DEPUTY COMMISSIONER OF INCOME TAX (EXEMPTIONS), JAIPUR V. M/S NARI UTTHAN SANSTHAN, JAIPUR

ITA 962/JPR/2018

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 6492 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-09-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 14-08-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BK GUPTA
• Assessee Lawyers: ANUP BHATIA CA DHK
• Keywords: Capital asset; Business income; Charitable institution; Additional evidence; Question of law; Benefit of exemption; Set aside
• Section: 143(3); 12A; 12AA; 10B; 250; 143(2); 44AB; 13; 22; 10(23C); 131; 6; 12; 11

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES B, JAIPUR JH JES'K LH 'KEKZ] YS[KK LNL; ,OA JH FOT; IKY JKO] U;KF;D LNL; DS LE{K BEFORE: SHRI RAMESH C SHARMA, AM & SHRI VIJAY PAL RAO, JM VK;DJ VIHY LA - @ ITA NO. 962/JP/2018 FU/KZKJ.K O'KZ @ ASSESSMENT YEAR: 2012-13 D.C.I.T.(EXEMPTIONS), CIRCLE, JAIPUR. CUKE VS. M/S NARI UTTHAN SANSTHAN, C/O- UMA RATNU VPO-BODLASI, DIST.- SIKAR. LFKK;H YS[KK LA -@THVKBZVKJ LA -@ PAN/GIR NO.: AAAJN 0272 F VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS @ REVENUE BY : SHRI B.K. GUPTA (CIT-DR) FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI ANUP BHATIA (CA) LQUOKBZ DH RKJH[K @ DATE OF HEARING: 24/07/2020 MN?KKS'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT :09/09/2020 VKNS'K@ ORDER PER: R.C. SHARMA, A.M. THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 22/05/2018 OF LD. CIT(A)-1, JODHPUR CAMP AT JAIPUR FOR THE A.Y. 2012-13 IN THE MATTER OF ORDER PASSED U/S 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT, THE ACT). 2. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. THE FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE I.E. NARI UTTHAN SANSTHAN IS A CHARITABLE INSTITUTION, WHICH IS REGISTERED UNDER SOCIETIES REGISTRATION ACT AND ALSO UNDER SECTION 12AA OF THE ACT. IT FILED THE RETURN OF INCOME FOR A.Y. 2012-13 ON 16-01-2013 2 ITA NO. 962/JP/2018 DCIT VS. NARI UTTHAN SANSTHAN ADMITTING THE TOTAL INCOME AT RS. NIL. THE RETURN WAS SELECTED FOR SCRUTINY UNDER CASS AND NOTICE U/S 143(2) OF THE ACT WAS ISSUED ON 07-08-2013. THE ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT ON 30-03-2015 DETERMINING THE TOTAL INCOME AT RS. 3,60,18,483/- BY MAKING VARIOUS ADDITIONS / DISALLOWANCES. 3. IN THE COURSE OF ASSESSMENT, THE A.O. TREATED THE RECEIPT OF RS. 5,60,05,920/- FROM MILK TRADE ACTIVITY AS COMMERCIAL ACTIVITY AND FURTHER ESTIMATED RS. 56,00,592/- BEING 10% OF TOTAL RECEIPTS AS INCOME OF THE ASSESSEE AS AGAINST RS. 15,66,425/-SHOWN BY THE ASSESSEE. 4. BY THE IMPUGNED ORDER, THE LD. CIT(A) ALLOWED THE ASSESSEES CLAIM AND HELD THAT RECEIPT FROM MILK TRADE WAS NOT A COMMERCIAL ACTIVITY. THE PRECISE OBSERVATION OF THE LD. CIT(A) WAS AS UNDER: 5.3 I HAVE CONSIDERED THE FACTS OF THE CASE AND SUBMISSIONS OF THE APPELLANT I FIND THAT THE AO HELD THAT MILK COLLECTION AND DISBURSEMENT ACTIVITY CARRIED OUT BY THE ASSESSEE WAS A BUSINESS ACTIVITY, WHICH ATTRACTED PROVISO TO SECTION 2(15) CONSEQUENTLY HELD THAT PROVISIONS OF SEC. 13(8) ALSO ATTRACTED IN ASSESSEE'S CASE. AS PER THE AO THIS BUSINESS ACTIVITY WAS CARRIED OUT OTHER THAN THE ACTIVITY OF CHARITABLE NATURE, THEREFORE, HE HELD THAT THE ASSESSEE WAS REQUIRED TO MAINTAIN SEPARATE BOOKS OF ACCOUNTS FOR THIS BUSINESS AS PER SEC. 11(4A). THE AO WHILE DENYING THE EXEMPTION U/S. 11 & 12, IN THE ABSENCE OF DOCUMENTARY EVIDENCES, ESTIMATED THE ASSESSEE'S INCOME FROM THIS INCOME TO THE EXTENT OF 10% OF GROSS RECEIPTS I.E. RS. .56,00,592/- AS AGAINST RS. 15,66,425/- DECLARED BY THE 3 ITA NO. 962/JP/2018 DCIT VS. NARI UTTHAN SANSTHAN ASSESSEE. THE CRUX OF THE APPELLANT'S SUBMISSIONS IS THAT MILK TRADE ACTIVITIES ARE REQUIRED TO BE SEEN AS A WHOLE, AND NOT IN ISOLATION, TO EACH OTHER AS THE ACTIVITIES OF MILK COLLECTING AND DISBURSEMENT WAS ONLY IN THE NATURE TO SUPPORT THE WOMEN WELFARE WHICH IS A MAIN OBJECT OF THE ASSESSEE SOCIETY. THE APPELLANT ALSO TRIED TO PROVE THAT THERE WAS NO ELEMENT OF BUSINESS INVOLVED IN THIS ACTIVITY. TO SUPPORT ITS CASE, THE APPELLANT FURNISHED DETAILS /NAME OF VARIOUS WOMEN, WHO GOT BENEFITED BY THIS ACTIVITIES / PROJECTS. THE APPELLANT STRONGLY ARGUED THAT THE WELFARE APPROACH IMPLEMENTED BY THE ASSESSEE SOCIETY WITH THE HELP OF DONORS, UNDER NO STRETCH OF INTERPRETATION CAN BE TREATED AS A BUSINESS COMMERCIAL ACTIVITY. AFTER CONSIDERING THE VARIOUS CONTENTIONS AND SUBMISSIONS OF THE APPELLANT, I TEND TO AGREE WITH THE SAME. TO APPRECIATE THE ABOVE WE CONSIDER IT APPROPRIATE TO READ THE PROVISIONS CONTAINED IN SECTION 2(15) OF THE ACT WHICH ARE REPRODUCED AS UNDER: '2(15) 'CHARITABLE PURPOSE' INCLUDES RELIEF OF THE POOR, EDUCATION, MEDICAL RELIEF, PRESERVATION OF ENVIRONMENT (INCLUDING WATERSHEDS, FORESTS AND WILDLIFE) AND PRESERVATION OF MONUMENTS OR PLACES OR OBJECTS OF ARTISTIC OR HISTORIC INTEREST, AND THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY: PROVIDED THAT THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY SHALL NOT BE A CHARITABLE PURPOSE, IF IT INVOLVES THE CARRYING ON OF ANY ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINESS, OR ANY ACTIVITY OF RENDERING ANY SERVICE IN RELATION TO ANY TRADE, COMMERCE OR BUSINESS, FOR A CESS OR FEE OR ANY OTHER CONSIDERATION, IRRESPECTIVE OF THE NATURE OF USE OR APPLICATION, 017 RETENTION, OF THE INCOME FROM SUCH ACTIVITY: PROVIDED FURTHER THAT THE FIRST PROVISO SHALL NOT APPLY IF THE AGGREGATE VALUE OF THE RECEIPTS FROM THE ACTIVITIES REFERRED TO THEREIN IS TWENTY- FIVE LAKH RUPEES OR LESS IN THE PREVIOUS YEAR;' 5.3.1. SECTION 2(15) DEFINES CHARITABLE PURPOSE TO INCLUDE EDUCATION. THERE IS NO RESTRICTION IMPOSED IN THE MANNER AND MODE OF EDUCATION UNDER THIS ACT. FURTHER THE PROVISO TO SECTION 2(15) OF THE ACT PROVIDES THAT THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC SHALL NOT BE A CHARITABLE PURPOSE IF IT INVOLVES THE CARRYING ON ANY 4 ITA NO. 962/JP/2018 DCIT VS. NARI UTTHAN SANSTHAN ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINESS OR ANY ACTIVITY OF RENDERING ANY SERVICE IN RELATION TO ANY TRADE, COMMERCE OR BUSINESS, FOR A CESS OR FEE OR ANY OTHER CONSIDERATION, IRRESPECTIVE OF THE NATURE OF USE OR APPLICATION OR RETENTION OF THE INCOME FROM SUCH ACTIVITY. THUS THE ABOVE PROVISO STIPULATES THAT THE ASPECT OF COMMERCIALITY WILL BE CONFINED TO THE LAST LIMB OF SECTION 2(15) I.E. ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY AND NOT TO ANY OTHER LIMB NAMELY RELIEF OF THE POOR, EDUCATION OR MEDICAL RELIEF, PRESERVATION OF ENVIRONMENT AND PRESERVATION OF MONUMENTS OR PLACE OR OBJECT OF ARTISTIC OR HISTORICAL INTEREST. CIRCULAR NO.11 OF 2008 DATED 19.12.2008 FURTHER AMPLIFIES THE ABOVE POSITION WHEREBY IT HAS BEEN PROVIDED THAT THE INSERTION OF PROVISO TO SECTION 2(15) OF THE ACT BY FINANCE ACT 2010 WILL NOT APPLY TO THE FIRST THREE LIMBS I.E. RELIEF OF THE POOR, EDUCATION OR MEDICAL RELIEF EVEN IF IT INDEPENDENTLY INVOLVES CARRYING ON COMMERCIAL ACTIVITY. IT HAS BEEN STATED IN THE SAID CIRCULAR AS UNDER: 'THE NEWLY INSERTED PROVISO TO SECTION 2(15) WILL APPLY TO ENTITIES WHOSE PURPOSE IS ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY' I.E. THE FOURTH LIMB OF THE DEFINITION OF 'CHARITABLE PURPOSE' CONTAINED IN SECTION 2(15). I FENCE, SUCH ENTITIES WILL NOT BE ELIGIBLE FOR EXEMPTION UNDER SECTION 11 OR UNDER SECTION 10(23C) OF THE ACT IF THEY CARRY ON COMMERCIAL ACTIVITIES. WHETHER SUCH AN ENTITY IS CARRYING ON AN ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINESS IS A QUESTION OF FACT WHICH WILL BE DECIDED BASED ON THE NATURE, SCOPE, EXTENT AND FREQUENCY OF THE ACTIVITY.' IN VIEW OF THE ABOVE I FIND FORCE IN THE CONTENTION OF THE LD COUNSEL FOR THE APPELLANT THAT COMMERCIALITY IS NOT A TEST TO DETERMINE THE GENUINENESS OF THE CHARITABLE NATURE OF EDUCATION ACTIVITIES OF A TRUST OR INSTITUTION UNDER THE AMENDED PROVISION OF SECTION 2(15) OF THE ACT. 5.3.2 THE OBJECTS AND ACTIVITIES OF THE APPELLANT ARE STATED IN THE MEMORANDUM AND RULES & REGULATIONS OF THE SOCIETY: - A. ESTABLISHING OF SCHOOLS FOR PROMOTION OF EDUCATION. 