Income-tax Officer, V. Serum Institute of India Research Foundation, Pune

ITA 621/PUN/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 9343 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 9 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-01-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 19-01-2018
• Assessment Year: 2005-2006
• Appeal Filed On: 06-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T B VIJAYA REDDY; MUKESH JHA S
• Assessee Lawyers: R S ABHYANKAR
• Keywords: Capital asset; Gift; Charitable institution; Earning of tax free income; Capital receipt
• Section: 56(2); 12A; 12AA; 56; 12; 11

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE . , , BEFORE SHRI D.KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO.621/PUN/2016 / ASSESSMENT YEAR : 2005-06 ITO (EXEMPTIONS), WARD-2, PUNE . /APPELLANT VS. SERUM INSTITUTE OF INDIA RESEARCH FOUNDATION, SAROSH BHAVAN, 16-B/1, DR. AMBEDKAR ROAD, PUNE 411 001 PAN : AAATS8170P . / RESPONDENT / APPELLANT BY : SHRI T.B. VIJAYA REDDY AND SHRI MUKESH JHA, CIT-DRS / RESPONDENT BY : SHRI R.S. ABHYANKAR / DATE OF HEARING : 19.01.2018 / DATE OF PRONOUNCEMENT: 29.01.2018 / ORDER PER D. KARUNAKARA RAO, AM : THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORDER OF CI T(A)-10, PUNE DATED 19-01-2016 FOR THE ASSESSMENT YEAR 2005-06. 2. GROUNDS RAISED BY THE REVENUE ARE EXTRACTED AS UNDER : 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN FAILING TO APPRECIATE THAT VOLUNTARY CONTRIBUTIONS (WHETHER CO RPUS DONATIONS OR GENERAL DONATIONS) RECEIVED BY THE CHARITABLE TRUST ARE INCOME AS DEFINED VIDE SECTION 2(24)(IIA) OF THE ACT AND CORPUS DONAT IONS ARE EXEMPT FROM TAX U/S.11(1)(D) ONLY IF ASSESSEE IS REGISTERED U/S .12A/12AA OF THE ACT. 2. THE LD. CIT(A) HAS ERRED IN PLACING RELIANCE UPO N THE APPELLATE DECISION OF HONBLE DELHI HIGH COURT IN ITA NO.5082 /DEL/2010 IN THE CASE OF ITO (EXEMPTIONS) VS. SMT. BASANTI DEVI AND SHRI CHAKAN LAL GARG EDUCATIONAL TRUST FOR A.Y. 2003-04, WHICH IN TURN I S NOW UNDER CHALLENGED IN THE HONBLE SUPREME COURT. ITA NO.621/PUN/2016 SERUM INSTITUTE OF INDIA RESEARCH FOUNDATION 2 3. BRIEFLY STATED RELEVANT FACTS ARE THAT THE ASSESSEE IS AN AOP AS PER THE AO AND FILED THE RETURN OF INCOME DECLARING TOTAL INCOME AT NIL. THIS IS THE SECOND ROUND OF THE PROCEEDINGS BEFORE THE TRIBUNAL. IN THE FIRST ROUND, THE TRIBUNAL VIDE ITA NOS. 1539/PUN/2008, ORD ER DATED 12-09-2012 AND THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES GIVING THE FOLLOWING DIRECTIONS : 11. . . . . . . . WE FIND THE AO BROUGHT TO TAX T HE CORPUS DONATION OF RS. 3 CRORES ON THE GROUND THAT APPROVAL U/S.35(1)(II) HAS NOT BEEN GRANTED TO THE ASSESSEE FOUNDATION AND THAT THE ASSESSEE HAS A LSO NOT BEEN REGISTERED U/S.12A OF THE INCOME TAX ACT. . . . . . . . THE ORDER OF THE AO HAS BEEN UPHELD BY THE CIT(A). IT IS THE SUBMISSIO N OF THE LEARNED COUNSEL FOR THE ASSESSEE THAT EVEN IF APPROVAL U/S. 35(1)(II) IS NOT GRANTED THEN ALSO THE AMOUNT CANNOT BE BROUGHT TO TAX SINCE IT IS IN NATURE OF A GIFT AND SINCE THIS ASPECT HAS NOT BEEN CONSIDERED BY THE LOWER AUTHORITIES IN THE LIGHT OF THE VARIOUS DECISIONS C ITED THEREFORE THE TRIBUNAL SHOULD DECIDE THE ISSUE OR RESTORE THE ISSUE TO THE FILE OF THE AO FOR FRESH ADJUDICATION. WE FIND THE ALTERNATE CONTENTION OF THE ASSESSEE IS MORE ACCEPTABLE SINCE THE LOWER AUTHORITIES HAVE NOT DEC IDED THE ISSUE FROM THE ANGLE OF GIFT. CONSIDERING THE TOTALITY OF THE FAC TS OF THE CASE, WE DEEM IT PROPER TO RESTORE THE ISSUE TO THE FILE OF THE AO W ITH A DIRECTION TO EXAMINE THE CONTENTION OF THE ASSESSEE THAT THE AMOUNT OF R S.3 CRORES RECEIVED AS CORPUS DONATION IS IN THE NATURE OF GIFT AND THEREF ORE THE SAME IS NOT TAXABLE IN VIEW OF THE RATIO OF THE DECISIONS CITED (SUPRA). THE AO SHOULD ALSO KEEP IN MIND THE OUTCOME OF THE WRIT PETITION F ILED BY THE ASSESSEE, IF AVAILABLE AT THE TIME OF PASSING THE ORDER. . . . . . . . . 4. BEFORE GIVING THE SAID DIRECTION IN PARA NO.11, THE TRIBU NAL HELD THAT ASSESSEE IS NOT HAVING REQUISITE APPROVAL AS REQUIRED U/S.35(1 )(II) OF THE ACT AND THEREFORE, THE EXEMPTION U/S.10(21) OF THE A CT IS NOT AVAILABLE TO THE ASSESSEE. FURTHER, THE TRIBUNAL OBSERVED THAT SINCE THE ASSESSEE HAS NOT BEEN REGISTERED U/S.12A OF THE ACT, THE EXEMPTION AVAILABLE U/S.11 OF THE ACT IS ALSO NOT AVAILABLE TO THE PRE SENT ASSESSEE. IN RESPONSE, ASSESSEE SUBMITTED BEFORE THE TRIBUNAL IN TH E FIRST ROUND OF THE PROCEEDINGS HELD THAT THE SAID DONATION OF RS.3 CRO RES AMOUNT TO A GIFT TO THE CORPUS OF THE RESEARCH FOUNDATION. IN THE LIGHT OF THESE FACTS, IN THE ABSENCE OF SPECIFIC FINDING, ON THE AVAILABLE OF EXE MPTION TO THE GIFT OF RS.3 CRORES OF THIS KIND, THE TRIBUNAL DIRECTED T HE AO TO EXAMINE THE CONTENTION OF THE ASSESSEE THAT RS.3 CRORES RECEIVED BY THE ITA NO.621/PUN/2016 SERUM INSTITUTE OF INDIA RESEARCH FOUNDATION 3 ASSESSEE TRUST TOWARDS CORPUS DONATION WHETHER IT AMO UNTS TO A GIFT AND NOT TAXABLE IN VIEW OF CERTAIN DECISIONS RELIED UPON BY THE ASSESSEE. AO WAS ALSO DIRECTED TO CONSIDER THE OUTCOME OF THE WRIT PETITIONS, IF ANY, AT THE TIME OF PASSING THE SET ASIDE ASSESSMENT. 5. GIVING EFFECT TO THE SAID DIRECTION OF THE TRIBUNAL, THE AO REITERATED THE POSITION AND HELD THE SAME IS NOT EXEMPT FROM TAXATION. THE DETAILS OF DECISION OF THE AO IS GIVEN IN ORDER DATED 20 -02-2014 PASSED U/S.254 OF THE ACT. AO EXTRACTED THE FINDINGS OF T HE TRIBUNAL IN THE FIRST FOUND IN PART-A OF HIS ORDER. IN PART-B RELATING TO SET-ASIDE ASSESSMENT PROCEEDINGS, THE AO DISCUSSED THE ASSESSEE S SUBMISSION THAT THE SAID AMOUNT IS NOT A TAXABLE INCOME WITHIN THE M EANING OF SECTION 2(24)(IIA) OF THE ACT. AO ALSO DISCUSSED THE FOLLOWING DE CISIONS WHICH ARE RELIED UPON BY THE ASSESSEE : 1. PANDIT KANAHYA LAL PUNJ CHARITABLE TRUST VS. DIT 2. J.B. EDUCATION SOCIETY VS. ACIT 3. NIRMAL AGRICULTURAL SOCIETY VS. ITO 71 ITD 152 (HYD.) THESE ABOVE DECISIONS ARE RELEVANT FOR THE LEGAL PROPOSIT ION THAT WHERE THERE IS NO APPROVAL, THE CORPUS DONATION IS NOT INCO ME OF THE TRUST AS THE SAME CONSTITUTE A CAPITAL RECEIPT. EVENTUALLY, THE AO ELABORATED ON THE MEANING OF SECTION 2(24)(IIA) OF THE ACT. THESE PROVISIO NS ENLISTS THE ITEMS OF INCOME AND THE VOLUNTARY CONTRIBUTIONS RECEIV ED BY THE TRUST OR AN INSTITUTION OR AN ASSOCIATION ETC. ON SUCH ITE MS CONSTITUTE INCOME. FURTHER, THE AO ALSO DISTINGUISHED THE JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. GROZ BECKERT SABO O LTD. 116 ITR 125 AND REASONED THAT A GIFT WITH CONDITIONS ATTACHED CO NSTITUTES TAXABLE GIFT. THE SOCALLED GIFT IS NOT A VOLUNTARY CONTRIBUT ION. FURTHER, THE