ITO (Exemptions), New Delhi V. Maharaja Agrasen Hospital Charitable Trust, New Delhi

ITA 3556/DEL/2011

• Counselvise Citation: 355620114 RSA 2011
• Duration Of Justice: 7 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-02-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 07-02-2012
• Assessment Year: 2003-2004
• Appeal Filed On: 15-07-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R S NEGI
• Assessee Lawyers: ANS HUM JAIN; AMOD SINHA
• Keywords: Charitable institution; Tax effect
• Section: 12; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH E NEW DELHI) BEFORE SHRI RAJPAL YADAV AND SHRI K.G. BANSAL ITA NOS. 3555 & 3556/DEL/2011 ASSESSMENT YEARS: 2003-04 & 2004-05 INCOME-TAX OFFICER, VS. MAHARAJA AGRASEN HOSPITAL TRUST WARD-IV, CHARITABLE TRUST, ROAD NO.35, NEW DELHI. ROHTAK ROAD, PUNJABI BAGH(W) NEW DELHI (PAN: AAATM1408N) (APPELLANT) (RESPONDENT) ( CROSS OBJ. NOS. 310 & 311/DEL/2011 ) ITA NOS. 3555 & 3556/DEL/2011 ASSESSMENT YEARS: 2003-04 & 2004-05 MAHARAJA AGRASEN HOSPITAL TRUST VS. INCOME-TAX OFFI CER, CHARITABLE TRUST, ROAD TRUST WARD-IV, ROHTAK ROAD, PUNJABI BAGH(W) NEW DELHI. NEW DELHI (PAN: AAATM1408N) (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI RS NEGI, S R.DR RESPONDENT BY: S/SHRI AMOD SINHA & ANSHUM JAIN, ADVOCATES DATE OF HEARING : 07.02.2012 DATE OF PRONOUNCEMENT : 29.02.2012 ORDER PER BENCH: THE REVENUE IS IN APPEALS BEFORE US AGAINST THE SE PARATE ORDERS OF EVEN DATE I.E. 10.05.2011 PASSED BY THE LEARNED CIT(APPE ALS) FOR ASSESSMENT YEARS 2003-04 AND 2004-05. THE GRIEVANCE OF THE REV ENUE IS THAT LEARNED CIT(APPEALS) HAS ERRED IN DELETING ADDITION OF RS.7 5,81,000 AND 2 RS.116,02,000 IN ASSESSMENT YEARS 2003-04 AND 2004- 05 RESPECTIVELY. ON RECEIPT OF NOTICE IN THE REVENUES APPEALS, ASSESSE E HAS FILED CROSS OBJECTIONS BEARING NOS. 310 & 311/DEL/2011. IN THE CROSS-OBJEC TIONS, ASSESSEE HAS PLEADED THAT TAX EFFECT INVOLVED IN THE APPEALS OF REVENUE IS LESS THAN RS. 3 LACS AND THEREFORE, THEY ARE NOT MAINTAINABLE. HOWE VER, LEARNED COUNSEL FOR THE ASSESSEE AT THE TIME OF HEARING DID NOT PRESS T HE CROSS OBJECTIONS, THEY ARE REJECTED. 2. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE IS A SOCIETY REGISTERED UNDER THE SOCIETIES ACT VIDE REGISTRATION NO. S-111 07 DATED 11.8.1980. IT IS RUNNING AND MAINTAINING HOSPITAL IN THE NAME OF MAH ARAJA AGRASEN HOSPITAL. THE MAIN AIMS AND OBJECTS OF THE SOCIETY IS TO GIVE FREE MEDICAL AID TO EVERY DESERVING HUMAN BEING IRRESPECTIVE OF CASTE, CREED AND SEX, TO WORK AND PROPAGATE FOR PROMOTING BETTER HEALTH AMONGST THE P UBLIC, AND TO WORK FOR THE UPLIFTMENT OF SOCIETY. TO SET UP, MANAGE AND OR GANIZE HOSPITALS, DISPENSARIES, CHARITABLE INSTITUTIONS, TO PROVIDE T RAINING PROGRAMS FOR THE DOCTORS, NURSES AND PARAMEDICAL WORKERS ETC. THE A SSESSEE WAS ALSO GRANTED REGISTRATION UNDER SEC. 12A(A) OF THE ACT W.E.F. 16 .12.1980. IT IS ALSO ENJOYING REGISTRATION UNDER SEC. 80-G OF THE INCOME -TAX ACT, 1961. IT HAS FILED ITS RETURN OF INCOME FOR ASSESSMENT YEAR 2003 -04 ON 31.10.2003 AND FOR 3 ASSESSMENT YEAR 2004-04 ON 12.10.2004. IT HAS DECLA RED NIL INCOME IN BOTH THE ASSESSMENT YEARS. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY ASSESSMENT AND A NOTICE UNDER SEC. 143(2) WAS DULY ISSUED AND SERVED UPON THE ASSESSEE. IT CAME TO THE NOTICE OF THE LEARNED ASSESSING OFFICER THAT ASSESSEE HAS CREDITED ITS ACCOUNTS BY A SUM OF RS.9 1,33,042 UNDER THE HEAD FRESH CORPUS DONATION IN ASSESSMENT YEAR 2003-04. ASSESSING OFFICER HAS FURTHER OBSERVED THAT OUT OF THIS AMOUNT, A SUM OF RS.15,52,042 WAS RECEIVED BY CHEQUE. THE REST OF THE AMOUNTS WAS RECEIVED WIT H THE HELP OF HUNDI COUPONS AND ASSESSEE FAILED TO GIVE DETAILS OF DON ORS. SIMILARLY, IN ASSESSMENT YEAR 2004-05, ASSESSING OFFICER HAS OBSE RVED THAT A SUM OF RS.137,79,668 HAS BEEN CREDITED TOWARDS CORPUS FUND S OUT OF THAT A SUM OF RS.116,02,000 WAS RECEIVED THROUGH HUNDIES. ASSESSI NG OFFICER HAS OBSERVED THAT ASSESSEE WAS UNABLE TO GIVE SEPARATE DETAILS/CONFIRMATIONS/IDENTITY OF THE PERSON IN RES PECT OF CORPUS DONATION RECEIVED THROUGH HUNDIES AS REQUIRED UNDER SEC. 11( 1)(D) AND HENCE HE TREATED THESE DONATIONS AS INCOME OF THE ASSESSEE A ND MADE THE ADDITION. 3. DISSATISFIED WITH THE ORDER OF THE ASSESSING OFF ICER, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LEARNED FIRST APPEL LATE AUTHORITY. LEARNED FIRST APPELLATE AUTHORITY HAS DECIDED BOTH THE APPE ALS BY SEPARATE ORDERS BUT 4 HIS FINDINGS ARE VERBATIM SAME EXCEPT VARIATION IN THE QUANTUM. THE ASSESSEE CONTENDED BEFORE THE LEARNED CIT(APPEALS) THAT ITS CASE IS SQUARELY COVERED BY THE ORDER OF THE ITAT PASSED IN THE CASE OF SHRE E MAHADEVI TIRATH SARDA MA SEVA SANGH VS. ITO REPORTED IN 133 TTJ 57. ACCO RDING TO THE ASSESSEE, IN THE HUNDI COUPONS, IT WAS SPECIFICALLY MENTIONED THAT THIS DONATION IS BEING RECEIVED FOR CONSIDERATION OF BUILDING AND TH E DONOR WAS FULLY AWARE ABOUT THE ASPECT. THE ASSESSEE HAS SUBMITTED THE DE TAILS OF ALL THOSE