5 ITA NO. 962/JP/2018 DCIT VS. NARI UTTHAN SANSTHAN B. CREATING EDUCATION AWARENESS AMONGST GIRLS AND HELPING IN ADMISSION INTO SCHOOLS. C. PROVIDING OF MEDICAL FACILITIES, EDUCATION FACILITIES AND PROVIDING OF EMPLOYMENT TO UNEMPLOYED WOMEN PARTICULARLY IN RURAL AREAS. D. FINDING OUT AND PROMOTING DIFFERENT TYPES OF ENVIRONMENT PROTECTION MODES. E. REMOVAL / ERADICATION OF SOCIAL PROBLEMS LIKE CHILD MARRIAGE, DOWRY SYSTEM ETC. F. PROVIDING OF SHELTER AND EMPLOYMENT TO SENIOR CITIZENS, PHYSICALLY HANDICAPPED PERSONS AND DEPRIVED OF WOMEN. G. PROVIDING OF HOSTEL FACILITIES TO SC/ST STUDENTS. H. EXECUTION OF VARIOUS RURAL DEVELOPMENT PROJECTS IN RURAL AREAS OF RAJASTHAN THROUGH THE HELP OF VARIOUS GOVERNMENT, NON- GOVERNMENT, NATIONAL AND INTERNATIONAL ORGANIZATIONS. 5.3.3. FROM THE ABOVE, IT IS CLEAR THAT THE PREDOMINANT OBJECTIVE OF THE ASSESSEE TRUST IS TO EMPOWER THE GIRLS, WOMEN BY IMPARTING EDUCATION, PROVIDING OF MEDICAL FACILITIES AND PROVIDING EMPLOYMENT TO THEM. TO ATTAIN ITS OBJECTS, THE ASSESSEE HAS TO REACH OUT TO ITS DONORS FOR GRANTING DONATIONS IN FORM OF A SCHEME OF ENABLING ACQUISITION OF CATTLE (BUFFALO) BY WOMEN BENEFICIARIES AND USING THEM AS PART OF THEIR LIVELIHOOD SOURCE IN FORM OF FEEDING THEM, EXTRACTING MILK THEREFROM, USING SUCH MILK NOT ONLY FOR THEIR CHILDREN BUT EVEN SELLING THE SURPLUS MILK IN MARKET TO GENERATE A SOURCE OF INCOME FOR - THEIR ECONOMIC UPLIFTMENT. 5.4. AS DISCUSSED ABOVE, THE LAST LIMB OF THE DEFINITION OF CHARITABLE PURPOSE UNDER SECTION 2(15) TALKS ABOUT THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY. THE PREDOMINANT OBJECTS AND THE VISION MAKE IT CLEAR THAT THE OBJECTS OF THE ASSESSEE ARE TO PROVIDE 'MEDICAL RELIEF 'IMPART EDUCATION' TO THE WOMEN AND GIRLS AND ITS MAKING SERIOUS EFFORTS FOR WOMEN EMPOWERMENT, HENCE THE PROVISO TO SECTION 2(15) 6 ITA NO. 962/JP/2018 DCIT VS. NARI UTTHAN SANSTHAN DOES NOT APPLY IN THE CASE OF THE ASSESSEE. THUS TO KNOW THE MISSION AND REASON OF THE ASSESSEE TRUST ONE HAS TO READ ITS OBJECTIVES IN TOTALITY. VARIOUS OTHER OBJECTIVES PROVIDED IN THE TRUST DEED ARE MERELY INDEPENDENT/ANCILLARY TO THE MAIN OBJECT WHICH IS TO PROVIDE MEDICAL RELIEF AND IMPART EDUCATION AND; EMPOWER THEM TO SURVIVE IN SOCIETY AND DO NOT IN ANY WAY CONSTITUTE OBJECTIVES OF GENERAL PUBLIC UTILITY AS CONTENDED BY THE AO. THUS THE CASE OF THE ASSESSEE DOES NOT FALL WITHIN THE LAST LIMB OF THE DEFINITION OF CHARITABLE PURPOSE GIVEN UNDER SECTION. HERE I MAY REFER TO FEW JUDGMENT OF VARIOUS COURTS WHICH SUPPORTS THE CONTENTION OF THE APPELLANT. 5.4.1. THE HON'BLE ITAT DELHI BENCH `A' IN THE CASE OF B. B. EDUCATIONAL SOCIETY VS. CIT [2018] 92 TAXMANN.COM 300 (DELHI - TRIB.) HELD THAT WHERE COMMISSIONER REJECTED ASSESSEE'S APPLICATION UNDER SECTION 12AA MAINLY ON GROUND THAT IT WAS CHARGING HEFTY FEE FROM STUDENTS, IN VIEW OF FACT THAT WHEN HEFTY FEES WAS BEING CHARGED BY ASSESSEE- SOCIETY AND AT SAME TIME, IT WAS PROVIDING FREE EDUCATION TO NEEDY STUDENTS AND FREE MEDICAL AID TO NEEDY PATIENTS, IT COULD NOT CHANGE ITS NATURE FROM CHARITABLE SOCIETY TO PROFIT MAKING SOCIETY AND, THUS, IMPUGNED ORDER PASSED BY COMMISSIONER WAS TO BE SET ASIDE. 5.4.2. THE HON'BLE ITAT CHENNAI BENCH `A' IN THE CASE OF THAMIZH THAI SEVA TRUST VS. DIRECTOR OF INCOME-TAX (EXEMPTIONS), CHENNAI [2015] 53 TAXMANN.COM 215 (CHENNAI - TRIB.) HELD THAT ACTIVITIES CARRIED OUT BY TRUST FOR PROVIDING EMPLOYMENT TO RURAL POOR COULDN'T BE HELD AS COMMERCIAL ACTIVITIES. THE RELEVANT FINDINGS AS CONTAINED IN THIS ORDER ARE REPRODUCED AS UNDER:- 'IT IS TRUE THAT THE PROVISO TO SECTION 2(15), RESTRICTS THE SCOPE OF CHARITABLE PURPOSE IN A CASE WHERE THE ACTIVITIES CARRIED ON BY AN ASSESSEE INVOLVES ACTIVITIES IN THE NATURE OF TRADE, COMMERCE OR BUSINESS, OR ANY ACTIVITY OF RENDERING ANY SERVICE IN RELATION TO ANY TRADE, COMMERCE OR BUSINESS, FOR A CESS OR FEE OR ANY OTHER CONSIDERATION, IRRESPECTIVE OF THE NATURE OF USE OR APPLICATION, OR RETENTION, OF THE INCOME FROM SUCH ACTIVITIES. IN THE PRESENT CASE, THE 7 ITA NO. 962/JP/2018 DCIT VS. NARI UTTHAN SANSTHAN OBJECT OF THE ASSESSEE TRUST IS NOT TO ORGANIZE MILK SOCIETIES AND RUN FACTORIES IN THE NATURE OF TRADE, COMMERCE OR BUSINESS. THE CRUCIAL POINT TO BE LOOKED INTO THE OBJECTIVE IS THAT THOSE ACTIVITIES ARE PROPOSED TO BE CARRIED OUT FOR 'ECONOMIC DEVELOPMENT OF RURAL, POOR WOMEN.' THE ACTIVITIES FOR THE UPLIFTMENT OF RURAL WOMEN IN INDIA ARE GENERALLY CONSIDERED AS CHARITABLE IN NATURE. IN ORDER TO IMPROVE THE ECONOMIC CONDITIONS OF POOR PEOPLE IN VILLAGES, IT IS VERY NECESSARY THAT THE RURAL POPULATION MUST ENGAGE IN SOME ECONOMIC ACTIVITIES OUT OF WHICH THEY CAN EARN REASONABLE LIVELIHOOD. ECONOMIC ACTIVITIES ARE VERY ESSENTIAL TO GENERATE INCOME, WHICH IS AGAIN ESSENTIAL TO ENSURE A SUSTAINABLE GROWTH FOR THE POOR PEOPLE IN VILLAGES. THEREFORE, CARRYING ON OF ECONOMIC ACTIVITIES FOR GENERATING INCOME FOR THE POOR PEOPLE IN VILLAGES CANNOT BE TREATED AS ACTIVITIES IN THE NATURE OF TRADE, COMMERCE OR BUSINESS. THE ACTIVITIES IN THE NATURE OF TRADE, COMMERCE OR BUSINESS HAVE ESSENTIALLY AN UNDERLYING OBJECTIVE OF EARNING PROFIT BY ASSUMING RISK. THERE IS ALSO A NECESSITY OF INTRODUCING CAPITAL INTO BUSINESS. AS FAR AS THE PRESENT CASE IS CONCERNED, THE ASSESSEE TRUST CONTEMPLATES TO HELP RURAL POOR WOMEN TO SET UP MILK SOCIETIES AND FACTORIES FOR GIVING FRUITFUL EMPLOYMENT TO SUCH RURAL WOMEN-FOLK. IN THESE CASES, HUGE CAPITAL INVESTMENTS ARE NOT CONTEMPLATED; PROFITS AND GAINS ARE NOT EXPECTED. THE CONTRIBUTION OF RURAL POOR WOMEN WILL BE IN THE NATURE OF THEIR LABOUR. INSTEAD OF WORKING AS LABOUR FOR OTHERS, THE WOMEN-FOLK ARE PROMPTED TO JOIN THEMSELVES AS GROUPS AND SOCIETIES SO THAT THEY CAN WORK FOR THEIR BETTERMENT BY AVOIDING MIDDLEMEN AND AGENTS. WHEN THE ASSESSEE TRUST CONTEMPLATES TO ORGANIZE MILK SOCIETIES FOR FACILITATING SALE OF MILK, THE UNDERLYING INTENTION IS TO GET GOOD PRICE FOR THE MILK SOLD BY THE VILLAGERS AND ALSO TO ENCOURAGE THEM TO REAR THEIR OWN MILK ANIMALS. THE VILLAGERS CAN EARN A DECENT LIVELIHOOD BY ENGAGING THEMSELVES IN REARING OF MILK ANIMALS AND SELLING OF MILK WITHOUT MIDDLEMEN AND EXPLOITATION, THROUGH THE SOCIETIES FORMED UNDER THE GUIDANCE OF THE ASSESSEE-TRUST. THIS IS THE SAME CASE WITH OTHER PROPOSED ACTIVITIES LIKE GINNING, SPINNING, FRUIT PROCESSING ETC., WHERE LABOUR OF THE VILLAGE WOMEN-FOLK COULD BE FRUITFULLY DEPLOYED, TO KEEP AWAY EXPLOITATION. [PARA 9] THE ECONOMIC ACTIVITIES IN THE ABOVE NATURE CANNOT BE TREATED AS ACTIVITIES IN THE NATURE OF TRADE, COMMERCE OR BUSINESS AS CONTEMPLATED IN PROVISO TO SECTION 2(15). THEREFORE, THE DIRECTOR OF INCOME-TAX (EXEMPTIONS) HAS CHARACTERIZED THE ACTIVITIES OF THE ASSESSEE-TRUST AS COMMERCIAL IN NATURE WITHOUT GOING INTO THE CIRCUMSTANCES IN WHICH THE ACTIVITIES ARE CONTEMPLATED TO BE CARRIED ON BY THE ASSESSEE TRUST. [PARA 10]' 5.4.3. THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF D IT VS. WOMEN'S INDIA TRUST [2015] 60 TAXMANN.COM 55 (BOMBAY) HELD THAT 8 ITA NO. 962/JP/2018 DCIT VS. NARI UTTHAN SANSTHAN WHERE MOTIVE OF ASSESSEE IS NOT GENERATION OF PROFIT BUT TO PROVIDE TRAINING TO NEEDY WOMEN IN ORDER TO EQUIP OR TRAIN THEM AND MAKE THEM SELF-CONFIDENT AND SELF-RELIANT AND OCCASIONAL SALES OR TRUST'S OWN FUND GENERATION WAS FOR FURTHERING OBJECTS OF TRUST, PROVISO TO SECTION 2(15) WOULD NOT APPLY. SIMILARLY, IN THE INSTANT CASE ALSO, COLLECTING THE MILK FROM THE NEEDY WOMEN AND PROFIT EARNED THEREON, IS NOTHING BUT MAKING THESE WOMEN SELF-CONFIDENT AND SELF-RELIANT, WHICH IS ULTIMATE OBJECT OF THE APPELLANT TRUST. EARNING PROFIT OUT OF THIS ACTIVITY IS NOT THE OF THE APPELLANT, PROFIT IS ANCILLARY. 