Income Tax Officer (Exemptions), Ambala V. M/s Kesho Ram Narati Devi Gupta Charitable Trust (Regd.), Ambala Cantt.

ITA 81/CHANDI/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 8550 (ITAT-CHANDIGARH)
• Duration Of Justice: 11 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-01-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 21-07-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 22-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Charitable institution
• Section: 12A; 12; 11

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SHRI H.L. KARWA, HONBLE VICE PRESIDENT AND MS. ANNAPURNA MEHROTRA, ACCOUNTANT MEMBER ITA NO. 81/CHD/2015 ASSESSMENT YEAR 2010-11 THE ITO (EXEMPTIONS) VS. KESHO RAM NARATI DEVI GU PTA AMBALA CHARITABLE TRUST (REGD.) 3703/6-11 AMBALA PAN NO. AAHFK8304L (APPELLANT) (RESPONDENT) APPELLANT BY : SH. SUSHIL KUMAR RESPONDENT BY : SH. TEJ MOHAN SINGH DATE OF HEARING : 21/01/2016 DATE OF PRONOUNCEMENT : 21/01/2016 ORDER PER ANNAPURNA MEHROTRA A.M. THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST T HE ORDER OF THE CIT(A), PANCHKULA, DATED 25.11.2014. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) IS RIGHT IN DELETING THE ADDITION OF RS.63 LACS ON ACCOUNT OF DONATION AND R S. 30 LACS BEING THE COST OF LAND MADE ON THE BASIS OF WILL OF SMT. NARATI DEVI GUPT A AND CLAIMED EXEMPT U/S 11(1)(D) OF THE IT ACT, 1961. 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) IS RIGHT IN GIVING RELIEF OF RS. 93 LACS WHICH WAS ADDED BACK BY THE AO IN TH E ABSENCE OF ANY SPECIFIC DIRECTIONS TO CONTRIBUTE IT TOWARDS CORPUS FUND AND THE DELAY IN FILING OF FORM NO. 10 WAS CONDONED BY THE WORTHY CIT, PANCHKULA FOR CLAIMING EXEMPTION U/S 11(2) OF THE IT ACT FOR ACCUMULATION OF INCOME. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESEE IS A CHARITABLE TRUST AND FILED ITS RETURN OF INCOME ON 29.07.2010 DECLARING NIL INCOME . DURING ASSESSMENT PROCEEDINGS IT WAS FOUND THAT THE ASSESSEE TRUST HA D RECEIVED RS. 63,00,000/- IN THE CAPITAL ACCOUNT AS DONATION FROM ONE SMT. NARAT I DEVI, WHO WAS THE SETTLOR OF THE TRUST, THROUGH HER WILL. IT WAS ALSO FOUND T HAT SMT. NARATI DEVI HAD ALSO 2 DONATED 15 MARLA LAND SITUATED AT PATTRI JHAMBRA, T EHSIL SHAHBAD, DISTRICT KURUKESHTRA THROUGH HER WILL WHICH HAD NOT BEEN ACC OUNTED FOR IN THE BOOKS OF THE ASSESSEE. THE A.O. OBSERVED THERE WAS NO SPECIF IC DIRECTION IN THE WILL TO TREAT THE DONATIONS AS PART OF CORPUS FUNDS. ON BEI NG ASKED TO EXPLAIN WHY THESE DONATIONS SHOULD NOT BE