AO CONSIDERED THE FACT THAT ASSESSEE IS A REGISTERE D BODY UNDER THE ITA NO.621/PUN/2016 SERUM INSTITUTE OF INDIA RESEARCH FOUNDATION 4 BOMBAY PUBLIC TRUST, 1950 AS A CHARITABLE TRUST AND ELABO RATED ON THE PROVISIONS OF SECTION 2(24)(IIA) OF THE ACT. EVENTUALLY, AS PER THE DISCUSSION GIVEN IN PARA NO.D9 OF THE ORDER, THE AO HELD TH AT CORPUS DONATION DOES NOT TANTAMOUNT TO EXEMPT INCOME AS LAID DOWN U/S.2(24)(IIA) OF THE ACT. AO DREW OUR ATTENTION PARALLEL TO TH E PROVISIONS OF SECTION 12A/11(1)(D) OF THE ACT AND REASONED T HAT THE VOLUNTARY CONTRIBUTION TO THE CORPUS OF THE TRUST ARE TAXABLE AS THE INCOME OF THE TRUST BUT FOR THE PROVISIONS OF CLAUSE (D) OF S ECTION 11(1) OF THE ACT. IN THE ABSENCE OF ANY SUCH SPECIFIC EXCLUSIONS PROVIDED IN THE PROVISIONS OF SECTION 10(21) OF THE ACT, THE SAID DONATION BE COMES TAXABLE IN THE HANDS OF THE ASSESSEE IN THE YEAR UNDER CONSIDERATIO N. 6. AGGRIEVED WITH THE SAID ADVERSE DECISION OF THE AO, THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A). THE CIT(A) PASSED ORDER D ATED 19-01-2016 REVERSING THE ORDER OF THE AO. IN HIS ORDER , CIT(A) ALSO EXTRACTED THE DIRECTIONS OF THE TRIBUNAL AND ALSO HEARD T HE ASSESSEE IN THE LIGHT OF THE PROVISIONS OF SECTION 35 AND CONSIDERED TH E WRITTEN SUBMISSIONS OF THE ASSESSEE. EVENTUALLY, THE CIT(A) ALLOWED THE ASSESSEES GROUNDS ON THIS ISSUE OF CLAIM OF EXEMPTION OF SUM OF RS. 3 CRORES DONATION TO CORPUS AS PER THE DISCUSSION GIVEN IN PARA NO.6 OF HIS ORDER AND THE SAME IS EXTRACTED HERE AS UNDER : 6. I HAVE CONSIDERED THE SUBMISSION OF THE ASSESSE E AND GIVEN A CAREFUL THOUGHT. CORPUS DONATION COMPRISES TWO WOR DS VIZ. CORPUS AND DONATION. CORPUS IS A LATIN EXPRESSION, WHICH MEAN S A BODY OR STRUCTURE. IT ALSO MEANS A DIRECTION TO CONSTITUTE A BODY OR SUBSTANCE. IN COMMON PARLANCE THIS TERM IS UNDERSTOOD AS CAPITAL SUM. THIS ALSO INCLUDES ENDOWMENT . THE EXPRESSION ENDOWMENT MEANS BEQUEST, GIFT . IT IS AN ACT OF ENDOWING WHICH IS A CAPITAL SUM PROVID ED AND PROVIDES FOR A PERMANENT INCOME. ENDOWMENT ALSO MEANS PROPERTY OR MONEY BESTOWED AS PERMANENT FUND . IN TERMS OF CHARITY, THE CORPUS SYMBOLIZES FUNDS TO RETAIN IT'S CHARACTER AS A PRINCIPAL AMOUNT . IT ALSO DENOTES THE FUNDS EARMARKED FOR A SPECIFIC PURPOSE 'THE INTENTION OF THE CORPUS IS THAT, THE FUNDS SHOULD NOT BE DEPLETED AND IT RETAINS IT'S OR IGINAL CHARACTER OF THE FUND I . E . PRINCIPAL. FURTHER, THE EXPRESSION CORPUS IS OFTEN USED FROM THE POINT OF THE DONOR SYMBOLIZING HIS DIRECTIONS TO US E THE MONEY IN A ITA NO.621/PUN/2016 SERUM INSTITUTE OF INDIA RESEARCH FOUNDATION 5 MANNER AS PER HIS WISHES. THIS IN OTHER WORDS MEANS THAT DONOR GIVES DIRECTION TO THE DONEE FOR WHAT PURPOSE AND HOW IT IS TO BE USED. THE DIRECT TAX LAWS (AMENDMENT) ACT 1989 W.E.F. 1.4 .1989 HAD REVAMPED CORPUS DONATION. THE AMENDMENT CARRIED OUT IS THAT, THE WORD VOLUNTARY CONTRIBUTION HAS BEEN BROUGHT UNDER SECTI ON 2(24)(IIA) OF I.T. ACT. THE EFFECT OF AMENDMENT IS THAT EVERY VOLUNTAR Y CONTRIBUTION PARTAKES THE CHARACTER OF INCOME. CORPUS DONATION I S A VOLUNTARY CONTRIBUTION, THEREFORE, CONSTITUTES INCOME UNDER S ECTION 2(24) (IIA) OF I.T. ANOTHER AMENDMENT WAS MADE IN SECTION 11(1)(D) BY T HE SAME ACT. THE EFFECT OF THE AMENDMENT IS THAT DEDUCTION WILL BE ALLOWED UNDER SECTION 11(1)(D) IN RESPECT OF VOLUNTARY CONTRIBUTI ON WITH SPECIFIC DIRECTION THAT THEY SHALL FORM PART OF THE CORPUS O F THE TRUST OR INSTITUTIONS. PRIOR TO THIS AMENDMENT, VOLUNTARY CONTRIBUTION WI TH A SPECIFIC DIRECTION, WHICH IS ALSO KNOWN AS CORPUS D ONATION WAS NEVER CONSIDERED AS AN INCOME AND WAS TOTALLY EXCLUDED FR OM THE PURVIEW OF INCOME. NOW, THE QUESTION ARISES WHETHER SUCH CORP US DONATION IS TAXABLE AS INCOME OR NOT, EVEN IN THE CASES IN WHIC H THE TRUST IS NOT REGISTERED U/S.12AA OF THE I.T. ACT BECAUSE FOR THO SE TRUSTS WHICH ARE REGISTERED U/S.12AA, EXEMPTION TO CORPUS DONATION H AS BEEN PROVIDED AS PER PROVISIONS OF SECTION 11(1)(D). FOR SUCH TRUST TO WHICH REGISTRATION U/S.12AA HAS NOT BEEN PROVIDED, ITS TAX LIABILITY IS REQUIRED TO BE DECIDED WITH REFERENCE TO THE SCHEME OF THE I.T. AC T AS HELD IN THE CASE OF M/S. PENTAFOUR SOFTWARE EMPLOYEES WELFARE FOUNDATIO N AND FURTHER IN THE CASE OF SMT. BASANTIDEVI AND SHRI CHAKAN LALA G ARG EDUCATION TRUST, BY DELHI HIGH COURT IN ITA NO.5082/2010. IN BOTH THE CASES , IT HAS BEEN HELD THAT CORPUS DONATION BEING IN THE NAT URE OF CAPITAL RECEIPT ARE NOT CHARGEABLE TO INCOME TAX. SO FAR AS SECTION 2(24)(IIA) IS CONCERNED, THIS SECTION HAS TO BE READ IN THE CO NTEXT OF THE INTRODUCTION OF THE PRESENT SECTION 12. IT IS SIGNIFICANT THAT SECTION 2(24)(IIA) WAS INSERTED W.E.F. 01-04-1973 SIMULTANEOUSLY WITH THE PRESENT SECTION 12. SECTION 12 MAKES IT CLEAR BY THE WORDS APPEARING IN PARENTHESIS THAT CONTRIBUTIONS MADE WITH A SPECIFIC DIRECTION THAT T HEY SHOULD FORM A PART OF THE CORPUS OF THE TRUST OR INSTITUTION SHALL NOT BE CONSIDERED AS INCOME OF THE TRUST. IN THE CASE OF R.B. SHRIRAM RELIGIOU S AND CHARITABLE TRUST 172 ITR 373 HONBLE BOMBAY HIGH COURT HELD THAT EVE N IGNORING THE AMENDMENTS TO SECTION 12, WHICH MEANS THAT EVEN BEF ORE THE WORDS APPEARING TO PARENTHESIS IN THE PRESENT SECTION 12, IT CANNOT BE HELD THAT VOLUNTARY CONTRIBUTIONS SPECIFICALLY RECEIVED TOWARDS THE CORPUS OF THE TRUST MAY BE BROUGHT TO TAX. THE AFORESAID DECISION WAS FOLLOWED BY THE HONBLE BOMBAY HIGH COURT IN TH E CASE OF TRUSTEES OF KASTURBAI SCINDIA COMMISSION TRUST 189 ITR 5. IN THE PRESENT CASE, THE AO. ON EVIDENCE HAS ACCEPTED THE FACT THAT THE IMPUGNED DONATION HAS BEEN RECEIVED TOWARDS THE CORPUS OF THE ENDOWMENT . THE SAME IS SUPPORTED BY APPELLANT BY FILING COPY OF DIRECTION ISSUED BY THE DONOR COMPANY M/S. SERUM INSTITUTE OF INDIA LTD. VIDE IT' S LETTER DATED 22 ND & 25 TH MARCH, 2005, CONTAINING SPECIFIC DIRECTIONS REGAR DING NATURE OF DONATION BEING CORPUS OF THE FOUNDATION. AN IDENTIC AL FINDINGS HAVE BEEN GIVEN BY AGRA I.T.AT. ALSO IN THE CASE OF M/S GAUDI YA GRANTH ANUVED TRUST IN I.T.A. NO. 386 / 2012. HENCE, AFTER CONSID ERING THE POSITION OF LAW AS IT IS PREVAILING AT PRESENT ON THE BASIS OF SEVERAL DECISIONS CITED (SUPRA), THE CORPUS DONATION IS CONSIDERED TO BE IN THE NATURE O F CAPITAL RECEIPT AND IS NOT TAXABLE IRRESPECTIVE OF FACT WHETHER THE APPELLANT IS REGISTERED U/S. 12AA OR NOT. THEREFORE , I AGREE WITH THE VIEW OF APPELLANT THAT THE AMOUNT OF RS.3,00,00,000/- BE ING IN THE NATURE OF CORPUS DONATION IS NOT TAXABLE UNDER THE I.T. ACT B EING IN THE NATURE OF CAPITAL RECEIPT AND THEREFORE ADDITION OF RS. 3,00, 00,000/- MADE BY AO. TOWARDS THE TAXABLE INCOME OF THE APPELLANT IS HERE