DCIT(E), New Delhi V. Ram Pyari Devi Charitable Trust, New Delhi

ITA 2599/DEL/2015

• Counselvise Citation: [2018] 123 COUNSELVISE.COM (IT) 8302 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 5 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-10-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Assessment Year: 2011-2012
• Appeal Filed On: 01-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JANARDAN DAS SENIOR
• Assessee Lawyers: C S AGARWAL SENIOR
• Keywords: Charitable institution
• Section: 80G; 12A; 12AA; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH A : NEW DELHI) BEFORE SHRI N.K. SAINI, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.2599/DEL./2015 (ASSESSMENT YEAR : 2011-12) DCIT (E), CIRCLE 2 (1), VS. RAM PYARI DEVI CHARITAB LE TRUST, NEW DELHI. 50, GULMOHAR PARK, NEW DELHI 110 049. (PAN : AAATR2534G) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI C.S. AGARWAL, SENIOR ADVOCATE REVENUE BY : SHRI JANARDAN DAS, SENIOR DR DATE OF HEARING : 13.09.2018 DATE OF ORDER : 03.10.2018 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : THE APPELLANT, DCIT (E), CIRCLE 2 (1), NEW DELHI (HEREINAFTER REFERRED TO AS THE REVENUE) BY FILI NG THE PRESENT APPEAL, SOUGHT TO SET ASIDE THE IMPUGNED ORDER DATE D 16.02.2015 PASSED BY LD. CIT (APPEALS)-40, NEW DELHI QUA THE A SSESSMENT YEAR 2011-12 ON THE GROUNDS INTER ALIA THAT :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) HAS ERRED IN HOLDING THAT DONAT ION MADE OUT OF CORPUS FUND IS APPLICATION OF INCOME IGNORING TH E PROVISIONS OF SECTION 11(1)(A) WHICH PROVIDES FOR EXEMPTION OF INCOME SUBJECT TO APPLICATION THEREOF FOR THE OBJECTS OF T HE ORGANIZATION. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) HAS ERRED IN HOLDING THAT DONAT ION MADE OUT ITA NO.2599/DEL./2015 2 OF CORPUS FUND AS APPLICATION OF INCOME IGNORING TH E FACT THAT RECEIPTS BY WAY OF CORPUS DONATION BEING EXEMPT U/S 11 (1)( D) DO NOT CONSTITUTE INCOME OF THE ORGANIZATION AND AS SU CH BENEFIT U/S 11(1)(A) IS NOT ADMISSIBLE FOR THE SAME. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LD. CIT(A) HAS ERRED IN HOLDING THAT DONATI ON DO NOT CONSTITUTE INCOME OF THE ORGANIZATION U/S 12(1) OF THE ACT. 2. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICA TION OF THE CONTROVERSY AT HAND ARE : ASSESSEE TRUST REGISTERED UNDER SECTION 12A OF THE INCOME-TAX ACT, 1961 (FOR SHORT THE ACT ) AND NOTIFIED U/S 80G (5)(VI) OF THE ACT IS RUNNING AN EDUCATIONA L INSTITUTION IN THE NAME OF DELHI PUBLIC SCHOOL IN KOLKATA UNDER AG REEMENT WITH DELHI PUBLIC SCHOOL SOCIETY. DURING ASSESSMENT PRO CEEDINGS, AO NOTICED THAT THE ASSESSEE HAS GIVEN DONATION OF RS. 1,75,00,000/- TO USHA MARTIN SCHOOL FROM THE CORPUS FUND. DECLINING THE CONTENTIONS RAISED BY THE ASSESSEE, AO BY INVOKING THE PROVISIONS CONTAINED U/S 11(1)(D) TREATED THE CORPUS DONATION OF RS.1,75,00,000/- AS INCOME AND ADDED THE SAME AS IN COME U/S 2(24)(IIA) AND THEREBY ASSESSED THE TOTAL INCOME AT RS.1,75,00,000. 