TREATED AS THE TRUSTS INCOME U/S 12 OF THE ACT, THE ASSESSEE MOVED AN APPLICATION U/S 144A SEEKING DIRE CTION FROM ADDL. CIT, AMBALA. THE ADDL. CIT ISSUED DIRECTION TO THE AO OB SERVING THAT IN ABSENCE OF ANY SPECIFIC DIRECTION FROM THE DONOR WITH REGARD T O THE DONATION OF RS.63,00,000/- AND VALUE OF 15 MARLAS LAND, THESE C ANNOT BE TREATED AS FORMING PART OF THE CORPUS FUND OF THE TRUST AND THUS DO NO T QUALIFY FOR EXEMPTION U/S 11(L)(D) OF THE ACT. THEREAFTER THE ASSESSEE EXPLAI NED DURING ASSESSMENT PROCEEDINGS THAT THE AFORESAID AMOUNTS HAD BEEN REC EIVED THROUGH THE WILL OF SMT. NARATI DEVI AND THEREFORE WERE TO BE TREATED A S A PART OF THE CORPUS FUND OF THE ASSESSEES TRUST. ALTERNATIVELY THE ASESSEE ALSO FILED FORM NO. 10 BEFORE THE A.O. FOR ACCUMULATING OR SETTING APART THE IMPUGNED AMOUNTS AND THUS CLAIMED EXEMPTIONS U/S 11(2) OF THE ACT. THE A.O. REJECTED THE CONTENTION OF THE ASSESSEE AND HELD THAT SINCE THERE WAS NO SPECIFIC DIRECTION IN THE WILL TO TREAT THE AMOUNTS DONATED AS BEING TOWARDS THE CORPUS OF THE TRUST, THE SAME WERE TO TREATED AS VOLUNTARY DONATIONS. FURTHER, THE A.O . HELD THAT FORM 10 FILED BY THE ASSESSEE WAS AN AFTERTHOUGHT AND MOREOVER NO SPECIF IC PURPOSE HAS BEEN MENTIONED IN FORM NO. 10 FOR ACCUMULATING THE INCOM E. LD. A.O. THEREFORE HELD THAT EVEN ALTERNATIVELY THE ASSESSEE WAS NOT ENTITL ED TO CLAIM EXEMPTION U/S 11(2) OF THE AMOUNT ACCUMULATED. LD. A.O. THEREFORE , MADE ADDITION OF RS. 63,00,000/- TO THE INCOME OF THE ASSESSEE AS BEING VOLUNTARY DONATION RECEIVED AND WORKED OUT THE VALUE OF THE LAND DONATED AT RS. 30,00,000/- AND MADE ADDITION OF THE SAME ALSO. THUS AN ADDITION OF RS. 93,00,000/- WAS MADE TO THE INCOME OF THE ASSESSEE. 3 4. AGGRIEVED BY THE SAME THE ASSESSEE FILED APPEAL BEFORE THE LD. CIT(A), WHO DELETED THE ADDITION MADE BY HOLDING THAT THE D ONATIONS RECEIVED WERE CORPUS DONATIONS. THE LD. CIT(A) HELD AT PARA 4.6 T O 4.11 OF THE ITS ORDER AS FOLLOWS:- 4.6 AFTER CONSIDERING THE FACTS AND SUBMISSIONS, I T IS FOUND THAT THOUGH THE SPECIFIC DIRECTION TO FORM PART OF THE CORPUS HAS N OT BEEN MENTIONED SPECIFICALLY IN THE WILL BUT THE FACTS CLEARLY ESTABLISHES THE I NTENTION OF THE SETTLOR BY EXECUTING THE TRUST DEED AND WILL THAT ALL THE MOVA BLE AND IMMOVABLE PROPERTIES HELD BY HER WILL BE USED FOR THE CHARITA BLE PURPOSE THROUGH CREATION OF A TRUST IN THE NAME OF HER LATE HUSBAND AND HER NAM E. THE PROVISIONS FOR THE FUND CREATED THROUGH THE TRUST DEED ALSO SHOWS THAT FUND WILL CONSTITUTE OTHER SUMS/PROPERTIES