BANK OF INDIA RETIRED EMPLOYESS MEDICAL ASSISTANCE SCHEME, MUMBAI V. CIT (E), MUMBAI

ITA 3249/MUM/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 8696 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 09-05-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MANJUNATHA SWAMY
• Keywords: Capital asset; Gift; Revision of order; Charitable institution; Opportunity of being heard; Difference of opinion; Assessment record; Capital receipt; Change of opinion
• Section: 143(3); 12A; 12AA; 263; 63; 11

Judgement Text

B IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER ./ I.T.A. NO.3249 /MUM/2016 ( / ASSESSMENT YEAR : 2011-12) BANK OF INDIA RETIRED EMPLOYEES MEDICAL ASSISTANCE SCHEME, STAR HOUSE, C-5, G BLOCK, BANDRA KURLA COMPLEX, BANDRA (E), MUMBAI 400 051. / V. COMMISSIONER OF INCOME TAX (EXEMPTIONS), PIRAMAL CHAMBERS, 6 TH FLOOR, LALBAUG, MUMBAI 400 012. ./ PAN : AABTB3373J ( / APPELLANT ) .. ( / RESPONDENT ) ASSESSEE BY SHRI VI JAY MEHTA REVENUE BY : SHRI MANJUNATHA SWAMY, CIT-DR / DATE OF HEARING : 29-12-2016 / DATE OF PRONOUNCEMENT : 30-01-2017 / O R D E R PER RAMIT KOCHAR, ACCOUNTANT MEMBER THIS APPEAL, FILED BY THE ASSESSEE, BEING ITA NO. 3249/MUM/2016, IS DIRECTED AGAINST THE ORDER DATED 16 TH FEBRUARY, 2016 PASSED BY LEARNED COMMISSIONER OF INCOME TAX (EXEMPTIONS), MUMBAI (HE REINAFTER CALLED THE CIT(E) ), FOR THE ASSESSMENT YEAR 2011-12 U/S 263 O F THE INCOME-TAX ACT,1961 (HEREINAFTER CALLED THE ACT)., ARISING FROM THE A SSESSMENT ORDER DATED 12 TH DECEMBER, 2013 PASSED BY THE LEARNED ASSESSING OFFI CER (HEREINAFTER CALLED THE AO) U/S 143(3) OF THE ACT , BY HOLDING THE SA ID ASSESSMENT ORDER AS ERRONEOUS SO FAR AS PREJUDICIAL TO THE INTEREST OF REVENUE. ITA 3249/MUM/2016 2 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE IN THE MEMO OF APPEAL FILED WITH THE INCOME-TAX APPELLATE TRIBUNAL, MUMBA I (HEREINAFTER CALLED THE TRIBUNAL) READ AS UNDER:- BEING AGGRIEVED AGAINST ORDER OF THE COMMISSIONER OF INCOME TAX (E), MUMBAI, THIS APPEAL PETITION IS BEING FILE D TO CONSIDER THE FOLLOWING GROUNDS OF APPEAL, WHICH ARE INDEPENDENT AND WITHOUT PREJUDICE TO EACH OTHER: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE COMMISSIONER OF INCOME TAX (EXEMPTIONS) ERRED IN PA SSING AN ORDER UNDER SECTION 263 OF THE ACT. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE COMMISSIONER OF INCOME TAX (EXEMPTIONS) ERRED IN PA SSING AN ORDER UNDER SECTION 263 OF THE ACT THOUGH PROVISION S OF S.263 ARE NOT APPLICABLE TO THE FACTS OF THE CASE AND IN LAW .. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE COMMISSIONER OF INCOME TAX (EXEMPTIONS) HAS WRONGLY HELD THAT ORDER IS ERRONEOUS AND PREJUDICE TO THE INTEREST OF THE REVENUE THOUGH THE ASSESSING OFFICER HAS APPLIED HIS MIND A ND PASSED ORDER AFTER CONSIDERING THE FULL FACTS AVAILABLE ON RECORDS. THE CIT(E) HAS NO JURISDICTION TO PASS AN ORDER ON ACCO UNT OF CHANGE OF OPINION. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE COMMISSIONER OF INCOME TAX (EXEMPTIONS) ERRED IN CO NSIDERING THAT THE A O HAS HELD THAT THE APPELLANT WAS GRANTE D EXEMPTION S.11 OF THE ACT THOUGH THE A O TREATED THE RECEIPT AS CAPITAL (CORPUS) RECEIPT AND HENCE NOT TAXABLE. 5. THE CIT (E) FAILED TO APPRECIATE THAT: A) THE AMOUNT HAS BEEN RECEIVED WITH SPECIFIC DIREC TION TO AS A CORPUS OF THE FUND AND HENCE NOT TAXABLE AS REVENUE RECEIPT. B) AS PER DETAILED SUBMISSION THE AMOUNT RECEIVED I S NOT INCOME OF THE TRUST. ITA 3249/MUM/2016 3 C) THAT THE APPELLANT TRUST IS NOT CARRYING ANY ACT IVITY WHICH IS OF A COMMERCIAL NATURE. D) THAT EXPENDITURE IS INCURRED ON THE OBJECTS OF T HE TRUST AND E) IN VARIOUS JUDGMENTS QUOTED IN THE SUBMISSION DU RING THE PROCEEDINGS ARE FULLY COVERED IN FAVOUR OF THE APPE LLANT. 6. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE COMMISSIONER OF INCOME TAX (EXEMPTIONS) ERRED IN PA SSING AN ORDER ON WRONG FACTS AND WITHOUT GIVING ANY COGENT REASON / ORDER AND WITHOUT CONSIDERING THE SUBMISSION MADE B Y THE APPELLANT. 3. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSMENT IN THIS CASE FOR ASSESSMENT YEAR 2011-12 WAS COMPLETED BY THE AO U/S 143(3) OF THE ACT ON 12 TH DECEMBER, 2013 WHEREIN THE INCOME ASSESSED OF THE ASSESSEE-TRUST WAS AT ASSESSED AT NIL. A PROPOSAL WAS RECEIVED BY LE ARNED CIT(E) FROM THE LEARNED ADDL. DIT (EXEMPTIONS) RANGE 1, MUMBAI VIDE LETTER NO. ADDL. DIT(EXEM)/RG.1/REOPENING/2014-15 DATED 24 TH APRIL, 2015 REGARDING REVISION OF ORDERS PREJUDICIAL TO REVENUE U/S 263 O F THE ACT IN THE CASE OF THE ASSESSEE-TRUST I.E. M/S BANK OF INDIA RETIRED EMPLO YEES MEDICAL ASSISTANCE TRUST. BASED ON THE AFORESAID PROPOSAL, A SHOW-CAUS E NOTICE WAS ISSUED TO THE ASSESSEE BY LEARNED CIT(E) VIDE LETTER NO. CIT( E)/263/2015-16 DATED 1ST JANUARY, 2016 WHICH IS REPRODUCED AS UNDER:- IN YOUR CASE, THE ASSESSMENT WAS COMPLETED U/S 143 (3) DATED 12.12.2013 DETERMINING A TOTAL INCOME AT RS.NIL. 3. IT IS OBSERVED FORM THE RECORDS THAT THE ASSESSI NG OFFICER HAS STATED THAT THE TRUST IS NOT DULY REGISTERED U/S.12 A OF THE I.T. ACT 1961 AND SUBSEQUENTLY NOT LIABLE FOR EXEMPTION U/S. 11 OF THE I.T. ACT 1961 AND THE ASSESSMENT WAS COMPLETED ACCO RDINGLY. HOWEVER, THE ASSESSING OFFICER HAS ERRONEOUSLY ALLO WED THE CORPUS DONATION OF RS.1,90,00,000/- U/S 11(1)(D) OF THE I.T. ACT 1961. IN THE CASE OF U.P. FOREST CORPORATION V/S DY . CIT(2008) 297 ITR 1 (SC) THE HON'BLE SUPREME COURT HAS HELD T HAT ITA 3249/MUM/2016 4 REGISTRATION U/S.12A IS A CONDITION PRECEDENT FOR A VAILING THE BENEFIT OF SEC 11 & 12 OF THE ACT, UNLESS OR UNTIL THE INSTITUTION IS REGISTERED U/S. 12A OF THE I.T. ACT 1961. 4. FURTHER, IT IS OBSERVED THAT THE TRUST HAS RECEI VED INTEREST INCOME OF RS.1,46,32,985/-. AS AGAINST THE ABOVE IN COME, THE ASSESSING OFFICER HAS ALLOWED THE EXPENSES TO THE E XTENT OF INCOME AVAILABLE. HOWEVER, THE ASSESSING OFFICER HA S ALSO ALLOWED EXPENDITURES WHICH HAS NO DIRECT NEXUS TO EARN THE INTEREST INCOME OF RS.1,46,32,985/-. 5. I HAVE EXAMINED THE RECORDS AS WELL AS THE ORDER PASSED BY THE ASSESSING OFFICER AS DISCUSSED ABOVE AND I AM O F THE OPINION THAT THE ORDER PASSED BY THE ASSESSING OFFICER IS E RRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REV ENUE AND THEREFORE REQUIRES REVISION. 