3. ASSESSEE CARRIED THE MATTER BY WAY OF APPEAL BEF ORE THE LD. CIT (A) WHO HAS DELETED THE ADDITION BY ALLOWING TH E APPEAL. FEELING AGGRIEVED, THE REVENUE HAS COME UP BEFORE T HE TRIBUNAL BY WAY OF FILING THE PRESENT APPEAL. 4. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS R ELIED UPON AND ITA NO.2599/DEL./2015 3 ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. 5. LD. DR FOR THE REVENUE CHALLENGING THE IMPUGNED ORDER FILED SHORT SYNOPSIS REITERATING THE REASONS RECORD ED BY THE AO IN THE ASSESSMENT ORDER. HOWEVER, ON THE OTHER HAND, TO REPEL THE ARGUMENTS ADDRESSED BY THE LD. DR FOR THE REVENUE, LD. AR FOR THE ASSESSEE ALSO FILED WRITTEN SYNOPSIS AND SUPPORTED THE FINDINGS RETURNED BY THE LD. CIT (A). 6. UNDISPUTEDLY, ASSESSEE TRUST BEING REGISTERED U/ S 12A AND 80G(5)(VI) OF THE ACT IS RUNNING AN EDUCATIONAL INS TITUTION. IT IS ALSO NOT IN DISPUTE THAT THE ASSESSEE TRUST HAS BEE N ENJOYING THE EXEMPTION U/S 11 OF THE ACT. IT IS ALSO NOT IN DIS PUTE THAT THE ASSESSEE SOCIETY HAS DONATED RS.1,75,00,000/- TO US HA MARTIN SCHOOL FROM ITS CORPUS FUND OF RS.2.73 CRORES. IT IS ALSO NOT IN DISPUTE THAT NO AMOUNT OF THE CORPUS FUND IS LYING UNUTILIZED. 7. WHEN WE EXAMINE THE INCOME AND EXPENDITURE ACCOU NT OF THE ASSESSEE TRUST, AVAILABLE AT PAGE 13 OF THE PAP ER BOOK, IT SHOWS THAT THE ENTIRE RECEIPT ON ACCOUNT OF DONATION HAS BEEN SPENT FOR CHARITABLE PURPOSE I.E. FOR RUNNING THE SCHOOL. IT FURTHER SHOWS THAT RECEIPT DURING THE YEAR UNDER ASSESSMENT AMOUNTS TO RS.23,91,37,581/- WHEREAS THE PAYMENT/EXPENDITURE A MOUNTS TO RS.24,14,55,129/-. IT ALSO SHOWS THAT DURING THE A SSESSMENT UNDER ITA NO.2599/DEL./2015 4 CONSIDERATION, THE ASSESSEE HAS RECEIVED RS.75,00,0 00/- AS CORPUS DONATION AND HAD PAID RS.1,75,00,000/- AS DONATION TO M/S. USHA MARTIN SCHOOL. EVEN OTHERWISE, WHEN THE AO HAS NOT ARRIVED AT ANY FINDING THAT THERE WAS ANY INCOME OF THE ASSESS EE TO BE TAXED THE DONATION OF RS.1.75 CRORES GIVEN BY THE ASSESSE E TO ANOTHER CHARITABLE INSTITUTION CANNOT BE TAXED U/S 11(1)(D) OF THE ACT. MOREOVER, WHEN THE CORPUS FUND OF THE ASSESSEE, A C HARITABLE TRUST, HAS NOT BEEN DIVERTED FOR PERSONAL USE, DONATION MA DE BY IT TO SOME OTHER CHARITABLE TRUST REGISTERED U/S 12AA FOR CHAR ITABLE PURPOSE CANNOT BE BROUGHT TO TAX PARTICULARLY WHEN THERE IS NOT AN IOTA OF ALLEGATION ON THE PART OF THE ASSESSEE THAT ANY PAR T OF THE DONATION HAS BEEN DIVERTED FOR PERSONAL USE. 8. IN VIEW OF WHAT HAS BEEN DISCUSSED ABOVE, LD. CI T (A) HAS PASSED A REASONED ORDER BY APPLYING THE SETTLED PRI NCIPLES OF LAW ON FACTS OF THIS CASE, HENCE FINDING NO ILLEGALITY OR PERVERSITY IN THE IMPUGNED ORDER, PRESENT APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THIS 3 RD DAY OF OCTOBER, 2018. SD/- SD/- (N.K. SAINI) (KULDIP SINGH ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 3 RD DAY OF OCTOBER , 2018 TS ITA NO.2599/DEL./2015 5 COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-40, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.