TaxTMI 
TaxTMI 
2026 (8) TMI 1414
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.... of the Income Tax Act (hereinafter referred as 'the Act') for Assessment Year 2021-22 by CPC, Benguluru. 2. None appeared on behalf of the assessee. We heard the ld. DR at length who assisted us with the facts of the case. Case records carefully perused and considered. 3. Assessee filed the following grounds of appeal as under: 1. "The ld. ADDL/JCIT (Appeal) has erred in law and on facts in confirming, the income at Rs. 10,12,100/- made by CPC. The order of CIT(Appeal) is wrong and bad in law. 2. The Ld. ADDL/JCIT(A) erred in law in holding that Form No. 10B was mandatory under section 12A(1)(b). Under the proviso thereto, the audit report is required only if the total income, computed without giving effect to secti....
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....ble. However, corpus donations, received with a specific direction to form part of the corpus of the trust, are capital receipts and do not constitute "income", irrespective of whether the trust is registered under 12A or not. 6. The interest charged under Section 234B also liable to be deleted being consequential to the deletion of the addition. 7. That the appellant reserves the right to modify, alter, amend, or add further grounds of appeal at the time of the hearing." 4. The brief facts of the case are that the assessee is a trust, carrying out public charitable activities. The trust filed application in Form 10A on 05.03.2019 for registration under section 12AA and approval under section 80G of the Act. The said ap....
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....(A). The ld. CIT(A) upheld the rectification order dated 15.12.2022 under section 154 of the Act. The CIT(A) held that section 12A(1)(b) provides that where the total income of a trust, before giving effect to sections 11 and 12 exceeds the maximum amount not chargeable to tax in any previous year, the accounts of the trust must be audited and the audit report in Form 10B must be furnished at least one month prior to the due date u/s 139(1). The CITA() held that Corpus donations are part of "income" under section 2(24)(iia) and only upon fulfillment of conditions of section 12A can they be excluded under section 11(1)(d). Since Form 10B was not filed these donations cannot be excluded for determining the applicability of section 12A(1)(b). ....
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....o, the provisions of section 11(1)(d) excludes donations made towards corpus of the Trust as follows- [inserted by Finance Act 1989 w. e. f. 1-4-1989]: 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- ******* (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. 9. We further note that Section 12(1) provides as follows - Income of trusts or institutions from contributions. 12. (1) Any voluntary contributions....
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....rds corpus are exempt from taxation. There are catena of legal jurisprudence which have held that the donations to the corpus fund are exempt being a capital receipt and hence not taxable. The hon'ble Supreme Court in the case of R.B. Shreeram Religious & Charitable Trust [1998] 233 ITR 53 (SC) and it was held that - Undoubtedly by a subsequent amendment in 1972 to the definition of income under section 2(24), voluntary contributions, not being contributions towards the corpus of such a trust, are included in the definition of 'income' of such a religious or charitable trust. Section 12 as amended in 1972 also expressly provides that any voluntary contribution received by a trust for religious or charitable purposes, not being cont....
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....49 KerHC, held as follows: "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 11 shows that subject to the provisions of Sections 62 and 63, the incomes enumerated therein shall not be included in the total income of the previous year of the person in receipt of the income. The person in receipt of the income, insofar as these cases are concerned, is the respondent assessee. One of the income that is enumerated in clause (d) of sub-Section (1) of the Section is the 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. The fact that the donors had ....