MOVABLE AND IMMOVABLE COMING INTO T HE POSSESSION OF TRUSTEES. THE REGISTERED WILL HAS ALSO BEEN SPECIFICALLY MADE TO TRANSFER OF ALL IMMOVABLE AND MOVABLE PROPERTIES OWNED BY SMT. NARATI DEVI TO THE CHARITABLE TRUST AFTER HER DEATH. NORMALLY, A DONATION IS MADE IN THE LIFE TIME OF THE DONOR WHICH CAN BE CONSIDERED TO BE A DEEMED DONATION FOR THE PURPO SE OF SECTION 11 BUT THE TRANSFER OF PROPERTIES TO THE TRUST AFTER THE DEATH OF DONOR BY WAY OF REGISTERED WILL OF THE SETTLOR WILL ONLY CONSTITUTE AS DONATIO N IMPLIED TOWARDS TO CORPUS FUND OF THE TRUST. NORMALLY A PERSON CANNOT BE EXPECTED TO INCLUDE THE WORDS IN THE WILL AS PER PROVISIONS OF THE ACT BUT THE APPARENT INTENTION OF THE SETTLOR IS REFLECTED IN THE WILL. THE TRUSTS AS WELL AS WILL W ERE CREATED WITH SPECIFIC INTENTION TO UTILISE ALL HER IMMOVABLE AND MOVABLE PROPERTIES AFTER HER DEATH FOR THE CHARITABLE PURPOSES. FURTHER, THE APPELLANT HAS REL IED ON FEW COURT DECISIONS WHICH SUPPORT THE VIEW ADOPTED BY THE APPELLANT. 4.7 THE HON'BLE HIGH COURT OF KARNATAKA IN THE CASE OF DIT VS. SRI RAMAKRISHNA SEVA ASHRAMA 357 ITR 731 HELD THAT IT IS NOT NECESS ARY THAT A VOLUNTARY CONTRIBUTION SHOULD BE MADE WITH A SPECIFIC DIRECTI ON TO TREAT IT AS A CORPUS BY OBSERVING AS UNDER :- 'THE WORD 'CORPUS' IS USED IN THE CONTEXT OF THE AC T. ONE HAS TO UNDERSTAND THE SAME IN THE CONTEXT OF A CAPITAL, OPPOSED TO AN EXP ENDITURE. IT IS A CAPITAL OF AN ASSESSEE; A CAPITAL ON AN ESTATE; CAPITAL OF A TRUS T; A CAPITAL OF AN INSTITUTION. THEREFORE, IF ANY VOLUNTARY CONTRIBUTION IS MADE WI TH A SPECIFIC DIRECTION, IT SHALL BE TREATED AS THE CAPITAL OF THE TRUST FOR CARRYING ON ITS CHARITABLE OR RELIGIOUS ACTIVITIES, THEN, SUCH AN INCOME FALLS U/S LL(L)(D) AND IS 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 O F THE DONOR IS TO GIVE THAT MONEY TO A TRUST WHICH THEY WILL KEEP IT IN TRUST ACCOUNT IN DEPOSIT AND THE INCOME FROM THE SAME IS UTILIZED FOR CARRYING ON A PARTICULAR ACTIV ITY, IT SATISFIES THE DEFINITION PART OF THE CORPUS. THE ASSESSEE WOULD BE ENTITLED TO THE B ENEFIT OF EXEMPTIONS FROM PAYMENT OF TAX LEVIED. THEREFORE, WHAT ULTIMATELY REVEALS THAT, - (I) THE INTENTION OF THE DONOR AND (II) HOW THE RECIPIENT-ASSESSEE TREATS THE SAID INCOME. IF T HE INTENTION OF THE DONOR IS THAT THE AMOUNT/DONATION GIVEN IS TO BE TREATED AS CAPIT AL AND THE INCOME FROM THAT CAPITAL HAS TO BE UTILIZED FOR THE CHARITABLE PURPO SES, THEN THE SAID VOLUNTARY CONTRIBUTION IS TOWARDS THE PART OF THE CORPUS OF T HE