SIR RATAN TATA TRUST, MUMBAI V. CIT (EXEMPTION), MUMBAI

ITA 773/MUM/2021

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 8761 (ITAT-MUMBAI)
• Duration Of Justice: 9 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-02-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2016-2017
• Appeal Filed On: 11-05-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMOL KIRTANE
• Keywords: Business income; Revision of order; Charitable institution; Opportunity of being heard; Maximum Marginal Rate; Rule of consistency; Earning of tax free income; Benefit of exemption; Set aside; Capital Gains
• Section: 263; 11; 143(3); 192; 13; 10(23C)

Judgement Text

आयकर अपीलीय अिधकरण मुंबई पीठ “डी ”, मुंबई ŵी जी. एस. पɄू,अȯƗ एवं ŵी िवकास अव̾थी, Ɋाियक सद˟ के समƗ IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “D”, MUMBAI BEFORE SHRI G. S. PANNU, PRESIDENT & SHRI VIKAS AWASTHY, JUDICIAL MEMBER आअसं. 773/मुं/2021 (िन.व.2016-17) ITA NO.773/MUM/2021 (A.Y.2016-17) Sir Ratan Tata Trust, Bombay House, 24, Homi Modi Street, Fort, Mumbai-400001. PAN: AAATS1013P ...... अपीलाथŎ /Appellant बनाम Vs. CIT (Exemptions), Room No.617, 6 th Floor, Piramal Chambers, Lalbaug, Parel, Mumbai-400012 ..... Ůितवादी/Respondent अपीलाथŎ Ȫारा/ Appellant by : Sh. Sukhsagar Syal, Advocate Ůितवादी Ȫारा/Respondent by : Sh. Amol Kirtane, CIT-DR सुनवाई की ितिथ/ Date of hearing : 15/12/2021 घोषणा की ितिथ/ Date of pronouncement : 16/02/2022 आदेश/ ORDER This appeal by the assessee is directed against the order of Commissioner of Income Tax (Exemptions), Mumbai [hereinafter referred to as ‘the CIT(E)’] dated 17.03.2021 passed under section 263 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for the AY 2016-17. 2 आअसं.773/मुं/2021(िन.व.2016-17) ITA NO.773/MUM/2021 (A.Y.2016-17) 2. Sh. Sukhsagar Syal appearing on behalf of the assessee submitted that the CIT(E) invoked revisional jurisdiction under section 263 of the Act on the ground that the Assessing Officer (AO) has not made detailed enquiries with respect to investment in shares by the assessee, hence, the assessment order dated 04.12.2018 passed under section 143(3) of the Act is erroneous in so far as prejudicial to the interest of Revenue. The ld. Counsel for the assessee submitted that for similar reasons the CIT(E) had exercised revisional powers under section 263 of the Act in the AYs 2014-15 and 2015-16 in assessee’s own case and other group trusts. The matter travelled to the Tribunal. In appeal by the assessee for AY 2014-15 in ITA No. 3737/Mum/2019, the Tribunal vide order dated 28.12.2020 quashed the revision order. Similarly, for AY 2015-16, the assessee had assailed the order of CIT(E) passed under section 263 of the Act in ITA No. 1933/Mum/2020. The Tribunal vide order dated 08.03.2021 following its earlier order quashed the revision order. The facts in the impugned AY are identical to the facts in the preceding AYs in assessee’s own case. The CIT(E) has passed the order under section 263 of the Act on similar lines. In the impugned AY the CIT(E) has cited similar reasons for invoking revisional jurisdiction as was stated in AYs 2014-15 & 2015-16. Placing reliance on the decisions of Tribunal in assessee’s own case, the ld. Counsel prayed for quashing the impugned order for AY 2016- 17. 3. Sh. Amol Kirtane representing the department vehemently defended the order of CIT(E) passed under section 263 of the Act. However, the ld. Departmental Representative (DR) fairly admitted that the Tribunal in assessee’s own case in the preceding AYs i.e. AYs 2014-15 & 2015-16 has quashed the revision orders passed on similar set of facts. 3 आअसं.773/मुं/2021(िन.व.2016-17) ITA NO.773/MUM/2021 (A.Y.2016-17) 4. Both sides heard, documents on record examined. The CIT(E) invoked revisional powers under section 263 of the Act on the ground that the AO has failed to examine the nature of investment in shares by the assessee. For ready reference conclusion of the impugned order is reproduced herein below: “7. Conclusion: 7.1. Thus, it clearly comes out from the above judgements that not conducting due verification amounts to the order being erroneous and prejudicial to the interest of revenue. No enquiry or due verification, even in cases where the issue was debatable also amounts to the order being erroneous and prejudicial to the interest of revenue. Similarly, adopting the pertinent line of enquiry but not taking it to the logical end also renders the order erroneous and prejudicial to the interest of revenue. 7.2. In the light of the discussion in the preceding paragraphs, | am convinced that the order dated 04.12.2018 passed under section 143(3) of the Income Tax Act, for the assessment year 2016-17 is erroneous in so far as it is prejudicial to the interests of the revenue. Therefore, order is set aside to the file of the A.O. for making a de-novo assessment after proper examination of entire gamut of issues involved. The Assessing Officer is further directed to decide on the issues involved after affording reasonable opportunity of being heard to the Trust and pass a speaking and well-reasoned order.” 