BY DELETED. ACCORDINGLY, GROUND NO. 1 IS ALLOWED. ITA NO.621/PUN/2016 SERUM INSTITUTE OF INDIA RESEARCH FOUNDATION 6 7. FROM THE ABOVE, IT IS EVIDENT THAT THE CIT(A) EXAMINED T HE DICTIONARY MEANING OF THE EXPRESSION CORPUS AND DONAT ION AND ALSO ANALYSED THE AMENDED PROVISIONS OF SECTION 2(24) BY THE D IRECT TAX LAWS AMENDMENT ACT, 1989 W.E.F. 01-04-1989 QUA THE CORPU S DONATIONS. HE HELD THAT, PRIOR TO THE AMENDMENT, THE VOLU NTARY CONTRIBUTIONS WITH SPECIFIC DIRECTION WAS NEVER CONSIDERED A S INCOME AND TOTALLY EXCLUDED FROM THE TAXATION. SUCH CORPUS DON ATIONS ARE EXEMPT IN PRINCIPLE ONLY IN VIEW OF THE PROVISIONS OF SECTION 11(1)(D) OF THE ACT IN CASES REGISTERED U/S.12AA OF THE ACT. IN THIS REGARD, CIT(A) DISCUSSED THE CASE LAWS OF PENTAFOUR SOFTWARE EMPLOYEES W ELFARE FOUNDATION AND JUDGMENT OF DELHI HIGH COURT IN THE CASE OF SMT. BASANTIDEVI AND SHRI CHAKAL LAL GARG EDUCATION TRUST IN IT A NO.5082/2010(SUPRA). CIT(A) RELIED ON BOTH THESE CASE LAW S FOR THE PROPOSITION THAT THE CORPUS DONATION BEING IN THE NATURE OF CAPITAL RECEIPT IS NOT CHARGEABLE TO TAX. CIT(A) FURTHER HELD THAT SECTION 2(24)(IIA) OF THE ACT IS REQUIRED TO BE READ IN THE CONTEXT OF INTRODUCTION OF THE PRESENT SECTION 12 OF THE ACT CONSIDERING THE SIMU LTANEOUS AMENDMENTS TO BOTH THE PROVISIONS W.E.F. 01-04-1973. EVEN TUALLY, THE CIT(A) HELD THAT THE SAID AMOUNT OF RS. 3 CRORES OF CORPU S DONATION IS NOT TAXABLE UNDER THE I.T. ACT BEING IN THE NATURE OF CA PITAL RECEIPT. BOMBAY HIGH COURT JUDGMENTS IN THE CASE OF R.B. SHRIRAM R ELIGIOUS AND CHARITABLE TRUST (SUPRA) AND THE TRUSTEES OF KASTUR BAI SCINDIA COMMISSION TRUST (SUPRA) WERE RELIED TOO. 8. AGGRIEVED WITH THE SAME, THE REVENUE IS IN APPEAL BEFORE US. IN THE GROUNDS, IT IS ARGUED THAT VOLUNTARY CONTRIBUTIONS OF BOTH CORPUS AND GENERAL DONATIONS RECEIVED BY A TRUST CONSTITUTES IN COME AS DEFINED U/S.2(24)(IIA) OF THE ACT AND NO SUCH EXEMPTION IS AVAILABLE TO SUCH ITA NO.621/PUN/2016 SERUM INSTITUTE OF INDIA RESEARCH FOUNDATION 7 CONTRIBUTIONS IN THE ABSENCE OF ANY SUCH EXPRESSLY PROV IDED EXEMPTION GIVING PROVISIONS LIKE CLAUSE (D) OF SECTION 11(1) OF THE ACT IS AVAILABLE TO THE REGISTERED TRUST U/S.12A/12AAOF THE ACT. REVENUE H AS OBJECTION, THE WAY THE CIT(A) RELIED ON THE DELHI HIGH COURT JUDGMENT IN THE CASE OF BASANTIDEVI AND CHAKAN LAL GARG EDUCATION TRUST (SUPR A) AND OTHERS. REGARDING THE JURISDICTIONAL HIGH COURT JUDGMENT IN THE CASES OF R.B. SHRIRAM RELIGIOUS AND CHARITABLE TRUST (SUPRA) THE TRU STEES OF KASTURBAI SCINDIA COMMISSION TRUST (SUPRA), LD. DR FOR THE RE VENUE SUBMITTED THAT THESE ARE THE TRUSTS WITH REGISTRATION U /S.12 OF THE ACT. THE ASSESSMENT YEARS INVOLVES IN THESE CASES ARE PRIOR TO A.Y. 1972- 1973 AND EARLIER. 9. FURTHER, LD. DR FOR THE REVENUE SUBMITTED THAT THE O RDER OF CIT(A) IS REQUIRED TO BE REVERSED AS THE CIT(A) IGNORED TH E FACT OF ABSENCE OF ANY SUCH EXEMPTION-PROVIDING-PROVISIONS LIKE CLAU SE (D) OF SECTION 11 OF THE ACT IN THE DEFINITION OF 2(24)(IIA) OF THE ACT F OR THE CASES LIKE THE PRESENT ASSESSEE. LD. DR FOR THE REVENUE REASO NED THAT IF VOLUNTARY CONTRIBUTIONS TO CONTRIBUTIONS OF THE TRUST ARE NOT TO BE TAXED AS INCOME, THE DEFINITION OF INCOME WOULD HAVE BEEN ACCORDING LY WORDED ON PAR WITH THE SECTION 11(1)(D) OF THE ACT. HE ALSO FILED TH E WRITTEN SUBMISSIONS IN THIS REGARD EXPLAINING THE PROVISIONS OF SECTIO N 2(24)(IIA) OF THE ACT NOT PROVIDING FOR EXCLUSION OF THE CORPUS DONAT IONS OR CORPUS SPECIFIC VOLUNTARY CONTRIBUTIONS FROM THE DEFINITION OF THE SCO PE OF INCOME. IN HIS WRITTEN SUBMISSIONS, CIT(A) DISCUSSED VARIOU S DECISIONS AND THE RELEVANT WRITTEN SUBMISSIONS FROM PARA N OS. 7.1 TO 8 ARE EXTRACTED AS UNDER : 7.1. THE RELIANCE WAS PLACED ON THE JUDGMENT OF TH E BOMBAY HIGH COURT IN THE CASE OF CIT VS. TRUSTEES OF KASTURBHAI SINDH IA REPORTED IN [1991] 189 ITR 5 IN WHICH IT HELD THAT THE DONATION SPECIF ICALLY TOWARDS CORPUS OF THE DONEE TRUST WOULD NOT CONSTITUTE INCOME IN T HE HANDS OF THE DONEE ITA NO.621/PUN/2016 SERUM INSTITUTE OF INDIA RESEARCH FOUNDATION 8 TRUST BASED ON THE READING OF SEC. 12(2) AND SEC.11 OF THE IT.ACT. THIS DECISION WAS BASED ON ITS EARLIER JUDGMENT IN THE C ASE OF TRUSTEES OF KHILACHAND DEVCHAND FOUNDATION VS CIT REPORTED IN [ 1998] 172 ITR 382. IT IS SEEN FROM THE JUDGMENT THAT THE ASSESSMENT YE ARS INVOLVED WERE 1969-70,71-72 AND 72-73. THESE ASSESSMENT YEARS WER E PRIOR TO THE INTRODUCTION OF CLAUSE 2(24)(IIA). FURTHER, THE DEC ISION WAS BASED ON THE READING OF THE THEN SECTION 12(2) R.W.S.11 OF THE I T.ACT. THE APPELLANT CASE IS NOT COVERED BY SEC.11 AND 12 OF THE IT.ACT AS IT IS NOT A REGISTERED U/S S 12A OF THE IT.ACT. THEREFORE, THIS DECISION IS OT HERWISE ALSO NOT APPLICABLE TO THE FACTS OF THE APPELLANT'S CASE. 7.2. RELIANCE WAS ALSO PLACED ON THE JUDGMENT OF TH E BOMBAY HIGH COURT IN THE CASE OF R. B.SHRIRAM RELIGIOUS AND CHARITABL E TRUST VS. CIT REPORTED IN [1988] 172 ITR 373. IT IS SEEN THAT THI S CASE PERTAINS TO THE A.Y. 1966-67. THE ISSUE INVOLVED IN THE CASE WAS WH ETHER SEC.12(1) DEALS WITH VOLUNTARY CONTRIBUTIONS OR THE INCOME DERIVED FROM THE VOLUNTARY CONTRIBUTIONS. IT WAS HELD THAT IT IS VOLUNTARY CON TRIBUTIONS WHICH IS TO BE TREATED AS INCOME BY INTERPRETING AND REFERRING TO THE SUBSEQUENT AMENDMENT MADE IN SEC.2(24)(IIA). THIS CASE IS IN N O WAY RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION. 7.3. THE NEXT CASE RELIED UPON IS THE DELHI HIGH CO URT DECISION IN THE CASE OF DIRECTOR OF INCOME TAX VS. SMT BASANTI DEVI AND SHRI CHAKHANLAL GARG EDUCATION TRUST FOR A.Y. 03-04 IN ITA NO.927/2009 D TD.23/9/2009 AND THE SHORT JUDGMENT OF THIS DECISION IS REPRODUCED B ELOW: 'THE RESPONDENT/ASSESSEE IS ADMITTEDLY A CHARITABLE ORGA NISATION WHICH IS A TRUST REGISTERED UNDER THE INDIAN TRUST ACT WHICH H AS ALSO BEEN GRANTED REGISTRATION UNDER THE I. T.ACT W.E.F. 1/4/2003. TH E ASSESSEE RECEIVED CERTAIN DONATIONS TOWARDS ITS CORPUS WHICH HAD BEEN DEPOSITED IN THE BANK AND THE MONEY WAS ADMITTEDLY SPENT FOR ACQUIRI NG LAND FOR CONSTRUCTION OF A COLLEGE. IN THESE CIRCUMSTANCES, WE ARE OF THE OPINION THAT THE CIT(A) AS WELL AS ITAT RIGHTLY CONCLUDED T HAT THE DONATIONS RECEIVED TOWARDS CORPUS OF THE TRUST WOULD BE CAPIT AL RECEIPT AND NOT REVENUE RECEIPT CHARGEABLE TO TAX. NO QUESTION OF L AW ARISES. DISMISSED' . 7 . 3.1 . IT IS CLEAR THAT THE HIGH COURT HAS NOT DEALT THE Q UESTION OF LAW HOLDING THAT IT DOES NOT ARISE . THE HIGH COURT APPARENTLY WAS CARRIED AWAY BY THE FACT THAT THE TRUST WAS REGISTERED SUBS EQUENTLY UNDER THE IT.ACT AND ALSO THE SUM RECEIVED WAS SPENT FOR THE CONSTRUCTION OF COLLEGE. IN VIEW OF THESE SPECIFIC CIRCUMSTANCES OF THE CASE, THE COURT HAS NOT DEALT WITH THE BASIC LEGAL PREMISE AS TO WHETHE R THE CHARITABLE TRUST NOT REGISTERED UNDER THE IT.ACT IS ENTITLED IN NOT TREATING IN THE CORPUS DONATION AS INCOME IN SPITE OF THE PROVISIONS OF SE C . 