2026 (8) TMI 1437

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....he impugned order, the Tribunal upheld the addition of Rs. 94,66,848/- as taxable interest income. 2.1. The appellant is a public charitable trust registered under Section 12AA of the Act on 08.02.1995. For Assessment Year 2017-18, the trust filed its original return of income on 24.10.2017, declaring 'NIL' income. A revised return was filed on 12.1.2019, also declaring 'NIL' income. The case was selected for scrutiny and a notice under Section 143(2) of the Act was issued on 22.9.2019. During the assessment, the Assessing Officer observed that the trust received fixed deposit interest of Rs. 1,81,83,804/-. 2.2. It is stated that, out of this total interest, the trust credited Rs. 87,44,300/- to its Income and Expenditure Account. How....

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....nd duly returnable as per the agreements between assessee and SHGs? 4. Section 11(1)(d) of the Act exempts voluntary contributions only when made with a specific written direction from the donor that they shall form part of the corpus. Interest earned from investing these capital funds constitutes income generated by the trust. The trust relied on foreign donor correspondence, such as letters from Secours Catholique, CBM, and Kinder Not Hilfe. These documents show that the original grants were given for micro-credit programmes and revolving loan funds. The letters permitted the appellant to distribute refunded funds to SHGs. However, none of the original donation letters contained an explicit direction from the donors instructing that ba....

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....r of Income Tax v. Society for Development Alternatives [2012 (1) TMI 77] does not assist the appellant. In that case, unspent project grants from tied-up funding agencies were held as unutilized grants under strict agency terms, where unspent amounts were returnable to the donors. In the instant case, the funds represent interest earned on fixed deposits held by the assessee trust, which the trust is free to use towards its general charitable objects. 8. The appellant trust argued that the Assessing Officer should have followed the re-assessment order for AY 2009-10. In the facts of the present case, it is clear that the interest accrued directly to the trust from its bank deposits. Any subsequent obligation or agreement to spend or all....