6. IN VIEW OF THE ABOVE FACTS, YOU ARE REQUESTED TO EXPLAIN AS TO WHY ORDER U/ S 263 OF THE ACT SHOULD NOT BE PASS ED ENHANCING OR MODIFYING THE ASSESSMENT OR CANCELLING THE ASSES SMENT IN YOUR CASE. IN THIS REGARD, YOU ARE REQUESTED TO ATTEND I N PERSON OR THROUGH YOUR AUTHORISED REPRESENTATIVE BEFORE THE U NDERSIGNED AND FILE THE WRITTEN SUBMISSIONS AND ARGUE THE MATT ER ON 19.01.2016 AT 3.30 PM IN MY OFFICE.' IN RESPONSE TO THE ABOVE SHOW CAUSE NOTICE, THE ASS ESSEE SUBMITTED BEFORE LEARNED CIT(E) AS UNDER:- WE ARE IN RECEIPT OF SHOW CAUSE NOTICE FOR REVI SION OF ASSESSMENT U/S 263 OF THE ACT. 2. THE ASSESSMENT OF THE ABOVE CASE WAS COMPLETED U /S 143(3) ON 12.12.2013 DETERMINING A TOTAL INCOME OF RS. NIL. 1. DURING THE ASSESSMENT PROCEEDINGS, THE APPELLANT HAD GIVEN FULL DETAILS REGARDING THE CORPUS DONATION RE CEIVED OF RS.1,90,00,000/-. IT WAS EXPLAINED THAT THE SAID AM OUNT IS THE CAPITAL RECEIPTS, CAPITAL OF INSTITUTION OR CAPITAL OF A TRUST. INTENTION OF THE DONOR AND THE TREATMENT OF INCOME BY THE RECIPIENT HAS TO BE SEEN FOR DETERMINING WHETHER TH E AMOUNT IS CONTRIBUTION TO THE CORPUS OF THE TRUST. ITA 3249/MUM/2016 5 THE AMOUNT HAS BEEN RECEIVED WITH SPECIFIC DIRECTIO N TO TREAT AS A CORPUS OF THE FUND. THE SAID AMOUNT IS TO BE KEPT I N CORPUS OF TRUST AND ONLY INCOME OUT OF THE SAME IS TO BE UTIL IZED FOR THE BENEFIT OF THE MEMBERS OF THE TRUST, WHICH IS OF A CHARITABLE NATURE. THE RECOGNISATION OR REGISTRATION OF A TRUST U/S.12 A DOES NOT CHANGE THE CHARACTER OF THE RECEIPT. THE CHARACTER OF THE RECEIPT IS 'CORPUS' AND HENCE IS A CAPITAL RECEIPT. THESE FACTS WERE AVAILABLE WITH THE ASSESSING OFFIC ER AND THE ASSESSING OFFICER HAD AFTER DUE VERIFICATION AND CO NSIDERING THE NATURE AND CHARACTER OF THE RECEIPTS HAS TREATED TH E RECEIPT AS A CORPUS OF THE FUND AND ACCORDINGLY THE SAID AMOUNT WAS NOT TREATED AS A INCOME OF THE TRUST. . WE ARE CHARITABLE TRUST THOUGH WE MAY NOT HAVE BEEN RECOGNIZED U/ S.12A DUE TO A TECHNICAL DEFECT. IT MAY ALSO BE STATED THAT THE ASSESSING OFFICER WAS AWARE OF THE FACT THAT REGIST RATION U/S.12A OF THE ACT WAS REJECTED AND THE ASSESSEE IS NOT ENT ITLED TO EXEMPTION U/S.11 OF THE ACT. THE ASSESSING OFFICER HAS STATED IN THE LAST PARAGR APH OF THE ORDER AS UNDER:- 'THE TRUST IS REGISTERED WITH THE CHARITY COMMISSIO NER, MUMBAI. REGISTRATION U/S.12A OF THE I.T. ACT REJECTED TO TH E ASSESSEE. THEREFORE ASSESSEE IS NOT LIABLE TO EXEMPTION U/S.1 1 OF THE ACT'. DURING THE ASSESSMENT, THE BALANCE SHEET AND PROFIT & LOSS ACCOUNT WAS AVAILABLE WITH THE ASSESSING OFFICER. D ETAILS OF THE CORPUS FUND RECEIVED DURING THE YEAR WAS PROVIDED T O THE ASSESSING OFFICER. THE AMOUNT OF RS.L,90,00,000/- W AS RECEIVED FROM BANK OF INDIA TOWARDS CORPUS OF THE FUND WHICH IS TO BE KEPT BY WAY OF TIED-UP FUND AND ONLY THE INTEREST E ARNED OUT OF THE SAID FUNDS IS TO BE UTILIZED FOR THE PURPOSE OF OBJECTS OF THE TRUST. AFTER CONSIDERING THE ABOVE FACTS, THE ASSESSING OF FICER HAS APPLIED HIS MIND AND HAS CLEARLY HELD AND COMPUTED THE INCOME AS PER COMPUTATION OF THE INCOME FILED IN THE RETUR N OF INCOME. HE HAS CONSCIOUSLY NOT MADE ANY ADDITION IN RESPECT OF THE AMOUNT RECEIVED BY WAY OF THE CORPUS FUND DURING TH E YEAR. ITA 3249/MUM/2016 6 THE ASSESSING OFFICER HAVING FORMED AN OPINION AND APPLIED HIS MIND TO THE FACTS OF THE CASE, NO REVISION OF THE S AID ORDER CAN BE MADE U/S.263 OF THE ACT. SECTION 263 OF THE ACT APP LIES TO THE CASE WHERE 'ANY ORDER PASSED BY THE ASSESSING OFFIC ER IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INT ERESTS OF THE REVENUE'. THERE IS NO ERROR IN PASSING THE ORDER BY THE ASSESSING OFFICER. THE ASSESSING OFFICER HAS CORRECTLY PASSED THE ORDER. IT MAY BE STATED THAT THE SIMILAR CASE WAS BEFORE T HE HON'BLE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH IN TH E. CASE OF ITO V. VOKKALINGERA SANGHA- ITA NO.281 TO 285/BANG/ 2014. COPY ENCLOSED. THE SAID CASE WAS DECIDED ON 14TH AU GUST, 2015. IN THE SAID CASE, IT HAS BEEN CLEARLY HELD THAT THO UGH THE REGISTRATION U/ S.12A HAS NOT BEEN GRANTED, THE ACC OUNTING PRINCIPLE IN RESPECT OF THE CORPUS OF THE FUND IS N OT TO BE DISTURBED. IN YOUR NOTICE YOU HAVE CITED THE JUDGMENT OF U.P. FOREST CORPORATION V. DCIT-297 ITR 1 (SC)(2008). AS PER TH E SAID JUDGMENT, THE REGISTRATION U/S.12A IS A CONDITION P RECEDENT FOR AVAILING THE BENEFIT OF S. 11 & S.12 OF THE ACT UNL ESS AND UNTIL THE INSTITUTION IS REGISTERED U/ S.12A OF THE ACT. WE WOULD INVITE YOUR ATTENTION TO THE ABOVE JUDGMEN T VIZ. ITO V. VOKKALINGERA SANGHA- ITA NO.281 TO 285/BANG/2014 WH EREIN AT PARAGRAPH NO.5.3.6 WHICH IS QUOTED AS UNDER.- 'BEFORE LOOKING INTO THE FACTS OF THE CASE, WE NOTI CE THAT REVENUE HAS RELIED UPON A JUDGMENT OF THE HON'BLE APEX COUR T IN THE CASE OF U.P. FOREST CORPORATION & ANOTHER V. DCIT REPORT ED IN 297 ITR 1 (SC). ACCORDING TO THE AFORESAID DECISION, REGIST RATION UNDER SECTION 12AA OF THE ACT IS MANDATORY FOR AVAILING T HE BENEFITS UNDER SECTION 11 & 12 OF THE ACT. HOWEVER, THE QUES TION THAT ARISES FOR OUR CONSIDERATION IN THE CASE ON HAND IS NOT THE BENEFIT UNDER SECTION 11 & 12 OF THE ACT, BUT RATHER WHETHE R VOLUNTARY CONTRIBUTIONS ARE INCOME AT ALL. THUS, WITH DUE RES PECT, THE AFORESAID DECISION, IN OUR VIEW, WOULD NOT BE OF AN Y HELP TO REVENUE IN THE CASE ON HAND'. IN THE SAID DECISION THE DETAILED DISCUSSION HAS BE EN CARRIED OUT BY THE BENCH AND HAS COME TO THE CONCLUSION THAT A SPECIFIC PURPOSE DONATION RECEIVED DOES NOT FALL WITHIN THE AMBIT OF THE PROVISION OF S.2(24)(IIA) OF THE ACT. THE PRINCIPLE S OF THE CAPITAL V REVENUE HAVE TO BE BORNE IN MIND AND CAPITAL RECEIP TS CANNOT BE ITA 3249/MUM/2016 7 TREATED AS AN INCOME. CONTRIBUTION RECEIVED FOR SPE CIFIC PURPOSE IS A CAPITAL RECEIPTS AND BEING A CAPITAL NATURE IT CANNOT BE CONSIDERED AS AN INCOME. THE SAID JUDGMENT HAS RELI ED ON NUMBER OF JUDGMENTS WHICH HAVE BEEN CITED IN THE SA ID CASE. IT HAS BEEN HELD THAT IRRESPECTIVE OF THE GRANTING OR NON GRANTING OF REGISTRATION U/ S.12A THE CHARACTER OF THE CONTRIBU TION RECEIVED DOES NOT CHANGE. WE ALSO RELIED ON THE FOLLOWING JUDGMENTS:- 1. ITO (EXEM) V. BASANTI DEVI & SHRI CHAKHANLALGARD EDUCATION TRUST -ITA NO.5082 (DEL)/2010 & C.O. NO.4 19 (DEL)/2010. 2. ITO V. M/S. GAUDIYA GRANTHANURVED TRUST -ITA NO.386/AGRA/2012. 