2 (24)(IIA) WHICH DEFINES INCOME TO INCLUDE VOLUNTARY CONTRIBUTIONS. THIS CASE HAS NOT ENUNCIATED ANY CLEAR PRINCIPLE, AS THERE IS NO DISC USSION ON THE ISSUE AND THEREFORE SHOULD NOT BE TAKEN AS A BINDING PRECEDEN T IN VIEW OF THE SUPREME COURT DECISION IN THE CASE OF PADMA SUNDER RAO VS . STATE OF TAMILNADU 255 ITR 147 (SC). 7 . 4. RELIANCE WAS ALSO PLACED ON THE JUDGMENT IN THE CASE OF PENTAFOUR SOFTWARE EMPLOYEES WELFARE FOUNDATION AS SEEN IN TH E APPEAL ORDER BUT THERE IS NO CITATION TO DOWNLOAD THE JUDGMENT . A CLOSE LOOK AT THE NAME OF THE FOUNDATION ITSELF REVEALS THAT IT IS NOT A CHAR ITABLE ORGANISATION AND THEREFORE, THE PROVISIONS OF SEC. 2 (24)(IIA) DO NO T APPLY TO SUCH NON CHARITABLE FOUNDATIONS. SO THE DECISION OF THIS CAS E IS NOT RELEVANT TO THE CHARITABLE ORGANIZATIONS. 7.5. RELIANCE WAS ALSO PLACED ON THE JUDGMENT OF TH E ITAT AGRA IN THE CASE OF GAUDIYA GRANTH ANUVED TRUST VS. DEPARTMENT OF INCOME TAX IN ITA NO.621/PUN/2016 SERUM INSTITUTE OF INDIA RESEARCH FOUNDATION 9 ITA NO.386/AGRA/2012 (A.Y. 07-08) DTD.12/7/2013. IT IS SEEN THAT THIS DECISION IS BASED BASICALLY ON THE CASES DISCUSSED ABOVE. THEREFORE, THERE IS NO SEPARATE DISCUSSION IS REQUIRED ON THE MERITS OF THIS CASE. 8 . IN RESULT, IT IS CLEAR THAT THE DECISIONS RELIED UP ON BY THE CIT(A) IN HIS ORDER HAVE NO RELEVANCE TO THE FACTS OF THE APPELLA NT CASE AND NONE OF THEM HAVE CONSIDERED THE IMPLICATION OF THE AMENDME NT IN SEC.2(24)(IIA) WHICH CAME INTO EFFECT FROM 1/4/1973. A BARE READIN G OF THE AMENDED PROVISIONS CLEARLY INDICATES THAT THE CORPUS DONATI ON IS ALSO AN INCOME IN RESPECT OF CHARITABLE ORGANIZATIONS. THE CORPUS DON ATION IS SPECIFICALLY EXEMPTED IN THE CASE OF REGISTERED TRUST U/S 12A. H AD THE INTENTION BEEN OTHERWISE, THERE WOULD NOT HAVE BEEN ANY SPECIFIC P ROVISION OF SEC . 11(1)(D) PROVIDING FOR SUCH CORPUS DONATION FROM BE ING INCLUDED AS INCOME. NO PROVISION OF THE ACT CAN BE TREATED AS REDUNDANT, AS THE SAME IS DEBATED AND PASSED BY THE PARLIAMENT. 10. PER CONTRA, LD. AR FOR THE ASSESSEE MADE VARIOUS SU BMISSIONS. IT IS THE CASE OF THE ASSESSEE THAT WHEN THE ASSESSEE DO ES NOT HAVE APPROVAL AS REQUIRED U/S.35(1)(II) OF THE ACT AS WELL AS U/S.12A /12AA OF THE ACT, THE ASSESSEE SHOULD BE TREATED AS ANY OTHER NORMAL TRUST AND NOT THE AOP AS HELD BY THE AO IN WHICH CASE THE PROVISIO NS OF SECTION 2(24)(IIA) OF THE ACT QUA THE EXPRESSION VOLUNTARY CONTRIBU TIONS, SHOULD BE CONSIDERED AT ITS GENERAL MEANING. REFERRING TO THE EXPRESSION VOLUNTARY CONTRIBUTIONS USED IN THE SAID PRO VISIONS OF SECTION 2(24)(II) OF THE ACT, LD. AR SUBMITS THAT THE VOLUN TARY CONTRIBUTIONS WHICH ARE OF THE CAPITAL NATURE SHOULD BE EX CLUDED FROM THE TAXATION CONSIDERING THE MEANING PROVIDED IN THE CONT EXT OF PROVISIONS OF CLAUSE (D) OF SECTION 11(1) OF THE ACT. RELEVAN T SUBMISSIONS OF THE ASSESSEE PROVIDED BEFORE US ARE EXTRACTED AS U NDER: AS STATED I N RELEVANT PARA OF OUR SUBMISSIONS THE INSTITUTE WA S NEVER GRANTED NOR CLAIMED EXEMPTION U/S 11 BUT EXEMPTION WAS ALWAYS GRANTED U/S 10(21) . COPY OF ASSESSMENT ORDER FOR AY 2003-04 IS ATTACHED HEREWITH FOR YOUR READY REFERENCE. AFTER ANALYSING THE DEFINITION OF INCOME U/S 2(24(I IA) YOU MAY OBSERVE THAT THE DEFINIT I ON ITSELF MAKES DISTINCTION BETWEEN CHARITABLE TRUS T & INSTITUTION REFERRED I NTO SEC. 10(21) BY USING THE WORD 'OR'. (EMPHASIS SUPPLIED) [(IIA) VOLUNTARY CONTRIBUTIONS RECEIVED BY A TRUST CREATED WHOLLY OR PARTLY FOR CHARITABLE OR RELIGIOUS PURPOSES OR BY AN INSTI TUTION ESTABLISHED WHOLLY OR PARTLY FOR SUCH PURPOSES OR BY AN ASSOCIATION OR INSTITUTION REFERRED TO IN CLAUSE (21) ITA NO.621/PUN/2016 SERUM INSTITUTE OF INDIA RESEARCH FOUNDATION 10 OR ------ WE HAVE BEEN APPROVED AS A SCIENTIFIC RESEARCH ORGA NISATION ALL ALONG AND ALSO ALWAYS RECEIVED APPROVAL U/S. 35 (1)(II) U PTO A.Y. 2004-05. LATEST APPROVAL DATED:- 10 T H APRIL, 2002 IS ENCLOSED. EVEN CBDT HAS NOT DENIED THE FACT THAT OURS IS A RESEARC H ORGANISATION WHILE REJECTION U/S 35(I)(II) FOR WEIGHTED DEDUCTIO N IN THE HANDS OF DONER. WE WERE RECOGNIZED AS 'SCIENTIFIC AND INDUSTRIAL RE SEARCH ORGANIZATION' (SIRO) BY THE DEPARTMENT OF SCIENTIFIC AND INDUSTRIAL RESEARCH, MINISTRY OF SCIENCE AND TECHNOLOGY, GOVER NMENT OF INDIA TILL 31.03.2013. ON THE OTHER HAND WE HAVE NEVER BEEN ASSESSED AS 'CHARITABLE ORGANISATION' YOU MAY KINDLY NOTICE THAT FOR THE PURPOSE OF INCOM E TAX A SEPARATE DISTINCTION IS MADE REGARDING THE SC HEME OF TAXATION. THE EXEMPTION IN RESPECT OF RESEARCH ASSOCIATION IS PROVIDED U/S. 10(21) AND THE ASSESSMENT OF CHARITY TRUSTS ARE GOV ERNED BY SEC 11, 12, 12AA & 13. 11. FURTHER, THE LD. AR FOR THE ASSESSEE ALSO FILED FURTHE R SUBMISSIONS WHICH ARE EXTRACTED AS UNDER : 1 IT IS CONTENDED THAT THE CORPUS DONATION WILL I N ANY CASE BE EXEMPT FROM TAX. IF CBDT DOES NOT GRANT SUCH APPROVAL, THE N ALSO THE AMOUNT CANNOT BE TAXED AS IT IS NOT IN THE NATURE OF INCOM E. 2 PROVISIONS OF SEC 2(24 )(IIA) ARE NOT APPLICABLE AND DONATION WITH A DIRECTION TO CORPUS IS NOT SUBJECT TO TAX THE RELEVANT EXTRACTS OF I.E. SECTION 2(24) (IIA) A RE REPRODUCED BELOW: [(IIA) VOLUNTARY CONTRIBUTIONS RECEIVED BY A TRUST CREATED WHOLLY OR PARTLY FOR CHARITABLE OR RELIGIOUS PURPOSES OR BY AN INSTI TUTION 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 UNI VERSITY 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] 3 SECTION 10(21) OF THE INCOME TAX ACT, 1961 IS RE PRODUCED BELOW: (21) ANY INCOME OF A RESEARCH ASSOCIATION FOR THE T IME BEING APPROVED FOR THE PURPOSE OF CLAUSE (II) [OR CLAUSE (III)] OF SUB -SECTION (1) OF SECTION 35: PROVIDED THAT THE RESEARCH ASSOCIATION- ITA NO.621/PUN/2016 SERUM INSTITUTE OF INDIA RESEARCH FOUNDATION 11 4. A PERUSAL OF CLAUSE (21) OF SECTION (10) SHOWS T HAT IT REFERS TO A SCIENTIFIC RESEARCH INSTITUTION WHICH IS 'FOR THE T IME BEING APPROVED U/S. 35(1) (II).' IF IT IS NOT SO APPROVED, AS IS THE PRESENT CASE, N EITHER SECTION 2(24 )(IIA) NOR S.1 0(21) CAN APPLY. 5. IN SUCH A CASE THE ASSESSEE STANDS AT PAR WITH ANY OTHER NORMAL ASSESSEE IN WHOSE CASE, ADMITTEDLY A GIFT CANNOT BE TAXED AS INCOME. 