Sakal Relief Fund, Pune V. Dy. CIT, Circle 6, Pune

ITA 758/PUN/2013

• Counselvise Citation: 75824514 RSA 2013
• Duration Of Justice: 11 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-03-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2001-2002
• Appeal Filed On: 02-04-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A K MODI; S P WALIMBE
• Assessee Lawyers: ASHOK KOTHARY
• Keywords: Gift; Charitable institution; Deemed to accrue or arise in india; Question of law; Condonation of delay; Ignorance of law
• Section: 143(3); 80G; 12A; 12AA; 147; 148; 12; 11; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE BEFORE: SHRI R.S. PADVEKAR, JUDICIAL MEMBER AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO S. 757 & 758 / P N/ 20 1 3 ASSESSMENT YEAR S : 200 0 - 01 & 2001 - 02 SAKAL RELIEF FUND, 595, BUDHWAR PETH, PUNE VS. DY. CIT, CIRCLE - 6, PUNE (APPELLANT) (RESPONDENT) PAN NO. AAATS4632C APPELLANT BY: SHRI ASHOK KOTHARY RESPONDENT BY: SHRI A.K. MODI & SHRI S.P. WALIMBE DATE OF HEARING : 0 3 - 03 - 2014 DATE OF PRONOUNCEMENT : 25 - 03 - 20 14 ORDER P ER R.S. PADVEKAR , JM : - TH ESE TWO APPEAL S ARE FILED BY THE ASSESSEE CHALLENGING THE IMPUGNED ORDER OF THE LD. CIT(A) - III, PUNE DATED 31 - 01 - 2013 FOR THE A.Y S . 200 0 - 01 & 2001 - 02 . THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS WHICH ARE VERBATI M IN BOTH THE APPEALS: 1. IN HOLDING THAT THE FUNDS RECEIVED BY THE ASSESSEE FOR SPECIFIC CHARITABLE WORK ARE VOLUNTARY CONTRIBUTIONS SO AS TO BRINGING THEM UNDER THE PURVIEW OF SEC 12 AND ACCORDINGLY TO BE TREATED AS INCOME OF THE TRUST. 2. IN TREATING THE FUND S RECEIVED BY THE ASSESSEE AS INCOME / VOLUNTARY CONTRIBUTION OF THE ASSESSEE AND TREATING THE SAME AS TAXABLE. 3. IN NOT FOLLOWING THE DECISIONS OF VARIOUS HIGH COURTS AND THE TRIBUNAL WHEREIN IT IS HELD THAT THE FUNDS RECEIVED FOR SPECIFIC PURPOSE ARE NOT T O BE CONSIDERED EITHER AS VOLUNTARY CONTRIBUTION OR AS CORPUS OF THE CHARITABLE INSTITUTIONS. 4. IN NOT TAKING COGNIZES OF OR CONSIDERING FORM NO. 10 BEING NOTICE FOR ACCUMULATION OF INCOME, FILED BY THE ASSESSEE BEFORE THE 2 ITA N OS. 757 & 758/PN/2013, SAKAL RELIEF FUND, PUNE ASSESSMENT WAS COMPLETED, ON THE GR OUND THAT IT WAS NOT FILED IN TIME. 5. IN NOT FOLLOWING THE DECISIONS OF HON SUPREME COURT IN THE CASE OF CIT VS NAGPUR HOTEL OWNERS' ASSOCIATION ( 247 ITR 20) AND OF HIGH COURTS WHERE IN THE COURTS HAVE HELD THAT THE BENEFIT OF SEC 11 WOULD BE AVAILABLE EVEN IF FORM 10 IS FURNISHED ANYTIME BEFORE THE ASSESSMENT PROCEEDINGS. 6. IN NOT FOLLOWING THE DIRECTIONS GIVEN BY THE HON. TRIBUNAL WHILE SETTING ASIDE EARLIER ORDER OF CIT (A) AND REMANDING THE MATTER FOR FRESH CONSIDERATION. 2. THE FIRST ISSUE IS WHETHER THE DONATIONS/CONTRIBUTIONS RECEIVED BY THE ASSESSEE BY MAKING APPEAL IN THE NEWSPAPERS ARE NOT TAXABLE IN THE HANDS OF THE ASSESSEE AND THIS ISSUE ARISES FROM GROUND NOS. 1 TO 3. THIS IS THE SECOND ROUND OF APPEAL BY THE ASSESSEE. THE BRIEF LY STATED FACTS ARE AS UNDER. THE ASSESSEE IS A CHARITABLE TRUST, REGISTERED U/S. 12A OF THE INCOME - TAX ACT. THE ASSESSEE FILED THE APPLICATION FOR GETTING THE RECOGNITION U/S. 80G OF THE I.T. ACT TO THE COMMISSIONER OF INCOME TAX - III, PUNE. IT WAS NOTICED THAT THE ASS ESSEE HAS NOT FILED THE RETURN S OF INCOME FOR THE A.YS. 2001 - 02 TO 2004 - 05. THE ASSESSEE SUBSEQUENTLY FILED THE RETURN S OF INCOME BELATEDLY ON 14 - 03 - 2005 FOR THE ABOVE ASSESSMENT YEARS. FROM THE AUDITED STATEMENT OF ACCOUNTS , IT WAS NOTICED BY THE ASSESS ING OFFICER THAT THE ASSESSEE WAS NOT CREDITING DONATIONS RECEIVED BY IT TO THE INCOME AND EXPENDITURE ACCOUNT BUT THE SAME WERE DIRECTLY TAKEN TO THE BALANCE SHEET UNDER THE HEAD EARMARKED FUND AND THE EXPENSES WERE BOOKED AGAINST THE SAID EARMARKED FU ND. IN THE OPINION OF THE ASSESSING OFFICER THERE IS NO CONCEPT OF EARMARKED FUND UNDER THE INCOME TAX ACT SAVE THE SPECIFIC CORPUS DONATION COVERED U/S. 11(1)(D) OF THE ACT , OTHERWISE ALL THE DONATIONS AND VOLUNTARY CONTRIBUTIONS RECEIVED BY THE ASSES SEE TRUST ARE TREATED AS AN INCOME. THE TOTAL INCOME OF THE ASSESSEE TRUST WAS COMPUTED BY THE ASSESSING OFFICER AS UNDER: 3 ITA N OS. 757 & 758/PN/2013, SAKAL RELIEF FUND, PUNE A.Y. 2000 - 01 A.Y. 2001 - 02 OPENING BALANCE RS.85,02,097/ - RS.4,41,50,260/ - INTEREST RS.26,87,550/ - RS.34,84,699/ - DONATION RS.4,0 7,94,064/ - RS.3,05,28,687/ - TOTAL RS.4,92,96,162/ - RS.7,46,78,948/ - LESS: EXPENDITURE RS.51,45,901/ - RS.1,38,59,044/ - BALANCE RS.4,41,50,260/ - RS.6,08,19,903/ - 3. IT IS OBSERVED BY THE ASSESSING OFFICER THAT THE ASSESSEE HAS NOT APPLIED ITS INCOME ON THE OBJECTS OF THE TRUST TO THE EXTENT OF 75% OF THE RECEIPTS INCLUDING THE VOLUNTARY CONTRIBUTIONS AND DONATIONS RECEIVED WHICH WERE DIRECT TAKEN TO THE HEAD EARMARKED FUND TO THE B ALANCE SHEET. THE ASSESSING OFFICER HAS A LSO OBSERVED THAT THE ASSES SEE DID NOT EXERCISE THE OPTION ABOUT ACCUMULATION OF THE INCOME AS PROVIDED U/S. 11(2) OF THE I.T. ACT AND NO NOTICE IN THE FORM OF 10 WAS ALSO GIVEN BY THE ASSESSEE WITHIN THE TIME ALLOWED FOR FILING OF THE RETURN U/S. 139(1) OF THE ACT. SO FAR AS THE I SSUE OF DONATIONS/CONTRIBUTIONS RECEIVED BY THE ASSESSEE TRUST WHICH ARE CLAIMED TO BE NOT THE REVENUE RECEIPTS AS NOT TAXABLE IN THE HANDS OF THE ASSESSEE , T HE ASSESSEE CARRIED THE ISSUE BEFORE THE TRIBUNAL IN FIRST ROUND OF THE APPEAL AND THE TRIBUNAL SE T ASIDE THE ISSUE TO THE FILE OF THE CIT(A) FOR FRESH CONSIDERATION BY THE FOLLOWING OBSERVATIONS AND DIRECTIONS: 2. IN THIS REGARD, THE ASSESSEES COUNSEL REFERRED TO PARA NO. 5.4 OF THE IMPUGNED ORDER AND MENTIONED THAT THE CIT(APPEALS) CONFIRMED THE VI EWS OF THE AO MERELY STATING THAT THE IMPUGNED ADDITION IS REQUIRED TO BE ASSESSED ENTIRELY IN THE ASSESSMENT YEAR 1999 - 2000 IF THE FORM NO. 10 WAS NOT FILED BY THE ASSESSEE. IN THE PROCESS, AS PER THE LEARNED COUNSEL, THE CIT(APPEALS) IS OF THE OPINION TH AT FILING OF FORM NO. 10 ALONG WITH RETURN OF INCOME IS MANDATORY AND NOT DIRECTORY AND FILING OF SUCH FORM NO. 10 BEFORE THE AO BEFORE THE END OF THE ASSESSMENT PROCEEDINGS DEEMED COMPLIANCE AND RELIED ON THE HONBLE SUPREME COURT IN THE CASE OF NAGPUR HO TEL OWNERS ASSOCIATION 247 ITR 201 (SC) FOR THE SAID PROPOSITION. IN THE INSTANT CASE, AS PER THE ASSESSEE, THE SAID FORM NO. 10 WAS SUBMITTED 4 ITA N OS. 757 & 758/PN/2013, SAKAL RELIEF FUND, PUNE BEFORE THE AO, WHICH WAS NOT ALLOWED. ON CONSIDERING THE FACTS, WE ARE OF THE OPINION THAT SUCH REJECTION OF THE SAID FORM NO. 10 FILED BEFORE THE AO WAS ERRONEOUS ON PART OF THE AO. THEREFORE, IN OUR OPINION, THE ISSUE RAISED BY THE ASSESSEE IS NOT IN ACCORDANCE WITH THE SAID APEX COURT DECISION IN THE CASE OF NAGPUR HOTEL OWNERS ASSOCIATION (SUPRA). THEREFORE, WE ARE OF THE OPINION THAT THE MATTER SHOULD BE SET ASIDE AS SUGGESTED BY BOTH THE PARTIES BEFORE US. CIT(APPEALS) SHALL EXAMINE THE WHOLE ISSUE AFRESH AND RESPECTFULLY CONSIDER THE CITED JUDGMENT OF THE SUPREME COURT. WHILE PASSING THE SPEAKING ORDER ON THI S ISSUE, THE SAID APPEALS SHALL PROVIDE REQUISITE DISCUSSION ABOUT THE INCIDENCE OF TAX ON THE REFERRED CORPUS DONATION MENTIONED IN GROUND NO. (I) ABOVE AND PASS A SPEAKING ORDER ON IF SUCH DONATIONS CONSTITUTE TAXABLE RECEIPTS OF THE TRUST. AS SUCH, THIS ISSUE WAS NEVER DISCUSSED IN PROPER MANNER AS EVIDENT FROM THE CONTENTS OF THE ORDER PASSED ON 02 - 09 - 2008. ACCORDINGLY, AFTER HEARING THE PARTIES, WE SET ASIDE ALL THE ISSUES TO THE FILE OF THE CIT(APPEALS) FOR WANT OF SPEAKING AND SUSTAINABLE ORDER. 4. IN SUM AND SUBSTANCE THE MATTER WAS REMITTED BACK TO THE FILE OF C IT(A) FOR FRESH ADJUDICATION IN RESPECT OF THE CONTRIBUTIONS/DONATIONS RECEIVED BY THE ASSESSEE. IT WAS CLAIMED BY THE ASSESSEE BEFORE THE LD. CIT(A) THAT THEY ARE FOR E ARMARKED OBJECTS AND SPECIFIC PURPOSE S AND HENCE, THE DONATIONS RECEIVED CANNOT BE TREATED AS THE REVENUE RECEIPTS IN THE HANDS OF THE ASSESSEE. THE ASSESSEE MADE THE FOLLOWING SUBMISSIONS BEFORE THE LD. CIT(A): 7.1.1. THE FUNDS RECEIVED BY THE ASSESSEE ARE FOR SPECIFIC PUR POSE. THE ASSESSEE HAS NEITHER CONTROL NOR DISCRETIONARY POWER TO USE THEM FOR ANY PURPOSE OTHER THAN THE PURPOSE FOR WHICH THE FUNDS HAVE BEEN RECEIVED. THIS IS UNLIKE GENERAL DONATIONS WHICH ARE GIVEN BY THE DONOR WITHOUT ANY CONDITION ATTACHED TO IT AND RECEIVED BY THE TRUST AS SUCH. 7.1.2. THE POINT INVOLVED IN THE MATTER IS WHETHER THE FUNDS RECEIVED BY THE ASSESSEE - TRUST FALL WITHIN THE DEFINITION OF THE TERM INCOME DERIVED FROM VOLUNTARY CONTRIBUTION. U/S. 12 OF THE INCOME TAX ACT, 1961 ANY VOLUN TARY CONTRIBUTION RECEIVED BY A TRUST ARE TO BE CONSIDERED AS 5 ITA N OS. 757 & 758/PN/2013, SAKAL RELIEF FUND, PUNE INCOME DERIVED THE PROPERTY HELD UNDER A CHARITABLE TRUST. THE SECTION ALSO PROVIDE THAT ANY VOLUNTARY CONTRIBUTION RECEIVED BY A CHARITABLE TRUST WITH A SPECIFIC DIRECTION THAT IT SHALL FROM A PART OF THE CORPUS WOULD NOT BE CONSIDERED AS INCOME. IT IS CLEAR FROM THE PROVISIONS OF SEC. 12 THAT FOR A RECEIPT TO BE CONSIDERED AS INCOME IT MUST BE A 'VOLUNTARY CONTRIBUTION'. ONCE IT IS ESTABLISHED THAT IT IS A VOLUNTARY CONTRIBUTION THE NEXT STEP WOULD BE TO EXAMINE IF IT IS TOWARDS THE CORPUS OF THE TRUST. IF IT IS TOWARDS THE CORPUS OF TRUST THEN IT CANNOT BE CONSIDERED AS INCOME. HOWEVER, THE POINT TO BE NOTED IS THAT IN THE FIRST INSTANCE THE RECEIPT HAS TO HAVE A CHARACTER OF 'VOLUNTARY CONTRI BUTION'. IF IT IS NOT A VOLUNTARY CONTRIBUTION THE QUESTION OF IT BEING CONSIDERED AS INCOME WOULD NOT ARISE. IT IS SUBMITTED THAT THE VOLUNTARY CONTRIBUTIONS COVERED BY SECTION 12 ARE THOSE CONTRIBUTIONS WHICH ARE FREELY AVAILABLE TO THE ASSESSEE WITHOUT ANY STIPULATION, WHICH THE ASSESSEE CAN UTILISE TOWARDS ITS OBJECTIVES ACCORDING TO ITS OWN DISCRETION AND JUDGMENT. THE CONDITIONAL FUNDS RECEIVED FOR A SPECIFIED PURPOSE WOULD ONLY MEAN THAT THE ASSESSEE WHICH IS A VOLUNTARY ORGANISATION, HAD AGREED TO ACT AS A TRUSTEE OF SUCH SPECIAL FUNDS GIVEN BY THE PUBLIC WITH THE RESULT THAT SUCH FUNDS NEED NOT BE POOLED OR INTEGRATED WITH THE ASSESSEES NORMAL INCOME OR CORPUS. FOR SUCH FUNDS THE ASSESSEE ACTS AS IN INDEPENDENT TRUSTEE FOR THAT AMOUNT, JUST THE S AME AS A TRUSTEE COLD ACT AS A TRUSTEE OF MORE THAN ONE TRUST. AMOUNTS RECEIVED WITH CONDITIONS ATTACHED TO THEM (TIED - UP FUNDS) CANNOT, THEREFORE, BE TREATED AS AMOUNTS WHICH ARE REQUIRED TO BE CONSIDERED FOR ASSESSMENT FOR ASCERTAINING THE AMOUNT EXPEND ED OR THE AMOUNT TO BE ACCUMULATED. SUCH FUNDS I.E. BOTH INCOMING AND OUTGOING NEED NOT BE REFLECTED IN THE INCOME AND EXPENDITURE ACCOUNT OF THE ASSESSEE AS THEY DO NOT CONSTITUTE ITS INCOME OR EXPENDITURE. 7.1.3. IN THE CASE OF SUKHDEV CHARITY ESTATE V. CIT (149 ITR 470) THE ASSESSEE TRUST HAD INITIATED A SCHEME FOR WATER SUPPLY. ON REQUEST TO OTHER TRUST IT RECEIVED SOME FUNDS FROM THAT OTHER TRUST SPECIFICALLY FOR WATER SUPPLY SCHEME. ON THE QUESTION OF WHETHER SUCH FUNDS CAN BE TREATED AS VOLUNTARY 6 ITA N OS. 757 & 758/PN/2013, SAKAL RELIEF FUND, PUNE INCOME OF THE TRUST THE HON'BLE RAJASTHAN HIGH COURT HELD THAT AS THE FUNDS WERE RECEIVED FOR SPECIFIC PURPOSE THEY WERE NOT INCOME OF THE TRUST. SOME OF THE OBSERVATIONS OF THE COURT, RELIED UPON BY THE ASSESSEE, ARE GIVEN HEREUNDER: THE WORD 'VOLUNTARY ' IN ITS VERY INCEPTION CONNOTES THE ABSENCE OF ANY OBLIGATION ON THE PART OF THE DONOR. THE INTENTION OF THE DONOR IN SUCH VOLUNTARY CONTRIBUTION IS EITHER SPECIFIC, I.E., WITH INSTRUCTIONS TO USE THE AMOUNT FOR SPECIFIC PURPOSE OR IT MAY BE GATHERED FROM THE FACTS AND CIRCUMSTANCES OR THE CORRESPONDENCE, IF ANY, IN THE MATTER. IN CASE THERE IS 'SPECIFIC DIRECTION THERE IS NO DIFFICULTY TO UNDERSTAND THE MOTIVE OR INTENTION. HOWEVER, WHEN IT IS TO BE GATHERED FROM THE CIRCUMSTANCES THE NATURE OF THE DONA TION WHEN THE DONOR PARTS WITH THE SAME, AND THE INTENTION AND MOTIVE OF THE RECIPIENT PLAY AN IMPORTANT ROLE. IF THE DONOR IS NOT FORCED TO ENTER INTO THE DEALING, THE NATURE OF THE DONATION WILL NOT CHANGE ITS FORM SO AS TO MAKE THE AMOUNT OF DONATION AN INCOME IN THE HANDS OF THE RECIPIENT.' (PAGE 480) 'IT IS NOTEWORTHY THAT THE ACT NOWHERE PROVIDES THAT WHATEVER IS RECEIVED BY A PERSON OR A TRUST MUST BE REGARDED AS INCOME LIABLE TO TAX. IN ALL CASE IN WHICH A RECEIPT IS SOUGHT TO BE TAXED AS INCOME, TH E BURDEN LIES UPON THE DEPARTMENT TO PROVE THAT IT IS WITHIN THE TAXING PROVISION. HOWEVER, IF THE RECEIPT IS IN THE NATURE OF INCOME, THE BURDEN OF PROVING THAT IT IS NOT TAXABLE BECAUSE IT FALLS WITHIN AS EXEMPTION PROVIDED BY THE ACT, LIES UPON THE ASSE SSEE.' (PAGE 482) 'IT IS THE INTENTION OF THE DONOR AND THE DONEE AT THE INITIAL STAGE WHICH HAS TO BE TAKEN INTO CONSIDERATION IN MATTERS OF THIS TYPE. EVEN IF THE RECIPIENT SUBSEQUENTLY CONDUCTS IN A WAY THAT THE INITIAL INTENTION GOES AWAY, STILL THAT WILL NOT CHANGE THE NATURE OF THE AMOUNT. (PAGE 484). APPLYING THE PRINCIPLES OF THE AFORESAID DECISIONS TO THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE, THE ONLY CONCLUSION THAT THAT CAN BE DRAWN WOULD BE THAT IT WAS FOR THE SPECIFIC PURPOSE OF THE I MPLEMENTATION OF THE WATER SUPPLY SCHEME THAT THE DEMAND WAS RAISED BY THE ASSESSEE - TRUST AND IT WAS IN RESPONSE TO THAT DEMAND THAT THE CALCUTTA TRUST MADE A VOLUNTARY CONTRIBUTION WITH A SPECIFIC INTENTION AND IMPLIED INSTRUCTIONS THAT THE AMOUNT WAS MEA NT FOR THE WATER SUPPLY 7 ITA N OS. 757 & 758/PN/2013, SAKAL RELIEF FUND, PUNE SCHEME. IT WAS WITH THE OBJECT AND INTENTION THAT THE ASSESSEE - TRUST RECEIVED THE AMOUNT AND CREDITED IIT IN THE SEPARATE ACCOUNTS MAINTAINED FOR THE PURPOSE. THE AMOUNT THEREFORE, BY NO STRETCH OF IMAGINATION CAN BE SAID TO BE IN COME AS ENVISAGED BY S. 12(1) SO AS TO ATTRACT THE PROVISIONS OF SUB - S. (2) OF THAT SECTION (PAGE 485) IT WAS THUS HELD THAT THE AMOUNTS RECEIVED SPECIFICALLY FOR THE PURPOSE OF UNDERTAKING SCHEME FOR WATER SUPPLY IS NOT INCOME OF THE ASSESSEE AND THEREF ORE NOT VOLUNTARY CONTRIBUTION AS DEFINED U/S. 12. ALSO IT WAS THE INTENTION OF THE DONOR AND THE DONE TO TREAT THE MONEY TO BE SPENT FOR THE SPECIFIC PURPOSE FOR WHICH IT WAS GIVEN BY THE DONOR AND RECEIVED AS SUCH BY THE DONE. 7.1.4. ALSO RELIANCE IS PL ACED ON THE DECISION OF ITAT IN THE CASE OF NIRMAL AGRICULTURAL SOCIETY V. ITO - 71 UD 152 (HYD). FOR THE SAKE OF CONVENIENCE THE RELEVANT OBSERVATIONS OF HON'BLE TRIBUNAL ARE REPRODUCED BELOW: 'THE GRANTS RECEIVED FROM BREAD FOR THE WORLD WERE FOR SPE CIFIC PURPOSES. THE GRANTS WHICH ARE FOR SPECIFIC PURPOSES DO NOT BELONG TO THE ASSESSEE - SOCIETY. SUCH GRANTS DO NOT FORM CORPUS OF THE ASSESSEE OR ITS INCOME. THOSE GRANTS ARE NOT DONATIONS TO THE ASSESSEE SO AS TO BRING THEM UNDER THE PURVIEW OF SECTION 12 OF THE ACT. VOLUNTARY CONTRIBUTIONS COVERED BY SECTION 12 ARE THOSE CONTRIBUTIONS FREELY AVAILABLE TO THE ASSESSEE WITHOUT ANY STIPULATION WHICH THE ASSESSEE COULD UTILISE TOWARDS ITS OBJECTIVES ACCORDING TO ITS OWN DISCRETION AND JUDGMENT. TIED - UP GRAN TS FOR A SPECIFIED PURPOSE WOULD ONLY MEAN THAT THE ASSESSEE, WHICH IS A VOLUNTARY ORGANISATION, HAS AGREED TO ACT AS A TRUSTEE OF A SPECIAL FUND GRANTED BY BREAD FOR THE WORLD WITH THE RESULT THAT IT NEED NOT BE POOLED OR INTEGRATED WITH THE ASSESSEE'S NO RMAL INCOME OR CORPUS. IN THIS CASE, THE ASSESSEE IS ACTING AS AN INDEPENDENT TRUSTEE FOR THAT GRANT, JUST AS SAME TRUSTEE CAN ACT AS A TRUSTEE OF MORE THAN ONE TRUST. TIED - UP AMOUNTS NEED NOT, THEREFORE, BE TREATED AS AMOUNTS WHICH ARE REQUIRED TO BE CONS IDERED FOR ASSESSMENT, FOR ASCERTAINING THE AMOUNT EXPENDED OR THE AMOUNT TO BE ACCUMULATED.' (PAGE 156 PARA 10) 8 ITA N OS. 757 & 758/PN/2013, SAKAL RELIEF FUND, PUNE 7.1.5. IT WOULD BE PERTINENT TO MAKE A REFERENCE TO SUB - SEC. (3) OF SEC. 12 WHICH WAS INSERTED BY THE TAXATION LAWS (AMENDMENT) ACT, 2001 TO CO VER THE DONATIONS RECEIVED BY THE TRUST OR INSTITUTIONS TO PROVIDE RELIEF TO THE VICTIMS OF EARTHQUAKE IN GUJARAT AS INCOME. AMONGST OTHER CONDITIONS IT ALSO STATES THAT IF THE FUNDS RECEIVED FOR GUJARAT RELIEF FUND ARE USED FOR ANY OTHER PURPOSE THEY SHA LL BE DEEMED TO BE INCOME OF THE CHARITABLE TRUST/INSTITUTION. BUT FOR THIS AMENDMENT THE FUNDS/DONATIONS RECEIVED BY THE TRUST OR THE INSTITUTIONS FOR PROVIDING RELIEF TO EARTHQUAKE AFFECTED PEOPLE OF GUJARAT, IT IS SUMMITED, WOULD NOT HAVE BEEN CONSIDER ED AS INCOME AS THEY WERE GIVEN BY THE DONORS AND RECEIVED BY THE TRUSTS/INSTITUTIONS FOR VERY SPECIFIC PURPOSE. 7.1.6. IN THE CASE OF THE ASSESSEE ALSO, THE FUNDS RECEIVED FROM THE PUBLIC AT LARGE AND OTHERS ARE FOR THE SPECIFIC PURPOSES THEY ARE NOT AVAI LABLE TO THE ASSESSEE FOR UTILIZATION TOWARDS ITS OBJECTIVES ACCORDING TO ITS OWN DISCRETION AND JUDGMENT. IN VIEW OF THIS AND RELYING ON THE ABOVE REFERRED DECISIONS, IT IS SUBMITTED THAT SUCH FUNDS NEITHER FORM CORPUS OF THE ASSESSEE NOR ITS INCOME. TH ESE FUNDS ARE NOT DONATIONS TO THE ASSESSEE SO AS TO BRING THEM UNDER THE PURVIEW OF SECTION 12. IT IS BEING SO THE SAME MAY NOT BE TREATED AS INCOME OF THE ASSESSEE AND THE ASSESSING OFFICER BE DIRECTED TO RECOMPUTE THE INCOME, ACCORDINGLY. 5. THE LD. CIT( A) WAS NOT CONVINCED BY THE EXPLANATION OF THE ASSESSEE AND HAS HELD THAT THE DONATIONS/CONTRIBUTIONS RECEIVED BY THE ASSESSEE FOR KARGIL RELIEF, ORISSA RELIEF, EARTHQUAKE RELIEF ETC. DURING THE RESPECTIVE YEARS AS THE INCOME OF THE ASSESSEE U/S. 2(24) (IIA) OF THE INCOME - TAX ACT R.W.S. 12 OF THE I.T. ACT. THE OPERATIVE PART OF THE FINDINGS OF THE LD. CIT(A) ARE AS UNDER: 8.1. THE FIRST CONTENTION RAISED BY THE APPELLANT IS THAT THE FUNDS IN QUESTION WERE RECEIVED BY THE APPELLANT FROM THE PUBLIC AT LA RGE FOR THE SPECIFIC PURPOSE I.E. KARGIL RELIEF, ORISSA RELIEF, ETC. AND SUCH CONDITIONAL FUNDS ARE NOT AVAILABLE TO THE APPELLANT FOR UTILIZATION TOWARDS ITS OBJECTIVES ACCORDING TO ITS OWN DISCRETION AND JUDGMENT AND THEREFORE SUCH FUNDS NEITHER FORM COR PUS OF THE APPELLANT NOR ITS INCOME. IT IS ARGUED THAT THESE FUNDS ARE NOT DONATIONS TO THE 9 ITA N OS. 757 & 758/PN/2013, SAKAL RELIEF FUND, PUNE APPELLANT SO AS TO BRING THEM UNDER THE PURVIEW OF SECTION 12 OF THE I.T. ACT. IT IS ALSO ADVOCATED THAT SUCH FUNDS I.E. BOTH INCOMING AND OUTGOING NEED NOT BE RE FLECTED IN THE INCOME AND EXPENDITURE ACCOUNT OF THE APPELLANT AS THE SAME DO NOT CONSTITUTE ITS INCOME OR EXPENDITURE AS THE APPELLANT IS ONLY TRUSTEE OF THESE FUNDS. THE APPELLANT FURTHER STATED THAT AS PER THE PRACTICE BEING FOLLOWED BY IT, SUCH DONATIO NS WERE BEING CREDITED TO THE 'EARMARKED FUND ACCOUNT' AND DIRECTLY TAKEN TO THE BALANCE SHEET AND THE EXPENDITURE INCURRED IS DEBITED TO SPECIFIC CALAMITY ACCOUNT FOR WHICH IT IS COLLECTED. ON THE OTHER HAND, THE CASE OF THE ASSESSING OFFICER IS THAT THER E IS NO CONCEPT OF 'EARMARKED FUNDS' OR 'TIED UP FUNDS' OR 'CONDITIONAL FUNDS' UNDER THE INCOME TAX ACT AND EXCEPT CORPUS DONATION FALLING U/S. 11(1)(D), ALL CONTRIBUTIONS/DONATIONS RECEIVED BY THE APPELLANT ARE TO BE CONSIDERED AS INCOME OF THE TRUST. TO RESOLVE THE CONTROVERSY, IN THE FIRST PLACE, IT IS NECESSARY TO REFER TO THE PROVISIONS OF SEC. 2(24), WHICH READ AS UNDER: (24) INCOME INCLUDES (I) PROFIT AND GAINS; (II) DIVIDEND; [(IIA) VOLUNTARY CONTRIBUTIONS RECEIVED BY A TRUST CREATED WHOLLY OR PART LY FOR CHARITABLE OR RELIGIOUS OR BY AN INSTITUTION ESTABLISHED WHOLLY OR PARTLY FOR SUCH PURPOSE [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 - CLAU SE (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 ELECTO RAL TRUST]]. EXPLANATION FOR THE PURPOSE OF THIS SUB - CLAUSE, TRUST INCLUDES ANY OTHER LEGAL OBLIGATION;] SECTION 2(24) OF THE INCOME TAX ACT, 1961 DEFINES THE EXPRESSION 'INCOME'. THE DEFINITION OF INCOME UNDER SUB - CLAUSE (II - A) AS AMENDED VIDE DIRECT TAX LAWS (AMENDMENT) ACT 1987 INCLUDES VOLUNTARY CONTRIBUTIONS MADE TO A CHARITABLE TRUST 'WITH A SPECIFIC DIRECTION THAT THEY SHALL FORM PART OF THE CORPUS OF THE TRUST' WERE EXCLUDED FROM THE DEFINITION OF' INCOME' BY THE DIRECT TAX LAWS 10 ITA N OS. 757 & 758/PN/2013, SAKAL RELIEF FUND, PUNE (AMENDMENT) ACT 1987. THUS, AFTER THE AMENDMENT, ALL VOLUNTARY CONTRIBUTIONS, WHETHER OF AN INCOME NATURE OR MADE WITH A SPECIFIC DIRECTION THAT THEY SHALL FORM PART OF THE CORPUS OF THE TRUST, ARE INCLUDED IN THE DEFINITION OF 'INCOME'. CLAUSE (II - A) OF SEC. 2(24) THUS P REVENTS THE TRUST FROM CLAIMING EXEMPTION UNDER GENERAL LAW ON THE GROUND THAT SUCH CONTRIBUTIONS STAND ON THE SAME FOOTING AS GIFT, EARMARKED FUNDS ETC., AND ARE THEREFORE, NOT TAXABLE. FURTHER, SECTION LL(L)(D), WHICH GRANTS EXEMPTION (SUBJECT TO REGISTR ATION OF THE TRUST U/S 12 A AND OTHER CONDITIONS) IN CASE OF VOLUNTARY CONTRIBUTIONS WITH A SPECIFIC DIRECTION THAT THEY SHALL FORM PART OF THE CORPUS OF THE TRUST ALSO USES THE EXPRESSION INCOME IN THE FORM OF VOLUNTARY CONTRIBUTIONS'. THUS, ALL VOLUNTAR Y CONTRIBUTIONS, WHETHER RECEIVED ON REVENUE ACCOUNT OR AS A CORPUS FUND OR FOR SPECIFIC PURPOSE ARE INCOME OF THE APPELLANT IN THE FIRST STAGE, AS DEFINED IN SEC. 2(24) (II - A). UNDER THE PROVISIONS OF INCOME TAX ACT, THERE IS NO EXCEPT OF 'EARMARKED FU NDS' OR TIED - UP FUNDS' AND ALL THE CONTRIBUTIONS/DONATIONS SHALL FIRST FORM PART OF THE INCOME OF THE TRUST. SUCH INCOME IS NOT INCLUDED IN THE TOTAL INCOME OF THE APPELLANT IF THE APPELLANT FULFILLS CONDITIONS LAID DOWN UNDER SEC. 11, 12, AND 13 OF TH E I.T. ACT. THEREFORE, THE TREATMENT GIVEN OR METHOD FOLLOWED BY THE APPELLANT IN ITS BOOKS OF ACCOUNT IN RESPECT OF THE SAID CONTRIBUTIONS IS CONTRARY TO WHAT IS PRESCRIBED IN AND ENVISAGED UNDER THE INCOME - TAX ACT, 1961. IT WOULD APPEAR THAT THE PLEA O F EARMARKED FUNDS OR TIED - UP FUNDS OR CONDITIONAL FUNDS WAS RAISED ONLY AFTER THE ASSESSING OFFICER NOTICED THAT THE APPELLANT HAS NOT FILED THE RETURNS OF INCOME FOR THE YEARS UNDER APPEAL AND FAILED TO COMPLY WITH THE REQUIREMENT UNDER SEC. 11(2) O N OR BEFORE THE SPECIFIED DATED. 8.1.1. THE NEXT ARGUMENT OF THE APPELLANT IS THAT DONATIONS RECEIVED DURING THE YEARS WERE NOT VOLUNTARY DONATIONS AND THE SAME DO NOT FALL WITHIN THE PURVIEW OF SEC. 12 OF THE I.T. ACT. ACCORDING TO THE DICTIONARY MEANIN G (BL A CKS LAW DICTIONARY), AN ACT CAN BE SAID TO BE VOLUNTARY IF IT IS DONE BY FREE CHOICE, OF ONES OWN ACCORD, WITHOUT COMPULSION OR OBLIGATION, WITHOUT VALUABLE CONSIDERATION, GRATUITOUS ETC. IN THE PRESENT CASE, THERE IS NO MATERIAL ON RECORD TO SUGGE ST THAT SUCH DONATIONS WERE GIVEN AGAINST THE WILL OF THE DONORS OR BY ANY COMPULSION OR UNDER ANY OBLIGATION. IT IS COMMON KNOWLEDGE THAT THE CONTRIBUTIONS TO SUCH RELIEF FUNDS ARE ALWAYS GIVEN ON ONE'S OWN ACCORD WITHOUT ANY COMPULSION OR OBLIGATION. THE REFORE, THE 11 ITA N OS. 757 & 758/PN/2013, SAKAL RELIEF FUND, PUNE DONATIONS RECEIVED BY THE APPELLANT DURING THE YEARS TOWARDS THESE FUNDS ARE NOTHING BUT VOLUNTARY CONTRIBUTIONS MADE BY THE DONORS AND THE SAME WOULD FALL WITHIN THE PURVIEW OF SEC. 12 OF THE I T ACT. WITH EFFECT FROM 01.04.1973, VOLUNTARY (NO N - CORPUS) DONATIONS RECEIVED FROM ANY PERSON WOULD BE TREATED AS INCOME OF THE RECIPIENT CHARITABLE TRUST WHILE CORPUS DONATIONS RECEIVED FROM ANY PERSON WOULD NOT FORM PART OF THE TOTAL INCOME OF THE RECEIVING TRUST. ONLY THOSE DONATIONS WITH SPECIFIC DIR ECTION THAT THEY WILL FORM PART OF THE CORPUS OF THE TRUST WILL REMAIN OUTSIDE THE PURVIEW OF THE TOTAL INCOME OF THE RECEIVING TRUST. ANY OTHER DONATION FOR ANY PURPOSE WILL BE A VOLUNTARY DONATION INCLUDIBLE IN INCOME. A DIRECTION FOR A CAPITAL PROJECT LIKE WATER SUPPLY SCHEME OR FOR A SPECIFIC PURPOSE AS IN THE PRESENT CASE IS NOT EQUIVALENT TO ONE FOR THE CORPUS IN AS MUCH AS WHILE THE CORPUS NATURE OF THE DONATION FORBIDS EXPENDING OF THE SUM AND PERMITS ONLY THE APPLICATION OF RECURRING INCOME THERE FROM, A DONATION FOR CAPITAL PROJECT HAS TO BE APPLIED SOMETIME OR THE OTHER. THE DONATIONS RECEIVED BY THE APPELLANT DO NOT CONSTITUTE CORPUS DONATIONS AND THE EXCLUSION PROVIDED IN SECTION 12 IN RESPECT OF CORPUS DONATIONS IS ALSO NOT APPLICABLE TO THE VOLUNTARY CONTRIBUTIONS RECEIVED BY THE APPELLANT. THUS, THE CONTRIBUTIONS SO RECEIVED BY THE APPELLANT ARE VOLUNTARY CONTRIBUTIONS AND THE SAME ARE INCLUDIBLE IN THE TOTAL INCOME OF THE APPELLANT. 8.1.2. THE OTHER CONTENTION OF THE APPELLANT IS THAT IN T HE ABSENCE OF SIMILAR PROVISIONS LIKE SEC. 12(3), WHICH WERE INTRODUCED BY THE TAXATION LAWS (AMENDMENT ACT) 2001 IN THE CONTEXT OF TAXABILITY OF UNUTILIZED DONATIONS RECEIVED TOWARDS GUJARAT EARTHQUAKE RELIEF FUND AND NOT TRANSFERRED TO THE PRIME MINISTER'S NATIONAL RELIEF FUND ON OR BEFORE 31 ST MARCH 2004 AS DEEMED INCOME OF THE PREVIOUS YEAR 2004 - 05. BUT FOR THIS SECTION, THE UNUTILIZED AMOUNT NOT TRANSFERRED TO THE PRIME MINISTERS NATIONAL RELIEF FUND ON OR BEFORE 31 ST MARCH 2004 C ANNOT BE CHARGED TO TAX AS INCOME OF THE PREVIOUS YEAR 2004 - 05 IF THE FUNDS WERE RECEIVED IN THE EARLIER YEARS. THE UNSPENT AMOUNT CANNOT ALSO BE CHARGED TO TAX IN THE YEAR OF RECEIPT AS THE TIME WAS ALLOWED UP TO 31 ST MARCH 2004 TO UTILIZE THE FUND FOR RE LIEF TO THE EARTHQUAKE VICTIMS IN GUJARAT OR FOR TRANSFER OF SUCH AMOUNTS TO THE PRIME MINISTER'S NATIONAL RELIEF FUND. THUS, SUB - SEC. (3) ONLY FACILITATES SHIFTING OF YEAR TAXABILITY OF UNUTILISED FUNDS FROM THE YEAR RECEIPT TO THE YEAR 2004 - 05 AS THE TRU STS/INSTITUTIONS WERE ALLOWED TIME TO UTILIZE THE 12 ITA N OS. 757 & 758/PN/2013, SAKAL RELIEF FUND, PUNE FUNDS OR TRANSFER THE FUNDS TOWARDS PRIME MINISTER'S NATIONAL RELIEF FUND TILL 31 ST MARCH 2004, IN FACT, SUB - SECTION (3) INSTEAD OF ADVANCING THE CASE OF THE APPELLANT SUPPORTS THE STAND OF THE REVENUE THAT SUCH DONATIONS ALWAYS CONSTITUTE INCOME OF THE TRUST IN THE YEAR OF RECEIPT OF THE CONTRIBUTIONS, IF NOT APPLIED FOR CHARITABLE PURPOSE OR FORM NO. 10 WAS NOT FILED ON OR BEFORE THE SPECIFIED DATE FOR ACCUMULATION OF UN - UTILIZED AMOUNT. 8.1.3. TURNING TO THE JUDICIAL PRECEDENTS RELIED UPON BY THE APPELLANT, IN THE CASE OF SUKHDEV CHARITY ESTATE VS. CIT (149 ITR 470), RELIED UPON BY THE APPELLANT, IT WAS FOR THE SPECIFIC PURPOSE OF THE IMPLEMENTATION OF THE WATER SUPPLY SCHEME THAT THE DEMAND WAS RAISED BY THE ASSESSEE - TRUST AND IT WAS IN RESPONSE TO THAT DEMAND THAT THE CALCUTTA TRUST MADE A VOLUNTARY CONTRIBUTION WITH SPECIFIC INTENTION AND IMPLIED INSTRUCTIONS THAT THE AMOUNT WAS MEANT FOR THE WATER SUPPLY SCHEME. IT WAS IN THAT CONTEXT, THE RAJASTHAN HI GH COURT HELD THAT THE INTENTION OF THE DONOR TRUST AS WELL AS THE DONEE - TRUST WAS TO TREAT THE MONEY AS CAPITAL TO BE SPENT FOR WATER SUPPLY SCHEME AND IT WAS OF NO SIGNIFICANCE WHETHER THE AMOUNT HAD BEEN SPENT OR WAS KEPT IN THE ACCOUNT OF THE SAID SCHE ME BY THE ASSESSEE - TRUST. FIRSTLY, THIS DECISION WAS RENDERED UNDER THE ERSTWHILE PROVISIONS OF SEC. 12(1) AND 12(2) OF THE I.T. ACT. UNDER THE EARLIER PROVISIONS OF SEC. 12(1), VOLUNTARY CONTRIBUTIONS RECEIVED BY A CHARITABLE TRUST WERE NOT INCLUDIBLE IN ITS TOTAL INCOME UP TO A.Y . 1972 - 73. HOWEVER, AS PER SEC. 12(2), THE TRUST TO TRUST (INTER TRUST) DONATIONS WERE INCLUDIBLE IN THE TOTAL INCOME OF A CHARITABLE TRUST. AS MENTIONED EARLIER, SECTION 12(2) WAS OMITTED AND SECTION 12(1) MODIFIED WITH EFFECT FROM 01.04.1973 AND THE DISTINCTION BETWEEN DONATIONS RECEIVED FROM THE CHARITABLE TRUSTS AND OTHERS HAVE BEEN DONE AWAY WITH WHILE THAT BETWEEN A CORPUS DONATION AND A NON - CORPUS DONATION INTRODUCED. AFTER THE AMENDMENT, VOLUNTARY (NON - CORPUS) DONATIONS R ECEIVED FROM ANY PERSON WOULD BE TREATED AS INCOME OF THE RECIPIENT CHARITABLE TRUST WHILE CORPUS DONATIONS RECEIVED FROM ANY PERSON WOULD NOT FORM PART OF THE TOTAL INCOME OF THE RECEIVING TRUST. THE PRESENT SECTION REFERS TO 'VOLUNTARY' AND 'CORPUS' CONT RIBUTIONS. ONLY THOSE DONATIONS WITH SPECIFIC DIRECTION THAT THEY WILL FORM PART OF THE CORPUS OF THE TRUST WILL REMAIN OUTSIDE THE PURVIEW OF THE TOTAL INCOME OF THE RECEIVING TRUST. ANY OTHER DONATION FOR ANY PURPOSE WILL BE A VOLUNTARY DONATION INCLUDIB LE IN TOTAL INCOME UNLESS IT IS SPECIFICALLY 13 ITA N OS. 757 & 758/PN/2013, SAKAL RELIEF FUND, PUNE GIVEN FOR THE CORPUS. IN THE PRESENT CASE, DONATIONS ARE NOT GIVEN WITH SPECIFIC DIRECTION THAT THEY WILL FORM PART OF THE CORPUS OF THE TRUST AND THEREFORE IT IS INCLUDIBLE IN THE TOTAL INCOME OF THE APPELLANT UNDER THE AMENDED PROVISIONS OF SEC. 12 AND IN MY HUMBLE OPINION THE DECISION OF RAJASTHAN HIGH COURT (149 ITR 470) IS NOT APPLICABLE TO THE YEARS UNDER APPEAL AND THE FACTS OF THE PRESENT CASE. 8.1.4. IN THE CASE OF NIRMAL AGRICULTURAL SOCIETY VS. ITO, 71 ITD 152 (HYD) THE GRANTS RECEIVED FROM FOREIGN DONOR WERE FOR SPECIFIC PURPOSES AND IN THAT CONTEXT, THE ITAT, HYDERABAD HELD THAT THE GRANTS WHICH WERE FOR SPECIFIC PURPOSES DID NOT BELONG TO THE ASSESSEE - SOCIETY; SUCH GRANTS DID NOT FORM CORPUS OF THE ASSESSEE OR ITS INCOME. THOSE GRANTS WERE NOT DONATIONS TO THE ASSESSEE SO AS TO BRING THEM UNDER THE PURVIEW OF SECTION 12. THE TRIBUNAL OBSERVED THAT VOLUNTARY CONTRIBUTIONS COVERED BY SECTION 12 ARE THOSE CONTRIBUTIONS FREELY AVAILABLE TO THE ASSESSE E WITHOUT ANY STIPULATION, WHICH THE ASSESSEE CAN UTILIZE TOWARDS ITS OBJECTIVES ACCORDING TO ITS OWN DISCRETION AND JUDGMENT. TIED - UP GRANTS FOR A SPECIFIED PURPOSE WOULD ONLY MEAN THAT THE ASSESSEE WHICH WAS A VOLUNTARY ORGANIZATION, HAD AGREED TO ACT AS A TRUSTEE OF A SPECIAL FUND GRANTED BY DONOR WITH THE RESULT THAT IT NEED NOT BE POOLED OR INTEGRATED WITH THE ASSESSEES NORMAL INCOME OR CORPUS. IN THE CASE ON HAND, THE CONTRIBUTIONS WERE RECEIVED FOR A PARTICULAR CALAMITY FUND WITHOUT ANY STIPULATION THAT IT SHOULD BE UTILIZED IN A PARTICULAR MANNER BY THE APPELLANT AND THE APPELLANT IS FREE TO UTILIZE THE FUNDS AT ITS DISCRETION OR JUDGMENT FOR ACHIEVING THE OVERALL PURPOSE OR THE OBJECT FOR WHICH THE FUND WAS CREATED OR RAISED. THEREFORE, IN THE PRE SENT CASE IT IS NOT CORRECT TO SAY THAT THE FUNDS ARE TIED - UP FUNDS AND THE APPELLANT ACTS ONLY AS A TRUSTEE OR CUSTODIAN OF SUCH FUNDS OR A DISBURSING AGENCY ON BEHALF OF THE DONORS. THEREFORE, THE DECISION OF ITAT, HYD IN THE ABOVE CASE ALSO HAS NO APPLI CATION TO THE FACTS OF THE PRESENT CASE. 8.1.5 FOR THE FOREGOING REASONS, THE ASSESSING OFFICER IS LEGALLY JUSTIFIED IN TREATING THE DONATIONS/CONTRIBUTIONS RECEIVED BY THE APPELLANT VIZ. DONATION FOR KARGIL RELIEF, ORISSA RELIEF, EARTHQUAKE RELIEF ETC. DURING THE RESPECTIVE YEARS AS THE INCOME OF THE APPELLANT UNDER SEC. 2(24)((IIA) AND AS VOLUNTARY CONTRIBUTIONS UNDER SECTION 12 OF THE I.T. ACT. 14 ITA N OS. 757 & 758/PN/2013, SAKAL RELIEF FUND, PUNE 6. THE LD. COUNSEL ARGUES THAT THE ASSESSEE TRUST HELP S THE VICTIMS IN THE NATURAL CALAMITIES LIKE EARTHQUAK E, FLOOD ETC. HE SUBMITS THAT THE APPEAL IS MADE IN THE NEWSPAPER FOR THE SPECIFIC NIDHI OR DONATIONS AND THE ASSESSEE CANNOT USE THE CONTRIBUTION OR DONATIONS RECEIVED FOR SPECIFIC PURPOSE TO ANY OTHER PURPOSE. HE REFERS TO PAPER BOOK NOS. 12A AND 12B W HERE THE COPIES OF THE ADVERTISEMENT PUBLISHED IN THE NEWSPAPER SAKAL RELIEF FUND ARE PLACED WHICH ARE IN MARATHI. HE ALSO REFERRED TO PAGE NO. 11 WHERE IT IS STATED THAT THE COPY OF THE RECEIPT IS PLACED. HE SUBMITS THAT THE FUNDS ARE COLLECTED ON THE S PECIFIC APPEAL AND HENCE, THOSE CANNOT BE TREATED AS VOLUNTARY CONTRIBUTION U/S. 12 OF THE I.T. ACT AND HENCE, IT IS NOT THE INCOME OF THE TRUST AND IT HAS SEPARATE IDENTITY. THE LD. COUNSEL RELIED ON THE FOLLOWING DECISIONS : (I). DIRECTOR OF INCOME - TAX (EXEMPTIONS) AND ANOTHER VS. SRI RAMAKRISHNA SEVA ASHRAMA 357 ITR 731 (KARN) . (II). SUKHDEO CHARITY ESTATE VS. ITO 192 ITR 615 (RAJ). 7. PER CONTRA, THE LD. DR SUBMITS THAT EXCEPT THE DONATIONS RECEIVED SPECIFICALLY FOR THE CORPUS FUND WITHIN THE MEANING O F SEC. 11(1)(D) R.W.S. 12 (1) ALL OTHER CONTRIBUTIONS ARE THE REVENUE RECEIPTS IN THE HANDS OF THE TRUST OR INSTITUTION WITHIN THE MEANING OF SEC. 11(1), 11(2) AND 12. HE SUBMITS THAT THERE IS NO CONCEPT OF THE EARMARKED FUND AS ULTIMATELY THE SAID FUNDS A RE COLLECTED NOT AS A PART OF THE CORPUS FUND. AS PER FACTS ON RECORD IT IS SEEN THAT THE ASSESSEE TRUST CAME FORWARD TO HELP THE AFFECTED PEOPLE AND VICTIMS OF THE EARTHQUAKE AND FLOOD S ETC. BY PROVIDING THEM HELP. THE ASSESSEE TRUST MAKES THE APPEAL IN THE NEWSPAPER TO THE PUBLIC AT LARGE THAT THE ASSESSEE IS DESIRING TO HELP THE PEOPLE ON SPECIFIC CALAMITIES LIKE EARTHQUAKE OR FLOOD S, EVEN IN THE KARGIL WAR TO THE DEPENDENT S AND WIDOW S OF THE S OLDIERS WHO HAVE DIED OR INJURED AND IN RESPONSE TO THE SAID APPEAL THE ASSESSEE RECEIVED THE FUNDS IN FORM OF THE DONATIONS OR VOLUNTARY CONTRIBUTIONS. IT IS NOT THE CASE OF THE 15 ITA N OS. 757 & 758/PN/2013, SAKAL RELIEF FUND, PUNE ASSESSEE THAT THE FUNDS RECEIVED ARE A PART OF THE C ORPUS FUND OF THE ASSESSEE. THE ASSESSEES CLAIM IS THAT THE DONATIONS OR CONTRIB UTIONS RECEIVED BY THE ASSESSEE ARE NOT EVEN A VOLUNTARY CONTRIBUTIONS . F OR ADJUDICATING THE CONTROVERSY WE HAVE TO CONSIDER THE PROVISIONS OF SEC. 11 AND SEC. 12 TOGETHER . SEC. 11(1)(D) OF THE ACT PROVIDES THAT INCOME IN THE FORM OF VOLUNTARY CONTRIBUTI ON MADE WITH SPECIFIC DIRECTIONS THAT THEY SHALL FORM PART OF THE CORPUS OF THE TRUST OR INSTITUTIONS THEN T HE SAME IS NOT BE TREATED AS AN INCOME OF THE TRUST OR INSTITUTION. SEC. 11(1)(D) READS AS UNDER: SEC. 11(1)(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. 8. SEC. 12 HAS UNDERGONE SUBSTANTIVE AMENDMENT BY THE FINANCE ACT, 1972 W.E.F. 01 - 04 - 1973. AS PER OLD SEC. 12 , ALL THE VOLUNTARY CONTRIBUTI ONS WHICH ARE APPLIED SOLELY FOR THE CHARITABLE OR RELIGIOUS PURPOSES WOULD NOT BE INCLUDED IN THE TOTAL INCOME OF THE TRUST OR THE INSTITUTION. AS PER THE PRESENT SEC. 12 , ALL THE VOLUNTARY CONTRIBUTIONS SAVE THE CONTRIBUTION MADE WITH SPECIFIC DIRECTION S THAT THEY SHALL FORM PART OF THE CORPUS OF THE TRUST ARE TO BE TREATED AS A PART OF THE INCOME OF THE TRUST U/S. 11 OF THE ACT. SEC. 12 OF THE ACT HAS CREATED LEGAL FICTION TO TREAT VOLUNTARY CONTRIBUTION, SAVE CONTRIBUTIONS FOR CORPUS FUND, AS REVENUE RECEIPTS OF THE TRUST OR INSTITUTION. WE ARE UNABLE TO ACCEPT THE ARGUMENT OF THE ASSESSEE THAT THE DONATIONS OR THE CONTRIBUTIONS RECEIVED BY MAKING THE APPEAL FOR SPECIFIC PURPOSE I.E. FOR REHABILITATION OF THE JAWANS AND THEIR FAMIL IES AFFECTED BY THE KARGIL WAR, EARTHQUAKE IN GUJARAT OR BY TSUNAMI ETC. ARE NOT HIT BY SEC. 12 (1) OF THE ACT . NOWHERE IT IS THE CASE OF THE ASSESSEE THAT THE CONTRIBUTIONS OR THE DONATIONS ARE RECEIVED W HICH SPECIFIC DIRECTIONS THAT THEY FORM THE CORPUS OF THE ASSESSEE TRUS T . A S PER THE ADVERTISEMENTS PUBLISHED OR APPEAL WHICH ARE MADE BY THE TRUST THROUGH THE NEWSPAPER IT CANNOT BE 16 ITA N OS. 757 & 758/PN/2013, SAKAL RELIEF FUND, PUNE SAID THAT THERE IS ANY COMP ULSION ON THE SOCIETY TO CONTRIBUTE FOR THE PURPOSE MENTIONED IN THE APPEAL. ALL THE CONTRIBUTION S WHICH ARE GIVEN GRATUIT OUS W ITHOUT CONSIDERATION IS VOLUNTARY IN FORM . WE HAVE EXAMINE D THE SAMPLE COPY OF THE RECEIPT WHICH IS PLACED IN THE COMPILATION. NOWHERE IT IS STATED THAT THE CONTRIBUTION IS GIVEN AS A PART OF THE CORPUS OF THE ASSESSEE TRUST . P RESUMING EVEN THAT THERE IS NO SPECIFIC DIRECTION BUT THE FACT REMAIN THAT IT IS A FUND RAISING PROGRAMME FOR APPLYING TO THE SPECIFIC CHARITABLE PURPOSE BY THE ASSESSEE AND NOT INCREASING THE CORPUS HENCE, IN OUR HUMBLE UNDERSTANDING THE VOLUNTARY CONTRIBUTIONS/DONATIO NS RECEIVED BY THE ASSESSEE TRUST IN RESPONSE TO THE APPEAL MADE IN THE NEWSPAPER IS HIT BY SEC. 12 (1) AND IT IS A PART OF THE INCOME OF THE ASSESSEE U/S. 11 (1) OF THE ACT. 9. IN THE CASE OF SRI RAMAKRISHNA SEVA ASHRAMA (SUPRA) , THE SAID ASSESSEE TRUST HAS CAPITALIZED THE DONATIONS RECEIVED BY THE SEVERAL ORGANIZATIONS FOR THE RURAL PROJECT. IN THE SAID CASE ALSO THE FUNDS COLLECTED BY THE ASSESSEE TRUST FOR THE RURAL PROJECT WERE EARMARKED FOR THE RURAL PROJECT. IN THE SAID DECISION , IT IS OBSERVED THAT A LL THE CONTRIBUTION S RECEIVED WERE KEPT IN FIXED DEPOSIT S AND NO PORTION OF THE CONTRIBUTION WAS RECEIVED WAS UTILIZED FOR THE RURAL PROJECT AND THE INCOME DERIVED FROM THE CORPUS WAS USED FOR CARRYING ON THE ESTABLISHED ACTIVITY . THERE IS SPECIFIC FINDIN G BY THE HON'BLE HIGH COURT THAT THE DONATIONS WERE COLLECTED COMPLYING WITH THE REQUIREMENT OF SEC. 11(1)(D) OF THE ACT. IN THE BACKGROUND OF THIS FACT IT WAS HELD THAT THE VOLUNTARY CONTRIBUTION S RECEIVED FOR THE RURAL PROJECT CANNOT BE TREATED AS AN IN COME OF THE ASSESSEE TRUST AND CONDITIONS OF APPLYING 85% OF THE INCOME FOR CHARITABLE PURPOSE IS NOT APPLICABLE. 10. IN THE CASE OF SUKHDEO CHARITY ESTATE (SUPRA) IT IS HELD THAT IF THE INTENTION OF THE DONOR IS THAT THE AMOUNT/DONATION GIVEN IS TO BE TRE ATED AS CAPITAL AND THE INCOME FROM THE CAPITAL HAS TO BE UTILIZED FOR 17 ITA N OS. 757 & 758/PN/2013, SAKAL RELIEF FUND, PUNE THE CHARITABLE PURPOSES, THEN THE SAID VOLUNTARY CONTRIBUTION RECEIVED BY THE TRUST OR INSTITUTION IS TOWARDS THE PART OF THE CORPUS OF THE TRUST. WE, THEREFORE, HOLD THAT THE VOLUNTAR Y CONTRIBUTION RECEIVED BY THE ASSESSEE WITH APPEAL TO APPLY THE SAME FOR CERTAIN SPECIFIC PURPOSES ARE HIT BY SEC. 12(1) OF THE ACT AND THE SAID DONATIONS/CONTRIBUTIONS ARE PART OF THE TOTAL INCOME OF THE ASSESSEE E VEN IF IN THE BALANCE SHEET THE SAID AMO UNT ARE EARMARKED UNDER THE SPECIFIC HEAD . WE MAY ALSO LIKE TO MENTION HERE THAT THE ASSESSEE IS SPENDING THE AMOUNT FROM THE SAID DONATIONS/CONTRIBUTIONS AND THOSE DONATIONS/CONTRIBUTIONS ARE NOT TREATED AS A PART OF THE CORPUS OF THE ASSESSEE TRUST. WE , ACCORDINGLY, DECIDE THIS ISSUE AGAINST THE ASSESSEE AND GROUND NOS. 1 TO 3 ARE DISMISSED. 11. THE NEXT ISSUE IS IN RESPECT OF DELAY IN FILING OF FORM NO. 10 U/S. 11(2) OF THE ACT AND THIS ISSUE ARISES FROM GROUND NOS. 4 AND 5. THE LD. COUNSEL SUBMITS TH AT EVEN IF THE ASSESSMENTS ARE FRAMED U/S. 147 R.W.S. 143(3) BUT IT IS THE FIRST ASSESSMENT AND SEC. 147 OF THE ACT CONTEMPLATE S ASSESSMENT AS WELL AS RE - ASSESSMENT. HE SUBMITS THAT THE ASSESSEE WAS UNDER BONAFIDE BELIEVE THAT THE ASSESSEE INCOME WAS NOT LIABLE TO TAX AND WAS TOTALLY EXEMPT U/S. 11 HENCE, THE RETURN S WERE NOT FILED. HE SUBMITS THAT AFTER RECEIPT OF THE NOTICE U/S. 148 OF THE ACT THE ASSESSEE FILED THE RETURN S AND DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE FILED THE FORM NO. 10. HE SUBMITS THAT EVEN IF THE HON'BLE TRIBUNAL HAS GIVEN THE DIRECTIONS THE LD. CIT(A) TO CONSIDER THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS . NAGPUR HOTEL OWNERS' ASSOCIATION 247 ITR 20 BUT THE SAME HAS NOT BEEN CONSIDERED IN THE PROPER SPRIT NOR UNDERLYING PRINCIPLES ARE APPLIED. HE SUBMITS THAT NOW ISSUE STANDS SQUARELY COVERED BY THE DECISION OF THE ITAT, INDORE BENCH IN THE CASE OF ITO VS. SHRI MAHAKAL MANDIR PRABANDH S A MITI (2010) 042 ITR (A.T.) 0001 (INDORE) 131 TTJ 0066 (IN DORE). 18 ITA N OS. 757 & 758/PN/2013, SAKAL RELIEF FUND, PUNE 12. PER CONTRA, THE LD. DR SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW . I N THE CASE OF SHRI MAHAKAL MANDIR PRABANDH S A MITI (SUPRA). THE IDENTICAL ISSUE HAS COME FOR CONSIDERATION AND THE TRIBUNAL HAS HELD AS UNDER: 9. WE HAVE CONSIDERED RIVAL SU BMISSIONS AND MATERIAL AVAILABLE ON RECORD. IT IS NOT IN DISPUTE THAT ASSESSEE WAS GRANTED REGISTRATION UNDER S. 12AA OF THE IT ACT, THEREFORE, ASSESSEE WOULD BE ENTITLED FOR THE BENEFIT UNDER SS. 11 AND 12 OF THE IT ACT. SEC, 11 (2) OF THE IT ACT PROVIDES : - 'WHERE 85 PER CENT OF THE INCOME REFERRED TO IN CL. (A) OR CL. (B) OF SUB - S. (1) R/W EXPLANATION TO THAT SUB - SECTION IS NOT APPLIED, OR IS NOT DEEMED TO HAVE BEEN APPLIED TO CHARITABLE OR RELIGIOUS PURPOSES IN INDIA DURING THE PREVIOUS YEAR BUT IS ACCUM ULATED OR SET APART EITHER IN WHOLE OR IN PART FOR APPLICATION TO SUCH PURPOSE IN INDIA, SUCH INCOME SO ACCUMULATED OR SET APART SHALL NOT BE INCLUDED IN THE TOTAL INCOME OF THE PREVIOUS YEAR OF THE PERSON IN RECEIPT OF THE INCOME, PROVIDED THE FOLLOWING C ONDITIONS ARE COMPLIED WITH NAMELY: - (A) SUCH PERSON SPECIFIES BY NOTICE IN WRITING GIVEN TO THE AO IN THE PRESCRIBED MANNER, THE PURPOSE FOR WHICH THE INCOME IS BEING ACCUMULATED OR SET APART AND THE PERIOD FOR WHICH THE INCOME IS TO BE ACCUMULATED OR SET APA RT WHICH SHALL IN NO CASE EXCEED 10 YEARS. (B) THE MONEY SO ACCUMULATED OR SET APART IS INVESTED OR DEPOSITED IN THE FORMS OR MODES SPECIFIED IN SUB - S, (5).' 9.1 RULE 17 OF IT RULES PROVIDES THAT NOTICE UNDER S. 11(2) TO BE GIVEN TO THE AO IN FORM NO. 10 A ND SHALL BE DELIVERED BEFORE EXPIRY OF THE TIME ALLOWED UNDER S. 139(1) OF THE ACT FOR FURNISHING THE RETURN OF INCOME. UNDER THE INCOME - TAX RULES BELOW R. 17, IT IS PROVIDED THAT THE DELAY IN FILING THE NOTICE IS CONDONABLE BY CIT AS IS REFERRED IN CIRCUL AR NO. 273, DT. 3RD JUNE, 1980 [(1981) 20 CTR (TLT) 3]. IN FORM NO. 10, THE ASSESSEE SHALL HAVE TO GIVE THE DETAILS OF ACCUMULATED FUNDS FOR CARRYING OUT THE PURPOSE OF THE TRUST. IT IS, THEREFORE, CLEAR THAT NO TIME - LIMIT IS PROVIDED UNDER S. 11(2) OF THE IT ACT FOR FURNISHING FORM NO. 10 BEFORE THE AO. THE TIME - LIMIT IS PROVIDED IN THE RULES ONLY. SEC. 148(1) OF THE IT ACT PROVIDES THAT BEFORE MAKING ASSESSMENT OR REASSESSMENT UNDER S. 147, THE AO SHALL SERVE ON THE ASSESSEE A NOTICE REQUIRING 19 ITA N OS. 757 & 758/PN/2013, SAKAL RELIEF FUND, PUNE HIM TO FURN ISH RETURN OF HIS INCOME WITHIN SUCH PERIOD AS MAY BE PRESCRIBED IN THE NOTICE AND PROPERLY VERIFIED AND THE PROVISIONS OF IT ACT SHALL, SO FAR AS MAY BE, APPLY ACCORDINGLY AS IF SUCH RETURN WERE A RETURN REQUIRED TO BE FURNISHED UNDER S. 139 OF THE IT ACT . IN ALL THE ASSESSMENT YEARS UNDER APPEALS, THE AO ISSUED NOTICE UNDER S. 148 OF THE IT ACT DIRECTING THE ASSESSEE TO FURNISH RETURN OF INCOME IN THE PRESCRIBED FORM. THE ASSESSEE FILED RETURN OF INCOME UNDER S. 148 OF THE IT ACT AND ALSO FILED FORM NO. 1 0 FOR ACCUMULATION OF FUNDS IN THE PRESCRIBED MANNER ALONG WITH THE RETURN OF INCOME. THEREFORE, AS PER S. 148(1), THE RETURN OF INCOME FILED ALONG WITH FORM NO. 10 SHALL BE TREATED AS RETURN SO FILED - UNDER - S. 139(1} OF THE IT ACT, THE GENUINENESS OF THE P URPOSE OF THE TRUST AND ACCUMULATION OF FUNDS FOR THE PURPOSE OF ASSESSEE AS DISCLOSED IN THE FORM NO. 10 ARE NOT DISPUTED BY THE AO. 9.2. HONBLE SUPREME COURT IN THE CASE OF CIT VS. NAGPUR HOTEL OWNERS ASSOCIATION (SUPRA) OBSERVED THAT THE ASSESSING A UTHORITY HELD THAT ASSESSEE HAS NOT APPLIED FOR ACCUMULATION OF ITS INCOME FOR CHARITABLE PURPOSES AS REQUIRED UNDER S. 11(2) WITHIN THE TIME SPECIFIED IN R. 17 OF THE IT RULES. HENCE, TOTAL INCOME WAS ASSESSED. THE TRIBUNAL , HOWEVER , HELD THAT THE OBJECTS OF THE ASSESSEE WERE CHARITABLE; HENCE, THE RELIEF SOUGHT BY THE ASSESSEE COULD NOT HAVE BEEN REFUSED ON THAT GROUND. IT WAS FURTHER HELD THAT THE TIME - LIMIT FIXED UNDER R. 17 CANNOT BE INSISTED UPON BY THE ASSESSING AUTHORITY BECAUSE SAID RULES COULD NOT HAVE FIXED A TIME - LIMIT FOR FILING AN APPLICATION UNDER S. 11(2) OF THE IT ACT. IN THIS CASE, THE QUESTION OF LAW WAS WHETHER SUCH FORM COULD BE FILED EVEN AFTER THE ASSESSMENT IS COMPLETED. HON'BLE SUPREME COURT IN THIS CASE CONSIDERING THE ABOVE RULES H ELD THAT 'IT IS NECESSARY THAT ASSESSING AUTHORITY MUST HAVE THIS INFORMATION AT THE TIME IT COMPLETES THE ASSESSMENT. IN THE ABSENCE OF ANY SUCH INFORMATION, IT WILL NOT BE POSSIBLE FOR THE ASSESSING AUTHORITY TO GIVE THE ASSESSEE THE BENEFIT OF SUCH EXC LUSION AND ONCE THE ASSESSMENT IS SO COMPLETED, IN OUR OPINION, IT WOULD BE FUTILE TO FIND FAULT WITH THE ASSESSING AUTHORITY FOR HAVING INCLUDED SUCH INCOME IN THE ASSESSABLE INCOME OF THE ASSESSEE. THEREFORE, EVEN ASSUMING THAT THERE IS NO VALID LI MITATION PRESCRIBED UNDER THE ACT AND THE RULES, EVEN THEN, IN OUR OPINION, IT IS REASONABLE TO PRESUME THAT THE INTIMATION REQUIRED UNDER S. 11 HAS TO BE FURNISHED BEFORE ASSESSING AUTHORITY COMPLETES THE CONCERNED ASSESSMENT BECAUSE SUCH REQUIREME NT IS MANDATORY AND WITHOUT THE PARTICULARS OF THIS INCOME, ASSESSING AUTHORITY CANNOT ENTERTAIN THE CLAIM OF 20 ITA N OS. 757 & 758/PN/2013, SAKAL RELIEF FUND, PUNE ASSESSEE UNDER S. 11, THEREFORE, COMPLIANCE OF THE REQUIREMENT OF THE ACT WILL HAVE TO BE ANY TIME BEFORE THE COMPLETION OF ASSESSMENT PROCEEDINGS '. THIS JUDGMENT IS DELIVERED ON 13TH DEC., 2000 AND ON CONSIDERATION OF THE RELEVANT PROVISIONS OF THE LAW, THEREFORE, GROUND NO. 3 OF THE DEPARTMENTAL APPEAL EXPLAINING THAT R. 17 AS HAS BEEN AMENDED ON 1ST APRIL, 1990 WAS NOT CONSIDERED BY THE LEARNED C IT(A) IS NOT CORRECT. THE ISSUE IS, THEREFORE, SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE ABOVE JUDGMENT OF THE HON'BLE SUPREME COURT. 9.3. HON'BLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. MAYUR FOUNDATION (SUPRA) CONSIDERING THE DECISION OF HON'BL E SUPREME COURT IN THE CASE OF NAGPAR HOTEL OWNERS' ASSOCIATION (SUPRA) HELD THAT WHERE THE ASSESSMENT IS IN APPEAL, IT SHOULD BE TREATED AS PENDING SO THAT FORM NO. 10 COULD BE FILED EVEN AT THE STAGE OF APPEAL. IN THIS CASE, THE DEPARTMENTAL APPEAL WAS DISMISSED CONFIRMING THE FINDING OF TRIBUNAL WHO HAS DECIDED ADDITIONAL GROUND OF APPEAL IN FAVOUR OF THE ASSESSEE BY HOLDING THAT ASSESSEE TRUST HAD COMPLIED WITH ALL THE REQUIREMENTS STIPULATED BY THE PROVISIONS OF S. 11(2) OF THE ACT EVEN IF ASSESSEE MO VED APPLICATION BEFORE CIT ACCOMPANIED BY FORM NO. 10 AND COPY OF THE RESOLUTION SEEKING ACCUMULATION OF THE TRUST INCOME UNDER S. 11(2) BY CONDONING THE DELAY IN FILING FORM NO. 10. SIMILARLY, TRIBUNAL, AHMEDABAD BENCH IN THE CASE OF STOCK EXCHANGE, AHMED ABAD VS. ASSTT. CIT (SUPRA) CONSIDERED THE SIMILAR ISSUE FOR THE ASST. YRS. 1989 - 90 TO 1995 - 96 HELD THAT FORM NO. 10 CAN BE FILED BEFORE COMPLETION OF THE ASSESSMENT. HON'BLE ANDHRA PRADESH HIGH COURT IN THE CASE OF CIT VS. MUMTAZ YARUD DOWLA WAQF (1999) 1 53 CTR (AP) 149 HELD THAT THE PERIOD PRESCRIBED UNDER R. 17 IS DIRECTIVE AND NOT MANDATORY, EVEN IF THE NOTICE IS NOT ISSUED WITHIN THE PERIOD PRESCRIBED UNDER R. 17, THE ASSESSEE WOULD BE ENTITLED TO THE BENEFIT OF S. 11 PROVIDED THE NOTICE IS ISSUED BEFO RE ASSESSMENT IS MADE. 9.4. ON CONSIDERATION OF ABOVE DISCUSSIONS, IT IS CLEAR THAT THE ASSESSEE FILED FORM NO. 10 ALONG WITH RETURN OF INCOME FILED UNDER S. 148 OF THE IT ACT PRIOR TO COMPLETION OF ASSESSMENT GIVING THE DETAILS OF THE FUNDS/AM OUNT TO BE ACCUMULATED. THE DETAILS SUBMITTED IN THE FORM NO. 10 ARE NOT DISPUTED. THE CLAIM OF THE ASSESSEE IS REJECTED MERELY ON THE REASONS THAT FORM NO. 10 WAS NOT FILED ON TIME. THE ISSUE IS, THEREFORE, SQUARELY COVERED BY SEVERAL DECISIONS REFERR ED TO ABOVE IN FAVOUR OF THE ASSESSEE. 9.5. WE MAY ALSO NOTE HERE THAT HON'BLE SUPREME COURT IN THE CASE OF KOPURCHAND SHRIMAL VS. CLT (1981) 24 CTR (SC) 345 : 21 ITA N OS. 757 & 758/PN/2013, SAKAL RELIEF FUND, PUNE (1981) (SC) HELD THAT APPELLATE AUTHORITY HAS JURISDICTION AND DUTY TO CORRECT A LL ERRORS IN THE PROCEEDINGS UNDER APPEAL AND TO ISSUE NECESSARY DIRECTIONS TO THE AUTHORITIES TO DISPOSE OF WHOLE MATTER AFRESH. ADMITTEDLY, IN THIS CASE, ASSESSEE FILED APPLICATION FOR CONDONATION OF DELAY IN FILING FORM NO. 10 BEFORE THE CIT, UJJAIN. TH E AO OBSERVED THAT THE DELAY IN FILING FORM NO. 10 WAS ABNORMAL. THE LEARNED CIT(A) REJECTED THE EXPLANATION OF THE ASSESSEE FOR CONDONATION OF DELAY ON THE GROUND THAT ONCE RESOLUTION WAS PASSED ABOUT ACCUMULATION OF CERTAIN AMOUNT, SAME WOULD INDICATE TH AT ASSESSEE WAS HAVING KNOWLEDGE OF LAW AND FURTHER CHANGE OF THE ADMINISTRATOR OF ASSESSEE IS NO GROUND FOR CONDONATION OF DELAY AND THAT IGNORANCE OF LAW CANNOT BE ACCEPTED AS AN EXCUSE. THOUGH, THIS POINT IS NOT AGITATED, BUT THE FACTS NOTED IN THE IMP UGNED ORDER CLEARLY SHOWS AT THE MOST, IT WAS A TECHNICAL MISTAKE ON PROCEDURE IN NOT FURNISHING FORM NO. 10 AS PER FINDING OF THE AO. THE AUTHORITIES BELOW SHOULD HAVE CONSIDERED THE OBJECTS OF PROVISIONS OF S. 11 WITH WHICH SUCH PROVISION HAS BEEN ENAC TED WHILE CONSIDERING THE ISSUE AND, ACCORDINGLY, THE PROVISIONS HAVE TO BE INTERPRETED IN A MANNER THAT WOULD ADVANCE A CAUSE OF CHARITY AND SHOULD NOT DEPRIVE AN ASSESSEE OF THE STATUTORY BENEFIT ON THE BASIS OF MERE TECHNICALITIES AND VENIAL BREACH, HON 'BLE SUPREME COURT IN THE CASE OF MOTILAL PADAMPAT SUGAR MILLS CO. LTD. VS. STATE OF UTTAR PRADESH (1979) (SC) HELD THAT 'THERE IS NO PRESUMPTION THAT EVERYBODY KNOWS THE LAW'. THE EXPLANATION OF ASSESSEE THAT THERE WAS IGNORANCE OF LAW ON ACCOUNT OF FREQU ENT CHANGE OF OFFICEBEARERS WAS NOT CONSIDERED BY THE AUTHORITIES BELOW IN PROPER PERSPECTIVE AS WELL AS IN THE LIGHT OF THE OBJECTS AND CHARITABLE ACTIVITIES OF ASSESSEE TRUST. THE AUTHORITIES BELOW INCLUDING THE LEARNED CIT SHOULD HAVE CONSIDERED THE CAS E OF THE ASSESSEE SYMPATHETICALLY AND SHOULD HAVE CONDONED THE DELAY IN FORM NO. 10 BELATEDLY IF THEY WERE NOT SATISFIED WITH THE EXPLANATION OF THE ASSESSEE. 13. IN THE CASE OF SHRI MAHAKAL MANDIR PRABANDH SAMITI (SUPRA) THE TRIBUNAL HAS CONSIDERED AND AP PLIED THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF NAGPUR HOTEL OWNERS' ASSOCIATION (SUPRA). IN THE PRESENT CASE THE FORM NO. 10 WAS AVAILABLE BEFORE THE ASSESSING OFFICER WHICH IS IN THE NATURE OF THE NOTICE U/S. 11(2) BEFORE THE COMPLETION O F THE ASSESSMENT. WE, THEREFORE, RESPECTFULLY FOLLOWING THE 22 ITA N OS. 757 & 758/PN/2013, SAKAL RELIEF FUND, PUNE DECISION OF THE ITAT, INDORE BENCH IN THE CASE OF SHRI MAHAKAL MANDIR PRABANDH SAMITI (SUPRA) ALLOW THE GROUND NOS. 4 AND 5 AND HOLD THAT THE ASSESSEE HAS MADE THE COMPLIANCE OF CONDITION OF SEC. 11(2) OF THE ACT IN RESPECT OF APPLICATION OF INCOME INCLUDING VOLUNTARY CONTRIBUTIONS U/S. 12 TO THE EXTENT OF 85% AND THE DONATIONS AND VOLUNTARY CONTRIBUTION S COVERED U/S. 12 SHOULD NOT BE IN CLUDED WHILE COMPUTING THE TOTAL INCOME OF THE ASSESSEE IN BO TH THE ASSESSMENT YEARS. 14. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE PARTLY ALLOWED. PRONOUNCED IN THE OPEN COURT ON 25 - 03 - 2014 SD/ - SD/ - ( R.K. PANDA ) ( R.S. PADVEKAR ) ACCOUNTANT MEMBER JUDICIAL MEMBER RK /PS PUNE , DATED : 25 TH MARCH, 2014 COPY TO 1 DEPARTMENT 2 ASSESSEE 3 THE CIT(A) - II I , PUNE 4 THE CIT - II I , PUNE 5 THE DR, ITAT, B BENCH, PUNE . 6 GUARD FILE. //TRUE COPY// BY ORDER PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL PUNE