5. Both sides are unanimous in stating that the reasons for invoking revisional powers in the impugned AY are identical to the AYs 2014-15 & 2015-16. The order passed under section 263 of the Act by the CIT(E) for AY 2014-15 was challenged before the Tribunal in ITA No. 3737/Mum/2019 (supra) by the assessee. The Tribunal after having examined the issue threadbare, held as under: “30. The next issue raised by the learned Commissioner is with respect to the alleged failure of the Assessing Officer in not examining whether investments held by the assessee are in conformity with the provisions of Section 11(5) of the Act, and in not examining whether the assessee is covered by the exceptions carved out under proviso to Section 13(1)(d). 4 आअसं.773/मुं/2021(िन.व.2016-17) ITA NO.773/MUM/2021 (A.Y.2016-17) 31. So far as this aspect of the matter is concerned, we have noted that the Assessing Officer has extensively examined the compliance with the requirements of Section 11(5) and Section13(1)(d) of the Act. Vide letter dated 2nd December 2016, the Assessing Officer specifically asked the assessee "whether any investment of the trust for last three years is in contravention of Section 11(5) of the Income Tax Act, 1961. Also, whether any investment of the trust in the last three years is covered by the provisions of Section 13(1)(d), please specify the same". In reply to this requisition, the assessee had duly furnished all the details of the investments held by the assessee. It was also categorically confirmed that these investments did not violate the provisions of Section 11(5) and 13(1)(d). In Annexure 1 to the letter dated 9th December 2016, the assessee filed complete details of all the scrips, the bifurcation of shares held as on 1st June 1973 and subsequent bonus shares allotted in connection with the holdings as on 1st June 1973, and it was thus made clear that no investments were made after 1st June 1973. The complete specific details about holdings in each of these shares as on 1st June 1973, and accretion in these holdings on account of allotment of bonus shares thereafter, were in 9 pages- and copies of these details were also furnished before us at pages 216- 223 of the paper book filed before us. All these details were also furnished in the year- end financial statements, which were duly filed with the Assessing Officer. The Assessing Officer categorically notes this and observes that "the assessee has to follow the accumulation provisions of Section 11(2), specific modes of investment/ deposits under section 11(5) and other related provisions of Section 13". Satisfied with the details filed by the assessee, the Assessing Officer had no issues with respect to section 11 and 15, and he noted that the income derived from property held under trust, which included these investments, is covered by the exemption under section 11 and, accordingly, he disallowed exemption of dividend under section 10(34). Learned Commissioner does not dispute these facts but adds that the Assessing Officer did not examine the fundamental question as to whether these shareholdings, as on 1st June 1973, were part of the corpus or not. Unless, according to the learned Commissioner, these shareholdings were held to be part of the corpus of the trust, these investments can not be held to be permissible investments under section 13(1)(d), and it is Assessing Officer's not looking into this aspect of the matter that rendered the subject assessment order erroneous and prejudicial to the interests of the revenue. 32. There is no dispute with the proposition that in terms of the provisions of Section 11(1)(d)(iii) the assessee trust could not have invested in the shares of a company, other than in shares of a public sector company or shares prescribed as a form or mode of investment under clause (xii) of Section 11 (5), after 30th November 1983. None of these conditions are satisfied in the present case. However, proviso to Section 13(1) (d) states that nothing in the clause, containing aforesaid provision, will apply to, inter alia, " (i) any assets held by the trust or institution where such assets form part of the corpus of the trust or institution as on the 1st day of June, 1973; and (ia)any accretion to the shares, forming part of the corpus mentioned in clause (i), by way of bonus shares 5 आअसं.773/मुं/2021(िन.