2024 (8) TMI 338

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.... 3. At the outset, it was stated that there was a solitary issue in the present appeal, being the allowance of claim of exemption to corpus donation received/utilized for capital purposes u/s 11(1)(a) of the Act, considering that the said corpus donation had also been claimed as exempt by the assessee in terms of Section 11(1)(d) of the Act. The Assessing Officer and the ld. CIT(A) had held the assessee's claim of exemption u/s 11(1)(a) of the Act, on account of utilization of this corpus donation, as not tenable, as it tantamounted to double exemption claimed by the assessee. It is against this denial of exemption u/s 11(1)(a) of the Act that the assessee has come up in appeal before us. 4. The facts, to put it briefly, are that the assessee is a trust registered u/s 12A of the Act and hence entitled to exemption u/s 11 of the Act. The object of the Trust, as noted in the assessment order, is religious activity. 5. During the impugned year the assessee had shown gross receipts of Rs. 1,08,46,787/- and applied an amount of Rs. 76,203/- for the objects of the Trust. The assessee had claimed exemption u/s 11(1)(d) of the Act of Rs. 1,08,37,253/- on account of corpus donation ....

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....here any such income is accumulated or set apart for application to such purposes in India, to the extent to which the income so accumulated or set apart is not in excess of fifteen per cent of the income from such property;" 9. As evident from a bare perusal of Section 11(1)(a), it grants exemption to Incomes of Charitable /Religious entities which is derived from property held under Trust wholly for the said purposes, to the extent so utilized. 10. Corpus donations are admittedly separately exempted from tax u/s 11(1)(d) of the Act. The same is reproduced hereunder:- "Income from property held for charitable or religious purposes. 11. (1) Subject to the provisions of sections 60 to 63, the following income shall not be included in the total income of the previous year of the person in receipt of the income- (a). (b). (c). d) income in the form of voluntary contributions made with a specific direction that they shall form part of the corpus of the trust or institution 11. Section 12(1) of the Act is reproduced hereunder : "Income of trusts or institutions from contributions. 12. (1) Any voluntary cont....

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....eld under trust wholly for charitable or religious purposes, to the extent to which such income is applied to such purposes in India; and, where any such income is accumulated or set apart for application to such purposes in India, to the extent to which the income so accumulated or set apart is not in excess of fifteen per cent of the income from such property; (b) income derived from property held under trust in part only for such purposes, the trust having been created before the commencement of this Act, to the extent to which such income is applied to such purposes in India; and, where any such income is finally set apart for application to such purposes in India, to the extent to which the income so set apart is not in excess of fifteen per cent of the income from such property; (c) income derived from property held under trust- (i) created on or after the 1st day of April, 1952, for a charitable purpose which tends to promote international welfare in which India is interested, to the extent to which such income is applied to such purposes outside India, and (ii) for charitable or religious purposes, created before the 1st day of April, 195....

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....dend ; (iia) voluntary contributions received by a trust created wholly or partly for charitable or religious purposes or by an institution established wholly or partly for such purposes or by an association or institution referred to in clause (21) or clause (23), or by a fund or trust or institution referred to in sub-clause (iv) or sub-clause (v) or by any university or other educational institution referred to in sub-clause (iiiad) or sub-clause (vi) or by any hospital or other institution referred to in sub-clause (iiiae) or sub-clause (via) of clause (23C) of section 10 or by an electoral trust. Explanation.-For the purposes of this sub-clause, "trust" includes any other legal obligation; Income by way of voluntary contributions are clearly, therefore, a distinct and separate category of income, different from income derived from property held under Trust and have been specifically listed as included in the definition of income u/s 2(24) of the Act. 18. Section 12(1) of the Act further fortifies this position that the income by way of corpus donation is distinct and separate from Income derived from property held under Trust, when it deems voluntary co....