TaxTMI 
TaxTMI 
2025 (11) TMI 1311
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.... public utility, the exemption u/s 11&12 were not admissible and sec. 13(8) was applicable as well as treating the corpus donation amounting to Rs. 7,45,56,979/- as revenue receipt so that sec.11(1)(d) was not applicable, is wholly illegal, unlawful and against the principles of natural justice. 2.1 The ld. CIT(A), has grievously erred in law and or on facts in applying the proviso to sec.2(15) and thereby denying the exemption u/s 11 & 12 by invoking sec. 13(8). The ld. CIT(A) ought not to have held that the appellant trust was covered under the last limb of "General Public Utility" and as such the proviso was applicable to the activities carried on by it treating them as trade, commerce or business. 2.2 That in the facts and circumstances of the case as well as in law the ld. CIT(A) ought not to have confirm that the appellant trust was covered under the last limb of sec. 2(15) and the proviso was applicable to the activities carried on by it. 3.1 The ld., CIT(A) has erred in law and or on facts in computing the total taxable income by disallowing exemption u/s 11 & 12 as well as treating the corpus donation as revenue receipt. 3.2 That in the ....
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....highly excessive and the commercial principles ought to have been applied. It is, therefore, prayed that the additions upheld by the CIT(A) may kindly be deleted". 3. The brief facts of the case are that the assessee filed its return of income on 03.10.2016 declaring total income at Rs. Nil for A.Y. 2016-17. The case was selected for the Assessing Officer issued notices calling for various details regarding the activities of the trust, its entitlement to exemption under sections 11 and 12 of the Act and the nature of corpus donations claimed under section 11(1)(d) of the Act. The Assessing Officer held that the assessee trust was engaged in activities that fell within the residual limb of "advancement of any other object of general public utility" and that the main source of its revenue was the sale of frozen semen doses, which he held to be an activity in the nature of trade, commerce or business. By invoking the proviso to section 2(15) and section 13(8), the Assessing Officer denied the exemption under sections 11 and 12 of the Act. The Assessing Officer further held that the corpus donation of Rs. 7,23,87,393/- received from milk supplying societies was not a volunt....
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....ish that the donations were for the corpus. The ld. counsel for the assessee placed reliance on Loknayak Jaiprakash Narayan Leprosy Eradication Trust v. ITO [2025] 176 taxmann.com 922 (Mum), DIT v. Sri Ramakrishna Seva Ashram [2011] 357 ITR 731 (Kar), CIT v. Bharathiya Sanskriti Vidhyapith Trust (ITA 278/2007), ACIT v. Balaji Educational and Charitable Trust [2011] 15 taxmann.com 53 (Mad), and Gujarat Cricket Association v. JCIT [2019] 101 taxmann.com 453 (Ahd). It was further submitted that in the alternative, if the corpus donation is treated as revenue receipt, the assessee is eligible for exemption under sections 11 and 12 as held by ITAT in assessee's own case for A.Y. 2014-15 vide order dated 17-01-2024 in ITA No. 1147/Ahd/2018. 7. We have heard the rival contentions and perused the material on record. Since the primary issue of corpus donation has already been adjudicated by the Ahmedabad Bench in the assessee's own case for A.Y. 2014-15 in Dudhsagar Research & Development Association v. ACIT (Exemption) [2024] 159 taxmann.com 1465 (Ahmedabad - Trib.) [11-10- 2022], it is necessary to reproduce the relevant findings contained therein: "10. We have heard the rival....
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....fees and subscriptions paid by entrants to a society or institution as a condition precedent to their membership and as the price of admission to the privileges and benefits of the society or institution are given under a contract and are not voluntary. The Delhi High Court in the case of CIT v. Divine Light Mission [2005] 146 Taxman 653/278 ITR 659 (Delhi) held that membership fee and subscription amounts received by trust/society from its members cannot be characterized as voluntary contribution within meaning of expression 'fund' in Section 12. While holding so, High Court made the following observations: 'Voluntary contribution is an act not coupled with compulsion. One may contribute or one may not contribute. Therefore, it is rightly said that it is in the nature of a gift. But so far as subscription is concerned, it is with some compulsion. If one wants to become a member of a trust and if he is required to pay subscription, as in the instant case, then it amounts to compulsion.' 12. Again, the Bombay High Court in the case of CIT v. Gem & Jewellery Export Promotion Council [1983] 13 Taxman 13/143 ITR 579, on the nature of voluntary contributions: It was we....
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....sed." 8. In the present appeal, we find that the issue regarding the nature of donations received by the assessee stands squarely covered by the above decision of the Coordinate Bench in assessee's own case for A.Y. 2014-15 in Dudhsagar Research & Development Association v. ACIT (Exemption) [2024] 159 taxmann.com 1465 (Ahmedabad - Trib.) [11-10-2022]. The factual matrix for the year under consideration is identical. Respectfully following the binding precedent, we uphold the finding of the Assessing Officer and the ld. CIT(Appeals) that the donations received from milk supplying societies, being compulsorily collected and linked to the quantity of milk fat supplied, do not satisfy the condition of being "voluntary contributions" with "specific direction" as required under section 11(1)(d) of the Act and therefore cannot be treated as corpus donations. Thus, the ground of the assessee on this issue is dismissed. However, on the alternative claim raised by the assessee, we find that this issue is also covered in favour of the assessee by the decision of the Coordinate Bench in assessee's own case in ITA No. 1147/Ahd/2018 order dated 17-01-2024, wherein the Tribunal held that once ....