. On query from the Bench, the Revenue was unable to show that this approval granted u/s 10(23C)(v) of the Act has been withdrawn or rescinded by the Ld. CCIT. We further note that this approval u/s 10(23C)(v) of the Act was available on record, when the CIT(E) accorded registration u/s 80G of the Act vide order dated 25.03.2009. This supports the contention put forth by the assessee that, at that material time even the Revenue itself did not consider holding of certificate u/s 80G to be contradictory or inconsistent with certificate held u/s 10(23C)(v) of the Act. 34. Moreover, according to us, the provisions of Section 115BBC(2)(b) are independent of the provisions of Secti....
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.... to be an institution to which section 80G apply. To such institutions the restriction of Explanation 3 will not be attracted. Thus, the position with effect from April 1, 2000 would be that notwithstanding one or more clauses of the trust deed being wholly or substantially religious, if the income-expenditure ratio in respect of the expenses incurred on such purposes falls within the ambit of sub-section (5B), it shall still be treated to be an institution to which the provisions of section 80G would apply and the donations to which would qualify for deduction." 36. In view of the above, the position which emerges is that, there may be instances where a trust which is existing both for charitable and religious purpose, has incurred religious expenditure which is less than 5% of the total expenses of the Trust. In such a case, the trust may be eligible for certificate u/s 80G of the Act and at the same time would not be liable to be taxed for the anonymous donations received by virtue of Section 115BBC(2)(b) of the Act. We thus find merit in the submission of the Ld.Sr.Counsel for assessee that, the exclusion set out in Section 115BBC(2)(b) of the Act can co-exist with Section 8....
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....cited by the assessee was not applicable. The CIT(A) further observed that, under any circumstance, the power to condone the delay in filing Form 10 was only with the Principal Commissioner and not vested with him. Hence, in absence of any order condoning the delay in filing of Form No. 10, the Ld. CIT(A) upheld the action of the AO denying the accumulation of income to the assessee u/s 11(2) of the Act. 40. At the time of hearing, the Ld.Sr.Counsel for assessee furnished the copy of the order passed u/s 119(2)(b) of the Act by the CIT(Exemptions), Mumbai dated 16.03.2023, wherein, the Ld. CIT(Exemption) has since condoned the delay in filing of Form 10 by the assessee for AY 2015-16. The Ld.Sr.Counsel accordingly prayed that, since the delay in filing the Form No. 10 has now been condoned by the competent authority, the AO may be directed to allow the benefit of exemption in relation to the accumulation of income u/s 11(2) of the Act. The Ld. CIT DR appearing for the Revenue did not dispute the same. Considering the foregoing factual position, the AO is directed re-compute the total income of the assessee and allow the admissible exemption u/s 11(2) of the Act as claimed by the....
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....on total income as computed under the IT Act. Any amount or expenditure, which was application of income, is not to be considered for determining twenty five per cent to be accumulated. Their Lordships, as noted earlier, affirmed the decision of Kerala High Court in (1997) 141 CTR (Ker) 502 : (1997) 228 ITR 620 (Ker) (supra) wherein it is held as under : "At the outset, the statutory language of s. 11(1)(a) of the IT Act, 1961, relates to the income derived by the trust from property. The trust is required to be wholly for charitable or religious purposes, and the income is expected to have relation to the extent to which such income is applied to such purposes in India. It is thereafter the statutory provision proceeds further that such income is not to be understood to be in excess of 25 per cent of the income from such properties. In other words, the very language of the statutory provision under consideration sets apart 25 per cent of the income from the source of property with reference to the extent to which such income is applied for such purposes, charitable or religious. In other words, for the purpose of s. 11(1)(a) of the Act, the income in terms of relevance wo....
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....reme Court referred to above. The circular of CBDT has also been considered by the Hon'ble Kerala High Court in its decision referred to above. Accordingly, the question referred to is answered in the affirmative and in favour of the assessee." 44. It is further noted that identical issue came up before the coordinate Bench of this Tribunal at Bangalore in ACIT (Exemption) Vs. Bhagwan Mahaveer Memorial Jain Educational & Cultural Trust, ITA Nos. 1514 & 1515/Bang/2016 for AYs 2020-11 and 2011-12 and ITA No. 137/Bang/2017 for AY 2012-13 dated 21.08.2019, wherein it was held as under: "16. The third issue that arises for consideration in ITA No.1515/Bang/2016 for AY 2011-12 is as to whether 15% accumulation for application in future has to be calculated on gross receipts or net receipts after deduction of revenue expenditure. The Assessee claimed accumulation of income for application for charitable purpose at 15% of the gross receipts. The AO was of the view that accumulation will be allowed only to the extent of 15% of the income after revenue expenditure. In other words income to be set apart u/s.11(1)(a) of the Act has to be computed at 15% of the net income i.e., ....