5.5. EVEN OTHERWISE ALSO, FROM THE ACTIVITIES OF THE APPELLANT TRUST DULY PROVED THAT PROFIT FROM MILK TRADE BUSINESS WAS INCIDENTAL IN NATURE AND APPELLANT WAS NOT HIT BY PROVISO TO SECTION 2(15). IN THIS REGARD, I MAY REFER TO THE DECISION OF HON'BLE ITAT AHMEDABAD BENCH 'B' RENDERED IN THE CASE OF SABARMATI ASHRAM GAUSHALA TRUST VS. ASSISTANT DIRECTOR OF INCOME-TAX ( EXEMPTION) [2013] 35 TAXMANN.COM 552 (AHMEDABAD - TRIB.). THE HEAD NOTE IS REPRODUCED AS UNDER:- 'SECTION 2(15), READ WITH SECTION 11, OF THE INCOME-TAX ACT, 1961 - CHARITABLE PURPOSE [PROVISO] - ASSESSMENT YEAR 2009-10 - WHETHER WHERE A TRUST IS CARRYING OUT ITS ACTIVITIES ON NON-COMMERCIAL LINES WITH NO MOTIVE TO EARN PROFITS, FOR FULFILMENT OF ITS AIMS AND OBJECTIVES, WHICH ARE CHARITABLE IN NATURE AND IN PROCESS EARN SOME PROFITS, SAME WOULD NOT BE HIT BY PROVISO TO SECTION 2(15) - HELD, YES - ASSESSEE-TRUST WAS REGISTERED WITH OBJECT OF BREEDING CATTLE AND TO IMPROVE QUALITY OF COWS AND OXEN - IT HAD ALSO SOLD SEMEN, FODDER, MILK, ETC., AND IN PROCESS, EARNED SOME PROFIT - IT WAS DENIED BENEFIT OF EXEMPTION ON GROUND THAT IT WAS EARNING PROFIT OVER YEARS AND ACTIVITIES WERE COMMERCIAL IN NATURE - IT WAS FOUND THAT TRUST WAS GRANTED REGISTRATION BY CHARITY COMMISSIONER AS WELL AS BY COMMISSIONER (EXEMPTION) UNDER SECTION 12A - FURTHER, NO MATERIAL WAS PRODUCED TO SHOW THAT ASSESSEE WAS CONDUCTING ITS AFFAIRS ON COMMERCIAL LINES WITH MOTIVE TO EARN PROFIT OR IT HAD DEVIATED FROM ITS OBJECTS - WHETHER SINCE AIMS AND OBJECTS OF ASSESSEE-TRUST WERE CHARITABLE AND PROFIT EARNED FROM SAID ACTIVITIES WAS INCIDENTAL IN NATURE, IT WAS NOT HIT BY SECTION 2(15) - HELD, YES - WHETHER, 9 ITA NO. 962/JP/2018 DCIT VS. NARI UTTHAN SANSTHAN CONSEQUENTLY, ASSESSEE WAS ENTITLED TO EXEMPTION UNDER SECTION 11 - HELD, YES [PARA 7] [IN FAVOUR OF ASSESSEE]' 5.5.1. MOREOVER, THE HON'BLE DELHI HIGH COURT IN THE CASE OF MOOL CHAND KHAIRATI RAM TRUST VS. DIRECTOR OF INCOME-TAX (EXEMPTIONS) [2015] 59 TAXMANN.COM 398 (DELHI) HELD THAT ASSESSEE WOULD NOT BE ENTITLED TO EXEMPTION UNDER SECTION 11 IF ITS ACTIVITIES ARE OUTSIDE SCOPE OF ITS OBJECTS, EVEN IF ITS ACTIVITIES ARE CHARITABLE IN NATURE. THE RELEVANT OBSERVATION AS EXTRACTED FROM THIS ORDER ARE GIVEN AS UNDER:- 'SECTION 11, READ WITH SECTIONS 12 AND 12A, OF THE INCOME-TAX ACT, 1961 CHARITABLE OR RELIGIOUS TRUST - EXEMPTION OF INCOME FROM PROPERTY HELD UNDER (APPLICATION OF INCOME) - ASSESSMENT YEAR 2006-07 - WHETHER ASSESSEE WOULD BE ENTITLED TO EXEMPTION UNDER SECTION 11(1)(A), ONLY IF INCOME IS APPLIED FOR CHARITABLE PURPOSE FOR WHICH PROPERTIES ARE HELD IN TRUST - HELD, YES - WHETHER IF ASSESSEE'S ACTIVITIES ARE OUTSIDE SCOPE OF ITS OBJECTS, IT WOULD NOT BE ENTITLED TO EXEMPTION EVEN IF SUCH ACTIVITIES ARE CHARITABLE IN NATURE - HELD, YES - WHETHER CONDITIONS IMPOSED UNDER SECTION 12A ARE IN ADDITION TO CONDITIONS OR EXEMPTIONS AS SPECIFIED UNDER SECTIONS 11 AND 12 AND, THUS, NOTWITHSTANDING THAT AN ASSESSEE HAS BEEN GRANTED A REGISTRATION UNDER SECTION 12A, IT WOULD BE NECESSARY FOR ASSESSEE TO COMPLY WITH CONDITIONS OF SECTION 11 IN ORDER TO CLAIM ANY BENEFIT UNDER PROVISIONS OF THAT SECTION AND IT IS NECESSARY FOR ASSESSING OFFICER TO EXAMINE WHETHER INCOME DERIVED FROM PROPERTY HELD IN TRUST HAS BEEN APPLIED FOR OBJECT OF TRUST - HELD, YES [PARAS 26 TO 29] [IN FAVOUR OF ASSESSEE] SECTION 2(15), READ WITH SECTION 11, OF THE INCOME-TAX ACT, 1961 - CHARITABLE PURPOSE (MEDICAL RELIEF) - ASSESSMENT YEAR 2006-07 - ASSESSEE-TRUST WAS SET UP WITH OBJECT OF IMPROVING AUYRVEDIC SYSTEM OF MEDICINE - IN FURTHERANCE OF ITS OBJECTS, IT SET UP A HOSPITAL WHICH PROVIDED ALLOPATHIC AS WELL AS AYURVEDIC TREATMENT AND INCLUDED INVESTIGATION TECHNIQUES OF MODERN MEDICINE - IT WAS DENIED EXEMPTION UNDER SECTION 11 ON GROUND THAT PROPORTION OF RECEIPTS PERTAINING TO AYURVEDIC RESEARCH INSTITUTE WAS SIGNIFICANTLY LOWER THAN THAT PERTAINING TO HOSPITAL AND, THUS, ASSESSEE'S ACTIVITIES WERE IN EXCESS OF ITS OBJECTS - WHETHER SINCE OBJECTS OF TRUST DID NOT PROHIBIT RUNNING OF AN ALLOPATHIC HOSPITAL OR DRAWING FROM ANY OTHER SYSTEM OF MEDICINE FOR IMPROVING AYURVEDIC SYSTEM OF MEDICINE AND ESTABLISHMENT OF AN ALLOPATHIC HOSPITAL ASSISTED ASSESSEE IN ITS OBJECT OF IMPROVING AYURVEDIC SYSTEM, ACTIVITIES OF ASSESSEE COULD NOT BE HELD TO BE ULTRA VIRES ITS OBJECTS AND FACT THAT 10 ITA NO. 962/JP/2018 DCIT VS. NARI UTTHAN SANSTHAN PROPORTION OF RECEIPTS PERTAINING TO AYURVEDIC RESEARCH INSTITUTE WAS SIGNIFICANTLY LOWER THAN THAT PERTAINING TO ALLOPATHIC HOSPITAL WOULD BE IMMATERIAL IN SUCH CASE - HELD, YES [PARAS 34 TO 40] [IN FAVOUR OF ASSESSEE] WORDS AND PHRASES: 'SUCH PURPOSES' AS OCCURRING IN SECTION 11(1)(A) OF THE INCOME-TAX ACT, 1961' 5.6. CONSIDERING THE FACTS OF THE CASE AND LEGAL PRECEDENTS CITED ABOVE, IT IS CLEAR THAT THE ACTIVITY OF MILK COLLECTION AND DISBURSEMENT CARRIED OUT BY THE APPELLANT TRUST WAS ONLY TO PROVIDE A PLATFORM TO NEEDY POOR WOMEN, PARTICULARLY IN RURAL AREA AND THEREFORE, UNDOUBTEDLY TO BE TREATED AS CHARITABLE PURPOSES, WHICH CANNOT BE SEEN IN ISOLATION WITH REGARD TO OBJECTS OF THE APPELLANT TRUST. THUS, IT IS HELD THAT THE AO ERRONEOUSLY HELD THE APPELLANT'S CASE IS HIT BY PROVISO TO SEC. 2(15) OF THE ACT AND HENCE, WAS NOT JUSTIFIED IN DENYING EXEMPTION U/S. 11 & 12 OF THE ACT. SINCE IT IS HELD THAT THE APPELLANT MILK TRADE ACTIVITY WAS NOT WITH ANY PROFIT MOTIVE OR WITH INTENT OF CARRY OUT ANY BUSINESS, THEREFORE, THERE WAS NO NEED TO MAINTAIN SEPARATE BOOKS OF ACCOUNTS FOR THIS ACTIVITY AS ALLEGED BY THE AO. 5.6.1. FURTHER, THE APPELLANT HAS PROVIDED VARIOUS DETAILS VIZ. BANK ACCOUNT, BOOKS OF ACCOUNTS AND VARIOUS OTHER DETAILS, FROM WHICH THE GENUINENESS OF THE TOTAL RECEIPTS OF RS. 5,60,05,920/- FROM MILK DISTRIBUTION AND EXPENSES OF RS. 5,44,39,495/- FOR MILK COLLECTION, DULY ESTABLISHES. ACCORDINGLY, IT IS HELD THAT THE AO, WITHOUT ANY BASIS ESTIMATED INCOME AT RS. 56,00,592/- BEING 10% OF TOTAL RECEIPTS AS INCOME OF THE APPELLANT AS AGAINST RS. 15,66,425/- SHOWN BY THE APPELLANT. 5. IN THE COURSE OF ASSESSMENT, THE A.O. WORKED OUT RS. 3,92,79,110/- AS SURPLUS OUT OF FCRS RECEIPTS OF THE ASSESSEE. IN THIS REGARD, THE AO NOTED THAT DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAD RECEIVED THE SUM OF RS. 5,90,74,787/- AS FOREIGN 11 ITA NO. 962/JP/2018 DCIT VS. NARI UTTHAN SANSTHAN CONTRIBUTIONS FOR VARIOUS PROJECTS UNDERTAKEN BY IT. OUT OF THIS, A SUM OF RS. 1,87,74,130/- WAS RECEIVED FROM HANS FOUNDATION AND RS. 4,03,00,657/- WAS RECEIVED FROM RURAL INDIA SUPPORTING TRUST. SINCE THE ASSESSEE FAILED TO FURNISH PROJECT-WISE BOOKS OF ACCOUNTS, THEREFORE, THE SURPLUS FROM PROJECTS IN THE HANDS OF ASSESSEE SOCIETY WAS WORKED OUT AS UNDER: - I. TOTAL RECEIPTS DURING THE YEAR RS. 5,90,74,787/- LESS: II. APPLICATION OF FUNDS AS PER AUDIT REPORT IN FORM 10B RS. 1,97,95,677/- SURPLUS RS. 3,92,79,110/- 6. BY THE IMPUGNED ORDER, THE LD CIT(A) DELETED THE ADDITION SO MADE AFTER HAVING A FOLLOWING OBSERVATION: 6.2. I HAVE CONSIDERED THE FACTS OF THE CASE AND APPELLANT'S SUBMISSIONS AND I FIND THAT THE AO MADE THE ADDITION OF RS. 3,92,79,110/- BEING SURPLUS OUT OF THE FCRA RECEIPTS HOLDING THAT THE ASSESSEE DID NOT PRODUCE PROJECT-WISE BOOKS OF ACCOUNTS. THE APPELLANT CONTENDED THAT THERE IS NO REQUIREMENT UNDER THE PROVISIONS OF INCOME TAX ACT 1961 REQUIRING THE ASSESSEE SOCIETY TO MAINTAIN SEPARATE PROJECT WISE BOOKS OF ACCOUNTS, AS IT DULY OBTAINED UTILIZATION CERTIFICATES FROM A CHARTERED ACCOUNT FOR ALL THE PROJECTS TAKEN UP BY IT, WHICH WERE SUBMITTED DURING THE COURSE OF ASSESSMENT ITSELF. IT WOULD BE RELEVANT TO REPRODUCE THE SEC. 11(4A) WHICH READS AS UNDER:- '(4A) SUB-SECTION (1) OR SUB-SECTION (2) OR SUB-SECTION (3) OR SUB-SECTION (3A) SHALL NOT APPLY IN RELATION TO ANY INCOME OF A TRUST OR AN INSTITUTION, BEING PROFITS AND GAINS OF BUSINESS, UNLESS THE BUSINESS IS INCIDENTAL TO THE ATTAINMENT OF THE OBJECTIVES OF THE TRUST OR, AS THE CASE MAY BE, INSTITUTION, AND SEPARATE BOOKS OF ACCOUNT ARE MAINTAINED BY SUCH TRUST OR INSTITUTION IN RESPECT OF SUCH BUSINESS.' 