3. PENTAFOUR SOFTWARE EMPLOYEES VS ACIT - I.T.A. N OS. 751 AND 752/MDS/2007 AND 4. ITO VS PENTAFOUR SOFTWARE - I.T.A. NO. L007/MDS/ 2007 AND CO. NO. 34/MDS/2008 IT WAS HELD IN THESE CASES AS UNDER:- 6. AS REGARDS THE NATURE OF INCOME THERE IS NO DISP UTE. THE ASSESSEE DID RECEIVE DONATION TOWARDS CORPUS FUNDS. WHETHER SUCH RECEIPTS COULD BE CONSTRUED TO BE INCOME? THE TERM 'INCOME' IS A DARK CAT IN THE BAG OF THE INCOME-TAX CODE. TH ERE IS NO EXHAUSTIVE DEFINITION OF THE WORD 'INCOME'. ALL REC EIPTS OF AN ASSESSEE CANNOT BE DEEMED TO BE INCOME OF THE ASSES SEE FOR THE PURPOSE OF INCOME-TAX. ONLY THOSE RECEIPTS WHICH BE AR THE NATURE OF INCOME CAN BE MADE EXIGIBLE TO TAX. THE DEFINITI ON OF THE WORD 'INCOME' AS GIVEN UNDER SECTION 2(24) IS INCLUSIVE. IT IS NOT EXHAUSTIVE. DONATIONS TOWARDS CORPUS ARE NOT FALLIN G WITHIN THE AMBIT OF THE DEFINITION OF INCOME. THIS IS A CAPITA L RECEIPT AND NOT EXIGIBLE TO TAX. THE DEPARTMENT DID NOT DOUBT THE N ATURE OR VERACITY OF THE RECEIPT. 10. CO. NO. 34(MDS)/2008:- IN THIS CROSS OBJECTION THE ASSESSEE OBJECTED THE INCLUSION OF RS.9,51,818/- RE CEIVED TOWARDS CORPUS FUND. WE FOR THE REASONS STATED ABOVE DECIDE THIS ISSUE IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. IN VIEW OF THIS THE OTHER GROUNDS RAISED IN THE CROSS OBJECTION HAV E BECOME INFRUCTUOUS. ITA 3249/MUM/2016 8 5. IN THE INCOME TAX APPELLATE TRIBUNAL BENCHC NE W DELHI ITA NO.3383/DEL/2009-ASSISTANT DIRECTOR OF INCOME T AX (E) TRUST CIRCLE II. NEW DELHI VS HOLOGRAM MANUFACTURER S ASSOCIATION 6. HON'BLE DELHI HIGH COURT HAS HELD IN THE APPEAL OF DIRECTOR INCOME TAX VS. BASANTI DEVI &SHRI CHAKHANLALGARG ED UCATION TRUST ITA 927/2009. FROM THE ABOVE JUDGMENTS, IT IS VERY CLEAR THAT THE CONTRIBUTIONS RECEIVED WITH A SPECIFIC DIRECTION THAT THEY SHALL FORM PART OF THE CORPUS OF THE TRUST ARE CAPITAL RECEIPTS IN THE HAN DS OF THE TRUST. THEY ARE NOT INCOME EITHER UNDER THE GENERAL LAW OR UNDER SECTION 2(24){IIA) RIGHTLY CONSTRUED. IN VIEW OF THESE FACTS, THE ASSESSING OFFICER HAS A FTER DUE CONSIDERATION HAS NOT ADDED THE AMOUNT RECEIVED BY WAY OF CORPUS FUND AS INCOME OF THE ASSESSEE. WE, THEREFOR E, REQUEST YOU TO DROP THE PROCEEDINGS U/S.263 IN RESPECT OF T HE CORPUS DONATION RECEIVED SINCE THERE IS NO ERROR ON THE PA RT OF THE ASSESSING OFFICER IN TREATING THE CORPUS FUND AS CA PITAL RECEIPTS AND IT IS NOT PREJUDICIAL TO THE INTEREST OF THE RE VENUE. . THE CHANGE OF AN OPINION IS OUT OF THE PURVIEW OF S ECTION 263 OF THE ACT. 2. THE ASSESSEE WOULD ALSO LIKE TO OBJECT TO THE DI RECTION AS TO THE ALLOWABILITY OR NOT OF EXPENDITURE INCURRED FOR THE OBJECT OF THE TRUST. IRRESPECTIVE OF THE REGISTRATION OF THE TRUST U/ S.12A, THE ASSESSEE TRUST IS REGISTERED FOR THE BENEFIT OF THE MEDICAL ASSISTANCE TO THE RETIRED EMPLOYEES. THE OBJECT OF THE TRUST IS TO PAY AND ADMINISTER PA YMENT OF MEDICAL ASSISTANCE TO THE RETIRED EMPLOYEES OF THE BANK. HENCE ANY EXPENDITURE INCURRED BY THE TRUST FOR THE MEDICAL ASSISTANCE OF THE RETIRED EMPLOYEES OF THE BANK OF INDIA IS FOR THE OBJECT OF THE TRUST AND THE SAME IS AN EXPENDITURE WHICH IS REQUIRED TO BE REDUCED FROM THE INCOME EARNED UNDER WHATEVER SOURCE BY THE TRUST. THESE FACTS WERE ALSO VERIFIED BY THE ASSESSING OFF ICER DURING THE ASSESSMENT PROCEEDINGS AND ACCORDINGLY THE EXPENDIT URE HAS ITA 3249/MUM/2016 9 BEEN CORRECTLY ALLOWED FROM THE INTEREST INCOME EAR NED BY THE TRUST. IN THE CASE OF CHARITABLE TRUST, THE INCOME OF THE TRUST IS REQUIRED TO BE UTILIZED FOR THE OBJECTS OF THE TRUS T ONLY. THE ASSESSING OFFICER HAS NOT DOUBTED THE PURPOSE FOR W HICH THE EXPENDITURE HAS BEEN INCURRED. IN FACT, NO TRUST WI LL HAVE ANY EXPENDITURE, WHICH HAS NEXUS TO THE EARNING OF THE INCOME, SINCE THE INCOME HAS NO NEXUS WITH THE EXPENDITURE INCURR ED. THE EXPENDITURE INCURRED IS AN APPLICATION OF FUND. ALL THE TRUSTS HAVE INCOME EITHER FROM THE PROPERTY OR INTEREST OR DIVI DEND INCOME (INVESTMENT INCOME). HOWEVER, THE SCHEME OF THE TRU ST IS TO INCUR THE EXPENDITURE FOR THE OBJECT FOR WHICH TRUST IS C REATED AND ACCORDINGLY THE SAME IS ALLOWABLE AS A DEDUCTION FR OM THE INCOME. IN VIEW OF THE ABOVE FACTS, THE ASSESSING OFFICER H AS RIGHTLY ALLOWED THE EXPENDITURE INCURRED FOR THE OBJECT OF THE TRUST. WE WOULD ONCE AGAIN DRAW YOUR ATTENTION TO THE JUDG MENT OF ITO V. VOKKALINGERA SANGHA- ITA NO.281 TO 285/BANG/2014 IN PARTICULAR PARA NO. 5.3.2 IN THE CASE OF NINNALAGRI CULTUARAL SOCIETY 71 ITD 152. IT WAS HELD THAT THE ASSESSEE H AD NOT GRANTED REGISTRATION U/S.12A BUT IT HAS BEEN HELD IN THE SA ID CASE THAT THE PURPOSE AND THE ACTIVITY OF THE ASSESSEE WAS TO ENG AGE IN CHARITABLE ACTIVITIES. THE TRUST IS REGISTERED UNDE R THE BOMBAY PUBLIC TRUST. WHATEVER AMOUNT HAS BEEN SPENT ON THO SE PROGRAMMES/PROJECTS/OBJECTS, IT WAS SPENT IN THE US UAL COURSE OF CARRYING ON ITS ACCLAIMED OBJECTS. THEREFORE, THERE WAS NO BASIS WHATSOEVER, FACTUAL OR LEGAL TO HOLD THAT THE AMOUN T SPENT BY THE ASSESSEE WAS NOT INCURRED AS A PART OF THE NORMAL A CTIVITIES FOR WHICH THE TRUST WAS FORMED. THEREFORE, MONEY SPENT BY TRUST FOR THE PURPOSE OF OBJECTS OF THE TRUST HAS TO BE ALLOW ED AS A DEDUCTION IN COMPUTATION OF INCOME. THE ASSESSING OFFICER HAS THEREFORE RIGHTLY ALLOWED THE DEDUCTION FROM THE INTEREST INCOME EARNED BY THE TRUST. WE, THEREFORE, REQUEST YOUR HONOUR NOT TO PASS AN O RDER ENHANCING OR MODIFYING OR CANCELLING THE ASSESSMENT . THE ASSESSMENT IS NOT AN ERRONEOUS SINCE ALL THE FA CTS WERE AVAILABLE AND AFTER DUE CONSIDERATION THE ORDER HAS BEEN PASSED ALLOWING THE CLAIM AND HENCE IS NOT PREJUDICE TO TH E INTEREST OF THE REVENUE. ITA 3249/MUM/2016 10 WE, THEREFORE REQUEST YOU TO DROP THE PROCEEDINGS I NITIATED U/S.263 OF THE ACT.' THE LD. CIT(E) REJECTED THE AFORE-SAID CONTENTIONS OF THE ASSESSEE AND HELD VIDE ORDERS DATED 16.02.2016 PASSED U/S 263 OF THE ACT , THAT THE ASSESSMENT ORDER DATED 12 TH DECEMBER, 2013 PASSED BY THE A.O. U/S 143(3) OF TH E ACT IS ERRONEOUS IN SO FAR IT WAS PREJUDICIAL TO THE INTER ESTS OF THE REVENUE AND SET ASIDE THE ASSESSMENT ORDER DATED 12-12-2014 PASSED BY THE A.O. U/S 143(3) OF THE ACT, FOR FRAMING FRESH ASSESSMENT AFTER PROV IDING PROPER OPPORTUNITY OF BEING HEARD TO THE ASSESSEE . THE ASSESSEE HAD ARG UED BEFORE THE LEARNED CIT(E) THAT AN AMOUNT OF RS. 1.9 CRORES WAS RECEIVE D BY THE ASSESSEE-TRUST TOWARDS CORPUS FUND WHICH CANNOT BE USED BY THE TRU ST AND ONLY INCOME DERIVED FROM THIS CORPUS FUND THEREON CAN BE USED F OR THE BENEFIT OF THE MEMBERS. THE REGISTRATION OF THE TRUST U/S 12A OF THE ACT DOES NOT CHANGE THE CHARACTER OF THE RECEIPT, HENCE, THE SAME IS CA PITAL RECEIPT. THE ASSESSEE- TRUST