HUNDIES BEFORE THE ASSESSING OFFICER. LEARNED FIRST APPELLA TE AUTHORITY ON AN ANALYSIS OF THE DETAILS ARRIVED AT A CONCLUSION THA T DONATION WAS COLLECTED FOR A SPECIFIC PURPOSE I.E. TO CONSTRUCT THE BUILDING A ND, THEREFORE, IT CANNOT BE TREATED AS INCOME OF THE ASSESSEE. LEARNED DR RELIE D UPON THE ORDER OF THE ASSESSING OFFICER. HE POINTED OUT THAT ASSESSEE FAI LED TO GIVE THE DETAILS OF THE DONORS AND, THEREFORE, ASSESSING OFFICER HAS RI GHTLY MADE THE ADDITION. ON THE OTHER HAND, LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT AS PER SECTION 12 READ WITH SECTION 11(1)(D) OF THE ACT, C ORPUS DONATIONS RECEIVED BY THE ASSESSEE WITH A SPECIFIC DIRECTION AT THE EN D OF THE DONORS, THE SAME WILL NOT BE TREATED AS INCOME OF THE ASSESSEE. HE P OINTED OUT THAT IN THE CASE OF SHREE MAHADEVI TIRATH SHARDA MA SEVA SINGH, ITAT HAS CONSIDERED A SIMILAR ASPECT. HE PLACED ON RECORD COPY OF THE ITA TS ORDER AND SUBMITTED THAT IN THAT CASE A DONATION BOX WAS PUT AT THE ENT RANCE OF THE TEMPLE. A 5 RESOLUTION WAS PASSED TO RAISE THE FUND FOR CONSTRU CTION OF THE BUILDING BY COLLECTING SUCH DONATIONS AND ACCORDINGLY WHATEVER CAME IN THAT DONATION BOX PUT FOR A SPECIFIC PURPOSE WAS APPLIED BY THE T RUST TOWARDS CONSTRUCTION OF THE BUILDING. THE ITAT ON AN ANALYSIS OF THE FAC TS AND CIRCUMSTANCES HELD THAT DONATION WAS RECEIVED FOR A SPECIFIC PURPOSE. THE DONORS HAVE DONATED THE AMOUNTS WITH A SPECIFIC DIRECTIONS THAT IT WILL BE USED FOR CONSTRUCTION OF THE BUILDING. IT WAS A CORPUS DONATIONS AND CANNOT BE TREATED AS INCOME FOR THE PURPOSE OF SECTION 11 OF THE ACT. 4. WE HAVE DULY CONSIDERED THE RIVAL CONTENTIONS AN D GONE THROUGH THE RECORD CAREFULLY. SECTION 12 SUB-SECTION (1) AND SE CTION 11(1)(D) ARE RELEVANT PROVISIONS FOR ADJUDICATING THE CONTROVERSY IN HAND . THEY READ AS UNDER: 12. INCOME OF TRUSTS OR INSTITUTIONS FROM CONTRIBU TIONS.-(1) ANY VOLUNTARY CONTRIBUTIONS RECEIVED BY A TRUST CREATED WHOLLY FOR CHARITABLE OR RELIGIOUS PURPOSES OR BY AN INSTITUTI ON ESTABLISHED WHOLLY FOR SUCH PURPOSES (NOT BEING CONTRIBUTIONS MADE WIT H A SPECIFIC DIRECTION THAT THEY SHALL FORM PART OF THE CORPUS O F THE TRUST OR INSTITUTION) SHALL FOR THE PURPOSE OF S.11 BE DEEME D TO BE INCOME DERIVED FROM PROPERTY HELD UNDER TRUST WHOLLY FOR C HARITABLE OR RELIGIOUS PURPOSES AND THE PROVISIONS OF THAT SECTI ON AND S. 13 SHALL APPLY ACCORDINGLY. X X X X X X X X 6 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 PERSONS IN RECEIPT OF THE INCOME- X X X X X X X X X (D) INCOME IN THE FORM OF VOLUNTARY CONTRIBUTIONS M ADE WITH A SPECIFIC DIRECTION THAT THEY SHALL FORM PART OF THE CORPUS O F THE TRUST OR INSTITUTION. 