12 ITA NO. 962/JP/2018 DCIT VS. NARI UTTHAN SANSTHAN 6.2.1. THE ABOVEMENTIONED PROVISIONS OF SUB-SECTION (4A) OF SECTION 11 OF THE ACT ARE MEANT TO APPLY IN CASE A TRUST CARRIES ON A BUSINESS WHICH IS INCIDENTAL TO THE ATTAINMENT OF THE OBJECTIVES OF THE TRUST THEREBY REQUIRING IT TO SPECIFICALLY MAINTAIN SEPARATE SET OF BOOKS OF ACCOUNT. HOWEVER, IN THE INSTANT CASE, THE AO DEMANDED PROJECT-WISE BOOKS OF ACCOUNTS IN RESPECT OF FOREIGN CONTRIBUTION RECEIVED BY THE APPELLANT, WHICH IS NOT AS PER LAW. THE AO WHILE COMPUTING THE SURPLUS OF RS. 3,92,79,110/- FAILED TO APPRECIATE THE FACT THAT SUCH REMAINING AMOUNT WAS ALSO UTILIZED FOR DISTRIBUTING AID UNDER NAV-PRABHAT PROJECTS MENTIONED ABOVE AND IN ACQUIRING THE CAPITAL ASSETS FOR THE PURPOSES OF SETTING UP MILK COLLECTING AND DISBURSEMENT FACILITY. FURTHER THERE IS NO REQUIREMENT UNDER SUB-SECTION (4) OR (4A) OF SECTION 11 OF THE ACT TO MAINTAIN PROJECT-WISE BOOKS OF ACCOUNT BY THE ASSESSEE. THE APPELLANT SUBMITTED THAT THE BOOKS OF ACCOUNT OF THE ASSESSEE SOCIETY WERE DULY AUDITED AND ALL THE RELEVANT DETAILS INCLUDING AMOUNT SPENT ON VARIOUS PROJECTS WERE SUBMITTED DURING THE COURSE OF ASSESSMENT EVEN. MORE IMPORTANTLY, THIS SECTION APPLIES IN CASE, A TRUST CARRIES OUT BUSINESS FOR PROFIT MOTIVE. HOWEVER, IN THE INSTANT CASE, NO SUCH MOTIVE IS ESTABLISHED. CONSIDERING THE APPELLANT'S SUBMISSIONS AND LEGAL POSITION, IT IS R - R HELD THAT THE AO WAS NOT CORRECT IN HOLDING THAT THE APPELLANT WAS REQUIRED TO MAINTAIN PROJECT WISE BOOKS OF ACCOUNTS AND THUS, WORKING OUT/ ADDITION OF SURPLUS OF RS. 3,92,79,100/- HELD AS ERRONEOUS. THE GROUND OF APPEAL IS ALLOWED. 7. WHILE FRAMING THE ASSESSMENT, THE A.O. DID NOT ACCEPT THE ASSESSEES CONTENTION WITH REGARD TO REVOLVING FUNDS OF RS. 2.50 CRORES AS APPLICATION OF FUNDS TOWARDS OBJECTIVES OF SANSTHAN. 13 ITA NO. 962/JP/2018 DCIT VS. NARI UTTHAN SANSTHAN 8. BY THE IMPUGNED ORDER, THE LD. CIT(A) AFTER CONSIDERING THE REMAND REPORT, ALLOWED THE ASSESSEES CLAIM AFTER HAVING THE FOLLOWING OBSERVATION: 7.3. I HAVE CONSIDERED THE ASSESSMENT ORDER & REMAND REPORT, THE APPELLANT'S SUBMISSIONS AND ADDITIONAL EVIDENCES FURNISHED BY THE APPELLANT. IT IS OBSERVED THAT IN THE REMAND REPORT, THE AO HAS NOT DISPUTED THIS AMOUNT TO THE TUNE OF RS. 2.50 CRORES WERE DISBURSED TO THESE WOMEN. THE ONLY ISSUE OF DISPUTE WAS REGARDING THE FACT THAT WHETHER THE MONEY WAS LOAN OR APPROPRIATION. 7.3.1. DURING THE REMAND PROCEEDINGS, STATEMENTS OF CERTAIN BENEFICIARIES HAVE BEEN RECORDED, COPIES OF WHICH WERE FURNISHED BY THE APPELLANT ALONG WITH RECEIPTS. UPON PERUSAL OF THE SAME, IT IS SEEN THAT IN CERTAIN CASES, IT IS STATED TO BE LOAN AND IN OTHER CASES, NOT AS SUCH. EVEN IF THESE ARE LOAN, SAME CANNOT BE ADDED TO THE INCOME OF THE APPELLANT. 7.4. AS HAS BEEN DISCUSSED IN ABOVE PARA, THE APPELLANT'S MAIN OBJECTS ARE IMPARTING EDUCATION AND PROVIDING MEDICAL FACILITIES TO THE NEEDY RURAL WOMEN AND TO EMPOWER THE WOMEN SO THAT THEY COULD SURVIVE IN THE SOCIETY. THESE AMOUNTS DISBURSED TO THESE WOMEN WERE MEANT TO HELP THESE WOMEN. FURTHER FROM THEIR STATEMENT, ONE MORE THING IS VERY MUCH CLEAR THAT THEY HAVE NOT RETURNED THIS AMOUNT TO THE ASSESSEE TILL DATE. ACCORDINGLY, THIS AMOUNT OF RS. 2,50,00,000/- IS ALLOWED HEREBY TO BE TREATED AS APPROPRIATION OF FUNDS. THUS, THE APPLICATION OF FUNDS ENHANCED BY THIS AMOUNT AND CONSEQUENTLY, THE APPELLANT GETS RELIEF OF RS. 2,50,00,000/- ON THIS ACCOUNT. THE AO IS DIRECTED TO RECALCULATE, ACCORDINGLY THE APPLICATION OF INCOME & SURPLUS, THUS REMAINING AS WELL AS THE ALLOWABLE ACCUMULATION. 14 ITA NO. 962/JP/2018 DCIT VS. NARI UTTHAN SANSTHAN 8. VIDE GROUND NO. 5, THE APPELLANT CONTENDED THAT THE AO ERRED IN TREATING AMOUNT OF CORPUS FUND AS GENERAL FUND AND HOLDING THAT APPLICATION OF FUND WAS NOT DONE ACCORDING TO LAW, BY THE ASSESSEE. THE AO NOTED THAT, IN THE RECEIPT AND PAYMENT ACCOUNT FOR THE YEAR UNDER CONSIDERATION, A SUM OF RS. 60,95,870/- WAS PARKED IN CORPUS FUND (FIXED ASSETS). THE AO OBSERVED THAT OUT OF THE TOTAL FCRA RECEIPTS OF RS. 5,90,74,7871-, THERE WAS NO OTHER RECEIPT WITH A SPECIFIC DIRECTION OR CLEAR MANDATE THAT IT WOULD FORM PART OF THE CORPUS FUND. IN ABSENCE OF ANY SPECIFIC DIRECTION IN RESPECT OF ANY CONTRIBUTION TO FORM PART OF CORPUS FUND, THE AO HELD THAT THE SUM OF RS. 60,95,870/- COULD NOT BE TREATED AS CONTRIBUTION TOWARDS CORPUS FUND : ACCORDINGLY THE SUM SO PARKED IN THE CORPUS FUND IN THE BOOKS OF ACCOUNTS WAS TREATED, OUT OF GENERAL CONTRIBUTION RECEIVED BY THE SANSTHAN DURING THE YEAR AND APPLICATION AS PER LAW, OUT OF THESE RECEIPTS WAS NOT DONE BY THE SANSTHAN. ACCORDINGLY, THE AO TREATED RS. 60,95,870/- AS GENERAL FUND INSTEAD OF CORPUS FUND. 8.1. THE APPELLANT HAS CONTESTED THIS ACTION OF THE AO BY SUBMITTING AS UNDER:- IN REFERENCE TO THE ABOVE GROUND WE MAY BE PERMITTED TO SUBMIT THAT THE DONATIONS RECEIVED BY THE ASSESSEE TOTALING TO RS. 5,90,74,787 AS ACCEPTED BY LEARNED AO IN HIS ASSESSMENT ORDER WERE RECEIVED FROM MS . HANS FOUNDATION AND MS . RURAL INDIA SUPPORTING TRUST. II WAS THE DONORS ONLY WHO PRESCRIBED THE USAGE OF SUCH DONATION FOR VARIOUS PURPOSES INCLUDING CAPITAL ASSETS ACQUISITION WHICH RESULTED IN THE TREATMENT OF SUCH FUND AS CORPUS FUNDS IN THE HANDS OF THE ASSESSEE. THE CORPUS DONATIONS CLAIMED BY THE ASSESSEE WERE RS. 60,95,870/- WHICH ARE DULY REFLECTING IN THE BALANCE SHEET OF THE ASSESSEE DATED 31.03.2012. THE USE OF SUCH CORPUS FUNDS WAS ACQUISITION OF VARIOUS CAPITAL ASSETS ONLY FOR THE PURPOSES OF MILK COLLECTION AND DISTRIBUTION ACTIVITY STIPULATED BY THE DONOR INSTITUTIONS ONLY. THE DETAILS OF SUCH CORPUS FIND WERE DULY PROVIDED PHASE-WISE ONLY DURING THE COURSE OF ASSESSMENT FOR THE INFORMATION OF LEARNED AO ONLY WHICH IS REITERATED BELOW: 15 ITA NO. 962/JP/2018 DCIT VS. NARI UTTHAN SANSTHAN PROJECTWISE CORPUS FUND AMOUNT NAVPRABHAT PHASE 1 RS. 36,09,0 6 3/ - NA VPRABHAT PHASE 2 RS. 18,18,96 2/ - NAVPRABHAT PHASE 3 RS. 6,67,845/ - TOTAL CORPUS FUND RS. 60,95,870/ - HOWEVER, LEARNED AO NEITHER HAS CONSIDERED THEM AS CORPUS FUND NOR HAS ALLOWED THE SAME AS APPLICATION OF INCOME IN HIS ASSESSMENT ORDER DATED 30.03.2015. IT IS WORTHWHILE TO MENTION THAT THE ASSESSEE SOCIETY HAS NOT CLAIMED VALUE OF SUCH ASSETS IN COMPUTATION OF APPLICATION OF INCOME OF THE ASSESSEE TRUST WHICH SUBSTANTIATE THE ASSESSEE'S CLAIM THAT THE TREATMENT OF CORPUS FUND AS GENERAL FUND IS INCORRECT AND UNLAWFUL. EVEN IF THE CAPITAL ASSETS ACQUIRED WERE TREATED AS GENERAL FUND THAN CORPUS FUND, LEARNED AO WHILE COMPUTING THE TOTAL INCOME OF THE ASSESSEE SOCIETY IN HIS ASSESSMENT ORDER DATED 30.03.2015 DID NOT REDUCE SUCH AMOUNT THEREFORE AGAIN ADOPTED AN UNLAWFUL ACTION ON HIS PART. WE ALSO PROVIDE A COMPARATIVE SHEET OF COMPUTATION OF TOTAL INCOME MADE BY LEARNED A0 VERSUS THE CORRECT MANNER OF COMPUTING THE TOTAL INCOME IN THE HANDS OF ASSESSEE PARTICULARS COMPUTATION AS PER LEARNED AO CORRECT COMPUTATION REMARKS TOTAL PROJECT RECEIPTS 5,90,74,787 5,90,74,787 LESS: CORPUS CONTRIBUTION 0 60,95,870 LEARNED AO DID NOT GIVE ANY DEDUCTION OF CORPUS CONTRIBUTION IN TOTAL INCOME COMPUTATION APPLICATION OF INCOME 1,97,95,677 0 LEARNED AO REDUC ED APPLICATION OF INCOME BEFORE GIVING BENEFIT OF 15% FREE ACCUMULATION BENEFIT BALANCE 3,92,79,110 5,29,78,917 LESS: ALLOWABLE ACCUMULATION @ 15% 88,61,218 79,46,838 LEARNED AO MENTIONED ALLOWABLE ACCUMULATION AT RS. 88,61,218/- IN HIS ASSESSMENT ORDER. BALANCE AMOUNT 3,04,17,892 4,50,32,079 16 ITA NO. 962/JP/2018 DCIT VS. NARI UTTHAN SANSTHAN LESS: AID/ASSISTANCE DISTRIBUTED UNDER NAV-PRABHAT PROJECT 0 2,50,00,000 L D AO DID NOT PERMIT THE DEDUCTION OF AID/ASSISTANCE DISTRIBUTED AMONGST WOMEN BENEFICIARIES APPLICATION OF INCOME 1,97,95,677 THE A SSESSEE CLAIMS THAT APPLICATION OF INCOME AS PER INCOME& EXPENDITURE A/C SHOULD BE REDUCED POST PROVIDING 15% FREE ACCUMULATION BENEFIT. - ADD: NET INCOME FROM MILK TRADE 56,00,592 0 LESS: D EEM E D APPLICATION OF SEED MONEY DISTRIBUTION TOTAL INC OME 3,60,18,484 2,36,402 YOUR HONOR WE MAY BE PERMITTED TO SUBMIT AT END THAT THE TYPE OF ASSESSMENT COMPLETED BY LEARNED AO IN PRESENT CASE IS CERTAINLY A HUGE SET-HACK TO WELFARE EFFORT TAKEN UP BY ASSESSEE SOCIETY FOR THE BENEFIT OF WOMEN EMPOWERMENT. IT'S SURELY AN ATTACK ON THE WOMEN EMPOWERMENT PROJECTS WHERE ON ONE SIDE INSTITUTIONS ARE PROMOTED BY THE GOVERNMENT TO TAKE UP WOMEN EMPOWERMENT INITIATIVES BUT ON THE OTHER SIDE GOVERNMENT AGENCIES ONLY ARE TROUBLING THE INSTITUTIONS WHICH PROMOTE THE WELFARE TO A LARGE CHUNK OF WOMEN BENEFICIARIES FOR ENSURING THEIR LIVELIHOOD PARTICULARLY FROM WEAKER AND RURAL SECTIONS. WE PRAY WITH 'BIDED HANDED THAT A JUSTICE IN THE CURRENT CASE WILL GIVE A RIGHT MASSAGE IN THE SOCIETY EVEN. YOUR HONOR WE MAY BE PERMITTED TO REQUEST THAT BEFORE GIVING ANY ORDER IN THE PRESENT CASE KINDLY VISIT THE AREA AND SEE THE KIND OF WORK CONDUCTED BY ASSESSEE SOCIETY IN THE FIELD.' 