ALSO ACKNOWLEDGED THAT THE REGISTRATION U/S 1 2A OF THE ACT WAS REJECTED BY THE REVENUE AND THEREFORE THE ASSESSEE IS NOT LI ABLE TO CLAIM EXEMPTION U/S 11 OF THE ACT. THE ASSESSEE SUBMITTED BEFORE T HE LEARNED CIT(E) THAT THE A.O. FORMED AN OPINION AND APPLIED HIS MIND TO THE FACTS OF THE ASSESSES CASE AND ALLOWED EXEMPTION U/S 11 OF THE ACT. IT WAS SU BMITTED BY THE ASSESSEE THAT CHANGE OF AN OPINION IS OUT OF THE PURVIEW OF SECTION 263 OF THE ACT. THE LD. CIT (E) OBSERVED THAT THE A.O. SHOULD HAVE DISA LLOWED THE CLAIM OF THE ASSESSEE-TRUST FOR EXEMPTION OF RS. 1.90 CRORES WHI LE COMPLETING THE ASSESSMENT FOR THE ASSESSMENT YEAR 2011-12 WHICH TH E A.O. HAS NOT DONE EVEN AFTER OBSERVING THAT THE TRUST IS NOT ENJOYING REGISTRATION U/S 12A OF THE ACT. THE LD. CIT (E) OBSERVED THAT THE A.O. WHILE FRAMING THE ASSESSMENT ORDER U/S 143(3) OF THE ACT HAS NOT FORMED ANY OPIN ION OF THE ISSUE WHICH IS NOW DEALT WITH IN BY THE LEARNED CIT(E) U/S 263 OF THE ACT. THUS, IT WAS OBSERVED BY THE LD. CIT (E) THAT THE A.O. WAS SILEN T ABOUT THE ELIGIBILITY OF EXEMPTION TO THE ASSESSEE U/S 11 OF THE ACT. HENCE , THE SAID ORDER IS ITA 3249/MUM/2016 11 ERRONEOUS IN SO FAR AS PREJUDICIAL TO THE INTEREST OF THE REVENUE AS THE A.O. ALLOWED THE CLAIM OF EXEMPTION EVEN WHEN THE TRUST WAS DOING ACTIVITIES WHICH WERE COMMERCIAL IN NATURE. THE LD. CIT (E) H ELD THAT THE HONBLE SUPREME COURT IN THE CASE OF U.P. FOREST CORPORATIO N V. DY. CIT (2008) 297 ITR 1 (SC) HELD THAT REGISTRATION U/S 12A OF THE AC T IS A CONDITION PRECEDENT FOR AVAILING THE BENEFIT OF SECTION 11 AND 12 OF TH E ACT. IN NUTSHELL, THE LD. CIT(E) RELYING ON THE EXPLANATION 2 TO SECTION 263 OF THE ACT WHICH HAS BEEN INSERTED BY FINANCE ACT 2015 W.E.F. 1ST JUNE, 2015 HELD THAT THE ASSESSMENT ORDER DATED 12.12.2013 PASSED BY THE A.O. U/S 143(3 ) OF THE ACT IN THIS CASE IS ERRONEOUS SO FAR AS IT PREJUDICIAL TO THE INTERE STS OF REVENUE AND ACCORDINGLY SET ASIDE THE SAME TO THE FILE OF A.O. FOR ASSESSME NT TO BE FRAMED AFRESH DE- NOVO ON MERITS AFTER GIVING OPPORTUNITY OF BEING HE ARD , VIDE ORDERS DATED 16.02.2016 PASSED BY LEARNED CIT(E) U/S 263 OF THE ACT. IT IS PERTINENT TO MENTION HERE THAT THE LEARNED CIT(E) DROPPED THE SE COND ISSUE RAISED IN THE SHOW CAUSE NOTICE DATED 01-01-2016 W.R.T. INTEREST INCOME OF RS.1,46,32,985/- , WHEREIN THE AO ALLOWED THE EXPEN DITURE HAVING NO NEXUS TO EARN INTEREST INCOME OF RS.1,46,32,985/-, WHILE PASSING THE IMPUGNED ORDER DATED 16.02.2016 U/S. 263 OF THE ACT. 4. AGGRIEVED BY THE ORDER OF THE LD. CIT (E) DATE D 16.02.2016 PASSED U/S 263 OF THE ACT, THE ASSESSEE IS IN APPEAL BEFORE THE TR IBUNAL. 5. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE IS BANK OF INDIA RETIRED EMPLOYEES MEDICAL ASSISTANCE TRUST, AND CORPUS FUND OF RS. 1.9 CRORES WAS RECEIVED FROM BANK OF INDIA WITH THE CONDITION THAT THE SAME CANNOT BE UTILIZED BY THE ASSESSEE AND ONLY THE INC OME EARNED THEREON CAN BE UTILIZED FOR THE BENEFIT OF THE MEMBERS OF THE TRUS T, WHICH IS OF CHARITABLE NATURE. THE LD. COUNSEL SUBMITTED THAT APPLICATION U/S 12A OF THE ACT WAS REJECTED BY THE REVENUE . IT IS SUBMITTED THAT WHI LE FRAMING THE ASSESSMENT ORDER DATED 12.12.2013 U/S 143(3) OF THE ACT THE CO RPUS FUND WAS NOT TAXED ITA 3249/MUM/2016 12 BY THE AO KEEPING IN VIEW THAT THE SAME IS CAPITAL RECEIPT . IT WAS SUBMITTED BY LEARNED COUNSEL FOR THE ASSESSEE THAT IT IS THE CONTENTION OF THE LD. CIT(E) THAT CORPUS FUNDS RECEIVED BY THE ASSESSEE IS CHARG EABLE TO TAX AS REVENUE RECEIPT. IT IS SUBMITTED THAT SHOW CAUSE NOTICE DA TED 01.01.2016 WAS ISSUED BY LEARNED CIT(E) ON TWO GROUNDS , OF WHICH ONE GRO UND WAS WITH RESPECT TO THE INTEREST INCOME OF RS. 1.46 CRORES AS AGAINST W HICH EXPENDITURE HAS BEEN INCURRED AND ALLOWED BY THE AO WHILE THE LEARNED C IT(E) CHALLENGED THE ALLOWABILITY OF EXPENDITURE HAVING NO NEXUS WITH IN TEREST INCOME IN THE AFORE- STATED SCN, BUT SAID SECOND ISSUE WAS FINALLY DROPP ED BY THE LD. CIT(E) WHILE FRAMING ORDER DATED 16.02.2016 PASSED U/S 263 OF TH E ACT, AND THE ASSESSMENT ORDER DATED 12.12.2013 PASSED BY THE AO U/S 143(3) OF THE ACT WAS FINALLY SET ASIDE BY LEARNED CIT(E) VIDE ORDERS DATED 16.02.2016 PASSED U/S 263 OF THE ACT ONLY ON ONE GROUND OF TAXABILITY OF CORPUS FUND TO THE TUNE OF RS.1.90 CRORES RECEIVED BY THE ASSESSEE FROM BAN K OF INDIA. IT IS SUBMITTED THAT FUND OF RS. 1.90 CRORES WAS RECEIVED FROM BANK OF INDIA WITH A SPECIFIC DIRECTION TO THE TRUST THAT THE SAME SHALL FORM PAR T OF THE CORPUS FUNDS AND THE SAME CANNOT BE UTILIZED BY THE ASSESSEE AND ONL Y INCOME DERIVED THEREON CAN BE UTILIZED FOR THE BENEFIT OF THE MEMBERS OF T HE ASSESSEE-TRUST. THE LD. COUNSEL INVITED OUR ATTENTION TO PAPER BOOK PAGE 29 WHEREBY LETTER DATED 19 TH SEPTEMBER, 2011 WAS ISSUED BY AGM(IR) OF BANK OF IN DIA WHICH IS PLACED ON RECORD WHEREBY RS 1.9 CRORES WAS GIVEN BY BANK OF I NDIA TO THE ASSESSEE TOWARDS CORPUS FUND OF THE SCHEME . THE ASSESSEE R ELIED ON THE DECISION OF THE MUMBAI-TRIBUNAL IN THE CASE OF CHANDRAPRABHU J AIN SWETAMBER MANDIR V. ACIT IN ITA NO. 230/MUM/2016 FOR THE ASSESSMENT YEAR 2011-12 DATED 12 TH AUGUST, 2016 IN WHICH ONE OF US BEING ACCOUNTANT M EMBER IS ONE OF THE SIGNATORY TO THE SAID ORDER , AND ALSO THE LEARNED COUNSEL FOR THE ASSESSEE RELIED UPON THE DECISION OF BANGALORE BENCH OF THE TRIBUNAL IN THE CASE OF ITO V. VOKKALIGARA SANGHA IN ITA NO. 281 TO 285/BANG/20 14 VIDE ORDERS DATED 14 TH AUGUST, 2015. ITA 3249/MUM/2016 13 6. THE LD. D.R., ON THE OTHER HAND RELIED ON THE DE CISION OF HONBLE SUPREME COURT IN THE CASE OF U.P. FOREST CORPORATIO N V. DY. CIT (2008) 297 ITR 1 (SC) AND SUBMITTED THAT NO REGISTRATION U/S 1 2A OF THE ACT WAS OBTAINED BY THE ASSESSEE AND HENCE THE CORPUS FUND IS ALSO T AXABLE BEING VOLUNTARY DONATION CHARGEABLE TO TAX U/S 2(24(IIA) OF THE ACT . 7. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND ALS O PERUSED THE MATERIAL AVAILABLE ON RECORD INCLUDING THE CASE LAWS RELIED ON BY BOTH THE SIDES. WE HAVE OBSERVED THAT THE ASSESSEE IS A TRUST NAMELY B ANK OF INDIA RETIRED EMPLOYEES MEDICAL ASSISTANCE TRUST WHEREIN THE OBJE CT OF THE TRUST IS TO PROVIDE FINANCIAL ASSISTANCE TO THE RETIRED EMPLOYE ES OF THE BANK, WHO HAVE BECOME MEMBERS OF THE SCHEME , TO MEET THE MEDICAL EXPENSES INCURRED BY THEM AND THEIR DEPENDENT SPOUSES. THE TRUST IS GOVE RNED BY AND ADMINISTERED UNDER THE BANK OF INDIA RETIRED EMPLOY EES MEDICAL ASSISTANCE SCHEME RULES, FORMULATED BY THE BANK. THE TRUST IS REGISTERED WITH THE CHARITY COMMISSIONER, MUMBAI. THE APPLICATION FOR R EGISTRATION OF THE TRUST U/S 12A OF THE ACT WAS REJECTED BY THE REVENUE. THE ASSESSEE HAS RECEIVED FROM BANK OF INDIA RS. 1.90 CRORES TOWARDS CORPUS F UND. THE RELEVANT LETTER DATED 19-09-2011 ISSUED BY AGM(IR) OF THE BANK OF INDIA IS PLACED ON RECORD VIDE PAPER BOOK PAGE NO. 29 , OF WHICH RELEVANT POR TION READS AS UNDER : - CERTIFICATE THIS IS TO CERTIFY THAT AS PER THE DECISION OF BANK S CENTRAL WELFARE COMMITTEE, FOR THE PURPOSE OF ALLOCATION OF FUNDS F OR DIFFERENT WELFARE ACTIVITIES, AN AMOUNT OF RS. 150.00 LAKHS AND RS.40 LAKHS HAS BEEN DEBITED TO THE BANKS P & L STAFF WELFARE EXPENSES ACCOUNT ON 04.03.20111 AND 29.03.2011 RESPECTIVELY AND PAID ACCORDINGLY TO THE CREDIT OF RETIRED EMPLOYEES MEDICAL ASSISTANCE SCHEMES ACCOUNT TOWA RDS CORPUS FUND OF THE SCHEME. THE ASSESSEE HAD ALSO SUBMITTED COPIES OF AUDITED B ALANCE SHEET AND PROFIT AND LOSS ACCOUNT BEFORE THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS ITA 3249/MUM/2016 14 U/S. 143(3) OF THE ACT READ WITH SECTION 143(2) OF THE ACT. THE DETAILS OF THE CORPUS FUND WAS DULY FURNISHED TO THE AO BY THE ASS ESSEE DURING ASSESSMENT PROCEEDINGS U/S 143(3) OF THE ACT READ WITH SECTION 143(2) OF THE ACT. THE AO WAS AWARE THAT REGISTRATION U/S 12A OF THE ACT OF T HE ASSESSEE-TRUST WAS REJECTED BY THE REVENUE. THE AO ACCEPTED THE CONTE NTIONS OF THE ASSESSEE WITHOUT ANALYZING THE PROVISIONS OF SECTION 11(1)(D ) R.W.S. 2(24(IIA) AND SECTION12 A OF THE ACT AND HIS ORDER IS ERRONEOUS A S NO EXEMPTION CAN BE GRANTED TO VOLUNTARY CONTRIBUTIONS RECEIVED BY THE ASSESSEE-TRUST UNLESS THE ASSESSEE-TRUST HOLDS REGISTRATION U/S 12A OF THE AC T. THE CORPUS DONATION OF RS. 1.90 CRORES RECEIVED BY THE ASSESSEE ARE VOLUNT ARY DONATIONS . THE ASSESSMENT ORDER OF THE AO IS CLEARLY ERRONEOUS AS IS AGAINST THE PROVISIONS OF SECTION 11(1)(D) R.W.S. 2(24(IIA) OF THE ACT AS TH E ASSESSEE-TRUST DOES NOT HOLD REGISTRATION U/S 12A OF THE ACT AND THERE IS NO EST OPPEL AGAINST LAW. THE PERUSAL OF THE LETTER DATED 19-09-2011 ISSUED BY AG M(IR) OF THE BANK OF INDIA STIPULATES MERELY THAT RS.1.90 CRORES ARE CORPUS D ONATIONS WHICH ARE VOLUNTARY IN NATURE WITHOUT SPECIFYING THE SPECIFIC PURPOSES FOR WHICH THESE CORPUS DONATIONS ARE TO BE APPLIED AS THESE ARE NOT SPECIFIC PASS THROUGH DONATIONS WHICH ARE TO BE APPLIED FOR THE SPECIFIC PURPOSES, RATHER AS STATED BY THE ASSESSEE THESE CORPUS DONATIONS ARE TO BE KE PT IN-TACT AND INCOME ACCRUED THEREON IS TO BE UTILIZED FOR MEETING MEDIC AL EXPENSES OF THE EMPLOYEES AND DEPENDENT SPOUSES OF BANK OF INDIA WH O ARE BENEFICIARIES OF THESE MEDICAL SCHEME. THUS , THE ASSESSMENT ORDER D ATED 12-12-2013 PASSED BY THE AO U/S 143(3) OF THE ACT IS CLEARLY ERRONEOU S SO FAR AS IS PREJUDICIAL TO THE INTEREST OF REVENUE. THE AO HAS NOT MADE THE R EQUIRED ENQUIRIES AS HE SHOULD HAVE MADE TO SEE WHETHER THESE CORPUS DONAT ION ARE ENTITLED FOR EXEMPTION U/S 11(1)(D) OF THE ACT IF READ IN CONJUN CTION WITH SECTION 2(24)(IIA) AND 12A OF THE ACT. THERE IS NO ESTOPPEL AGAINST LA W AND THE ASSESSMENT ORDER OF THE AO DATED 12-12-2013 PASSED U/S 143(3) OF THE ACT NOT BRINGING TO TAX AS INCOME CORPUS DONATION OF RS.1.90 CRORES U/S 2(24)(IIA) OF THE ACT IS AGAINST THE PROVISIONS OF THE LAW AND MORE SO THESE CORPUS DONATIONS ARE NOT ITA 3249/MUM/2016 15 FOR SPECIFIC PURPOSES BEING NOT PASS THROUGH CORPUS DONATIONS AND THE ASSESSEE-TRUST DOES NOT HOLD REGISTRATION U/S 12A O F THE ACT. THE PERUSAL OF THE ASSESSMENT ORDER OF THE AO U/S 143(3) OF THE AC T WILL CLEARLY REVEAL THE SAME AS UNDER, WHEREIN THE AO HAS NOTED THAT THE AS SESSEE IS NOT ENTITLED FOR EXEMPTION U/S 11 OF THE ACT:- ON PERUSAL OF THE ASSESSMENT RECORD, IT IS OBSERVE D THAT THE OBJECTS OF THE TRUST IS TO PROVIDE FINANCIAL ASSISTANCE TO THE RETIRED EMPLOYEES OF THE BANK, WHO HAVE BECOME THE MEMBER OF THE SCHEME TO M EET THE MEDICAL EXPENSES INCURRED BY THEM AND HIS/HER DEPENDANT SPO USE. THE TRUST IS GOVERNED BY AND ADMINISTERED UNDER THE BANK OF INDIA RETIRED EMPLOYEES MEDICAL ASSISTANCE SCHEME RULES F ORMULATED BY THE BANK. THE TRUST IS REGISTERED WITH THE CHARITY COMMISSION ER, MUMBAI, REGISTRATION U/S 12A OF THE I.T. ACT REJECTED TO TH E ASSESSEE. THEREFORE ASSESSEE IS NOT LIABLE TO EXEMPTION U/S 11 OF THE I .T. ACT. WE HAVE OBSERVED THAT THE MUMBAI BENCH OF THIS TR IBUNAL IN THE CASE OF CHANDRAPRABHU JAIN SWETAMBER MANDIR V. ACIT IN ITA NO. 230/MUM/2016 VIDE ORDERS DATED 12-08-2016 WHEREIN IT HAS BEEN HE LD THAT THE CORPUS DONATIONS RECEIVED BY THE ASSESSEE TRUST FOR UTILIZ ATION FOR SPECIFIC PURPOSES CANNOT BE BROUGHT TO TAX DESPITE THE FACT THAT THE TAX-PAYER TRUST IN THAT CASE WAS NOT REGISTERED U/S 12AA OF THE ACT. THE AFORE- STATED ORDER OF THE TRIBUNAL IS REPRODUCED BELOW IN WHICH ONE OF US (ACCOUNTANT MEMBER) IS SIGNATORY OF THE SAID ORDER OF THE TRIBUNAL:- 9. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND AL SO PERUSED THE MATERIAL AVAILABLE ON RECORD INCLUDING THE CASE LAW S RELIED ON. WE HAVE OBSERVED THAT THE ASSESSEE IS A RELIGIOUS CHARITABL E TRUST DULY REGISTERED UNDER THE BOMBAY PUBLIC TRUST ACT, 1950. THE ASSESS EE COULD NOT PRODUCE REGISTRATION U/S 12A/12AA OF THE ACT AND HE NCE IT COULD BE PRESUMED THAT THE ASSESSEE IS NOT REGISTERED U/S 12 A/12AA OF THE ACT AS THE ONUS WAS ON THE ASSESSEE TO BRING ON RECORD THE EVIDENCES TO PROVE ITS CONTENTIONS WHICH IT WANT COURT TO BELIEV E AND CONSEQUENTLY TO ITA 3249/MUM/2016 16 SEEK IMMUNITIES AND PROTECTIONS GRANTED TO A REGIST ERED TRUST. THE ASSESSEE HAS RECEIVED CORPUS DONATIONS TO THE TUNE OF RS. 4,55,446/- DURING PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEA R WHICH ARE BEING GIVEN WITH SPECIFIC DIRECTIONS BY THE DONORS TO BE APPLIED TOWARDS SPECIFIC PURPOSE FOR WHICH THE RESPECTIVE FUNDS WER E CREATED . THIS IS AN ADMITTED POSITION BETWEEN THE PARTIES AND THERE IS NO DISPUTE WITH RESPECT TO THIS PROPOSITION. THE DETAILS OF THE COR PUS DONATIONS ARE AS UNDER : 1. BUILDING FUND - RS. 50,000/- 2. DEV DRAVYA FUND - RS. 2,92,066/- 3. GYAN FUND - RS. 41,541/- 4. VEYA VACHA FUND - RS. 1,809/- 5. AKHAND DEEPAK FUND - RS. 12,951/- 6. DADAWADI FUND - RS. 25,020/- 7. JIV DAYA FUND - RS. 18,063/- 8. AYAMBIL FUND - RS. 13,996/- TOTAL - RS. 4,55,446/- ========== THESE ABOVE