6. A REFERENCE IS ALSO DRAWN TO THE DECISION OF THE SUPREME GOVT. IN CIT VS. GROZ BECKERT SABOO LTD.116 ITR 125. THE SUPREME COURT, IN THE ABOVE CASE HAS HELD THAT A GIFT EVEN OF RAW MATERIAL SUBSEQUENTLY USED IN THE BUSINESS OF THE A SSESSEE IS NOT A REVENUE RECEIPT, WHEN IT IS RECEIVED BUT IT IS ONLY A CAPITAL RECEIPT AS IT IS A GIFT. 7. RELIANCE WAS PLACED ON THE CIRCULAR NO.158 [F.NO .173/2/73- IT(A)(A-I)] DATED 27-12-1974 ISSUED BY CBDT WHEREIN THE CBDT HAS CLARIFIED THAT A GIFT DOES NOT CONSTITUTE INCOME RE CEIPT AT ALL, BUT IS A CAPITAL RECEIPT WHEREIN IT IS HELD THAT 'RECEIPTS W HICH ARE OF A CASUAL AND NON-RECURRING NATURE WILL BE LIABLE TO INCOME- TAX ONLY IF THEY CAN PROPERLY BE CHARACTERIZED AS 'INCOME' EITHER IN ITS GENERAL CONNOTATION OR WITHIN THE EXTENDED MEANING GIVEN TO THE TERM BY THE INCOME-TA X ACT' 8. IN FACT, SECTION 12(1) CREATES A FICTION THAT AN Y VOLUNTARY CONTRIBUTIONS RECEIVED BY A TRUST CREATED WHOLLY FO R CHARITABLE OR RELIGIOUS PURPOSES OF BY AN INSTITUTION ESTABLISHED WHOLLY FO R SUCH PURPOSES, (NOT BEING CONTRIBUTIONS MADE WITH A SPECIFIC DIRECTION THAT THEY SHALL FORM PART OF THE CORPUS OF THE TRUST) SHALL FOR THE PURP OSES OF SECTION 11 BE 'DEEMED TO BE INCOME DERIVED FROM PROPERTY HELD UND ER TRUST.' THIS PROVISION, IN FACT SUPPORTS THE APPELLANTS CONTENTI ON AS POINTED BY THE PATNA HIGH COURT IN THE CASE OF BIHAR STATE BOARD O F DIGAMBAR JAIN RELIGIOUS TRUSTS REPORTED IN 187 ITR 295 AS EVEN UN DER SUCH FICTION, CORPUS DONATIONS ARE EXCLUDED. IT IS WELL SETTLED T HAT FICTION CREATED HAS TO BE STRICTLY & TO BE CONFINED TO THE PURPOSES FOR WH ICH IT IS CREATED. BOTH THE FICTIONS U/S 2(24 )(IIA) AND U/S 12 ARE CREATED TO DEEM CERTAIN RECEIPTS IS DERIVED FROM PROPERTY HELD UNDER TRUST. IN THIS RESPECT YOUR HONOR'S ATTENTION IS DRAWN TO THE OBSERVATIONS OF HIGH COUR T ON PAGE NO. 298 WHICH READS AS UNDER: 'THE VERY FACT EVEN UNDER THE INCOME TAX ACT A CONT RIBUTION WITH SPECIFIC DIRECTION THAT IT SHALL FORM PART OF THE CORPUS OF THE TRUST DOES NOT COME WITHIN THE PURVIEW OF THE DEFINITION OF INCOME IS C LEARLY DEMONSTRATIVE OF THE FACT THAT SUCH DONATION CANNOT COME WITHIN THE P URVIEW OF THE DEFINITION OF INCOME 9. WITH THE ABOVE BACK GROUND IT IS SUBMITTED THAT IN ORDER TO INVOKE THE PROVISIONS OF SECTION 12(1) THERE IS A PRECONDI TION OF REGISTRATION U/S 12A. AS THE INSTITUTE IS NOT REGISTERED U/S 12A, FI CTION CREATED IN SEC. 2(24)(IIA) IS TO BE READ WITH SEC. 12(2) TO DEEM IT AS INCOME DERIVED FROM THE PROPERTY HELD UNDER TRUST. THE DEPARTMENT HAS N EVER TREATED THE INSTITUTE AS CHARITABLE TRUST & NEVER GRANTED EXEMP TION U/S 11. IT WAS ALWAYS CLAIMED AND ALLOWED U/S 10(21) ONLY. 10. THE CONSEQUENCE OF REFUSAL OF APPROVAL U/S. 35( 1 )(II) CANNOT BE THAT AN ADMITTEDLY CAPITAL RECEIPT IS CONVERTED INT O A REVENUE RECEIPT. THERE IS NO SUCH PROVISION IN, OR A FICTION CREATED BY, THE IT ACT, 1961. 11. A DONATION, PARTICULARLY A DONATION TO THE CORP US OF A TRUST CAN NEVER CONSTITUTE A REVENUE RECEIPT BECAUSE IT IS IN THE NATURE OF A GIFT AND HENCE, ON CAPITAL ACCOUNT. ITA NO.621/PUN/2016 SERUM INSTITUTE OF INDIA RESEARCH FOUNDATION 12 12. IT IS ALSO SUBMITTED THAT INCOME OF THE TRUST N EED TO BE DETERMINED ON COMMERCIAL PRINCIPLES WHEN THERE IS NO ANY APPRO VAL AND IN THIS CONTEXT DONATION TO CORPUS IS NOT INCOME OF THE TRU ST BEING CAPITAL RECEIPT. WE WOULD LIKE TO DRAW YOUR KIND ATTENTION ON PAGE N O. 424 OF THE COMMENTARY OF THE LEARNED AUTHOR CHATURVEDI & PITHI SARIA IN THEIR BOOK INCOME TAX LAWS UNDER THE HEADING OBSERVED AS UNDER : 'INCOME, WHEN FALLS INTO THE TAX NET'. - ALTHOUGH S ECTION 14 OF THE 1961 ACT CLASSIFIES INCOME UNDER SIX HEADS, THE MAIN CHA RGING PROVISION IS SECTION 4(1) WHICH LEVIES INCOME-TAX, AS ONLY ONE T AX, ON THE 'TOTAL INCOME' OF THE ASSESSEE AS DEFINED IN SECTION 2(45) OF THAT ACT. AN INCOME IN ORDER TO COME WITHIN THE PURVIEW OF THAT DEFINIT ION MUST SATISFY TWO CONDITIONS. FIRSTLY, IT MUST COMPRISE THE 'TOTAL AM OUNT OF INCOME REFERRED TO IN SECTION 5'. SECONDLY, IT MUST BE 'COMPUTED IN THE MANNER LAID DOWN IN THIS ACT'. IF EITHER OF THESE CONDITIONS FAILS, THE INCOME WILL NOT BE A PART OF THE TOTAL INCOME THAT CAN BE BROUGHT TO CHARGE [ CIT V. HARPRASAD & CO. PVT. LTD., (1975) 991TR 118,125 (SC)] IN SHORT FIRST THE RECEIPT SHOULD BE INCOME. THEN O NLY IT WILL BE TAXED. 13. WE ARE NOT DISPUTING THAT FACT THAT REVENUE REC EIPT ARE TAXABLE & OUR DISPUTE IS ONLY TOWARDS DONATIONS TOWARDS CORPU S AS CAPITAL RECEIPT. 14. IN SUPPORT OUR CLAIM WE HAVE RELIED ON THE DECI SION OF DELHI HIGH COURT AS WELL VARIOUS ITAT DECISIONS . WE HAVE ATTA CHED HEREWITH EXTRACT FROM OPERATING PORTIONS OF SUCH DECISIONS 15. WE FURTHER RELY ON THE DECISION OF BOMBAY HIGH COURT IN THE CASE OF GIFT TAX V. CAWASJI JAHANGIR CO. (P) LTD. REPORT ED IN 106 ITR 390 IN WHICH IT WAS HELD THAT 'IT PERMITS THE COURT TO TAK E INTO CONSIDERATION THE BASIC PRINCIPLES IN THE ALLIED LAWS. IT DOES NOT CO MPEL THE COURT TO APPLY THE DEFINITION TO A CASE TO WHICH HAVING REGARD TO THE BASIC PRINCIPLES, IT CANNOT APPLY. THIS CASE RELATES TO GIFT TAX IN WHIC H THE OPENING WORDS FOR SECTION 2 'UNLESS THE CONTEXT OTHERWISE REQUIRES' A RE USED. THE SAID OPENING WORDS ARE FORMING PART OF THE INCOME TAX AC T IN WHICH THE DEFINITION OF INCOME HAS BEEN EMBEDDED. 12. WE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE AS WELL AS VARIOUS DECISIONS CITED BY BOTH THE PARTIES. WE HAVE ALSO GONE THROUGH THE WRITTEN SUBMISSIONS FURNISHED BY BOTH THE SIDES. 13. THE CASE OF THE REVENUE IS THAT THE VOLUNTARY CONTRIBUTIONS M ADE TO THE CORPUS OF THE TRUST CONSTITUTES TAXABLE INCOME OF THE TRUST. READING FROM THE PROVISIONS RELATING TO THE DEFINITION OF INCOM E IN SECTION 2(24(IIA) OF THE ACT AND SECTION 12(1) OF THE ACT, THE REVENUE HOLDS THAT SUCH INCOME NEEDS TO BE FIRST INCLUDED IN THE T OTAL INCOME OF THE ASSESSEE BEFORE ANY EXCLUSION IS MADE AS IN CASE OF C LAUSE (D) OF ITA NO.621/PUN/2016 SERUM INSTITUTE OF INDIA RESEARCH FOUNDATION 13 SECTION 11(1) OF THE ACT. IN THE INSTANT CASE, THE ASSESS EE IS NOT ONLY AN UNREGISTERED FIRM U/S.12A/12AA OF THE ACT BUT ALSO AN UNA PPROVED INSTITUTION FOR THE PROVISIONS OF SECTION 35(1)(II) AND 10(21) OF TH E ACT. SINCE THE PROVISIONS OF SECTION 12(1) DOES NOT APPLY TO TH IS CASE, THE PROVISIONS OF SECTION 2(24)(IIA) OF THE ACT APPLIES AND THEREFOR E, ALL THE VOLUNTARY CONTRIBUTIONS INCLUDING THOSE SPECIFIED FOR THE COR PUS OF THE TRUST, CONSTITUTES INCOME IN THE ABSENCE OF ANY PROV ISIONS PROVIDING FOR EXCLUSIONS ON PAR WITH SECTION 11(1)(D) OF THE ACT, THE AMENDMENT BY THE DIRECT TAX LAWS ACT, 1989 AS WELL AS OTHER AMEND MENTS AND SUBSEQUENT FINANCE ACTS ( WITH REFERENCE TO SECTION 56 RELATING TO GIFTS WERE AMENDED TO TAX CERTAIN GIFTS IN CERTAIN CIRCUMSTANCE S) WERE RELIED UPON BY THE LD. DR. THE VOLUNTARY CONTRIBUTIONS, IN PRIN CIPLE, EVEN THOUGH MADE TO THE CORPUS OF THE TRUST CONSTITUTE INC OME, IN A CASE LIKE THE PRESENT ASSESSEE ALTHOUGH IT IS REGISTERED AS A RESEARCH FOUNDATION, I.E. TRUST UNDER THE BOMBAY PUBLIC TRUST ACT. FURTHER, IT IS THE CASE OF THE REVENUE THAT THE CASE LAWS CITED BY THE LD. AR FOR THE ASSESSEE EITHER BELONG TO THE PERIOD PRIOR TO THE ABOVE SAID AMENDMENTS OR DISTINGUISHABLE ON FACTS. 