GURUKUL, SAMASTIPUR V. ITO-EXEMPTION, MUZAFFARPUR

ITA 44/PAT/2020

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 1480 (ITAT-PATNA)
• Duration Of Justice: 1 year(s) 11 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-05-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2014-2015
• Appeal Filed On: 16-06-2020
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Question of law; Capital receipt
• Section: 12; 11; 12A; 12AA; 250; 43; 13

Judgement Text

आयकर अपीलȣय अͬधकरण, “पटना “ Ûयायपीठ पटना IN THE INCOME TAX APPELLATE TRIBUNAL “PATNA” BENCH, PATNA (Heard from Kolkata Benches through web-based video conferencing platform) ] ] BEFORE SHRI RAJPAL YADAV, VICE PRESIDENT AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA No. 43 & 44/Pat/2020 Assessment Year : 2012-13 & 2014-15 GURUKUL 1, Kashipur Samastipur Bihar - 848101 PAN : AABTG6689C Vs Income Tax Officer – (Exemption), Muzaffarpur अपीलाथȸ/ (Appellant) Ĥ× यथȸ/ (Respondent) Assessee by : Shri G.P. Tulsyan, C.A. Revenue by : Shri Rupesh Agrawal, Sr. D/R स ु नवाई कȧ तारȣख/Date of Hearing : 19/05/2022 घोषणा कȧ तारȣख /Date of Pronouncement : 23/05/2022 आदेश/O R D E R PER RAJPAL YADAV, VICE PRESIDENT : The present two appeals are directed at the instance of the assessee against the separate orders the Learned Commissioner of Income Tax (Appeals), Patna - 2, [hereinafter the “ld. CIT(A)”], even dt. 07/02/2020, passed u/s 250 of the Income Tax Act, 1961 (in short “the Act”) for the Assessment Years 2012-13 & 2014-15. There is a delay of 71 days in filing of these appeals by the assessee. After perusing the petition for condonation for delay, we are convinced that the assessee was prevented by sufficient cause in filing the appeals in time. Hence, we condone the delay and admit these appeals. 2. The grounds of appeal taken by the assessee are verbatim for both the Assessment Years. Though it has taken three grounds of appeal but its sole grievance revolves around a single issue, namely, the ld. CIT(A) has erred in not granting exemption u/s 10/11 of Rs.34,15,500/- & Rs.31,20,000/- in ITA No. 43 & 44/Pat/2020 Assessment Year : 2012-13 & 2014-15 GURUKUL 2 Assessment Year 2012-13 & 2014-15 respectively, which was alleged to be received as corpus donation by the assessee. 3. The facts on all vital points are common for both the Assessment Years; therefore, for the facility of reference we take the facts from Assessment Year 2012-13. 4. In brief, the facts are that the assessee is a trust, namely, Gurukul. It has been running a school. According to the assessee it has received a corpus donation of Rs.34,15,500/- & Rs.31,20,000/- in Assessment Year 2012-13 & 2014-15 respectively. It has claimed these amounts as a capital receipt and exempt from tax u/s 11(1)(d) of the Act. This claim of the assessee was rejected by both the revenue authorities on the ground that exemption u/s 11 of the Act is available to a trust which has been registered u/s 12AA of the Act. Since, admittedly the assessee is not registered u/s 12AA of the Act, therefore, the authorities treated the assessee as a regular assessee and did not grant exemption u/s 11(1)(d) of the Act. 5. Dissatisfied with the orders of both the lower authorities, the assessee has come up in appeal before the Tribunal. 6. The ld. Counsel for the assessee submitted that the donations were received towards building fund from the students. Thus, these amounts are to be construed as corpus donations and be treated as capital receipts which are not taxable. In support of his contentions, he relied upon the following orders of the Tribunal and placed copies of these decisions:- * Tax Officer (exemption) vs. Smt. Basanti Devi and Shri Chakhan Lal Garg Educational Trust ITA No. 5082 (Delhi) 2010 ITA No. 43 & 44/Pat/2020 Assessment Year : 2012-13 & 2014-15 GURUKUL 3 *Chandraprabhu Jain Swetamber Mandir vs. Asst. CIT (2016) 050 ITR (TRIB) 0355 * ITO vs. Gaudiya Granth Anuved Trust (2013) 038 ITR(Trib) 0161 7. On the other hand, the ld. D/R drew our attention towards the definition of income available in Section 2(24)(ii) of the Act. He also drew our attention towards Section 11(1)(a) as well as 12A of the Act. He submitted that, Section 12A of the Act specifically postulate that unless an assessee being a Trust or Institution is registered with the Income Tax Act u/s 12AA of the Act, it is not entitled for the benefit of Section 11(1)(d) of the Act. 8. We have duly considered the rival contentions and gone through the record carefully. There is no dispute with regard to the fact that the assessee is not enjoying any registration with the Income Tax Department during the impugned Assessment Years. Section 2(24)(iia), Section 11(1)(d) and Section 12A of the Act, have a direct bearing on the controversy. Therefore, it is necessary to take note of these clauses. The same are reproduced below for ready reference:- Section 2(24)(iia) :- “(24) "income" includes (i) ************** (ii) *************** [(iia) voluntary contributions received by a trust created wholly or partly for charitable or religious purposes or by an institution established wholly or partly for such purposes [or by an association or institution referred to in clause (21) or clause (23), or by a fund or trust or institution referred to in sub-clause (iv) or sub-clause (v) [or by any university or other educational institution referred to in sub-clause (iiiad) or sub-clause (vi) or by any hospital or other institution referred to in sub-clause (iiiae) or sub-clause (via)] of clause (23C) of section 10[or by an electoral trust]]. Explanation.