व.2016-17) ITA NO.773/MUM/2021 (A.Y.2016-17) allotted to the trust or institution". Therefore, as long as the shares are part of the corpus, as on 1st June 1973, or the shares are received as accretion to the shares being held to be part of the corpus, the provisions of Section 13(1)(c) will not come into play. 33. It is an admitted position that the shares becoming part of the investment, after 1st June 1973, were accretion to the original shareholdings as on 1st June 1973 and these were allotted as bonus shares only. So far as the question of the shares being part of 'corpus' is concerned, the current financial period was over forty years after the cut-off date of 1st June 1973, and in none of those forty-plus years, the exemption was declined on the ground that these shares were not part of the corpus. There was no good reason to doubt these shares being part of the corpus. As we have noted earlier, an Assessing Officer can only be faulted for doing anything less than "what an Assessing Officer, in the course of his performance of his duties as an Assessing Officer should, as a prudent, judicious or reasonable public servant, reasonably do bonafide in a real-life situation". Viewed thus, we cannot fault the conduct of the Assessing Officer in not disturbing, or even not probing, something being constantly accepted for over four decades- particularly when there is no occasion or trigger to re-examine that aspect of the matter in this particular year and when there is no change in legal or factual position in this particular year. It may also be noted that, as pointed out to us by the learned counsel, the assessee trust was notified as an institution established for charitable purposes under section 10(23C)(iv), and this notification has been renewed from time to time. The conditions precedent for grant of notification under section 10(23C) were similar to section 13(1)(d) inasmuch as it was provided that if the funds were invested in modes other than those specified under section 11(5), the benefit of 10(23C) would not be available but an exception was made if such assets were to form part of the corpus as on 1st June 1973. On these facts, while granting the exemption under section 10(23C), Under Secretary in the Central Board of Direct Taxes, Govt of India, vide letter no 197/126/91-ITA-I dated 31st July 1992, had written a letter to the assessee trust seeking clarification whether all the shares form part of the corpus. The assessee trust, vide letter dated 21st August 1992, had clarified the said position, and it was only thereafter, on 10th May 1993, notification was issued by the Government of India notifying the assessee trust under section 10(23C). These facts, which are set out on page 17 of the second compilation filed before us, do show that the assessee trust was accepted to be holding these shares as part of the corpus by the CBDT itself. When an issue has been decided in a certain way by the CBDT, it cannot normally be open to the field officers to question the correctness of that position- particularly when it's a factual aspect, and this factual aspect has been found in a particular manner, and no interference in these settled facts is warranted on account of any particular reason. 34. While it is indeed true that there is no res judicata in the assessment proceedings, the principle of consistency, nevertheless has its firm roots in the income tax jurisprudence. Hon'ble Supreme Court's has, in the case 6 आअसं.773/मुं/2021(िन.व.2016-17) ITA NO.773/MUM/2021 (A.Y.2016-17) of Radhasoami Satsang v. CIT [(1992) 193 ITR 321 (SC)] held that, while strictly speaking, res judicata does not apply to income-tax proceedings but where a fundamental aspect permeating through the different assessment years has been found as a fact one way or the other, and the parties have allowed that position to be sustained by not challenging the order, it would not be at all appropriate to allow the position to be changed in a subsequent year. In the case of PCIT v. Quest Investment Advisors Pvt Ltd. [(2018) 419 ITR 545 (Bom.)], referring to this judgment and taking note of subsequent legal developments, Hon'ble jurisdictional High Court has, inter alia, observed as follows: 7. We note that the impugned order of the Tribunal records the fact that the Revenue Authorities have consistently over the years i.e. for the 10 years years prior to Assessment Years 2007-08 and 2008-09 and for 4 subsequent years, accepted the principle that all expenses which has been incurred are attributable entirely to earning professional income. Therefore, the Revenue allowed the expenses to determine professional income without any amount being allocated to earn capital gain. In the subject assessment year, the Assessing Officer has deviated from these principles without setting out any reasons to deviate from an accepted principle. Moreover, the impugned order of the Tribunal also records that the Revenue was not able to point out any distinguishing features in the present facts, which would warrant a different view in the subject assessment year from that taken in the earlier and subsequent assessment years. So far as the decision of Radhasoami Satsang (supra) is concerned, it is true that there are observations therein that restrict its applicability only to that decision and the Court has made it clear that the decision should not be taken as an authority for general applicability. 