14. SO FAR AS THE JUDGMENT OF HONBLE BOMBAY HIGH COURT IN THE CASE OF R.B. SHRIRAM RELIGIOUS AND CHARITABLE TRUST (SUPRA), IT IS A CASE WHERE VOLUNTARY CONTRIBUTIONS ARE MADE TO THE TRUST WIT HOUT ANY SPECIFIC DIRECTION BY THE DONOR THAT IT SHOULD BECOME PART OF THE CORPUS OF THE TRUST. IN THIS CASE, THE HONBLE HIGH COURT HELD T HAT IN THE ABSENCE OF ANY SUCH SPECIFIC DIRECTION, THE CONTRIBUTION BEC OMES TAXABLE FOR THE A.Y. 1966-67. REFERRING TO THE OTHER JUR ISDICTIONAL HIGH COURT JUDGMENT IN THE CASE OF TRUSTEES OF KASTURBAI SCIND IA COMMISSION TRUST (SUPRA), IT IS A CASE RELATING TO A.Y. 1969- 70 TO 1972- 73. ON FACTS, IT IS A CASE OF DONATION BY ONE TRUST TO TH E OTHER, UNLIKE ITA NO.621/PUN/2016 SERUM INSTITUTE OF INDIA RESEARCH FOUNDATION 14 TO THE CASE OF THE PRESENT ASSESSEE WHERE DONATION R ECEIVED BY GROUP CONCERN OF THE ASSESSEE TOWARDS THE CORPUS OF THE TRU ST WHICH IS NOT REGISTERED U/S.12A/12AA OR U/S.35(1)(II) OF THE ACT. 15. REFERRING TO THE OTHER DECISIONS OF HONBLE DELHI HIGH C OURT, LD. DR SUBMITTED THAT THE BASIC FACTS ARE NOT AVAILABLE FOR CO MMENTS, IF ANY. ASSESSEE FAILED TO FILE THE COPIES OF SAID DECISIONS. HOW EVER, HE SUBMITTED THAT THESE ARE THE CASES WHERE 12A REGISTRA TION DO EXIST AND THAT MAKES DIFFERENCE TO THE CASE OF THE ASSESSEE. THUS , LD. DR FOR THE REVENUE SUMMARISES THAT THE ABOVE COMMENTS STATING TH AT THE CASE LAWS CITED BY THE ASSESSEE HAS NO RELEVANCE. THEREFORE, LD. DR PRAYED FOR REVERSING THE ORDER OF CIT(A) AS HE IGNORED THE FACT T HAT SUBSEQUENT AMENDMENTS MADE TO THE VOLUNTARY CONTRIBUTIONS TO BE INCLUDED IN THE TOTAL INCOME OF THE ASSESSEE VIDE SECTION 12(1) OF THE ACT, AND ON THE GIFTS IN PRINCIPLE, SHOULD ALSO BE TAXABLE BY VIRTUE OF THE PRO VISIONS LIKE THE ONE U/S.56(2) OF THE ACT. 16 (A) FURTHER, LD. DR SUBMITTED THAT THE INCOME TAX AC T, 1961 PROVIDES FOR DEFINITION OF INCOME U/S.2(24)(IIA) OF THE ACT AND THE SAME READS AS UNDER : (IIA) VOLUNTARY CONTRIBUTIONS RECEIVED BY A TRUST CREATED WHOLLY OR PARTLY FOR CHARITABLE OR RELIGIOUS PURPOSES OR BY AN INSTI TUTION 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 TRUS T OR INSTITUTION REFERRED TO IN SUB-CLAUSE (IV) OR SUB-CLAUSE (V) [OR BY ANY UNI VERSITY 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]]. THE ABOVE PROVISION SPECIFIES THAT THE VOLUNTARY CONTRIBU TIONS RECEIVED BY A TRUST OR INSTITUTION CONSTITUTES INCOME. IN THE CASE OF A TRUST, THE PROVISIONS OF SECTION 12(1) PROVIDES FOR DEEMING THE VOLUNTARY CONTRIBUTIONS RECEIVED BY THE TRUST OR INSTITU TION, AS THE ITA NO.621/PUN/2016 SERUM INSTITUTE OF INDIA RESEARCH FOUNDATION 15 INCOME OF THE TRUST FOR THE PURPOSE OF SECTION 11 OF THE ACT. THIS SUB- SECTION (1) OF SECTION 12 OF THE ACT ALSO PROVIDE FOR NON-INC LUSION OF SUCH VOLUNTARY CONTRIBUTIONS IN THE TOTAL INCOME, IF THEY ARE MAD E TO FORM PART OF THE CORPUS OF THE TRUST OF INSTITUTION. THUS, TH E PROVISIONS OF SECTION 2(24)(IIA) AND SECTION 12(1) ARE IN TUNE WITH THE TAXAT ION OF VOLUNTARY CONTRIBUTIONS AND NON-TAXATION OF SUCH CONTRIB UTIONS IN TOTAL INCOME IF MADE TO THE CORPUS OF THE TRUST. (B). RELEVANT SUB-SECTION OF SECTION 12(1) IS EXTRACTED HERE AS UNDER : 12 (1) ANY VOLUNTARY CONTRIBUTIONS RECEIVED BY A T RUST CREATED WHOLLY FOR CHARITABLE OR RELIGIOUS PURPOSES OR BY AN INSTITUTI ON ESTABLISHED WHOLLY FOR SUCH PURPOSES ( NOT BEING CONTRIBUTIONS MADE WITH A SPECIFIC DIRECTION THAT THEY SHALL FORM PART OF THE CORPUS OF THE TRU ST OR INSTITUTION) SHALL FOR THE PURPOSES OF SECTION 11 BE DEEMED TO B E INCOME DERIVED FROM PROPERTY HELD UNDER TRUST WHOLLY FOR CHARITABLE OR RELIGIOUS PURPOSES AND THE PROVISIONS OF THAT SECTION AND SECTION 13 SHALL APPLY ACCORDINGLY. (C). FURTHER, BRINGING OUR ATTENTION TO THE PROVISIONS OF SE CTION 11(1)(D) OF THE ACT, LD. DR ARGUED THAT IT PROVIDES FOR EXEM PTION FROM INCLUDING THE CORPUS SPECIFIC VOLUNTARY CONTRIBUTIONS FROM TH E PURVIEW OF TOTAL INCOME OF THE ASSESSEE. THE SAID CLAUSE (D) READS AS UNDER : (D) INCOME IN THE FORM OF VOLUNTARY CONTRIBUTIONS MADE WITH A SPECIFIC DIRECTION THAT THEY SHALL FORM PART OF THE CORPUS O F THE TRUST OR INSTITUTION. FROM THE ABOVE, LD. DR SUMMED UP BY STATING THAT IT IS EASY TO INFER THAT THE VOLUNTARY CONTRIBUTIONS FORMS PART OF T HE TOTAL INCOME; WHEREAS VOLUNTARY CONTRIBUTIONS MADE WITH SPECIFIC DIRECTIONS TO BECOME PART OF THE CORPUS OF THE TRUST ARE OUTSIDE THE SCOPE OF TOTAL INCOME OF THE TRUST OR INSTITUTION. AS PER LD. DR, THIS LEGAL POSITION APPLIES TO THE TRUSTS COVERED U/S.12A AND S ECTION 11 OF THE ACT. THE POSITION WITH RESPECT TO THE TRUSTS UNREG ISTERED U/S.12A R.W.S. 11 OF THE ACT HAS TO BE UNDERSTOOD IN A DIFFERENT C ONTEXT, LIKE THE PRESENT ASSESSEE. THE EXCLUSIONS PROVIDED IN SECTION 12(1 ) OF 11(1)(D) OF ITA NO.621/PUN/2016 SERUM INSTITUTE OF INDIA RESEARCH FOUNDATION 16 THE ACT ARE NOT AVAILABLE TO THE ASSESSEE. IN THE ABS ENCE OF SUPPORTING PROVISIONS LIKE THAT OF SECTION 12(1) AND 11(1)(D) OF THE ACT , THE PROVISIONS LEFT FOR APPLYING TO THE CASE OF THE PRESENT AS SESSEE IS ONLY THE ONE OF SECTION 2(24)(IIA) OF THE ACT, WHICH MANDATES THAT THE VOLUNTARY CONTRIBUTIONS CONSTITUTES INCOME. UNLIKE THE PROVISIONS OF SECTION 12(1) OF THE ACT, IT DOES NOT DISTINGUISH VOLUNTARY CONTRIBUTIONS OR CORPUS SPECIFIC VOLUNTARY CONTRIBUTIONS. I N OTHER WORDS, THIS SECTION 2(24)(IIA) DOES NOT PROVIDE ANY EXCLUSION LIKE THE WAY THE CORPUS DONATIONS WERE EXCLUDED BY VIRTUE OF THE PROVISIONS OF SECTION 12(1) OF THE ACT. THEREFORE, THE CORPUS SPECIFIC VO LUNTARY CONTRIBUTIONS BECOME TAXABLE IN A CASE OF UNREGISTERED TR UST UNDER THE INCOME-TAX PROVISIONS. (D). REGARDING THE CAPITAL NATURE OF SUCH GIFTS/VOLUNTARY CONTRIBUTIONS AND THEREFORE, THEY ARE NOT TO BE INCLUDED IN THE TOTAL INCOME OF THE ASSESSEE, LD. DR ARGUED STATING THAT THE S AID DECISIONS BELONG TO THE PERIOD PRIOR TO THE AMENDMENT TO THE PRO VISIONS OF SECTION 56(2)(VI) TO (VIII) BY THE TAXATION LAWS AMENDMENT ACT, 2006 PR OVIDING FOR TAXATION OF GIFTS IN CASH OR KIND SUBJECTED TO FULFILMENT O F CERTAIN CONDITIONS SPECIFIED IN THESE AMENDED PROVISIONS. IN OTHER WO RDS, MANY GIFTS-CAPITAL RECEIPTS ARE NOW TAXABLE AS INCOME OF THE ASS ESSEE AFTER THE AMENDMENTS TO SECTION 56 OF THE ACT. THESE