STATED SPECIFIC DONATIONS GIVEN BY THE DONORS TO BE UTILIZED FOR SPECIFIC PURPOSES CANNOT BE DIVERTED FOR ANY OT HER PURPOSES BY THE ASSESSEE AND ARE CREDITED TO THE RESPECTIVE FUNDS I N THE BALANCE SHEET , AND UTILIZATION THEREOF IS ALSO REFLECTED FROM THES E SPECIFIC FUNDS. WE HAVE GONE THROUGH THE CASE LAWS RELIED UPON BY THE ASSESSE AS SET OUT ABOVE AND HAVE OBSERVED THAT THE COURTS/TRIBUNALS H AVE TAKEN A CONSISTENT VIEW THAT THESE CORPUS DONATIONS ARE HEL D TO BE CAPITAL RECEIPTS BEING CAPITAL IN NATURE AND ARE NOT TAXABL E DESPITE THE FACT THAT TRUST IS NOT REGISTERED U/S 12A/12AA OF THE ACT. IN ITO(E) V. BASANTI DEVI & SHRI CHAKHAN LAL GARG E DUCATION TRUST IN ITA NO. 5082(DEL.) 2010 FOR ASSESSMENT YEAR 2002-03 VIDE ORDERS DATED 19-01-2011, ITAT, DELHI RELYING ON ITAT, DELHI DECI SION IN THE TAXPAYERS OWN CASE FOR ASSESSMENT YEAR 2003-04 WHER EBY THE TRIBUNAL HELD THAT THE AMOUNT RECEIVED BY THE TAX-PAYER TRUS T FROM ITS SETTLER, TOWARDS INFRASTRUCTURE FUND, WAS NOT TAXABLE IN THE HANDS OF THE TAX- PAYER TRUST, DESPITE THE FACT THAT THE TAX-PAYER TR UST IS NOT REGISTERED U/S 12A OF THE ACT, AND CONSEQUENTLY THE TRIBUNAL D ISMISSED THE REVENUE APPEAL. THE REVENUE WENT IN APPEAL AND THE HONBLE DELHI ITA 3249/MUM/2016 17 HIGH COURT DISMISSED THE APPEAL OF THE REVENUE AGAI NST THE TRIBUNALS ORDER FOR ASSESSMENT YEAR 2003-04 IN ITA NO. 927/20 09 VIDE ORDERS DATED 23-09-2009 IN BASANTI DEVI & SHRI CHAKHAN LAL GARG EDUCATION TRUST. SIMILAR VIEW WAS TAKEN BY ITAT, AGRA IN THE CASE OF ITO V. GAUDIYA GRANTH ANUVED TRUST REPORTED IN (2014) 48 T AXMANN.COM 348(AGRA-TRIB) WHEREBY TRIBUNAL HELD AS UNDER: THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER DATED FEBRUARY 24, 2012 PASSED BY THE LEARNED COMMISSIONER OF INCO ME-TAX (APPEALS)-I, AGRA FOR THE ASSESSMENT YEAR 2007-08. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF AP PEAL : '1. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HA S ERRED IN LAW AND ON FACTS IN FAILING TO APPRECIATE THAT VOLUNTARY CO NTRIBUTIONS (WHETHER CORPUS DONATIONS OR GENERAL DONATIONS) RECEIVED BY A CHARITABLE TRUST ARE INCOME AS DEFINED VIDE SECTION 2(24)(IIA) OF TH E ACT AND CORPUS DONATIONS ARE EXEMPT FROM TAX UNDER SECTION 11(1)(D ) ONLY IF ASSESSEE IS REGISTERED UNDER SECTION 12A/12AA OF THE ACT. 2. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HA S ERRED IN PLACING RELIANCE UPON THE APPELLATE DECISION OF THE HON'BLE DELHI HIGH COURT IN I.T.A. NO. 5082/DEL/2010 IN THE CASE OF IT O (EXEMPTION) V SMT. BASANTI DEVI AND SHRI CHAKHAN LAL GARG EDUCATI ON TRUST FOR THE ASSESSMENT YEAR 2003-04, WHICH IN TURN IS NOW U NDER CHALLENGE IN THE HON'BLE SUPREME COURT. 3. THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEAL S)-1, AGRA BEING ERRONEOUS IN LAW AND ON FACTS BE SET ASIDE AN D THE ORDER OF THE ASSESSING OFFICER BE RESTORED. 4. THE APPELLANT CRAVES TO AMEND THE GROUNDS OF THE AP PEAL STATED ABOVE AND WHEN NEED FOR DOING SO MAY ARISE.' ITA 3249/MUM/2016 18 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE- TRUST HAS SHOWN DONATION OF RS. 68,50,000 FROM BBT, MUMBAI. THE ASS ESSING OFFICER COMPUTED THE ASSESSMENT ON TOTAL INCOME OF RS. 68,7 0,000 REJECTING THE ASSESSEE'S CONTENTION THAT DONATION RECEIVED TOWARD S THE CORPUS OF THE TRUST. THE COMMISSIONER OF INCOME-TAX (APPEALS) DEL ETED THE ADDITION OF RS. 68,50,000 OUT OF THE ADDITION OF RS. 68,70,000 MADE BY THE ASSESSING OFFICER AS UNDER: 'I HAVE ALSO EXAMINED THE TERM CORPUS FUND AND CORP US DONATION AS IT IS BEING GENERALLY USED WITH RESPECT TO A TRUST. A COR PUS FUND DENOTES A PERMANENT FUND KEPT FOR THE BASIC EXPENDITURES NEED ED FOR THE ADMINISTRATION AND SURVIVAL OF THE ORGANISATION. TH E CORPUS FUND IS GENERALLY NOT ALLOWED TO BE UTILISED FOR THE ATTAIN MENT OF THE PURPOSES, BUT THE INTEREST/DIVIDEND ACCRUED ON SUCH FUND CAN BE UTILISED AS WELL AS ACCUMULATED. SUCH FUND CAN ALSO BE USED FOR CREA TION OF CAPITAL ASSET OR PROPERTY OF THE TRUST FROM WHICH INCOME CAN BE G ENERATED. CORPUS FUND ARE GENERALLY CREATED OUT OF CORPUS DONATION. A DON ATION WILL BE TREATED AS CORPUS DONATION ONLY IF IT IS ACCOMPANIED BY A S PECIFIC WRITTEN DIRECTION OF THE DONOR. IN THE ABSENCE OF ANY WRITT EN DIRECTION OF THE DONOR, A CONTRIBUTION OF GRANT CANNOT BE TRANSFERRE D TO CORPUS FUND. IN THE PRESENT CASE, THE DONOR, THE BHAKTIVEDANTA BOOK TRU ST HAS VERY CATEGORICALLY IN HIS LETTER, WHILE PROVIDING MONEY TO THE APPELLANT TRUST, HAS MENTIONED THE AMOUNT OF RS. 68,50,000 AS CORPUS DONATION AND SUCH AMOUNT HAS BEEN USED BY THE TRUST FOR PURCHASING TH E LAND AND GIVING MONEY ON INTEREST AS LOAN. THEREFORE, THE AMOUNT OF RS. 68,50,000 SHOWN BY THE APPELLANT TRUST HAS BEEN FOUND TO BE IN THE NATURE OF CORPUS DONATION. ITA 3249/MUM/2016 19 NOW, THE QUESTION ARISES WHETHER SUCH CORPUS DONATI ON IS TAXABLE AS INCOME OR NOT EVEN IN THE CASES IN WHICH THE TRUST IS NOT REGISTERED UNDER SECTION 12AA BECAUSE FOR THOSE TRUSTS WHICH ARE REG ISTERED UNDER SECTION 12AA, EXEMPTION TO CORPUS DONATION HAS BEEN PROVIDE D AS PER PROVISION OF SECTION 11(1)(D). FOR SUCH TRUST TO WHICH REGIST RATION UNDER SECTION 12AA HAS NOT BEEN PROVIDED, ITS TAXABILITY IS REQUI RED TO BE DECIDED WITH REFERENCE TO THE SCHEME OF THE ACT AS HELD IN THE D ECISION OF PENTAFOUR SOFTWARE EMPLOYEES WELFARE FOUNDATION V. ASST. CIT (SUPRA). IN BOTH THE DECISIONS REFERRED BY THE LEARNED AUTHORISED REPRES ENTATIVE, IN CASE OF PENTAFOUR SOFTWARE EMPLOYEES WELFARE FOUNDATION V. ASST. CIT, IT HAS BEEN HELD THAT CORPUS DONATION BEING IN THE NATURE OF CAPITAL RECEIPT ARE NOT CHARGEABLE TO INCOME-TAX. THE DECISION OF THE I NCOME-TAX APPELLATE TRIBUNAL, DELHI IN THE CASE OF BASANTI DEVI AND SRI CHAKHAN LAL GARG EDUCATION TRUST FOR BOTH ASSESSMENT YEARS 2002-03 A ND 2003A-04 ARE ANNEXED WITH THIS ORDER AS ANNEXURE A-1 IN WHICH RE FERENCE TO THE DECISION IN THE CASE OF PENTAFOUR SOFTWARE EMPLOYEE S WELFARE FOUNDATION IS ALSO GIVEN. I HAVE ALSO COME ACROSS ANOTHER DECISION OF THE HON 'BLE INCOME-TAX APPELLATE TRIBUNAL, KOLKATA IN THE CASE OF SHRI SHA NKAR BHAGWAN ESTATE V. ITO [1997] 61 ITD 196 (CAL) IN WHICH, THE TAXABILITY OF CORPUS DONATION HAS BEEN EXAMINED IN THE LIGHT OF SECTION 12 READ SECTION 2(24)(IIA) OF THE INCOME-TAX ACT AND IN THIS DECISI ON, IT HAS BEEN HELD AS UNDER : 'SO FAR AS SECTION 2(24)(IIA) IS CONCERNED, THIS SE CTION HAS TO BE READ IN THE CONTEXT OF THE