TRUST. SIMILARLY, THE ASSESSEE AFTER RECEIVING THE AMOUNT, KEEPS THE AMOUNT IN DEP OSIT AND ONLY UTILIZE 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 REL EVANCE AS LONG AS THE CONTRIBUTION RECEIVED ARE KEPT IN DEPOSIT AS CAPITA L AND ONLY THE INCOME FROM THE SAID CAPITAL WHICH IS TO BE UTILIZED FOR CARRYING O N CHARITABLE AND RELIGIOUS ACTIVITIES OF THE INSTITUTE/CORPUS OF THE TRUST, FO R WHICH SECTION LL(L)(D) IS ATTRACTED AND THE SAID INCOME IS NOT LIABLE FOR TAX UNDER THE ACT. ' 4 4.8 FURTHER, REFERENCE IS MADE TO THE CASE OF SMT. SHANTABEN NATWARLAL HARGOVANDAS FOUNDATION VS. ADIT (EXEMPTION) ITA NO. 7517 (MUM.) OF 1997, DECIDED BY THE HON'BLE ITAT MUMBAI BENCH. IN THIS C ASE, THE ASSESSEE TRUST RECEIVED DONATION THROUGH A WILL AND CLAIMED EXEMPT ION THEREOF. THE AO DENIED THE SAME ON THE GROUND THAT IT WAS NOT CLEAR FROM WILL OF DONOR THAT DONATION WAS GIVEN TO ITS CORPUS. THE HON'BLE ITAT CONSIDERING WILL AND LETTER OF ITS EXECUTOR HELD THAT SAID DONATION RECEIVED BY AS SESSEE WAS TOWARDS ITS CORPUS AND SHOULD BE CONSIDERED ENTITLED TO EXEMPTION U/S 1 L(L)(D) OF THE ACT. 4.9 THE AO HAS ALSO TAKEN GROUND THAT THE ASSESSEE HAS SHIFTED ITS STAND FROM THE ISSUE OF CORPUS FUND AND FILED FORM NO. 10 TO TREAT THE AMOUNT OF RS.63,00,000/- AND THE VALUE OF PROPERTY RECEIVED THROUGH WILL OF SMT. NARATI DEVI AS ACCUMULATED OR SET APART FOR CARRYING OUT THE TRUST S CHARITABLE PURPOSES. THE AO CONCLUDED THAT FORM, NO. 10 FILED BY THE APPELLANT DOES NOT HAVE ANY LEGAL SANCTITY AS THE SAME WAS FILED AFTER THREE YEARS FR OM THE END OF RELEVANT PREVIOUS YEAR. ON THE AO'S STAND, THE APPELLANT HAS SUBMITTE D THAT THE TRUST HAS TO FILE FORM NO. 10 ON EXPECTATION OF ADVERSE/UNFAVOURABLE INTENTION OF THE AO. THE CIT, PANCHKULA VIDE HER ORDER DATED 11.04.2013 HAS CONDONE THE DELAY FOR FILING FORM NO. 10 FOR THE SAID YEAR. THUS, THE FORM NO. 1 0 HAS ALSO PRESUMED ITS LEGAL SANCTITY AND BENEFITS ON ITS BASIS OR ALLOWABLE AS PER STATUTORY PROVISIONS. IN VIEW OF ACCEPTANCE OF FORM NO. 10 AFTER CONDONATION OF DELA Y BY CIT, PANCHKULA, THE ARGUMENT TAKEN BY THE AO IN THE ORDER HAVE NO LEGAL SANCTITY. 4.10 REGARDING THE VALUE OF 15 MARIAS LAND WHICH HA S BEEN ESTIMATED ON THE BASIS OF COMMERCIAL RATE ADOPTED ON THE BASIS OF CO LLECTORATE RATE, THE APPELLANT HAS SUBMITTED THE INCOME OF THE SAID LAND CANNOT BE INCLUDED IN THE INCOME OF TRUST AS THE SAME HAS NOT BEEN TRANSFERRED IN THE N AME OF THE TRUST. ALTHOUGH, THE STAND TAKEN BY THE APPELLANT IS NOT CORRECT AS THE LAND HAS ALREADY BEEN DONATED TO THE TRUST AND THE POSSESSION OF LAND IS IN THE HANDS OF THE TRUST. HOWEVER, CONSIDERING THE OTHER FACTORS AND CONSIDER ING THE LAND TO BE PART OF THE CORPUS FUND THE ALTERNATIVE GROUND ON THE VALUATION OF THE LAND DOES NOT STAND. 