ASPECTS WE RE NOT CONSIDERED IN THE SAID DECISIONS CITED BY THE ASSESSEE WH ICH ARE RELEVANT FOR THE PROPOSITION THAT THE VOLUNTARY CONTRIBU TIONS MADE TO THE CORPUS OF THE TRUST CONSTITUTES CAPITAL RECEIPT A ND THEREFORE, THE SAME DOES NOT CONSTITUTE TAXABLE INCOME. THE CIRCULAR O F THE CBDT OF 1974 IS INAPPLICABLE AS THE SAME RELATES TO THE PERIOD PRIO R TO THE AMENDMENT TO SECTION 56 OF THE ACT. ITA NO.621/PUN/2016 SERUM INSTITUTE OF INDIA RESEARCH FOUNDATION 17 17. PER CONTRA, THE CASE OF THE ASSESSEE IS THAT THE O RDER OF CIT(A) DOES NOT REQUIRE ANY AMENDMENT. THE GIFTS IN PRINCIPLE ARE THE CAPITAL RECEIPTS AND ARE NOT TO BE INCLUDED IN THE TOTAL INCOME O F THE ASSESSEE. FURTHER, ASSESSEE IS OF THE VIEW THAT THE VOLUNTARY CONT RIBUTIONS MADE TO THE CORPUS OF THE TRUST ASSUMES CAPITAL NATURE AND THEREFORE THEY ARE NOT REQUIRED TO BE INCLUDED IN THE TOTAL INCOME OF THE ASSESSEE. REFERRING TO THE PROVISIONS OF SECTION 12(1), ASSESSEE SUBMIT S THAT THE CORPUS DONATIONS WERE DEEMED AS INCOME INCLUDIBLE IN THE T OTAL INCOME OF THE ASSESSEE AND SUCH DEEMED PROVISIONS CANNOT BE E XTENDED TO UNDERSTAND THE PROVISIONS OF SECTION 2(24)(IIA) OF THE ACT RELA TING TO THE DEFINITION OF INCOME. HE ALSO RELIED ON THE WRITTEN SUBMISSIONS MADE BY THE ASSESSEE BEFORE US. 18. WE HAVE HEARD THE PARTIES AND PERUSED THE DETAILS/FA CTS, SUBMISSIONS AND CASE LAWS FURNISHED BY THE ASSESSEE AND THE REVENUE. THERE IS NO DISPUTE ON THE BASIC FACTS THAT THE ASSESS EE IS REGISTERED TRUST UNDER THE BOMBAY PUBLIC TRUST ACT, 1950 AND HOWE VER, IT IS UNAPPROVED BY THE CBDT AS REQUIRED U/S.35(1)(II) OF THE ACT. FURTHER, IT IS ALSO NOT REGISTERED U/S.12A/12AA OF THE ACT AND THERE FORE, THE IMMUNITY PROVIDED UNDER SECTION 11(1)(D) OF THE ACT OR THE E XEMPTION AND 10(21) OF THE ACT IS NOT AVAILABLE TO THE ASSESSEE TR UST. THE FACT RELATING TO CORPUS-SPECIFIC- DONATIONS OF RS.3 CRORES IS ALSO UNDISPUT ED. 19. CONSIDERING THE ABOVE, WE NEED TO EXAMINE THE NON-T AXABILITY OF THE CORPUS DONATIONS IN ASSESSEES CASE DESPITE INAPPLICA BILITY OF THE PROVISIONS OF SECTION 12(1)/11(1)(D)/SECTION 35/10(21) ETC. ON T HE FACE OF IT, WE FIND THE PROVISIONS OF SECTION 2(24)(IIA) OF THE ACT APPL Y TO THE CASE OF THE ASSESSEE AS DEMONSTRATED BY THE LD. DR B EFORE US. HOWEVER, THERE EXISTS NO FAVOURABLE DECISION TO THE ASSES SEE. FURTHER, ITA NO.621/PUN/2016 SERUM INSTITUTE OF INDIA RESEARCH FOUNDATION 18 WE FIND THESE DECISIONS RELATE TO THE PERIOD OF POST-AMEND MENTS TO SECTION 12(1)/11(1)(D) OR SECTION 56(2) OF THE ACT ETC. ONE OF SUCH DECISION OF THE TRIBUNAL OF MUMBAI BENCHES, I.E. CHANDRAPRABHU JAIN SWETAMBER MANDIR VS. ACIT (2017) 82 TAXMANN.COM 245 (MUMB AI- TRIB.), IS RELEVANT AND IT HAS EXCLUSIVELY DEALT WITH THIS ISSUE IN DETAIL. OF COURSE, THIS DECISION HAS NOT CONSIDERED THE AMENDED T HE PROVISIONS OF SECTION 56(2) OF THE ACT WHICH GOVERNS THE TAXING OF CER TAIN GIFTS DESPITE ITS CAPITAL NATURE. 20. WE HAVE PERUSED THE SAID DECISION OF MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF CHANDRAPRABHU JAIN SWETAMBER MAND IR VS. ACIT (2017) 82 TAXMANN.COM 245 (MUMBAI-TRIB.). IT IS ALSO A CASE OF UNREGISTERED TRUST U/S.12A/12AA OF THE ACT. THE QUESTIO N BEFORE THE TRIBUNAL IN THIS CASE IS ALLOWABILITY OF EXEMPTION TO THE CORPU S TRUST WHEN THE TRUST IS NOT REGISTERED UNDER THE INCOME-TAX PROVISIONS. THE TRIBUNAL ELABORATED ON VARIOUS DECISIONS AND CONCLUDED BY STATING THAT THE CORPUS DONATIONS ARE NOT TO BE TAXED EVEN IF THE T RUST IS NOT REGISTERED U/S.12A/12AA OF THE ACT. THE CORPUS DONATIO N WITH SPECIFIC DIRECTION IS A SIGNIFICANT FACTOR IN GRANTING RELIEF BY THE TRIB UNAL. CONTENTS FROM PARA 9 ONWARDS OF THE ORDER OF THE TRIBUN AL ARE RELEVANT. IN THE SAID ORDER, THE TRIBUNAL CONSIDERED VARIOUS DECISION S VIZ., THE DECISION OF DELHI BENCH OF THE TRIBUNAL IN THE CASE OF ITO (EX EMPTIONS) VS. SMT. BASANTIDEVI & SHRI CHAKHAN LAL GARG EDUCATION TRUS T ITA NO.5082/DELHI/2010 ORDER DATED 19-01-2011, ITO VS. GAUDI YA GRANTH ANUVED TRUST - ITA NO. 386/AGRA/2012 ORDER DATED 02-08-2013, M/S. PENTAFOUR SOFTWARE EMPLOYEES WELFARE FOUNDATION VS. ACIT - ITA NOS. 751 AND 752 /MADS/2007 AND OTHERS, SHRI SHANKAR BHAG WAN ESTATE VS. ITO 61 ITD 196 (CAL.). THE RATIO OF R.B. SHRIRAM RELIGIOUS AND CHARITABLE TRUST VS. CIT 172 ITR 373 IS RELEVANT AND TH E SAME WAS ALSO ITA NO.621/PUN/2016 SERUM INSTITUTE OF INDIA RESEARCH FOUNDATION 19 DISCUSSED IN THE SAID ORDER. AT THE END OF THE DISCUSSION, THE TRIBUNAL HELD THAT VOLUNTARY CONTRIBUTIONS RECEIVED BY THE ASSESS EE TOWARDS THE CORPUS CANNOT BE BROUGHT TO TAX IN VIEW OF THEIR CAPITAL NATURE. 21. FOR THE SAKE OF COMPLETENESS OF THE ORDER, WE PROC EED TO EXTRACT THE OPERATIONAL PARAGRAPHS OF THE ORDER OF THE TRIBUNAL HERE AS UND ER : 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 ASSESSE E COULD NOT PRODUCE REGISTRATION U/S12A/12AA OF THE ACT AND HENCE IT CO ULD BE PRESUMED THAT THE ASSESSEE IS NOT REGISTERED U/S 12A/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 BELIEVE AND CONSEQUENTLY TO SEEK IMMUNITIES AND PROTECTIONS GRANTED TO A REGISTERED TRUST. THE ASSE SSEE HAS RECEIVED CORPUS DONATIONS TO THE TUNE OF RS.4,55,446/- DURIN G PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR WHICH ARE BEING GIV EN WITH SPECIFIC DIRECTIONS BY THE DONORS TO BE APPLIED TOWARDS SPEC IFIC PURPOSE FOR WHICH THE RESPECTIVE FUNDS WERE CREATED . THIS IS AN ADMI TTED POSITION BETWEEN THE PARTIES AND THERE IS NO DISPUTE WITH RESPECT TO THIS PROPOSITION. THE DETAILS OF THE CORPUS 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 ASSES SE AS SET OUT ABOVE AND HAVE OBSERVED THAT THE COURTS/TRIBUNALS HAVE TA KEN A CONSISTENT VIEW THAT THESE CORPUS DONATIONS ARE HELD TO BE CAP ITAL RECEIPTS BEING CAPITAL IN NATURE AND ARE NOT TAXABLE DESPITE THE F ACT 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 VID E ORDERS DATED 19- 01-2011, ITAT, DELHI RELYING ON ITAT, DELHI DECISIO N IN THE TAXPAYERS OWN CASE FOR ASSESSMENT YEAR 2003-04 WHEREBY THE TRIBUN AL HELD THAT THE AMOUNT RECEIVED BY THE TAX-PAYER TRUST FROM ITS SET TLER, TOWARDS INFRASTRUCTURE FUND, WAS NOT TAXABLE IN THE HANDS O F THE TAX-PAYER TRUST, DESPITE THE FACT THAT THE TAX-PAYER TRUST IS NOT RE GISTERED U/S 12A OF THE ACT, AND CONSEQUENTLY THE TRIBUNAL DISMISSED THE RE VENUE APPEAL. THE REVENUE WENT IN APPEAL AND THE HONBLE DELHI HIGH C OURT DISMISSED THE APPEAL OF THE REVENUE AGAINST THE TRIBUNALS ORDER F OR ASSESSMENT YEAR ITA NO.621/PUN/2016 SERUM INSTITUTE OF INDIA RESEARCH FOUNDATION 20 2003-04 IN ITA NO. 927/2009 VIDE ORDERS DATED 23-09 -2009 IN BASANTI DEVI & SHRI CHAKHAN LAL GARG EDUCATION TRUST. SIMIL AR VIEW WAS TAKEN BY ITAT, AGRA IN THE CASE OF ITO V. GAUDIYA GRANTH ANUVED TRUST REPORTED IN (2014) 48 TAXMANN.COM 348 (AGRA-TRIB) W HEREBY TRIBUNAL HELD AS UNDER: THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER DATED FEBRUARY 24, 2012 PASSED BY THE LEARNED COMMISSIONE R OF INCOME-TAX (APPEALS)-I, AGRA FOR THE ASSESSMENT YEA R 2007-08. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : '1. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEAL S) HAS ERRED IN LAW AND ON FACTS IN FAILING TO APPRECIATE THAT VOLUNTAR Y CONTRIBUTIONS (WHETHER CORPUS DONATIONS OR GENERAL DONATIONS) RECEIVED BY A CHARITABLE TRUST ARE INCOME AS DEFINED VIDE SECTION 2(24)(IIA) OF THE AC T AND CORPUS DONATIONS ARE EXEMPT FROM TAX UNDER SECTION 11(1)(D ) ONLY IF ASSESSEE IS REGISTERED UNDER SECTION 12A/12AA OF TH E ACT. 2. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS 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 ITO (EXEMPT ION) V SMT. BASANTI DEVI AND SHRI CHAKHAN LAL GARG EDUCATION TRUST FOR THE ASSESSMENT YEAR 2003-04, WHICH IN TURN IS NOW UNDER CHALLENGE IN THE HON'BLE SUPREME COURT. 3. THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPE ALS)-1, AGRA BEING ERRONEOUS IN LAW AND ON FACTS BE SET ASIDE AND THE ORDER OF THE ASSESSING OFFICER BE RESTORED. 4. THE APPELLANT CRAVES TO AMEND THE GROUNDS OF THE APPEAL STATED ABOVE AND WHEN NEED FOR DOING SO MAY ARISE.' 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E-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 ACCUSED ON SUCH FUND CAN BE U TILISED AS WELL AS ACCUMULATED. SUCH FUND CAN ALSO BE USED FOR CREATIO N OF CAPITAL ASSET OR PROPERTY OF THE TRUST FROM WHICH INCOME CAN BE GENE RATED. 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 NO.621/PUN/2016 SERUM INSTITUTE OF INDIA RESEARCH FOUNDATION 21 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 TAXABI LITY OF CORPUS DONATION HAS BEEN EXAMINED IN THE LIGHT OF SECTION 12 READ S ECTION 2(24)(IIA) OF THE INCOME-TAX ACT AND IN THIS DECISION, IT HAS BEEN HE LD 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 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 T HAT EVEN IGNORING 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 CORP US DONATIONS CANNOT BE SUPPORTED. 12. FOR THE ABOVE REASONS, WE HOLD AS UNDER : 1. THE RELIGIOUS ENDOWMENTS ARE NOT INVALID ON THE GROUND THAT NEITHER THE TEMPLE NOR THE IMAGE HAD BEEN CONSECRATED AT TH E 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 NO.621/PUN/2016 SERUM INSTITUTE OF INDIA RESEARCH FOUNDATION 22 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 CAPITAL R ECEIPT AND ARE NOT TAXABLE, IRRESPECTIVE OF THE FACT WHETHER T HE TRUST IS REGISTERED UNDER SECTION 12AA OR NOT. THEREFORE, I AGREE WITH THE LEARNED AUTHORISED REPRESENTATIVE THAT THE AMOUNT O F RS. 68,50,000 BEING IN THE NATURE OF CORPUS DONATION IS NOT TAXABLE UND ER THE INCOME-TAX ACT BEING IN THE NATURE OF CAPITAL RECEIPT AND THEREFOR E, ADDITION OF RS. 68,50,000 MADE BY THE ASSESSING OFFICER TOWARDS THE TAXABLE INCOME OF THE ASSESSEE IS HEREBY DELETED AND ACCORDINGLY, GRO UND NO. 2 IS ALLOWED.' 4. THE LEARNED DEPARTMENTAL REPRESENTATIVE RELIED U PON 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 (APPEA LS) 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. 5. THE LEARNED AUTHORISED REPRESENTATIVE HAS SUBMIT TED 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 & RURAL AREAS V. DY. CIT [2004] 90 ITD 493 (HYD), SRI DWARKADHEESH CHARITABL E TRUST V. ITO [1975] 98 ITR 557 (ALL) AND DY. CIT V. NASIK GYMKHA NA [2001] 77 ITD 500 (PUNE). 6. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF THE PARTIES 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 ITA NO.621/PUN/2016 SERUM INSTITUTE OF INDIA RESEARCH FOUNDATION 23 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 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 COM MISSIONER OF INCOME- TAX (APPEALS). THE ORDER OF THE COMMISSIONER OF INCO ME-TAX (APPEALS) IS CONFIRMED. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. 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 OBJE CTIVES FOR WHICH THESE SEPARATE FUNDS ARE CONSTITUTED REMAIN AS CAPITAL FU NDS AS THE FUNDS CAN BE USED FOR FULFILLING SPECIFIC OBJECTIVES FOR WHIC H THESE FUNDS ARE CONSTITUTED AND HENCE TO BE TREATED AS CORPUS FUNDS AND TO BE EXCLUDED FROM COMPUTATION OF INCOME. THE ITAT , BANGALORE IN ITO V. VOKKALIGARA SANGHA I N A DECISION REPORTED IN (2015) 44 CCH 0509 (BANG. TRIB.) WHEREBY THE TRI BUNAL HELD THAT VOLUNTARY CONTRIBUTIONS RECEIVED FOR A SPECIFIC PUR POSES 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. 22. THE ABOVE EXTRACTED PORTION IS RELEVANT FOR THE RATIO S THAT THE CORPUS DONATIONS RECEIVED BY THE TRUSTS, WHICH IS NOT R EGISTERED U/S.12A/12AA OF THE ACT, ARE NOT TAXABLE AS THEY ASSUM E THE NATURE OF CAPITAL RECEIPT THE MOMENT THE DONATIONS ARE GIVEN TO THE CORPUS OF THE TRUST. 23. WE FIND THE PROVISIONS OF SECTION (24)(IIA)/12(1)/11(1)(D)/35/56(2 ) ARE RELEVANT FOR DECIDING THE CURRENT ISSUE. IT IS A SET TLED LEGAL PROPOSITION, IN CASE OF A REGISTERED TRUST UNDER THE INCO ME-TAX ACT, THE CORPUS SPECIFIC VOLUNTARY CONTRIBUTIONS ARE OUTSIDE THE SC OPE OF INCOME AS DEFINED IN SECTION 2(24)(IIA) OF THE ACT DUE TO THEIR CAPITA L NATURE. BUT IT IS A CASE OF UN-REGISTERED TRUST. DESPITE THE DET AILED ITA NO.621/PUN/2016 SERUM INSTITUTE OF INDIA RESEARCH FOUNDATION 24 DELIBERATIONS MADE BY THE LD. DR, WE FIND THE PRINCIPLES RELAT ING TO JUDICIAL DISCIPLINE ASSUME SIGNIFICANCE AND THE PRIORITY. IT IS ALSO DECIDED ISSUE THAT THERE IS NEED FOR UPHOLDING THE FAVOURA BLE VIEW IF THERE EXISTS DIVERGENT VIEWS ON THE ISSUE. AS DISCUSSED IN THE PRECEDING PARAGRAPHS ABOVE, THERE ARE MULTIPLE DECISIONS IN FAVOUR OF THE ASSESSEE. 24. ACCORDINGLY, THE CORPUS-SPECIFIC-VOLUNTARY CONTRIBUTION S ARE OUTSIDE THE TAXATIONS IN CASE OF AN UNREGISTERED TRUST U/S.12/12A/12AAA OF THE ACT TOO. FROM THIS POINT OF VIEW, AND FOR THIS REASON, THE DECISION OF THE CIT(A) IN GRANTING RELIEF TO ASSES SEE DOES NOT CALL FOR ANY INTERFERENCES. ACCORDINGLY, GROUNDS OF APPEAL RAISED BY THE REVENUE ARE DISMISSED. 25. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 29 TH DAY OF JANUARY, 2018. SD/- SD/- (VIKAS AWASTHY) (D. KARUNAKARA RAO) /JUDICIAL MEMBER / ACCOUNTANT MEMBER PUNE; DATED : 29 TH JANUARY, 2018 / COPY OF THE ORDER FORWARDED TO : / BY ORDER, //TRUE COPY// //TRUE COPY// SENIOR PRI VATE SECRETARY , / ITAT, PUNE 1. / THE APPELLANT 2. / THE RESPONDENT 3. THE CIT(A)-10, PUNE 4. CIT-10, PUNE 5. , , B BENCH PUNE; 6. / GUARD FILE.