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....sessee's appeal is accordingly allowed. 46. Ground Nos. 4 & 5 of the appeal of the assessee are as follows:- "4. On the facts and under the circumstances of the case and in law, the 8670814- Commissioner of Income Tax Appeals, National Faceless Appeal Centre, erred in confirming addition of Rs. 25,50,98,981/-u/s 11(1)(d) of I T Act, 1961 without giving opportunity to the appellant to accumulate the same under section 11(2) of the I. T. Act, 1961. 5. On the facts and under the circumstances of the case and in law, the A.O. ought to have allowed as deduction expenditure under the head Grant-in-aid Charity Rs. 17,64,54,309/- Services to Sai Devotees Rs. 18,77,189/-, Expenses on Other Objects Rs. 19,37,850/- Expenditure Building Fund Rs. 12,15,87,500/- and Expenditure 35AC Fund Rs. 9,20,04,557/- when relevant information was available on record." 47. Ground No. 4 relates to the Ld. CIT(A)'s action of confirming the order of the AO denying the benefit of exemption u/s 11(1)(d) of the Act in relation to the interest earned on corpus funds. Ground No. 5 raised by the assessee, is noted to be without prejudice to Ground No. 4, wherein the assessee has claimed that t....
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....e cases of DIT vs Shri Ram Krishna SevaAashrama& CIT(E) vs Mata Amrithanandamayi Math (supra) was misplaced. In these cases, the donor had made a specific direction that the interest earned on corpus donation shall also be towards corpus and therefore on such unique facts the benefit of exemption u/s 11(1)(d) of the Act was allowed to that assessee. The facts involved in the present case are found to be distinguishable. Before us also, the assessee has not been able to adduce any evidence or letter or directions from the corpus donors that the interest derived from investment of the corpus funds would also be towards the corpus of the assessee.We thus hold that the Ld.CIT(A) had rightly denied the exemption claimed by the assessee u/s 11(1)(d) of the Act in relation to the interest income of Rs. 25,50,98,980/- derived from investment of corpus funds. The findings of the Ld. CIT(A) upholding the action of the AO is found to be relevant and is therefore extracted below:- "7.4 A careful reading of section 12 would reveal that the voluntary contributions ('Donations" under common parlance) are divided into two categories under the Act. viz.. (a) Voluntary contribu....
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....urce of the amount is interest earned on fixed deposit and not any voluntary donation. And there has not been any instruction whatsoever, by the original donor of the corpus funds that this amount has to be used for corpus of the assessee trust only. Therefore, in absence of any of the characteristics mandatory for exemption u/s 11(1)(d) the amount of interest earned on the corpus fund shall not be eligible for the above mentioned exemption. 7.7 It is considered essential here to point out, as to why, the cases relied upon by the assessee are distinguishable and as a corollary does not entitle Assessee Trust to avail the exemption provided u/s 11(1)(d). I. In the case of Mata Amrithananadamayi Math (supra). The fact of the case was that the donors had made specific direction that the interest earned on the corpus donation shall also be treated as corpus donation. The court have made the following observation before making the interest Income eligible for exemption u/s 11(1)(d). 5. Having considered the submissions made, we are of the view that the question that is framed has to be answered in the light of Section 11(1)(d) of the Act. A reading of Section ....
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....r the Leprosy patients and is credited to a particular account and from the income from the said capital, the said activity is carried on the requirement of Clause (b) of sub-section (1) of Section 11 is complied with. In the instant case, on record, we see that those people who have paid amounts by way of donation that includes the cheque with a letter with a specific direction, which is in compliance with Section (1) (d) of the Act. But, in case if the contributions are made without cheques i.e.. by cash, and oral direction has been issued to the trust to utilize the said fund for the purpose of treating the leprosy patients and if such amounts arc credited to the account meant for it, even then the requirement of clause (d) of sub-section (1) of Section 11 is complied with. Therefore, we do not see any substance in the said contention" From the facts of the case above we can appreciate that the amount in question here in this case was the voluntary donation, Secondly the courts have observed existence of written direction on the donation received by cheque and existence of oral instruction in case of donations received in cash. What has also been observed by the court t....