—For the purposes of this sub-clause, "trust" includes any other legal obligation;] ITA No. 43 & 44/Pat/2020 Assessment Year : 2012-13 & 2014-15 GURUKUL 4 Section 11(1)(d) :- “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 [subject to the condition that such voluntary contributions are invested or deposited in one or more of the forms or modes specified in sub-section (5) maintained specifically for such corpus].” Section 12A :- “12A. 79 [(1)] 80 The provisions of section 11 and section 12 shall not apply in relation to the income of any trust or institution unless the following conditions are fulfilled, namely:— (a) the person in receipt of the income has made an application for registration of the trust or institution in the prescribed form 81 and in the prescribed manner to the 82 [***] 83 [Principal Commissioner or] Commissioner before the 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, 84 [whichever is later and such trust or institution is registered under section 12AA] : ************ 9. A bare perusal of the above provisions would indicate that the expression “income” for the purpose of Income Tax, includes voluntary contribution received by a trust created wholly or partly for charitable or religious purposes or an institution established wholly or partly for such purposes. 10. Therefore, any donation received by any trust or institution has to be treated as income. However, the scheme of Income Tax u/s 11 to 13 of the Act provides a mechanism for assessment of income from property held by a charitable or religious trust. A perusal of Section 11(1)(d) of the Act would indicate that if any voluntary contribution is being received by a trust or institution with a specific direction that such contribution will be part of corpus then, it will be credited to a separate account meant for construction of building or any infrastructure. In other words, it can be treated as a ITA No. 43 & 44/Pat/2020 Assessment Year : 2012-13 & 2014-15 GURUKUL 5 capital contribution towards the corpus of the trust. But perusal of Section 12A of the Act would indicate that before claiming any exemption from taxability of income u/s 11 or 12 of the Act, the assessee should be registered with the Income Tax Department u/s 12A of the Act. Further Section 12AA of the Act provides a procedure for grant of registration. Since the assessee is not having any registration, the grant/non-grant of such registration is not in dispute, therefore, there is no necessity to make reference to Section 12AA of the Act. As far as the reliance placed by the ld. Counsel for the assessee on the order of the Delhi Bench of the ITAT in the case of Smt. Basanti Devi and Shri Chakhan Lal Garg Educational Trust (supra) is concerned, the ITAT Delhi Bench had given its finding relying upon the order of the Hon’ble Delhi High Court. The finding of the Tribunal reads as under:- “11. The Hon'ble Delhi High Court, vide its order dated 23.9.2009, in ITA No. 927/09 (supra), have dismissed the Department's appeal against the aforesaid Tribunal order, by observing as follows:- "The respondent/assessee is admittedly a Charitable Organization which is a trust registered under the Indian Trust Act which has also been granted registration under the Income Tax Act w.e.f. 1.4.2003. The assessee received certain donations towards its corpus which had been deposited in the bank and the money was admittedly spent for acquiring land for construction of a college. In these circumstances, we are of the opinion that the CIT(A) as well as ITAT rightly concluded that the donations received towards corpus of the trust would be capital receipt and not revenue receipt chargeable to tax. No question of law arises. Dismissed." 11. A perusal of this finding would indicate that the Hon’ble High Court was dealing with an issue on 23/09/2009. The assessment order is not discernible from it but it revealed that the trust was registered with the Income Tax Department w.e.f. 1 st April, 2003. Therefore, there was a registration in favour of the trust. ITA No. 43 & 44/Pat/2020 Assessment Year : 2012-13 & 2014-15 GURUKUL 6 In other two decisions, this aspect has not been categorically examined and if we accept the proposition as canvassed by the ld. Counsel for the assessee, then the whole scheme of assessment of charitable institution/trust contemplated in Section 11 to 13 of the Act would become redundant. The arguments of the ld. Counsel for the assessee is that, it is not necessary that a trust/institution should be registered for availing benefit of Section 11(1)(d) of the Act. If an institution has demonstrated that donations were received towards corpus then automatically, it will become a capital receipt which is not taxable. However, we do not agree with these submissions because nowhere in the Act this proposition has been provided. Therefore, in our understanding the case-laws relied upon by the assessee are not applicable on the facts of the present case and we do not find any merit in these appeals and dismiss them same as such. 12. In the result, both the appeals of the assessee are dismissed. Order pronounced in the Court on 23 rd May, 2022 at Kolkata. Sd/- Sd/- (RAJESH KUMAR) (RAJPAL YADAV) ACCOUNTANT MEMBER VICE-PRESIDENT Kolkata, Dated 23/05/2022 *SC SrPs ITA No. 43 & 44/Pat/2020 Assessment Year : 2012-13 & 2014-15 GURUKUL 7 आदेश कȧ ĤǓतͧलͪप अĒेͪषत/Copy of the Order forwarded to : 1. अपीलाथȸ / The Appellant 2. Ĥ×यथȸ / The Respondent. 3. संबंͬधत आयकर आय ु Èत / Concerned Pr. CIT 4. आयकर आय ु Èत)अपील (/ The CIT(A)- 5. ͪवभागीय ĤǓतǓनͬध ,आयकर अपीलȣय अͬधकरण,Patna/DR,ITAT, Patna 6. गाड[ फाईल /Guard file. आदेशान ु सार/ BY ORDER, TRUE COPY Sr. Pr. Secretary/DDO आयकर अपीलȣय अͬधकरण ITAT, Patna