8.2. I HAVE CONSIDERED THE FACTS OF THE CASE AND APPELLANT'S SUBMISSION AND I FIND THAT THE APPELLANT HAD RECEIVED THE DONATIONS TOTALING TO RS. 5,90,74,787/-FROM M/S HANS FOUNDATION AND M/S RURAL INDIA SUPPORTING TRUST. THE APPELLANT HAS SATISFACTORILY ESTABLISHED THAT THESE DONORS PRESCRIBED THE USAGE OF SUCH DONATION FOR VARIOUS PURPOSES INCLUDING CAPITAL ASSETS ACQUISITION WHICH RESULTED IN THE TREATMENT OF SUCH FUND AS CORPUS FUNDS IN THE HANDS OF THE ASSESSEE. AS PER THEIR DIRECTIONS THE APPELLANT ONLY CLAIMED CORPUS DONATION AT 17 ITA NO. 962/JP/2018 DCIT VS. NARI UTTHAN SANSTHAN RS. 60,95,870/- WHICH WERE DULY REFLECTED IN THE BALANCE SHEET. THE USE OF SUCH CORPUS FUNDS WAS ACQUISITION OF VARIOUS CAPITAL ASSETS ONLY FOR THE PURPOSES OF MILK COLLECTION AND DISTRIBUTION ACTIVITY STIPULATED BY THE DONOR INSTITUTIONS ITSELF. IT IS ALSO NOTICED THAT THE APPELLANT SOCIETY DID NOT CLAIM VALUE OF SUCH ASSETS IN COMPUTATION OF APPLICATION OF INCOME OF THE ASSESSEE TRUST WHICH SUBSTANTIATES ITS CLAIM THAT THE TREATMENT OF CORPUS FUND AS GENERAL FUND IS INCORRECT. ACCORDINGLY, THE AO IS DIRECTED TO TREAT THE SUM OF RS. 60,95,870/- AS CORPUS FUND. THE GROUND REGARDING THIS ISSUE IS ALLOWED. 9. AGAINST THE ABOVE FINDING/ORDER OF THE LD. CIT(A), THE REVENUE IS IN FURTHER APPEAL BEFORE US WHEREIN FOLLOWING GROUNDS HAVE BEEN TAKEN: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN ALLOWING EXEMPTION U/S 11 OF THE I.T. ACT, 1961 TO THE ASSESSEE WITHOUT APPRECIATING THE FACT THAT THE PROVISO OF SECTION 2(15) OF THE I.T. ACT, 1961 ATTRACTED AS GROSS RECEIPTS OF MILK TRADE ACTIVITY WAS VERY MUCH HIGHER THAN THE PRESCRIBED LIMIT OF RS. 25 LACS. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN ALLOWING EXEMPTION U/S 11 OF THE I.T. ACT, 1961 IGNORING THE FINDING OF THE AO THAT THE SEPARATE BOOKS OF ACCOUNTS WERE NOT MAINTAINED BY THE ASSESSEE FOR MILK TRADING AS REQUIRED U/S 11(4A) OF THE INCOME TAX ACT, 1961. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN ALLOWING RS.2,50,00,000 AS APPLICATION OF FUND ON ACCOUNT OF AID LOANS/ADVANCES IGNORING THE FACT THAT NEITHER ANY ASSURANCE WAS GIVEN NOR ANY AFFIDAVIT WAS FILED BY THE ASSESSEE SOCIETY THAT THESE LOANS/ADVANCES GIVEN BY IT WERE NOT TO BE RE-PAID BY THESE BENEFICIARIES WHEREAS A SUM OF RS.7,75,329/- WAS APPEARED AS 'RECOVERY FROM BENEFICIARIES' IN RECEIPTS AND PAYMENT ACCOUNT FOR THE YEAR UNDER CONSIDERATION. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN ALLOWING RS.60,95,870/- AS CORPUS FUND IGNORING THE FACT THAT NO SPECIFIC DIRECTIONS WERE MADE BY THE DONORS THAT IT SHALL 18 ITA NO. 962/JP/2018 DCIT VS. NARI UTTHAN SANSTHAN FORM PART OF THE CORPUS OF THE TRUST OR INSTITUTION AS REQUIRED UNDER SECTION 11(1)(D) OF THE INCOME TAX ACT, 1961. 5. ANY OTHER QUESTION OF LAW AS DEEMED FIT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE MAY ALSO BE FRAMED BEFORE THE HON'BLE TRIBUNAL IN THE INTEREST OF JUSTICE. 10. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE HAVE CONSIDERED AND TAKEN NOTE OF ALL THE MATERIAL PLACED BEFORE US AND ALSO DELIBERATED ON THE JUDICIAL PRONOUNCEMENTS REFERRED BY THE LOWER AUTHORITIES IN THEIR RESPECTIVE ORDERS AS WELL AS CITED BY THE LD. AR AND LD. DR DURING THE COURSE OF HEARING BEFORE US IN THE CONTEXT OF FACTUAL MATRIX OF THE CASE. FROM THE RECORD, WE FOUND THAT THE ASSESSEE M/S NARI UTHAN SANSTHAN (HEREINAFTER REFERRED TO AS NUS) IS A SOCIETY REGISTERED UNDER THE SOCIETIES REGISTRATION ACT, 1958 AS WELL AS A PUBLIC CHARITABLE INSTITUTION UNDER SECTION 12AA OF THE ACT VIDE ORDER DATED 01.04.2008. FOR THE ASSESSMENT YEAR 2012-13 THE ASSESSEE FILED ITS RETURN OF INCOME ON 16.01.2013 VIDE RECEIPT NO. 512 WITH THE OFFICE OF DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE JHUNJHUNU, JHUNJHUNU. LATER THE ASSESSMENT WAS TAKEN UP BY THE INCOME TAX OFFICER (EXEMPTION), WARD-II, JAIPUR UNDER SUB-SECTION (2) OF SECTION 143 OF THE ACT. 11. DURING THE COURSE OF ASSESSMENT, THE AO MADE VARIOUS INQUIRIES INCLUDING EXAMINATION OF BOOKS OF ACCOUNTS DOCUMENTS CONSISTING OF CASH BOOK, LEDGER, SALARY REGISTERS AND OTHER RELEVANT DOCUMENTS ETC. THE ASSESSEE PROVIDED ALL THE REQUIRED INFORMATION TO THE EXTENT 19 ITA NO. 962/JP/2018 DCIT VS. NARI UTTHAN SANSTHAN POSSIBLE AT ITS END, HOWEVER AO APPLIED THE PROVISIONS OF PROVISO TO SECTION 2(15) AS WELL AS SECTION 13 OF THE ACT AND DENIED THE BENEFIT OF EXEMPTION TO THE ASSESSEE AVAILABLE UNDER SECTION 11 &12 OF THE ACT THEREBY MAKING A TAXABLE ASSESSMENT OF THE ASSESSEE. HE EVEN DID NOT ALLOW THE LEGITIMATE CLAIM OF CORPUS CONTRIBUTIONS AND ASSISTANCE DISTRIBUTED TO VARIOUS WOMEN BENEFICIARIES. FURTHER THE AO ALSO ADDED A NOTIONAL FIGURE OF RS.56,00,592/- IN TOTAL INCOME OF THE ASSESSEE AS MILK BUSINESS INCOME. THE TOTAL INCOME OF THE ASSESSEE AS PER THE ASSESSMENT ORDER PASSED BY THE AO DETERMINED WAS RS. 3,60,18,483. THE ASSESSEE FEELING AGGRIEVED AGAINST SAID ASSESSMENT ORDER FILED AN APPEAL BEFORE THE LD. CIT(APPEALS) ON VARIOUS 8 GROUNDS. LEARNED CIT(APPEALS) IN HIS APPELLATE ORDER DATED 22.05.2018 ADMITTED ALL THE GROUNDS OF APPEAL THEREBY GIVING THE ASSESSEE RELIEF AS PER THE PROVISIONS OF INCOME TAX ACT. 12. FROM THE RECORD WE FOUND THAT THE ASSESSEE BEING A SOCIETY ESTABLISHED WITH THE FOLLOWING MAIN OBJECTIVES OF WELFARE: A. ESTABLISHING OF SCHOOLS FOR PROMOTION OF EDUCATION. B. CREATING EDUCATION AWARENESS AMONGST GIRLS AND HELPING IN ADMISSION INTO SCHOOLS. C. PROVIDING OF MEDICAL FACILITIES, EDUCATION FACILITIES AND PROVIDING OF EMPLOYMENT TO UNEMPLOYED WOMEN PARTICULARLY IN RURAL AREAS. D. FINDING OUT AND PROMOTING DIFFERENT TYPES OF ENVIRONMENT PROTECTION MODES. E. REMOVAL / ERADICATION OF SOCIAL PROBLEMS LIKE CHILD MARRIAGE, DOWERY SYSTEM ETC. 20 ITA NO. 962/JP/2018 DCIT VS. NARI UTTHAN SANSTHAN F. PROVIDING OF SHELTER AND EMPLOYMENT TO SENIOR CITIZENS, PHYSICALLY HANDICAPPED PERSONS AND DEPRIVED OF WOMEN. G. PROVIDING OF HOSTEL FACILITIES TO SC/ST STUDENTS. H. EXECUTION OF VARIOUS RURAL DEVELOPMENT PROJECTS IN RURAL AREAS OF RAJASTHAN THROUGH THE HELP OF VARIOUS GOVERNMENT, NON- GOVERNMENT, NATIONAL AND INTERNATIONAL ORGANISATIONS. IN ITS EFFORT TO ACHIEVE SUCH OBJECTIVES IN ADDITION TO VARIOUS ACTIVITIES TAKEN UP BY THE SOCIETY FROM TIME TO TIME IT ALSO TOOK UP THE FOLLOWING SPECIFIC PROJECTS / INITIATIVES: A. SNEHALAYA (THE SHELTER HOME): A SELFLESS AND COMPASSIONATE TO ALL SHELTER HOME SPECIALLY FOR SOCIALLY IGNORED ELDERLY, ORPHANS AND DESTITUTE AT VIRAT NAGAR, JAIPUR PROVIDING SHELTER TO MORE THAN 30 CHILDREN AND 4 SENIOR CITIZENS. B. HANS KARUNA SWASTYA PARIYOJNA: A HEALTH INITIATIVE TO EDUCATE AND SPREAD HEALTH AWARENESS AMONG RURAL WOMEN THROUGH ACTIVITIES LIKE MEDICAL CAMPS, FREE MEDICAL CHECK-UPS AND FREE DISTRIBUTION OF MEDICINES. C. TARA-AKSHAR PROJECT: EMPOWERING RURAL WOMEN BY ENABLING THEM WITH READING AND WRITING ABILITIES OF HINDI LANGUAGE AND ALONGSIDE TRAIN THEM ON BASIC MATHEMATICS CALCULATIONS USED IN THEIR DAY TO DAY LIFE. D. UPNRM PROJECT: HELPING IN FORMATION OF MORE THAN 500 GROUPS OF WOMEN CALLED SELF-HELP GROUP UNDER THE UPNRM (UMBRELLA PROJECT OF NATURAL RESOURCE MANAGEMENT) PROJECT OF NABARD, THEREBY PROVIDING RURAL WOMEN A STRONG CAPITAL BASE AND DEVELOPING THEIR SAVING HABITS BY RAISING THEIR ENTREPRENEURSHIP SKILLS. E. COMMUNITY CENTRE: PROVIDING OF PROPER INFRASTRUCTURE OF TOILETS TO RURAL WOMEN TO SAVE THEM FROM GOING TO THE FIELDS FOR DAY ROUTINE AND SNAKE BITE INCIDENTS. 