8. However, subsequently the Apex Court in Bharat Sanchar Nigam Ltd. v. Union of India [2006] 282 ITR 273 has after referring to the decision of Radhasoami Satsang (supra) has observed as under :-- "20. The decisions cited have uniformly held that res judicata does not apply in matters pertaining to tax for different assessment years because res judicata applies to debar courts from entertaining issues on the same cause of action whereas the cause of action for each assessment year is distinct. The courts will generally adopt an earlier pronouncement of the law or a conclusion of fact unless there is a new ground urged or a material change in the factual position. The reason why courts have held parties to the opinion expressed in a decision in one assessment year to the same opinion in a subsequent year is not because of any principle of res judicata but because of the theory of precedent or the precedential value of the earlier pronouncement. Where facts and law in a subsequent assessment year are the same, no authority whether quasi-judicial or judicial can generally be permitted to take a different view. This mandate is subject only to the usual gateways of distinguishing the earlier decision of where the 7 आअसं.773/मुं/2021(िन.व.2016-17) ITA NO.773/MUM/2021 (A.Y.2016-17) earlier decision is per incuriam. However, these are fetters only on a co- ordinate Bench which, failing the possibility of availing of either of these gateways, may yet differ with the view expressed and refer the matter to a Bench of superior strength or in some cases to a Bench of superior jurisdiction." (emphasis supplied) 9. The principle accepted by the Revenue for 10 earlier years and 4 subsequent years to the Assessment Years 2007-08 and 2008-09 was that the entire expenditure is to be allowed against business income and no expenditure is to be allocated to capital gains. Once this principle was accepted and consistently applied and followed, the Revenue was bound by it. Unless of course it wanted to change the practice without any change in law or change in facts therein, the basis for the change in practice should have been mentioned either in the assessment order or at least pointed out to the Tribunal when it passed the impugned order. None of this has happened. In fact, all have proceeded on the basis that there is no change in the principle which has been consistently applied for the earlier assessment years and also for the subsequent assessment years. Therefore, the view of the Tribunal in allowing the respondent's appeal on the principle of consistency cannot in the present facts be faulted with, as it is in accord with the Apex Court decision in Bharat Sanchar Nigam Ltd.'s case (supra). 35. We are not, in this context, really concerned about the final determination of merits on this issue. Our limited point is that given the accepted past history of the case, and given the fact that there were no material factual or legal developments in the relevant financial period, it was not at all unreasonable on the part of the Assessing Officer not to question whether or not the investments in shares were part of the corpus. There were no reasons to provoke such an inquiry. 36. In any event, even if these investments were to be held to be contrary to the provisions of Section 11(5), all that could have been done by the Assessing Officer was to decline exemption under section 11 in respect of income from these investments, i.e., dividends, which, for the reasons we will set out now, is completely tax neutral for the assessee. In support of this consequence of investment being in violation of the provisions of Section 11(5), we may draw support from the following observations made by Hon'ble jurisdictional High Court, in the case of DIT Vs Sheth Mafatlal Gaganbhai Foundation Trust [(2001) 249 ITR 533 (Bom)]: In other words, only the non-exempt income portion would fall in the net of tax as if it was the income of an AOP. Section 11(5) lays down various modes or forms in which a trust is required to deploy its funds. Section 13(1) lays down cases in which section 11 shall not apply. Under section 13(1)(d)(iii), it has been laid down that any share in a company, not being a Government company, held by the trust after 30-11-1983 shall result in 8 आअसं.773/मुं/2021(िन.