4.11 IN VIEW OF AFORESAID, I AM OF THE OPINION THAT IN THE INSTANT CASE THE INTENTION OF THE DONOR WHO WAS SETTLOR OF THE TRUST THROUGH H ER WILL MADE THE DONATION APPARENTLY TOWARDS THE CORPUS OF THE TRUST. THEREFO RE, THE TRUST IS ENTITLED FOR EXEMPTION U/S LL(L)(D) OF THE ACT FOR CONTRIBUTION OF THE SUM OF RS.63,00,000/- AND THE IMMOVABLE PROPERTY OF 15 MARIA LAND RECEIVED BY THE TRUST BY WAY OF WILL OF LATE SMT. NARATI DEVI. THESE GROUNDS OF APPEAL ARE ALLOWED. 5. AGGRIEVED BY THE SAME, THE REVENUE FILED THE PRE SENT APPEAL BEFORE US. 6. BEFORE US, LD. AR RELIED UPON THE ORDER OF THE C IT(A) AND STATED THAT THE INTENTION OF THE DONOR WAS TO MAKE CORPUS DONATION, WHICH WAS EVIDENT FROM THE COMBINED READING OF THE TRUST DEED AND THE WILL OF THE DONOR. LD. AR FURTHER RELIED ON THE DECISION OF THE ITAT MUMBAI BENCH IN THE CASE OF SMT. SHANTABEN NATWARLAL HARGOVANDAS FOUNDATION VS. ADIT (EXEMPTIO N) ITA NO. 7517 (MUM.) OF 1997, REPORTED AT 3 SOT 838 (MUM) TO STATE THAT THE DONA TIONS MADE THROUGH THE WILL WAS TO BE TREATED AS DONATION TOWARDS THE CORPUS OF THE TRUST AND THUS COULD NOT BE INCLUDED IN THE INCOME OF THE ASSESSEE TRUST. 5 7. LD. DR ON THE OTHER HAND RELIED UPON THE ORDER O F THE A.O. AND STATED THAT IN THE ABSENCE OF ANY SPECIFIC DIRECTION IN TH E WILL OF THE DONOR, TO TREAT THE DONATIONS TOWARDS THE CORPUS OF THE TRUST, THE SAME COULD NOT BE HELD AS CORPUS DONATION AND WERE TO BE TREATED AS VOLUNTARY DONATION TO BE SUBJECTED TO TAX AN INCOME OF THE ASSESSEE AS PER THE PROVISI ON OF SECTION 12A OF THE INCOME TAX ACT, 1961. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE AUTHORITIES BELOW. 9. THE UNDISPUTED FACTS EMERGING IN THE PRESENT CAS E IS THAT DURING THE IMPUGNED ASSESSMENT YEAR, THE ASSESSEE TRUST RECEIV ED A DONATION OF RS. 63,00,000/- PLUS 15 MARLA LAND SITUATED FROM ONE SM T. NARATI DEVI WHO WAS ALSO THE SETTLOR OF THE TRUST, THROUGH HER WILL DATED 02 .07.2008. THE ISSUE TO BE ADJUDICATED UPON IS WHETHER THE IMP UGNED DONATION AMOUNTS TO CORPUS DONATION OR IS A VOLUNTARY DONATION TO BE SUBJECTED TO TAX AS PER SECTION 12 OF THE ACT. CORPUS DONATION, AS THE NAME SUGGESTS IS DONATION T OWARDS THE CAPITAL OF THE TRUST. SUCH DONATIONS ARE NOT TREATED AS INCOME DER IVED FROM PROPERTY OF THE TRUST AND ARE THEREFORE NOT SUBJECTED TO TAX. VOLUN TARY DONATION, ON THE OTHER HAND, WHICH ARE FULLY EXPENDABLE, ARE TREATED AS IN COME OF A CHARITABLE TRUST. WHETHER A DONATION IS CORPUS OR VOLUNTARY IS TO BE DETERMINED FROM THE INTENTION OF THE DONOR AND THE TREATMENT GIVEN BY THE RECIPIE NT TO THE SAID DONATION. THE HONBLE KARNATAKA HIGH COURT IN DIT (EXEMPTIONS) & ANR. VS. SRI RAMAKRISHNA SEVA ASHARAMA (2013) 357 ITR 731 (KAR.) HAS HELD TH AT DIRECTION FOR TREATING VOLUNTARY CONTRIBUTIONS AS TOWARDS CORPUS RECEIVED NEED NOT BE IN WRITING. THE SAME CAN BE GATHERED FROM THE INTENTION OF THE DONO R AND THE TREATMENT GIVEN BY THE RECIPIENT. IN VIEW OF THE SAME WE DO NOT AGR EE WITH THE CONTENTION OF THE 6 LD. DR THAT SINCE THERE IS NO SPECIFIC DIRECTION IN THE WILL TO TREAT THE DONATION AS TOWARDS CORPUS, THEY SHOULD NOT BE TREATED AS CORPU S DONATION. BUT HAVING SAID SO, IT IS IMPERATIVE TO DETERMINE T HE TRUE INTENTION OF THE DONOR AND THE RECIPIENT OF THE DONATION I.E. THE ASSESSEE , WHETHER IT WAS TO TREAT THE DONATION AS CONTRIBUTING TOWARDS THE CAPITAL OF THE TRUST. FOR DERIVING THE AFORESAID INTENTION, THE FACT THAT THE DONOR IS ALSO THE SETTLOR OF THE TRUST IS AN IMPORTANT FACT. COMBINING THIS FACT WITH THE RELEVANT CLAUSES IN THE TRUST DEED AND WILL OF THE DONOR, WOULD REVEAL THE INTENTION OF THE DONOR AND ALSO THE RECIPIENT OF THE DONATION. THE RELEVANT CL AUSES OF THE TRUST DEED DEALING WITH FUNDS READS AS FOLLOWS:- TRUST DEED (III) THE ORIGINAL SUM OF RS. 21,000/- DONATED BY SETTLER AND OTHER SUMS PROPERTIES MOVABLE AND IMMOVABLE COMING INTO THE POSSESSION OF THE TRUSTEES UNDER THESE PRESENTS, WILL FORM PART OF THE TRUST FUNDS. FUNDS :- (XIII) (I) FOR THE PRESENT A SUM-OF RS.21,000/- (TWENTY ONE THOUSANDS ONLY) HAS BEEN EARMARKED AND PROVIDED BY THE SAID SMT. NARATI DEVI, AUTHOR OF THE TRUST TO FORM THE NUCLEUS. THIS SHALL BE KEPT AS THE RESERVE FUND AND THE INCOME ALONGWITH OTHER ADDITIONAL FUNDS MAY BE SPENT TO ACHIEVE T HE AIMS AND THE OBJECTS OF AND FOR THE PURPOSES OF THE TRUST AND IT SHALL BE THE F UND OF THE SOCIETY AND SHALL BE IN THE NAME OF THE TRUST NAMELY SHRI KESHO RAM NARATI DEVI GUPTA CHARITABLE TRUST. THE RESERVE FUND CAN ONLY BE SPENT WITH THE CONSENT OF TWO/THIRD MAJORITY OF THE MEMBERS FOR THE TIME BEING. (II) ALL OTHER VOLUNTARY DONATIONS AND CONTRIBUTIONS I NCLUDING AID AND ANONYMOUS DONATIONS, IF ANY, SHALL BE DEPOSITED IN THE SAME FUND. (III) THE FUND OF THE TRUST MAY BE DEPOSITED IN SOME SCHEDULED BANK / BANKS OR WITH SOME