21 ITA NO. 962/JP/2018 DCIT VS. NARI UTTHAN SANSTHAN IN ADDITION TO THE ACTIVITIES MENTIONED ABOVE THE ASSESSEE ALSO TOOK UP A PROJECT OF PROVIDING SELF-EMPLOYMENT AMONGST RURAL WOMEN IN FORM OF WHITE REVOLUTION I.E. THE ASSESSEE DISTRIBUTED FUNDS AMONGST VARIOUS WOMEN BENEFICIARIES FOR ACQUIRING BUFFALO(S) WHICH IN TURN UPLIFTED THEIR ECONOMIC LEVEL TO A LARGE EXTENT AND HELPED THEM IN MAKING SELF- DEPENDENT. WE ALSO FOUND THAT DURING THE RELEVANT FINANCIAL YEAR 2011- 12 THE ASSESSEE MAINTAINED PROPER BOOKS OF ACCOUNTS AND GOT THEM AUDITED FROM PRACTICING CHARTERED ACCOUNTANTS FIRM ON 21.09.2012. A COPY OF SUCH AUDITED FINANCIAL STATEMENT WAS SUBMITTED ALONG WITH THE RETURN FILED BY THE ASSESSEE. IN ADDITION TO THE ABOVE AN AUDIT REPORT UNDER FORM 10B (AS PER THE REQUIREMENT OF SECTION 12A OF THE ACT) WAS ALSO SUBMITTED BY THE CHARTERED ACCOUNTANT. 13. DURING THE RELEVANT FINANCIAL YEAR APART FROM NORMAL CHARITABLE ACTIVITIES FOLLOWING ACTIVITIES WERE SUBSTANTIALLY CARRIED OUT BY THE ASSESSEE: A. RECEIPT AND DISBURSEMENT OF FUNDS AMONGST VARIOUS WOMEN BENEFICIARIES AS PER THE PROJECT APPROVED BY DONOR ORGANIZATION BEING THE HANS FOUNDATION AND THE RURAL INDIA SUPPORTING TRUST. B. RECEIPT AND DISTRIBUTION OF DONATION AND ITS DISTRIBUTION IN FORM OF CATTLE ACQUISITION SUPPORT AND CARRYING OUT ALLIED ACTIVITIES OF COLLECTING MILK, SETTING UP OF A MILK CHILLING PLANT, PROVIDING PLATFORM TO SELL THE MILK PRODUCED THROUGH CATTLE ACQUIRED BY VARIOUS WOMEN BENEFICIARIES THROUGH THE HELP OF ASSESSEE ETC. 22 ITA NO. 962/JP/2018 DCIT VS. NARI UTTHAN SANSTHAN C. ESTABLISHING A BUILDING CALLED SNEHALAYA FOR PROVIDING SHELTER TO ORPHANS AND OLD AGE PERSONS. DURING THE COURSE OF ASSESSMENT THE RELEVANT DOCUMENTS IN SUPPORT OF SUCH ACTIVITIES WERE PRODUCED BEFORE AO AS AND WHEN REQUIRED. 14. FROM READING OF PAGE NO. 3 OF THE ASSESSMENT ORDER, THE A.O. RAISED FOLLOWING QUESTIONS: A. WHETHER MILK COLLECTION AND DISBURSEMENT ACTIVITY CARRIED OUT BY THE ASSESSEE WAS A BUSINESS. B. IF SUCH ACTIVITY FORMS PART OF BUSINESS WHETHER THE PROVISIONS OF PROVISO TO SECTION 2(15) OF THE ACT ARE APPLICABLE. C. WHETHER THE MILK COLLECTION ACTIVITY REQUIRED COMPLIANCE UNDER SUB-SECTION (4A) OF SECTION 11 OF THE ACT. D. WHETHER MILK COLLECTION ACTIVITY REQUIRED TO COMPLY WITH TAX AUDIT PROVISIONS AS PER SECTION 44AB OF THE ACT. E. WHETHER THE APPLICABILITY OF THE PROVISIONS OF SECTION 13(8) OF THE ACT ENVISAGE BY AO IS CORRECT IN THE FACTS AND CIRCUMSTANCES OF THE CASE OR NOT. F. WHETHER ADDITION OF INCOME TO THE EXTENT OF 10% OF GROSS RECEIPTS OF MILK ACTIVITY BEING RS. 56,00,592/- THEREFORE BEING LEGITIMATE OR NOT. 15. NOW THE QUESTION WHICH REQUIRES OUR CONSIDERING AS TO WHETHER MILK COLLECTION AND DISTRIBUTION ACTIVITY OF ASSESSEE TRUST WAS A BUSINESS? WE HAD CAREFULLY GONE THROUGH THE OBJECTS OF THE ASSESSEE SOCIETY AND FOUND THAT IT AIMS TO PROVIDE MEDICAL FACILITIES, EDUCATION FACILITIES AND PROVIDING OF EMPLOYMENT TO UNEMPLOYED WOMEN PARTICULARLY IN RURAL AREAS WHICH PROMPTED THE ASSESSEE TO REACH OUT TO ITS DONORS FOR GRANTING DONATIONS IN FORM OF A SCHEME OF ENABLING 23 ITA NO. 962/JP/2018 DCIT VS. NARI UTTHAN SANSTHAN ACQUISITION OF CATTLE (BUFFALO) BY WOMEN BENEFICIARIES AND USING THEM A PART OF THEIR LIVELIHOOD SOURCE IN FORM OF FEEDING THEM, EXTRACTING MILK THEREFROM, USING SUCH MILK NOT ONLY FOR THEIR CHILDREN BUT EVEN SELLING THE SURPLUS MILK IN MARKET TO GENERATE A SOURCE OF INCOME FOR THEIR ECONOMIC UPLIFTMENT. IT IS IMPORTANT TO NOTE THAT BEFORE SUCH SUPPORT PROVIDED BY THE ASSESSEE SOCIETY MOST OF THE WOMEN BENEFICIARIES WERE EITHER NOT HAVING ANY SOURCE OF INCOME OR CATTLE OR WERE LIVING MISERABLE LIFE CONDITIONS. THE APPROACH DEVELOPED BY THE ASSESSEE INSTITUTION AS PER THE INSTRUCTIONS OF DONORS WAS PRINCIPALLY TO ENSURE THEIR HOLISTIC DEVELOPMENT OF WOMEN BENEFICIARIES IN FORM OF MAKING THEM AS A PART OF SELF-HELP GROUPS TO CREATE A COOPERATIVE MOVEMENT AMONGST THEM, PROVIDING CATTLE TO PRODUCE AND SELL MILK FOR BEING SELF-DEPENDENT ETC. THE ACTIVITIES TAKEN UP ARE REQUIRED TO BE SEEN AS A WHOLE BUT NOT IN ISOLATION TO EACH OTHER. FURTHER THE MILK PRODUCED WITH THE HELP OF CATTLE NEEDED A MARKET TO SELL AND GENERATE CASH FOR FURTHER PROCURING CHARA, KHALI AND OTHER FODDER ETC. FOR THE CATTLE OWNED BY WOMEN BENEFICIARIES AND USING THE REMAINING SURPLUS TOWARDS THE LIVELIHOOD AND EDUCATION OF THE CHILDREN OF SUCH WOMEN BENEFICIARIES. ONE MAY UNDERSTAND THAT IT IS NOT ONLY THE PRODUCTION OF MILK WHICH IS IMPORTANT BUT AT THE SAME TIME ITS SPEEDY DISPOSAL IN A SHORTER PERIOD OF TIME TO THE PROCUREMENT AGENCY / DAIRY WAS NECESSARY AS MILK IS A HIGHLY PERISHABLE PRODUCT AND 24 ITA NO. 962/JP/2018 DCIT VS. NARI UTTHAN SANSTHAN NON-TIMELY COLLECTION AND DELIVERY SYSTEM WOULD ENDED THE WHOLE PURPOSE OF THE LIVELIHOOD PROGRAMME. 16. WE ALSO FOUND THAT TO PROVIDE A PLATFORM TO ALL SUCH WOMEN BENEFICIARIES FOR ENSURING REALIZATION OF MILK PRODUCED BY THEM THE ASSESSEE SOCIETY CAME UP TO FURTHER SUPPORT THEM IN COLLECTING THE MILK PRODUCED THROUGH VARIOUS MILK-COLLECTION VANS, ESTABLISHING A LABORATORY TO ENSURE QUALITY OF MILK PRODUCED TO ENSURE FETCHING BEST PRICE FOR MILK SO PRODUCED AS WELL KEEPING SUCH MILK IN A CHILLING PLANT TILL HANDED OVER TO THE RELEVANT DIARY. THE ACTIVITY SO CONDUCTED WAS AS PER THE UNDERSTANDING BETWEEN THE ASSESSEE AND DONORS. 17. IT IS PERTINENT TO MENTION HERE THAT THE COMMERCIAL MILK DIARIES WOULD HAVE NOT DONE MILK COLLECTING ETC. ON ITS OWN AS IT COULD HAVE BEEN A COSTLY AND NON-PROFITABLE AFFAIR FOR THEM AND THEREFORE THE WHOLE SCHEME OF UPLIFTMENT OF RURAL WOMEN BENEFICIARIES WOULD HAVE COME TO AN END WITHOUT FETCHING ANY FRUITS AT ALL. SUCH CIRCUMSTANCES ONLY HAVE POSED AND PROMPTED THE ASSESSEE SOCIETY TO EVEN PROVIDE SUCH SERVICES IN FORM OF COLLECTION, STORAGE AND DISBURSAL OF MILK. NOT EVEN THAT IT WOULD HAVE BEEN INCONVENIENT FOR COMMERCIAL MILK PROCESSING BUYERS TO PAY PROCEEDS OF MILK OBTAINED TO DIFFERENT MILK PRODUCER WOMEN DIRECTLY THEREFORE TO PROVIDE SUCH SERVICE THE ASSESSEE SOCIETY WORKED SIMPLY AS A NODAL AGENCY TO COLLECT, TEST, STORE, CHILL AND DISBURSE THE MILK AS WELL AS TO COLLECT SALE PROCEEDS OF SUCH MILK AND PAY BACK THE SAME TO 25 ITA NO. 962/JP/2018 DCIT VS. NARI UTTHAN SANSTHAN VARIOUS WOMEN BENEFICIARIES ONLY. THE BANK ACCOUNT OF ASSESSEE SOCIETY WAS USED JUST TO COLLECT AND DISBURSE THE MILK COLLECTION PROCEEDS AMONGST VARIOUS WOMEN BENEFICIARIES. WE ALSO INVITE KIND ATTENTION ON THE FACT THAT THE CO-OPERATIVE AND PIOUS MOVEMENT SO BEGAN GRADUALLY BECAME MATURE AND IN DUE COURSE OF TIME I.E. ON 28.10.2014 THE ASSESSEE SOCIETY HANDED OVER THE POSSESSION OF CHILLING PLANT, MILK TESTING LABORATORY, CANES, MILK COLLECTION VANS TO A FPO CREATED WITH THE VISION AND HELP OF ASSESSEE SOCIETY ONLY. THE ASSESSEE SOCIETY WAS NOT AT ALL INDULGED OR INVOLVED IN ANY KIND OF MILK BUSINESS. THE ACTIVITIES OF MILK COLLECTING AND DISBURSEMENT WERE ONLY IN THE NATURE TO SUPPORT TO WOMEN WELFARE. SUCH GIVING UP OF MILK CHILLING PLANT AND OTHER ALLIED FACILITIES INCLUDING EQUIPMENT ETC. HELD BY NUS (ASSESSEE SOCIETY) TO FPO CREATED AND RUN BY WOMEN BENEFICIARIES FULLY SUBSTANTIATES THAT THERE WAS NO BUSINESS TAKEN UP BY THE ASSESSEE. 