5. A BARE PERUSAL OF THE ABOVE CLAUSES WOULD REVEAL THAT IF VOLUNTARY CONTRIBUTION HAS BEEN RECEIVED BY THE ASSESSEE WITH SPECIFIC DIRECTIONS THAT THEY SHALL FORM PART OF THE CORPUS OF THE TRUST OR INSTITUTION THEN SUCH CONTRIBUTION WOULD NOT FALL WITHIN THE AMBIT OF INC OME FOR THE PURPOSE OF SECTION 11 OF THE ACT. THE CASE OF THE ASSESSING OF FICER IS THAT ASSESSEE SOCIETY FAIL TO SUBSTANTIATE ITS CLAIM OF DONATION RECEIVED TOWARDS THE CORPUS FUND. IN OTHER WORDS, ACCORDING TO THE A.O., IT HAS NOT ESTABLISHED ON THE RECORD THAT DONATIONS WERE RECEIVED WITH A SPECIFIC DIRECTIONS THAT THESE ARE TOWARDS CORPUS. THE BASIS FOR ARRIVING AT THIS CONC LUSION ASSIGNED BY THE ASSESSING OFFICER IS THAT ASSESSEE COULD NOT GIVE C OMPLETE NAME/ADDRESS, IDENTITY OF THE DONORS AND THUS GENUINENESS OF THE DONATION EXHIBITING THAT THEY ARE FOR CORPUS REMAINED UNEXPLAINED. TO OUR MI ND, LEARNED ASSESSING OFFICER FAILED TO APPRECIATE THE TRUE ASPECTS. ACCO RDING TO THE ASSESSEE, IT HAS 7 BEEN SPECIFIED IN THE HUNDI COUPONS THAT DONATIONS WOULD BE FOR CONSTRUCTION OF BUILDING, THUS, IT SUGGESTS THAT WHEN DONATION W AS COLLECTED FROM THE DONORS, HE WAS APPRAISED THE OBJECT FOR WHICH SUCH AMOUNT WAS BEING DONATED BY HIM. IF THE DONOR WAS NOT WILLING TO GIV E THE DONATION FOR CONSTRUCTION OF THE BUILDING, HE MAY REFUSE TO GIVE THAT AMOUNT. LEARNED CIT(APPEALS) HAS FURTHER OBSERVED THAT SECTION 115( BBC) HAS BEEN BROUGHT ON THE STATUTE BOOK W.E.F. 01.04.2007. THIS SECTION DEALS WITH TAXATION OF ANONYMOUS DONATION. BUT THIS PROVISION HAS BEEN BRO UGHT ON THE STATUTE BOOK W.E.F. ASSESSMENT YEAR 2007-08. IT IS NOT APPL ICABLE IN THESE TWO ASSESSMENT YEARS. LEARNED FIRST APPELLATE AUTHORITY HAS CONSIDERED THE JUDGEMENT OF HON'BLE GUJARAT HIGH COURT IN THE CASE OF STHANAKVASI VARDHMAN VANIK JAIN SANGH [2003] 131 TAXMAN 270 (GU J.). TAKING INTO CONSIDERATION THE ORDER OF THE LEARNED CIT(APPEALS) , WE DO NOT FIND ANY ERROR IN IT. ACCORDINGLY, THE APPEALS OF REVENUE AS WELL AS CROSS-OBJECTIONS OF THE ASSESSEE ARE DISMISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 29.02.2012 SD/- SD/- ( K.G. BANSAL ) ( RAJPAL YADAV ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 29/02/2012 MOHAN LAL 8 COPY FORWARDED TO: 1) APPELLANT 2) RESPONDENT 3) CIT 4) CIT(APPEALS) 5) DR:ITAT ASSISTANT REGISTRAR