RELIABLE CONCERNS OF REPUTE AND CREDIT AS DECIDED BY THE BOARD OF TRUSTEES FROM TIME TO TIME IN THE NAME OF THE SAID SHRI KESHO RAM NARATI DEVI GUPTA CHARITABLE TRUST, AMBALA CANTT. (IV) ALL ACCOUNTS IN THE BANK OR WITH THE BANKERS SH ALL BE OPERATED UPON BY THE PRESIDENT OR MANAGING TRUSTEE OR BY THE PRESIDEN T AND-SECRETARY OR ANY ONE OF THE TRUSTEES DECIDED UPON BY BOARD OF TRUSTEES. THE RELEVANT PORTION OF THE WILL TRANSFERRING THE I MPUGNED MOVABLE AND IMMOVABLE PROPERTY OF THE DONOR READS AS FOLLOWS:- WILL THEREFORE I HAVE RIGHT TO GIVE THE SAID PROPERTI ES TO ANY PER SON, I HAVE ESTABLISHED SHRI KESHO RAM NARATI DEVI GUPTA CHARIT ABLE TRUST, AMBALA CANTT. ON 01.06.2005, AND I AM THE TRUSTEE OF THE SAID TRUST. I AM OLD BUT WITH MY FULL SENSES AND SOUND MIND KEEPING IN VIEW OF T HE LOSS AND PROFIT AND THERE IS NO CERTAINITY OF LIFE WHEN THIS MORTAL IRAME COLLA SPED AND THEREFORE IN MY LIFE TIME I WANT TO ARRANGEMENT OF MY PROPERTY. SO T HAT AFTER MY DEATH NO DISPUTE ARISE AMONGST MY LEGAL HEIRS AND THE PROPERTY WILL NOT RUINED DUE TO DISPUTES. 7 THEREFORE WITH MY FULL SENSES AND SOUND MIND KEEP ING IN VIEW OF LOSS AND PROFIT WITHOUT ANY PRESSURE 1 AM EXECUTING THIS IN TJ.1 . THAT DURING MY LIFE TIME .I SHALL BE ABSOLUTE OWNER OF THE SAID MOVEABLE END IMMOVEABLE PROPERTIES, AND AFTER MY DEATH MY ABOVE SAID MOVEABLE AND IMMOVEABLE PROPERT IES BANK ACCOUNTS AND THE BALANCES LYINNG IN THE BANK ACCOUNTS FIX ED DEPOSITS AND THE AMOUNT WHICH WAS LYING IN RR.Y BANK ACCOUNTS AT THE TIME OF MY DEATH SHARES WHICH ARE IN MY NAME OR I ACQUIRE IN FUTURE W ILL BECOME THE ABSOLUTE OWNER SHRI KESHO RAM NARATI DEVI GUPTA CHARITABLE TRUST 3 703/6-11 BEHIND S D GIRLS HOSTEL AMBALA CANTT. THE TRUST WILL USE THE SAI D AMOUNT AS PER TRUST DEED FOR THE WELFARE OF THE PEOPLE, AND HAVE FULL RIGHT TO USE THE SAID AMOUNT, .-O OTHER PERSON OR LEGAL HEIR HAVE ANY- RIGHTS ON MY ABOVE MENTIONED MOVEABLE AND IMMOVABLE PROPERTY EXCET THE TRUST, REGARDING THIS MOVEABLE AND IMMOVEABLE PROPERTY THIS IS MY LEST WILL. IN CASE ANY PERS ON OR MY LEGAL HEIR OR ANY RELATIVES CHALLANGE THIS KILL THEN THE SAME SHALL BE TREAT ED AS NULL AND VOID OR FAKE. THEREFORE I HAVE WRITTEN THIS WILL SO THAT IT SER VE THE DOCUMENTARY EVIDENCE AT THE TIME OF NEED. DT. 02.07.2008. A COMBINED READING OF THE ABOVE REVEALS THAT THE SE TTLOR OF THE TRUST WHO HAD CREATED THE TRUST WITH AN INITIAL CAPITAL OF RS. 21 ,000/- HAD INTENDED CREATING A RESERVE FUND FROM ALL CONTRIBUTION , AIDS AND DON ATIONS TO BE USED FOR THE PURPOSE OF THE TRUST. FURTHER THE SETTLOR HERSELF H AD TRANSFERRED OWNERSHIP OF ALL HER MOVABLE AND IMMOVABLE PROPERTY TO THE TRUST, AF TER HER DEATH THROUGH HER WILL. THE INTENTION THEREFORE WAS CLEARLY TO SETTLE HER ENTIRE WEALTH TOWARDS THE CAPITAL OF THE TRUST 10. WE THEREFORE CONCUR WITH THE FINDINGS OF THE LD . CIT(A) AND HOLD THAT THE AMOUNTS DONATED THROUGH WILL AMOUNTING TO RS. 63,00 ,000/- AND LAND MEASURING 15 MARLA, WERE TOWARDS THE CORPUS OF THE TRUST AND THUS CANNOT BE TREATED AS INCOME OF THE ASSESSEE U/S 11 OF THE INC OME TAX ACT, 1961. REGARDING THE ISSUE OF VALUATION OF LAND, SINCE WE HAVE HELD THE DONATION TO BE CORPUS DONATION EXEMPT U/S 11(1)(D) OF THE ACT, THE GROUND RELATING TO VALUATION OF LAND REMAINS ONLY ACADEMIC IN NATURE AND IS THER EFORE NOT BEING ADJUDICATED UPON. 11. GROUND NO. 1 RAISED BY THE REVENUE IS THEREFORE DISMISSED. 12. IN GROUND NO. 2 THE REVENUE HAS AGITATED AGAINS T THE RELIEF GRANTED BY THE LD. CIT(A) OF RS. 93 LACS RECEIVED BY THE ASSES SEE TRUST THROUGH THE WILL OF THE 8 DONOR. SMT. NARATI DEVI GUPTA, DESPITE THE FACT THA T F.NO. 10 FOR ACCUMULATION OF INCOME WAS FILED DELAYED BY THE ASSESSEE. 13. BRIEFLY STATED, DURING ASSESSMENT PROCEEDING TH E ASSESSEE WHILE CONTENDING THAT THE DONATIONS RECEIVED THROUGH WILL , WERE CORPUS DONATIONS, HAD ALSO ALTERNATIVELY FILED F.NO. 10 FOR ACCUMULAT ING THE AFORESTATED INCOME AND CLAIMING EXEMPTION OF THE SAME AS PER THE PROVI SION OF SECTION 11(2) OF THE INCOME TAX ACT, 1961. THE AO DENIED BENEFIT OF THE SAME FOR THE REASON THAT THEY WERE FILED THREE YEARS AFTER THE END OF THE RE LEVANT PREVIOUS YEAR, AND MUCH AFTER THE PRESCRIBED TIME LIMIT U/S 11(2). IN APPEAL, LD. CIT(A), REJECTED THE CONTENTION OF THE AO BY HOLDING THAT THE DELAY IN F ILING F.NO. 10 HAD BEEN CONDONED BY THE CIT, PANCHKULA VIDE HER ORDER DT. 1 1/04/2013. 14. WE HAVE HEARD THE ARGUMENTS OF THE REPRESENTATI VES OF BOTH THE PARTIES AND HOLD THAT IN VIEW OF OUR FINDING IN PARA 10 OF THIS ORDER THAT THE IMPUGNED DONATIONS ARE CORPUS DONATIONS NOT LIABLE TO TAX AS PER SECTION 11(1)(D) OF THE ACT, THERE WAS NO REQUIREMENT TO FILE F.NO. 10 BY T HE ASSESSEE AT ALL. WE THEREFORE FIND NO MERIT IN THIS GROUND RAISED BY TH E REVENUE AND DISMISS THE SAME. 15. IN THE RESULT THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 21/01/2016. SD/- SD/- (H.L. KARWA) (ANNAPURNA MEHROTRA) VICE PRESIDENT ACCOUNTANT MEMBER DATED : 21/01/2016 AG COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT, TH E CIT(A), THE DR