18. THE DEFINITION OF THE TERM BUSINESS AS PER SECTION 2(13) OF THE ACT DEFINING IT AS ANY TRADE, COMMERCE, MANUFACTURING ACTIVITY OR ANY ADVENTURE OR CONCERN IN THE NATURE OF TRADE, COMMERCE OR MANUFACTURE. A BARE LOOK OF DEFINITION COUPLED WITH THE CIRCUMSTANCES MENTIONED ABOVE IN WHICH MILK COLLECTION AND DISBURSEMENT ACTIVITY WAS CARRIED OUT BY ASSESSEE SOCIETY EVIDENTLY PROVE THAT THERE WAS NO ELEMENT OF BUSINESS INVOLVED AT ALL IN THE GIVEN CIRCUMSTANCES OF THE CASE. IT WAS PURELY AND MERELY A HYPOTHETICAL THOUGHT MADE BY THE A.O. WITHOUT 26 ITA NO. 962/JP/2018 DCIT VS. NARI UTTHAN SANSTHAN UNDERSTANDING THE GENUINENESS OF THE ASSESSEES CASE TO TREAT MILK COLLECTING AND DISBURSEMENT ACTIVITY AS BUSINESS CARRIED OUT BY THE ASSESSEE. THE MILK COLLECTION AND DISBURSEMENT WAS ONLY A SUPPORT ACTIVITY TO ACHIEVE THE PURPOSE OF WOMEN EMPOWERMENT PARTICULARLY THAT BELONGING TO THE BACKWARD RURAL AREA OF THE STATE OF RAJASTHAN. 19. PERUSAL OF THE LIST OF VARIOUS WOMEN BENEFICIARIES FURTHER DEMONSTRATE THAT WOMEN BENEFICIARIES UNDER THE PROJECT WERE INCLUDING SC/ST/OBC/BPL, WIDOWS AS WELL AS OTHER NEEDED SECTION OF THE SOCIETY. 20. IN VIEW OF THE ABOVE, WE CAN SAFELY CONCLUDE THAT THE MILK COLLECTING AND DISBURSEMENT ACTIVITY BY NO MEANS COULD BE TREATED AS BUSINESS CARRIED OUT BY THE ASSESSEE. 21. NOW WE SEE APPLICABILITY OF PROVISO TO SECTION 2(15) OF THE ACT WHICH IS INVOKED BY THE A.O. THE PROVISIONS OF SECTION 2(15) OF THE ACT FOR THE A.Y. 2012-13 UNDER CONSIDERATION READS AS UNDER: SECTION 2 (15) 'CHARITABLE PURPOSE' INCLUDES RELIEF OF THE POOR, EDUCATION, MEDICAL RELIEF, PRESERVATION OF ENVIRONMENT (INCLUDING WATERSHEDS, FORESTS AND WILDLIFE) AND PRESERVATION OF MONUMENTS OR PLACES OR OBJECTS OF ARTISTIC OR HISTORIC INTEREST, AND THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY: PROVIDED THAT THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY SHALL NOT BE A CHARITABLE PURPOSE, IF IT INVOLVES THE CARRYING ON OF ANY ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINESS, OR ANY ACTIVITY OF RENDERING ANY SERVICE IN RELATION TO ANY TRADE, COMMERCE OR BUSINESS, FOR A CESS OR FEE OR ANY OTHER CONSIDERATION, IRRESPECTIVE OF THE NATURE OF USE OR APPLICATION, OR RETENTION, OF THE INCOME FROM SUCH ACTIVITY: 27 ITA NO. 962/JP/2018 DCIT VS. NARI UTTHAN SANSTHAN PROVIDED FURTHER THAT THE FIRST PROVISO SHALL NOT APPLY IF THE AGGREGATE VALUE OF RECEIPTS FROM THE ACTIVITIES REFERRED TO THEREIN IS TEN LAKH RUPEES OR LESS IN THE PREVIOUS YEAR. THE CHARITABLE PURPOSE CARRIED OUT AND ENSURED BY THE ASSESSEE TRUST MAY IT BE RUNNING AN ORPHANAGE CUM OLD AGE HOME IN THE NAME OF SNEHALAYA, DISTRIBUTING AID AMONGST VARIOUS RURAL WOMEN BENEFICIARIES FOR LIVELIHOOD PROGRAMME, HELPING RURAL WOMEN BENEFICIARIES IN FORM OF COLLECTING AND DISBURSING MILK PRODUCED, ESTABLISHING COMMUNITY CENTERS TO PROVIDE TOILET TO WOMEN BENEFICIARIES, HELPING IN SETTING UP SELF-HELP GROUPS, PROVIDING FREE HEALTH CHECK-UPS AND OTHER MEDICAL SERVICES FOR RURAL WOMEN BENEFICIARIES AND ALL ALLIED ACTIVITIES BY NO STRETCH OF MEANING CAN BE LOOKED OR FOUND AS GENERAL PUBLIC UTILITY THESE ACTIVITIES ARE UNDOUBTEDLY FALL INTO THE AMBIT OF RELIEF TO POOR ONLY. THE CARRYING OUT OF CHARITABLE ACTIVITIES IN THE NATURE OF RELIEF TO POOR ARE NOWHERE COVERED UNDER THE AMBIT OF PROVISO TO SECTION 2(15) OF THE ACT MENTIONED ABOVE. 22. FROM THE RECORD, WE FOUND THAT THE ACTIVITY OF MILK COLLECTION AND DISBURSEMENT CARRIED OUT BY TRUST WAS ONLY TO PROVIDE A PLATFORM TO DISADVANTAGED WOMEN BENEFICIARIES FROM RURAL BACKGROUND PARTICULARLY BEING ECONOMICALLY HIGHLY WEAKER AREAS THEREFORE UNDOUBTEDLY TO BE TREATED AS CHARITABLE PURPOSES PROMOTING RELIEF TO POOR. ACCORDINGLY, THE A.O. WAS NOT JUSTIFIED IN INVOKING PROVISO TO SECTION 2(15) OF THE ACT AND DENIAL OF EXEMPTION UNDER SECTION 11 & 12 OF THE ACT TO THE 28 ITA NO. 962/JP/2018 DCIT VS. NARI UTTHAN SANSTHAN ASSESSEE SOCIETY IS UNJUSTIFIED UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 23. A DETAILED FINDING HAS BEEN RECORDED BY THE LD. CIT(A) AT PAGE 10 PARA 5 OF HIS APPELLATE ORDER WHEREIN HE CONCLUDED AS UNDER: 5.3.3. FROM THE ABOVE, IT IS CLEAR THAT THE PREDOMINANT OBJECTIVE THE ASSESSEE TRUST IS TO EMPOWER THE GIRLS, WOMEN BY IMPARTING EDUCATION, PROVIDING OF MEDICAL FACILITIES AND PROVIDING EMPLOYMENT TO THEM. TO ATTAIN ITS OBJECTS, THE ASSESSEE HAS TO REACH OUT TO ITS DONORS FOR GRANTING DONATIONS IN FORM OF A SCHEME OF ENABLING ACQUISITION OF CATTLE (BUFFALO) BY WOMEN BENEFICIARIES AND USING THEM AS PART OF THEIR LIVELIHOOD SOURCE IN FORM OF FEEDING THEM, EXTRACTING MILK THEREFROM, USING SUCH MILK NOT ONLY FOR THEIR CHILDREN BUT EVEN SELLING THE SURPLUS MILK IN MARKET TO GENERATE A SOURCE OF INCOME FOR THEIR ECONOMIC UPLIFTMENT. 24. WE OBSERVE THAT THE LD. CIT(A) HAS DELIBERATED ON VARIOUS JUDICIAL PRONOUNCEMENTS WHILE REACHING TO THE ABOVE CONCLUSION. THE CONCLUSION OF THE LD. CIT(A) AT PARA 5.6 AS UNDER: 5.6 CONSIDERING THE FACTS OF THE CASE AND LEGAL PRESIDENTS ABOVE, IT IS CLEAR THAT THE ACTIVITY OF MILK COLLECTION AND DISBURSEMENT CARRIED OUT BY THE APPELLANT TRUST WAS ONLY TO PROVIDE A PLATFORM TO NEEDY POOR WOMAN, PARTICULARLY IN RURAL AREAS AND THEREFORE, UNDOUBTEDLY TO BE TREATED AS CHARITABLE PURPOSE IS, WHICH CANNOT BE SEEN IN ISOLATION WITH REGARD TO OBJECTS OF THE APPELLANT TRUST. THUS, IT IS HELD THAT THE AO ERRONEOUSLY HELD THE APPELLANT CASE IS HIT BY PROVISO TO SECTION 2(15) OF THE ACT AND HENCE, WAS NOT JUSTIFIED IN DENYING EXEMPTION UNDER SECTION 11 AND 12 OF THE ACT. SINCE IT IS HELD THAT THE APPELLANT MILK TRADE ACTIVITIES WAS NOT WITH ANY PROFIT MOTIVE WITH INTENT OF CARRY OUT ANY BUSINESS, THEREFORE, THERE WERE NO NEED TO MAINTAIN SEPARATE BOOKS OF ACCOUNTS FOR THIS ACTIVITY AS ALLEGED BY THE AO. 5.6.1 FURTHER THE APPELLANT HAS PROVIDED VARIOUS DETAILS VIZ. BANK ACCOUNT, BOOKS OF ACCOUNTS AND VARIOUS OTHER DETAILS, FROM WHICH THE GENUINENESS OF THE TOTAL RECEIPT OF RUPEES 5,60,05,920/- FOR MILK 29 ITA NO. 962/JP/2018 DCIT VS. NARI UTTHAN SANSTHAN DISTRIBUTION AND EXPENSES OF RUPEES 5,44,39,495/- FOR MILK COLLECTION DULY ESTABLISHES. ACCORDINGLY, IT IS HELD THAT THE AO, WITHOUT ANY BASES ESTABLISHED INCOME AT RUPEES NOTE 56,00,592 BEING 10% OF TOTAL RECEIPTS AS INCOME OF THE APPELLANT AGAINST RUPEES 15,66,425 SHOWN BY THE APPELLANT. THE DETAILED FINDING SO RECORDED BY THE LD. CIT(A) ARE AS PER MATERIAL ON RECORD, THEREFORE, DO NOT REQUIRE OUR INTERFERENCE. ACCORDINGLY, WE DISMISS GROUND NO.1 OF THE REVENUES APPEAL. 25. GROUND NO. 2 OF THE REVENUES APPEAL READS AS UNDER: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN ALLOWING EXEMPTION U/S 11 OF THE I.T. ACT, 1961 IGNORING THE FINDING OF THE AO THAT THE SEPARATE BOOKS OF ACCOUNTS WERE NOT MAINTAINED BY THE ASSESSEE FOR MILK TRADING AS REQUIRED U/S 11(4A) OF THE INCOME TAX ACT, 1961. IF, MILK COLLECTION AND DISBURSEMENT WHETHER COVERED UNDER SUB-SECTION (4A) OF SECTION 11 OF THE ACT AND THEREFORE WHETHER SEPARATE SET OF BOOKS WERE REQUIRED TO BE MAINTAINED. IN THIS REGARD, WE OBSERVE THAT SECTION (4A) SUB-SECTION (1) OR SUB-SECTION (2) OR SUB-SECTION (3) OR SUB-SECTION (3A) SHALL NOT APPLY IN RELATION TO ANY INCOME OF A TRUST OR AN INSTITUTION, BEING PROFITS AND GAINS OF BUSINESS, UNLESS THE BUSINESS IS INCIDENTAL TO THE ATTAINMENT OF THE OBJECTIVES OF THE TRUST OR, AS THE CASE MAY BE, INSTITUTION, AND SEPARATE BOOKS OF ACCOUNT ARE MAINTAINED BY SUCH TRUST OR INSTITUTION IN RESPECT OF SUCH BUSINESS. THE ABOVEMENTIONED PROVISIONS OF SUB-SECTION (4A) OF SECTION 11 OF THE ACT ARE MEANT TO APPLY IN CASE A TRUST CARRIES ON A BUSINESS WHICH IS INCIDENTAL TO THE ATTAINMENT OF THE OBJECTIVES OF THE TRUST THEREBY REQUIRING IT TO SPECIFICALLY MAINTAIN SEPARATE SET OF BOOKS OF ACCOUNT. 