INTRODUCTION OF THE PRESENT SECTION 12 IT IS SIGNIFICANT THAT SECTION 2(24)(IIA) WAS INSERTED WITH EFFECT FROM AP RIL 1, 1973 SIMULTANEOUSLY WITH THE PRESENT SECTION 12, BOTH OF WHICH WERE INTRODUCED FROM THE SAID DATE BY THE FINANCE ACT, 1 972. SECTION 12 MAKES IT CLEAR BY THE WORDS APPEARING IN PARENTHESI S THAT CONTRIBUTIONS ITA 3249/MUM/2016 20 MADE WITH A SPECIFIC DIRECTION THAT THEY SHALL FORM PART OF THE CORPUS OF THE TRUST OR INSTITUTION SHALL NOT BE CONSIDERED AS INCOME OF THE TRUST. THE BOARD'S CIRCULAR NO. 108 DATED MARCH 20, 1973 IS EX TRACTED AT PAGE 1277 OF VOLUME I OF SAMPATH IYENGAR'S LAW OF INCOME-TAX, 9TH EDN. IN WHICH THE INTER-RELATION BETWEEN SECTION 12 AND SECTION 2 (24) HAS BEEN BROUGHT OUT. GIFTS MADE WITH CLEAR DIRECTIONS THAT THEY SHA LL FORM PART OF THE CORPUS OF THE RELIGIOUS ENDOWMENT CAN NEVER BE CONS IDERED AS INCOME. IN THE CASE OF R. B. SHREERAM RELIGIOUS & CHARITABLE T RUST V. CIT [1988] 172 ITR 373 (SC) IT WAS HELD BY THE BOMBAY HIGH COURT THAT EVEN IGN ORING THE AMENDMENT TO SECTION 12, WHICH MEANS THAT EVEN BEFORE THE WORDS APPEARING TO PARENTHESIS IN THE PRESENT SECTION 12, IT CANNOT BE HELD THAT VOLUNTARY CONTRIBUTORS SPECIFICALLY RECEIVED TOWARD S THE CORPUS OF THE TRUST MAY BE BROUGHT TO TAX. THE AFORESAID DECISION WAS FOLLOWED BY THE BOMBAY HIGH COURT IN THE CASE OF CIT V. TRUSTEES OF KASTURBAI SCINDIA COMMISSION TRUST [1991] 189 ITR 5 (BOM) . THE POSITION AFTER THE AMENDMENT IS A FORTIORI. IN THE PRESENT CASES THE A SSESSING OFFICER ON EVIDENCE HAS ACCEPTED THE FACTS THAT ALL THE DONATI ONS HAVE BEEN RECEIVED TOWARDS THE CORPUS OF THE ENDOWMENTS. IN VIEW OF TH IS CLEAR FINDING, IT IS NOT POSSIBLE TO HOLD THAT THEY ARE TO BE ASSESSED A S INCOME OF THE ASSESSEES. WE, THEREFORE, HOLD THAT THE ASSESSMENT OF THE CORPUS DONATIONS CANNOT BE SUPPORTED. 12. FOR THE ABOVE REASONS, WE HOLD AS UNDER : 1. THE RELIGIOUS ENDOWMENTS ARE NOT INVALID ON THE GRO UND THAT NEITHER THE TEMPLE NOR THE IMAGE HAD BEEN CONSECRATED AT T HE TIME OF CREATING THE ENDOWMENTS. 2. THE ASSESSEES HAVE TO BE ASSESSED IN THE STATUS OF 'INDIVIDUAL' SINCE THEY ARE ARTIFICIAL JURIDICAL ENTITIES AND ITA 3249/MUM/2016 21 3. THE VOLUNTARY CONTRIBUTIONS RECEIVED BY THE ASSESSE E TOWARDS THE CORPUS CANNOT BE BROUGHT TO TAX.' 6.5 EVEN AFTER CONSIDERING THE DEFINITION OF SECTIO N 2(24)(IIA) READ WITH SECTION 12, THE HON'BLE INCOME-TAX APPELLATE TRIBUN AL, KOLKATA ARRIVED TO THE CONCLUSION THAT THE VOLUNTARY CONTRIBUTION IN T HE NATURE OF CORPUS DONATION RAISED BY THE APPELLANT CANNOT BE BROUGHT TO TAX. IN THIS CASE ALSO, THE TRUST UNDER APPEAL WAS A PRIVATE RELIGIOU S TRUST NOT REGISTERED UNDER SECTION 12AA AND HENCE, CORPUS DONATION RECEI VED BY IT SHOULD NOT BE TAXABLE AS ITS INCOME. 6.6 AFTER CONSIDERING THE POSITION OF LAW AS IT IS PREVAILING AT PRESENT ON THE BASIS OF THE DECISION OF THREE TRIBUNALS, I.E., INCOME-TAX APPELLATE TRIBUNAL, CHENNAI, INCOME-TAX APPELLATE TRIBUNAL, D ELHI AND INCOME-TAX APPELLATE TRIBUNAL, KOLKATA AND FURTHER CONFIRMED B Y THE DELHI HIGH COURT, THE CORPUS DONATION IS IN THE NATURE OF A CA PITAL RECEIPT AND ARE NOT TAXABLE, IRRESPECTIVE OF THE FACT WHETHER THE TRUST IS REGISTERED UNDER SECTION 12AA OR NOT. THEREFORE, I AGREE WITH THE LE ARNED AUTHORISED REPRESENTATIVE THAT THE AMOUNT OF RS. 68,50,000 BEI NG IN THE NATURE OF CORPUS DONATION IS NOT TAXABLE UNDER THE INCOME-TAX ACT BEING IN THE NATURE OF CAPITAL RECEIPT AND THEREFORE, THE ADDITI ON OF RS. 68,50,000 MADE BY THE ASSESSING OFFICER TOWARDS THE TAXABLE I NCOME OF THE ASSESSEE IS HEREBY DELETED AND ACCORDINGLY, GROUND NO. 2 IS ALLOWED.' 4. THE LEARNED DEPARTMENTAL REPRESENTATIVE RELIED UPO N THE ORDER OF THE ASSESSING OFFICER, WHEREAS THE LEARNED AUTHORISED R EPRESENTATIVE RELIED UPON THE ORDER OF THE COMMISSIONER OF INCOME-TAX (A PPEALS) AND SUBMITTED THAT THE COMMISSIONER OF INCOME-TAX (APPE ALS) HAS FOLLOWED THE ORDERS OF THE INCOME-TAX APPELLATE TRIBUNAL, DE LHI BENCH, WHICH HAS BEEN CONFIRMED BY THE HON'BLE DELHI HIGH COURT, THU S, THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE. ITA 3249/MUM/2016 22 5. THE LEARNED AUTHORISED REPRESENTATIVE HAS SUBMITTE D THAT THE ISSUE IS COVERED BY VARIOUS ORDERS OF THE INCOME-TAX APPELLA TE TRIBUNAL IN THE CASES OF SHRI SHANKAR BHAGWAN ESTATE V. ITO [1997] 61 ITD 196 (CAL) , SOCIETY FOR INTEGRATED DEVELOPMENT IN URBAN & RUR AL AREAS V. DY. CIT [2004] 90 ITD 493 (HYD) , SRI DWARKADHEESH CHARITABLE TRUST V. ITO [1975] 98 ITR 557 (ALL) AND DY. CIT V. NASIK GYMKHANA [2001] 77 ITD 500 (PUNE) . 6. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF THE P ARTIES AND RECORDS PERUSED. THE GRIEVANCE OF THE REVENUE IS THAT THE C OMMISSIONER OF INCOME-TAX (APPEALS) HAS WRONGLY FOLLOWED THE JUDGM ENT OF THE HON'BLE DELHI HIGH COURT IN I. T. A. NO. 5082/DEL./2010, WH EREAS THAT ORDER HAS BEEN CHALLENGED BEFORE THE HON'BLE SUPREME COURT. T HE REVENUE DID NOT DISPUTE THE FACTS. WE NOTICED THAT THE COMMISSIONER OF INCOME-TAX (APPEALS) AFTER CONSIDERING THE DECISION OF THREE T RIBUNALS, I.E., INCOME- TAX APPELLATE TRIBUNAL, DELHI IN THE CASE OF ITO (E XEMPTION) V. SMT. BASANTI DEVI & SHRI CHAKHAN LAL GARG EDUCATION TRUS T [IT APPEAL NO. 5082 (DELHI) OF 2010, DATED 30-1-2009] THE REVENUE FILED APPEAL BEFORE THE HON'BLE DELHI HIGH COURT. THE HON'BLE DELHI HIG H COURT CONFIRMED THE ORDER OF THE INCOME-TAX APPELLATE TRIBUNAL, THE REV ENUE FILED APPEAL BEFORE THE HON'BLE SUPREME COURT, WHICH HAS BEEN DI SMISSED FOR NON- PROSECUTION VIDE JUDGMENT CIVIL APPEAL NOS. 7036 OF 2011, JUDGMENT DATED JANUARY 28, 2013, INCOME-TAX APPELLATE TRIBUN AL CHENNAI BENCH IN THE CASE OF PENTAFOUR SOFTWARE EMPLOYEES WELFARE FOUNDATION V. ASSTT. CIT [I.T. APPEAL NOS. 751 & 752 (MDS.) OF 2007] AND OTHERS AND INCOME- TAX APPELLATE TRIBUNAL, KOLKATA BENCH IN THE CASE O F SHRI SHANKAR BHAGWAN ESTATE (SUPRA) DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. WE FIND THAT THE FACTS OF THE CASE UNDER CONSIDERATION ARE IDENTICAL TO THE FACTS OF THE CASE DECIDED BY THE INCOME-TAX APPELLA TE TRIBUNAL, DELHI BENCH IN THE CASE OF SMT. BASANTI DEVI AND SHRI CHA KHAN LAL GARG ITA 3249/MUM/2016 23 EDUCATION TRUST AND OTHER ORDERS OF THE INCOME-TAX APPELLATE TRIBUNAL. SINCE FACTS ARE IDENTICAL, THEREFORE, TO MAINTAIN C ONSISTENCY, WE FOLLOW THE ABOVE ORDERS OF THE INCOME-TAX APPELLATE TRIBUNAL A ND THE LIGHT OF FACTS WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CO MMISSIONER OF INCOME- TAX (APPEALS). THE ORDER OF THE COMMISSIONER OF INC OME-TAX (APPEALS) IS CONFIRMED. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMIS SED. THE ITAT, CHENNAI IN INDIAN SOCIETY OF ANAESTHESIOL OGISTS V. ITO IN DECISION REPORTED IN (2014) 47 TAXMANN.COM 183(CHEN NAI-TRIB.) HELD THAT SPECIFIC FUNDS CREATED FOR FULFILLING SPECIFIC OBJECTIVES FOR WHICH THESE SEPARATE FUNDS ARE CONSTITUTED REMAIN AS CAPI TAL FUNDS AS THE FUNDS CAN BE USED FOR FULFILLING SPECIFIC OBJECTIVE S FOR WHICH THESE FUNDS ARE CONSTITUTED AND HENCE TO BE TREATED AS CORPUS F UNDS AND TO BE EXCLUDED FROM COMPUTATION OF INCOME. THE ITAT , BANGALORE IN ITO V. VOKKALIGARA SANGHA I N A DECISION REPORTED IN (2015) 44CCH 0509(BANG. TRIB.) WHEREBY THE TRIBUNAL HELD THAT VOLUNTARY CONTRIBUTIONS RECEIVED FOR A SPECIFI C PURPOSES CANNOT BE REGARDED AS INCOME U/S 2(24)(IIA) OF THE ACT SINCE THEY WERE CAPITAL RECEIPTS BEING CORPUS FUND AND TIED UP GRANTS FOR S PECIFIC PURPOSES. IN OUR CONSIDERED VIEW KEEPING IN VIEW OUR DETAILED DISCUSSIONS ABOVE AND THE CASE LAWS CITED BEFORE US, THESE CORPUS DON ATIONS OF RS.4,55,446/- RECEIVED BY THE ASSESSEE TRUST CANNOT BE BROUGHT TO TAX DESPITE THE FACT THAT THE ASSESSEE-TRUST WAS NOT RE GISTERED U/S 12A/12AA OF THE ACT. WE ORDER ACCORDINGLY. 10. IN THE RESULT, ASSESSEES APPEAL IN ITA NO 230 /MUM/2016 FOR ASSESSMENT YEAR 2011-12 IS ALLOWED . IN THE AFORESAID ORDER OF THE TRIBUNAL IN CHANDRAPR ABHU JAIN SWETAMBAR MANDIR(SUPRA) AND OTHER JUDGMENT(S) RELIED UPON BY THE ASSESSEE, THE DONATIONS WERE PASS-THROUGH DONATIONS WITH SPECIFIC PURPOSES FOR WHICH THE SAID VOLUNTARY DONATIONS CAN BE UTILIZED AND THE T AX-PAYER HAS NO CHOICE BUT TO SPEND THESE DONATIONS FOR SPECIFIC PURPOSES FOR WHICH THEY WERE GRANTED TO THE TAX-PAYER TRUSTS. WE ARE OF THE CONSIDERED VIE W THAT THE ASSESSMENT ITA 3249/MUM/2016 24 ORDER OF THE A.O. DATED 12-12-2013 PASSED U/S 143(3 ) OF THE ACT IN THE INSTANT APPEAL IS ERRONEOUS SO FAR AS IT IS PREJUDI CIAL TO THE INTEREST OF REVENUE WHICH CANNOT BE SUSTAINED IN LAW AS IT IS A GAINST THE PROVISIONS OF LAW AS DISCUSSED ABOVE . THE REVENUE HAS RIGHTLY R ELIED UPON THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF UP FORE ST CORPORATION (SUPRA) WHICH HAS CLEARLY HELD THAT FOR AVAILING EXEMPTION UNDER THE PROVISIONS OF SECTION 11 AND 12 OF THE ACT, THE REGISTRATION U/S 12A OF THE ACT IS ESSENTIAL. THE ORDER OF THE HONBLE SUPREME COURT IS REPRODUCE D HEREUNDER: 11. WE ARE OF THE CONSIDERED VIEW THAT FOR CLAIMING BE NEFIT UNDER SECTION 11(1)(A), REGISTRATION UNDER SECTION 12A IS A CONDI TION PRECEDENT. SECTION 11 PROVIDES FOR EXEMPTION OF INCOME WHICH IS APPLIED F OR CHARITABLE PURPOSES. SECTION 12 IS IN THE NATURE OF AN EXPLANATION OF SE CTION 11. SECTION 12A PROVIDES THAT PROVISIONS OF SECTIONS 11 AND 12 SHAL L NOT APPLY IN RELATION TO INCOME OF ANY TRUST OR INSTITUTION UNLESS CERTAIN C ONDITIONS ARE SATISFIED, ONE OF WHICH IS CLAUSE (A), THE SAME IS REPRODUCED AS U NDER: '12A. CONDITIONS AS TO REGISTRATION OF TRUSTS, ETC. THE PROVISIONS OF SECTION 11 AND SECTION 12 SHALL NOT APPLY IN RELATI ON TO THE INCOME OF ANY TRUST OR INSTITUTION UNLESS THE FOLLOWING CONDITION S ARE FULFILLED, NAMELY : (A)THE PERSON IN RESPECT OF THE INCOME HAS MADE AN APPLICATION FOR REGISTRATION OF THE TRUST OR INSTITUTION IN THE PRE SCRIBED FORM AND IN THE PRESCRIBED MANNER TO THE CHIEF COMMISSIONER OR COMMISSIONER BEFORE 1ST DAY OF JULY, 1973, OR BEFORE THE EXPIRY OF A PERIOD OF ONE YEAR FROM THE DATE OF THE CREATION OF THE TRUST OR THE ESTABLISHMENT OF THE INSTITUTION, WHICHEVER IS LATER : PROVIDED THAT THE CHIEF COMMISSIONER OR COMMISSIONE R MAY, IN HIS DISCRETION, ADMIT AN APPLICATION FOR THE REGISTRATI ON OF ANY TRUST OR INSTITUTION AFTER THE EXPIRY OF THE PERIOD AFORESAI D;' 12. APPLICATION FOR REGISTRATION UNDER SECTION 12A HAS TO BE MADE IN FORM 10A PRESCRIBED BY RULE 17-A OF THE INCOME-TAX RULES , 1962 BEFORE THE EXPIRY OF ONE YEAR FROM THE DATE OF THE CREATION OF THE TRUST OR THE ESTABLISHMENT OF THE INSTITUTION, WHICHEVER IS LATE R. THE SAME HAS TO BE MADE BY THE PERSON IN RECEIPT OF THE INCOME OF THE TRUST. CHIEF COMMISSIONER OR COMMISSIONER UNDER PROVISO TO CLAUS E (A) OF SECTION 12A HAS BEEN VESTED WITH THE DISCRETION TO ADMIT AN APP LICATION FOR REGISTRATION AFTER THE EXPIRY OF THE PRESCRIBED PER IOD. A CONJOINT READING OF SECTIONS 11, 12 AND 12A MAKES IT CLEAR THAT REGISTR ATION UNDER SECTION 12A IS A CONDITION PRECEDENT FOR AVAILING BENEFIT U NDER SECTIONS 11 AND ITA 3249/MUM/2016 25 12 OF THE ACT. UNLESS AND UNTIL AN INSTITUTION IS R EGISTERED UNDER SECTION 12A OF THE ACT, IT CANNOT CLAIM THE BENEFIT OF SECT ION 11(1)(A) OF THE ACT. KEEPING IN VIEW THE FACT THAT THE APPELLANT-CORPORA TION HAS NOT BEEN GRANTED REGISTRATION UNDER SECTION 12A OF THE ACT, WE HOLD THAT THE APPELLANT IS NOT ENTITLED TO CLAIM EXEMPTION FROM P AYMENT OF TAX UNDER SECTIONS 11(1)(A) AND 12 OF THE ACT. 13. WE, ACCORDINGLY, DISMISS THE APPEALS FILED BY THE CORPORATION WITHOUT DECIDING THE MERITS OF THE DISPUTE. THUS, WE DO NOT FIND ANY MERIT IN CONTENTION OF LE ARNED COUNSEL FOR THE ASSESSEE AND HOLD THAT THE ASSESSMENT ORDER DATED 12-12-2013 PASSED BY THE A.O. U/S 143(3) OF THE ACT IS ERRONEOUS SO FAR AS IS PREJUDICIAL TO THE INTEREST OF REVENUE, HENCE, WE HAVE NO HESITATION I N UP-HOLDING THE SAID ORDER DATED 16-02-2016 PASSED BY THE LEARNED CIT(E) U/S 2 63 OF THE ACT AS THE ASSESSMENT ORDER DATED 12-12-2013 PASSED BY THE AO U/S 143(3) OF THE ACT IS ERRONEOUS AS FAR AS BEING PREJUDICIAL TO THE INTERE ST OF REVENUE, AND ACCORDINGLY WE UPHOLD THE ORDER DATED 16.02.2016 PA SSED BY THE LD. CIT(E) U/S 263 OF THE ACT. WE ORDER ACCORDINGLY. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IN ITA NO. 3249/MUM/2016 FOR THE ASSESSMENT YEAR 2011-12 IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH JANUARY, 2017. # $% &' 30-01-2017 ( ) SD/- SD/- (JOGINDER SINGH) (RAMIT KOCHAR) JUDICIAL MEMBER ACCOUNTANT MEMBER $ MUMBAI ; & DATED 30-01-2017 [ .9../ R.K. R.K. R.K. R.K. , EX. SR. PS ITA 3249/MUM/2016 26 !'#$%&%# / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. : ( ) / THE CIT(A)- CONCERNED, MUMBAI 4. : / CIT- CONCERNED, MUMBAI 5. =>( 99?@ , ?@ , $ / DR, ITAT, MUMBAI B BENCH 6. (BC D / GUARD FILE. / BY ORDER, = 9 //TRUE COPY// / ( DY./ASSTT. REGISTRAR) , $ / ITAT, MUMBAI