व.2016-17) ITA NO.773/MUM/2021 (A.Y.2016-17) forfeiture of exemption. By virtue of the proviso (iia) it has been laid down that any asset which does not form part of permissible investment under section 11(5) shall be disposed of within one year from the end of the previous year in which such asset is acquired or by 31-3-1993, whichever is later. In the present case, the assessee was required to dispose of the shares under the said proviso by 31-3- 1993 [See the judgment of this Court in IT Appeal No. 81 of 1999 dated 14-9- 2000]. The shares have not been disposed of even during the assessment year in question. Now, under section 164(2), it is, inter alia, laid down that in the case of relevant income which is derived from property held under trust for charitable purposes, which is of the nature referred to in section 11(4A), tax shall be charged on so much of the relevant income as is not exempt under section 11. Section 164(2) was reintroduced by the Direct Tax Laws (Amendment) Act, 1989 with effect from 1-4-1989. Earlier it was omitted by the Direct Tax Laws (Amendment) Act, 1987. However, the Legislature inserted a proviso by the Finance Act, 1984 with effect from 1-4-1985. By the said proviso, it is, inter alia, laid down that where whole or part of the relevant income is not exempt by virtue of section 13(1)(d), tax shall be charged on the relevant income or part of the relevant income at the maximum marginal rate. The phrase 'relevant income or part of the relevant income' is required to be read in contradistinction to the phrase 'whole income' under section 161(1A). This is only by way of comparison. Under section 161(1A), which begins with a non obstante clause, it is provided that where any income in respect of which a person is liable as a representative assessee consists of profits of business, the tax shall be charged on the whole of the income in respect of which such person is so liable at the maximum marginal rate. Therefore, reading the above two phrases shows that the Legislature has clearly indicated its mind in the proviso to section 164(2) when it categorically refers to forfeiture of exemption for breach of section 13(1)(d), resulting in levy of maximum marginal rate of tax only to that part of the income which has forfeited exemption. It does not refer to the entire income being subjected to maximum marginal rate of tax 37. The insertion of subsection (6) and (7) to Section 11, it may be added, is effective st from 1 April 2015, and, therefore, the tax exemption under section 10(34), so far as the present assessment year is concerned, cannot be disturbed. In any event, since the income from dividends was exempt under section 10(34), as the aforesaid amendments had not come into effect at that point of time, it was completely tax neutral, even if these amendments can be said to have any influence on the taxability of dividends, as to whether or not income from the dividends in these shares is eligible for exemption under section 11 or not. As a matter of fact, the Assessing Officer has declined the exemption under section 10(34) only on the ground that the assessee was eligible for exemption under section 11 on this income. Therefore, even if the assessee is to be declined exemption under section 11 in respect of dividend income on these shares, he will be eligible for exemption under section 10(34). In the case of 9 आअसं.773/मुं/2021(िन.व.2016-17) ITA NO.773/MUM/2021 (A.Y.2016-17) DIT Vs Jasubhai Foundation [(2016) 374 ITR 315 (Bom)], Hon'ble jurisdictional High Court has also observed as follows: .......The provisions, namely, sections 10 and 11 fall under a Chapter which is titled "Incomes Which Do Not Form Part of Total Expenditure" (Chapter III). Section 10 deals with incomes not included in total income whereas section 11 deals with income from property held for charitable or religious purposes. We have not found anything in the language of the two provisions nor was Mr. Malhotra able to point out as to how when certain income is not to be included in computing total income of a previous year of any person, then, that which is excluded from section 10 could be included in the total income of the previous year of the person/assessee. That may be a person who receives or derives income from property held under trust wholly for charitable or religious purposes. Thus, the income which is not to be included in computation of the total income is a matter dealt with by section 10 and by section 11 the case of an assessee who has received income derived from property held under trust only for charitable or religious purposes to the extent to which such income is applied to such property in India and that any such income is accumulated or set apart for application for such purposes in India to the extent of which the income so accumulated or set apart in computing 15% of the income of such property, is dealt with. Therefore, it is a particular assessee and who is in receipt of such income as is falling under clause (a) of sub-section (1) of section 11 who would be claiming the exemption or benefit. That is a income derived by a person from property. It is that which is dealt with and if the property is held in trust for the specified purpose, the income derived therefrom is exempt and to the extent indicated in section 11(1)(a) of the Income Tax Act, 1961. There is nothing in the language of sections 10 or 11 which says that what is provided by section 10 or dealt with is not to be taken into consideration or omitted from the purview of section 11 38. It is thus clear that there is no prejudice to the legitimate interests of the revenue on this point either. Whether an income is exempt under section 10(34) or under 11, it does not prejudice the interests of the revenue in any way. Accordingly, even if the order can be said to be 'erroneous' for any reason, it cannot be said to be 'prejudicial to the interests of the revenue', and, therefore, section 263 could not have been invoked on this point either. We may, in this regard, refer to the following observations of Hon'ble Supreme Court in the case of Malabar Industrial Co Ltd (supra),: "A bare reading of this provision makes it clear that the pre-requisite to exercise of jurisdiction by the Commissioner suo motu under it, is that the order of the ITO is erroneous insofar as it is prejudicial to the interests of the revenue. The Commissioner has to be satisfied with twin conditions, namely, (i) the order of the Assessing Officer sought to be revised is erroneous; and (ii) it is prejudicial to the interests of 10 आअसं.773/मुं/2021(िन.व.2016-17) ITA NO.773/MUM/2021 (A.Y.2016-17) the revenue. If one of them is absent - if the order of the ITO is erroneous but is not prejudicial to the revenue or if it is not erroneous but is prejudicial to the revenue - recourse cannot be had to section 263(1)" 39. These reasons are, however, not the only reasons as to why the stand of the Commissioner, in invoking section 263, is wholly unsustainable in law. Even on merits, for the reasons we will set out now, it is clear that the investments in questions were held as the corpus, and, as such, the provisions of Section 13 (1)(d) were not attracted. 40. Explaining the scope of expression "corpus," Hon'ble Karnataka High Court, in the case of DIT Vs Shri Ramakrishna Seva Ashram [(2013) 357 ITR 731 (Kar)] has observed as follows: 11. The word 'corpus' is not defined under the Act. We do not find any judgment explaining the meaning of 'corpus'. In the Chambers 21st Century Dictionary, the meaning of the word 'corpus' has been given as under: (i) body of writings, eg: by a particular author, on a particular topic, etc.; (ii) a body of written and/or spoken material for language research; (iii) anatomy any distinct mass of body tissue that may be distinguished from its surroundings. Latin: meaning- 'body'. 12. In the Law Lexicon of P. Ramanatha Aiyar, 2nd Edition reprint-208 the meaning of the word 'Corpus' is given as under: "A Body; human body; an artificial body created by law; as a corporation; a body or collection of laws; a material substance; something visible and tangible; as the subject of a right; something having legal position as distinguished from an incorporeal physical substance as distinguished from intellectual conception; the body of estate; or a capital of on estate". 13. The word 'Corpus' is used in the context of Income Tax Act. We have to understand the same in the context of a capital, opposed to an expenditure. It is a capital of an assessee; a capital of an estate; capital of a trust; a capital of an institution. Therefore, if any voluntary contribution is made with a specific direction, then it shall be treated as the capital of the trust for carrying on its charitable or religious activities. Then such an income falls under Section 11(d) of the I.T. Act and is not liable to tax. Therefore, it is not necessary that a voluntary contribution should be made with a specific direction to treat it as 'corpus', If the intention of the donor is to give that money to a trust which they will keep it in trust account in deposit and the income from 11 आअसं.773/मुं/2021(िन.व.2016-17) ITA NO.773/MUM/2021 (A.Y.2016-17) the same is utilised for carrying on a particular activity, it satisfies the definition part, of the corpus. The assessee would be entitled to the benefit of exemptions from payment of tax levied. 14. In fact the Bombay High Court in the case of Trustees of Kilachand Devchand Foundation v. CIT [1988] 172 ITR 382 /[1987] 32 Taxman 393 dealing with the said voluntary contribution made for a charitable purpose, held that for being eligible for exemption, the donations must be voluntary and of a capital nature. That cannot be applied to charitable or religious purposes if the income thereof they must be so applied. The contribution made expressly to the capital or corpus of trust fall within the purview of sub-section (2) of Section 12. Therefore, such contributions cannot be deemed to be the income derived from the property for the purpose of Section 11 of the said Act and provisions of Section 11 will not apply. 15. The Rajasthan High Court in the ease of Sukhdeo Charity Estate v. ITO [1991] 192 ITR 615 (Raj.) dealing with such contributions held that, the principles enunciated in various cases when applied to the present case, leave no room for debate that the intention of the donor- trust as well as donee-trust was to treat the money as capital to be spent for Ladnu Water Supply Scheme. It is of no consequence whether the amount had since been paid to the State Government or kept in the account of the above-referred scheme by the assessee-trust. From whatever angle it may be seen, the deposited amount cannot be said to be income in the hands of the recipient-trust. Therefore, what ultimately reveals that,-(i) the intention of the donor and (ii) how the recipient- assessee treat the said income. If the intention of the donor is that the amount/donation given is to be treated as capital and the income from that capital has to be utilised for the charitable purposes, then the said voluntary contribution is towards the part of the corpus of the trust. Similarly, the assessee after receiving the amount, keeps the amount in deposit and only utilise the income from the deposit to carry out the charitable activities, then also the said amount would be a contribution to the corpus of the trust and the nomenclature in which the amount is kept in deposit is of no relevance as long as the contribution received are kept in deposit as capital and only the income from the said capital which is to be utilised for carrying on charitable and religions activities of the institute/corpus of the trust, for which Section 11(i)(d) of the Act is attracted and the said income is not liable for tax tinder the Act. [Emphasis, by underlining, supplied by us] 41. What essentially follows is that it's not the declaration of an investment being a corpus investment but the fact of its being treated as capital and rather than using the investment for the purposes of the trust, using the income from investment for the purposes of the trust, which is determinative of its being in the nature of corpus investment. How the trust is treating the investment, i.e., in 12 आअसं.773/मुं/2021(िन.व.2016-17) ITA NO.773/MUM/2021 (A.Y.2016-17) the capital field or not, is thus truly determinative of the investment being part of the corpus. Viewed thus, the mere fact of these investments being held as capital for at least more than four decades- as conclusively established by the material before the Assessing Officer, and only income from these investments being applied for the purposes of the trust, clearly establishes the fact of these investments being part of the corpus of the trust. 42. In view of the foregoing discussions, as also bearing in mind the entirety of the case, learned Commissioner was clearly in error in invoking powers under section 263 on the ground that the Assessing Officer failed to examine the investments of the trust complying with the provisions of Section 11(5) and Section 13(1)(d) of the Act. We disapprove his action on this point as well.” 6. Since, the facts in the impugned AY are identical to the facts in AY 2014-15 and the reasons for invoking revisional powers in the impugned AY are similar to the reasons stated in AY 2014-15, the findings given by the co-ordinate bench disapproving the action of CIT(E) in exercising revisional jurisdiction would mutates mutandis apply to the impugned AY. 7. For the reasons stated above, we hold that the CIT(E) has erred in exercising revisional jurisdiction on the ground that the AO has failed to make necessary enquiries with regard to the nature of investments made by the assessee. Ergo, the impugned order is quashed and the appeal of assessee is allowed. Order pronounced in the open court on Wednesday, the 16 th day of February, 2022. Sd/- Sd/- (G.S. PANNU) (VIKAS AWASTHY) अȯƗ / PRESIDENT Ɋाियक सद˟/JUDICIAL MEMBER मुंबई/Mumbai, िदनांक/Dated: 16/02/2022 SK, Sr.PS 13 आअसं.773/मुं/2021(िन.व.2016-17) ITA NO.773/MUM/2021 (A.Y.2016-17) Ůितिलिप अŤेिषत/Copy of the Order forwarded to : 1. अपीलाथŎ/The Appellant , 2. Ůितवादी/ The Respondent. 3. आयकर आयुƅ(अ)/ The CIT(A)- 4. आयकर आयुƅ CIT 5. िवभागीय Ůितिनिध, आय.अपी.अिध., मुबंई/DR, ITAT, Mumbai 6. गाडŊ फाइल/Guard file. BY ORDER, //True Copy// (Dy./Asstt. Registrar) ITAT, Mumbai