30 ITA NO. 962/JP/2018 DCIT VS. NARI UTTHAN SANSTHAN 26. WE FOUND THAT THE ASSESSEE HAD GOT ITS BOOKS OF ACCOUNTS DULY AUDITED AND SUBMITTED THE DETAILS TO THE EXTENT POSSIBLE FOR THE KIND REFERENCE OF THE AO EVEN. THE MILK COLLECTION AND DISBURSEMENT ACTIVITY WAS CONDUCTED AS PER THE SCHEME SANCTIONED BY THE DONORS ONLY AND THE ASSESSEE DID NOT ITSELF CARRIED OUT SUCH ACTIVITY ON ITS OWN WHICH DISTINGUISHES THE REQUIREMENT OF FOLLOWING THE PROVISIONS OF SECTION (4A) OF SECTION 11 OF THE ACT IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 27. WITH REFERENCE TO ABOVE QUERY OF THE A.O., THE OBSERVATIONS RECORDED BY LEARNED CIT(A) IN HIS APPELLATE ORDER (PAGE 18 OF THE APPELLATE ORDER) DATED 22.05.2018 ALLOWED THE GROUND OF APPEAL RAISED BY THE ASSESSEE IN ITS FAVOUR. THE DETAILED FINDINGS GIVEN BY THE LD. CIT(A) AT PARA 6 OF HIS APPELLATE ORDER ARE AS PER MATERIAL PLACED ON RECORD. ACCORDINGLY, WE DO NOT FIND ANY REASON TO INTERFERE IN THE FINDINGS OF THE LD. CIT(A) WHEREIN HE HELD THAT THE AO WAS NOT CORRECT IN HOLDING THAT THE ASSESSEE WAS REQUIRED TO MAINTAIN PROJECT WISE BOOKS OF ACCOUNTS AND THUS, WORKING OUT/ADDITION OF SURPLUS OF RS.3,92,79,100/- HELD AS ERRONEOUS. THE GROUND OF APPEAL IS ALLOWED. 28. GROUND NO.3 OF THE REVENUES APPEAL READS AS UNDER: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN ALLOWING RS. 2,50,00,000 AS APPLICATION OF FUND ON ACCOUNT OF AID LOANS/ADVANCES IGNORING THE FACT THAT NEITHER ANY ASSURANCE WAS GIVEN NOR ANY AFFIDAVIT WAS FILED BY THE ASSESSEE SOCIETY THAT THESE LOANS/ADVANCES GIVEN BY IT WERE NOT TO BE RE-PAID BY THESE BENEFICIARIES WHEREAS A SUM OF RS. 7,75,329/- WAS 31 ITA NO. 962/JP/2018 DCIT VS. NARI UTTHAN SANSTHAN APPEARED AS RECOVERY FROM BENEFICIARIES IN RECEIPTS AND PAYMENT ACCOUNT FOR THE YEAR UNDER CONSIDERATION. IN THIS REGARD, OBSERVATION OF THE A.O. ARE AT PAGE NO. 5 OF THE ASSESSMENT ORDER UNDER THE HEADING C:FRCA RECEIPTS AND ITS APPLICATION. 29. WITH REGARD TO THIS GROUND, THE ASSESSEE FILED PETITION FOR ACCEPTANCE OF ADDITIONAL EVIDENCE IN THE OFFICE OF THE LD. CIT(A) IN CONSEQUENCE OF THE APPLICATION SO MOVED BY THE ASSESSEE, THE AO I.E. DCIT (EXEMPTIONS), INCOME TAX DEPARTMENT, JAIPUR ISSUED SUMMON UNDER SECTION 131 OF THE ACT TO AROUND 11 BENEFICIARY WOMEN ASKING FOR PROVIDING THE CONFIRMATION REGARDING THE RETURN OR REFUND OF AID RECEIVED BACK TO THE ASSESSEE SOCIETY. THE REPORT DATED 18.10.2017 SUBMITTED BY DCIT (EXEMPTIONS), INCOME TAX DEPARTMENT, JAIPUR WHEREIN AT PAGE 3 OF HIS REPORT HE MENTIONED THAT: DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO FOUND THAT THE ASSESSEE TRUST ADVANCED RS. 2.50 CRORE DURING THE RELEVANT FINANCIAL YEAR 2011-12 TO VARIOUS WOMEN BENEFICIARIES BELONGING TO THE POOR FAMILIES FOR PURCHASING BUFFALOES UNDER A SCHEME NAME AS NAV PRABHAT. THE PAYMENTS WERE MADE TO 250 BENEFICIARIES AMOUNT TO RS. 1,00,0000 EACH FOR PURCHASING OF CATTLE/BUFFALOES. THE ASSESSEE CLAIMED AS AID MONEY (SAHAYTA RASHI) AS APPLICATION OF INCOME. TO VERIFY THE PAYMENT IS AID MONEY OR LOAN/ADVANCE ON TECH CHECK BASIS, SUMMONS U/S 131 OF THE IT ACT WERE ISSUED TO 11 BENEFICIARIES ON 08.06.2017 AND STATEMENT WERE RECORDED. AFTER RECORDING THE STATEMENT AND VERIFICATION, IT IS FOUND THAT NONE OF THE LADY ADMITTED THAT SHE HAS NOT ADMITTED THAT SHE HAS NOT TAKEN THE LOAN FROM THE ASSESSEE SOCIETY. THEY HAVE ALL ADMITTED THAT THE AMOUNT WAS TAKEN BY THEM FROM THE ASSESSEE BUT DUE TO THEIR WEAK FINANCIAL CONDITION THEY ARE NOT ABOVE TO REPAY THE MONEY. 32 ITA NO. 962/JP/2018 DCIT VS. NARI UTTHAN SANSTHAN 30. THE DOCUMENTS SO FILED DURING THE ASSESSMENT PROCEEDINGS SUBSTANTIATES ASSESSEES CLAIM IN AN EXPLICIT MANNER THAT THE ASSESSEE SOCIETY HAS DISTRIBUTED ONLY AID / ASSISTANCE AMONGST VARIOUS BENEFICIARIES WHICH WAS NEVER RECOVERED BACK FROM THEM OR WAS NEVER PAID BACK TO THE ASSESSEE SOCIETY ALL. OUT OF THE 11 STATEMENTS RECORDED DURING THE COURSE OF ADDITIONAL EVIDENCE PROCEEDINGS NOT A SINGLE BENEFICIARY ACCEPTED TO HAVE RETURNED OR REPAID THE AMOUNT DISBURSED TO THEM. THE ACTUAL FACTS ARE ONLY THAT THE AMOUNT DISTRIBUTED AMONGST WOMEN BENEFICIARIES WAS AID / ASSISTANCE ONLY WHICH WAS NEVER RETURNED BACK 31. AFTER CONSIDERING THE REMAND REPORT, FOLLOWING OBSERVATIONS WERE RECORDED BY LEARNED CIT(A) IN HIS APPELLATE ORDER (FROM PAGE 21 OF THE APPELLATE ORDER) DATED 22.05.2018 ALLOWING THE GROUND OF APPEAL RAISED BY THE ASSESSEE IN ITS FAVOR. IN THIS REGARD, DETAILED FINDING HAS BEEN RECORDED BY THE LD. CIT(A) AT PARA 7.2.1 TO 7.4, WHICH ARE AS PER MATERIAL ON RECORD AND DO NOT REQUIRE ANY INTERFERENCE. ACCORDINGLY, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) IN GIVING RELIEF OF RS. 2.50 CRORES AND DIRECTING THE A.O. TO RECALCULATE ACCORDINGLY THE APPLICATION OF INCOME AND SURPLUS. 32. GROUND NO. 4 OF THE REVENUES APPEAL READS AS UNDER: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN ALLOWING RS. 60,95,870/- AS CORPUS FUND IGNORING THE FACT THAT NO SPECIFIC DIRECTIONS WERE MADE BY THE DONORS THAT IT 33 ITA NO. 962/JP/2018 DCIT VS. NARI UTTHAN SANSTHAN SHALL FORM PART OF THE CORPUS OF THE TRUST OR INSTITUTION AS REQUIRED UNDER SECTION 11(1)(D) OF THE INCOME TAX ACT, 1961. IN THIS REGARD, WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND FOUND THAT THE CORPUS DONATIONS CLAIMED BY THE ASSESSEE WERE RS. 60,95,870/- WHICH ARE DULY REFLECTING IN THE BALANCE SHEET OF THE ASSESSEE DATED 31.03.2012. THE USE OF SUCH CORPUS FUNDS WAS ACQUISITION OF VARIOUS CAPITAL ASSETS ONLY FOR THE PURPOSES OF MILK COLLECTION AND DISTRIBUTION ACTIVITY STIPULATED BY THE DONOR INSTITUTIONS ONLY. THE DETAILS OF SUCH CORPUS FUND WERE DULY PROVIDED PHASE-WISE ONLY DURING THE COURSE OF ASSESSMENT FOR THE INFORMATION OF THE AO ONLY WHICH IS REITERATED BELOW: PROJECTWISE CORPUS FUND AMOUNT NAVPRABHAT PHASE 1 RS. 36,09,063/- NAVPRABHAT PHASE 2 RS. 18,18,962/- NAVPRABHAT PHASE 3 RS. 6,67,845/- TOTAL CORPUS FUND RS. 60,95,870/- HOWEVER, THE AO NEITHER HAS CONSIDERED THEM AS CORPUS FUND NOR HAS ALLOWED THE SAME AS APPLICATION OF INCOME IN HIS ASSESSMENT ORDER DATED 30.03.2015. 33. FROM THE RECORD, WE FOUND THAT THE ASSESSEE SOCIETY HAS NOT CLAIMED VALUE OF SUCH ASSETS IN COMPUTATION OF APPLICATION OF INCOME OF THE ASSESSEE TRUST WHICH SUBSTANTIATES THE ASSESSEES CLAIM THAT THE TREATMENT OF CORPUS FUND AS GENERAL FUND IS INCORRECT AND UNLAWFUL. EVEN IF THE CAPITAL ASSETS ACQUIRED WERE TREATED AS GENERAL FUND THAN CORPUS FUND, THE AO WHILE COMPUTING THE TOTAL INCOME OF THE ASSESSEE 34 ITA NO. 962/JP/2018 DCIT VS. NARI UTTHAN SANSTHAN SOCIETY IN HIS ASSESSMENT ORDER DATED 30.03.2015 DID NOT REDUCE SUCH AMOUNT THEREFORE AGAIN ADOPTED AN UNLAWFUL ACTION ON HIS PART. A DETAILED FINDING HAS BEEN RECORDED AT PAGE NO. 26 OF HIS APPELLATE ORDER AT PARA 8.2 AND AFTER CONSIDERING THE VARIOUS JUDICIAL PRONOUNCEMENTS, DIRECTED THE A.O. TO TREAT SUM OF RS. 60,95,870/- AS CORPUS FUND. DETAILED FINDING SO RECORDED BY THE LD. CIT(A) ARE AS PER THE MATERIAL ON RECORD AND DO NOT REQUIRE ANY INTERFERENCE ON OUR PART. 34. IN VIEW OF THE ABOVE DISCUSSION, WE CAN SAFELY CONCLUDE THAT THE LD. CIT(A) HAS DEALT WITH EACH AND EVERY OBJECTION OF THE A.O. THREADBARE AND AFTER GIVING DETAILED FINDINGS, DELETED THE ADDITION SO MADE BY THE A.O. THE FINDINGS SO RECORDED BY THE LD. CIT(A) ARE AS PER THE MATERIAL ON RECORD WHICH DO NOT REQUIRE ANY INTERFERENCE ON OUR PART. 35. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 09 TH SEPTEMBER, 2020. SD/- SD/- FOT; IKY JKO JES'K LH 'KEKZ (VIJAY PAL RAO) (RAMESH C SHARMA) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKA D@ DATED:- 09 TH SEPTEMBER, 2020 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- THE D.C.I.T.(EXEMPTIONS), CIRCLE, JAIPUR. 2. IZR;FKHZ @ THE RESPONDENT- M/S NARI UTTHAN SANSTHAN, SIKAR. 35 ITA NO. 962/JP/2018 DCIT VS. NARI UTTHAN SANSTHAN 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 962/JP/2018) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR