Case Law Details
Versova Kokni Sunni Jamat Trust Vs CPC (ITAT Mumbai)
The brief facts of the case pertaining to this issue as emanating from the record are: The assessee trust is a religious trust formed in the year 2013 and is duly registered with “Maharashtra State Board of Warf” having registration no. MSBW/MUM/284/2013 vide certificate dated 12.03.2013. The main objective of the assessee trust was to maintain, administer and manage the Masjid, Dargah, provide funeral facility for Muslims, celebrate and perform Muslim festivals, to provide burial ground for Muslims, to provide burial materials and facilities for last rites of Muslims. During the year under consideration the assessee filed its return of income on 10.2015 declaring total income at Rs. 4,75,980 in form ITR – 7 claiming exemption under section 11 of the Act. While processing the return under section 143(1) of the Act, the Assessing Officer after making certain adjustments determine the total income of the assessee at Rs.21,67,070/- as against Rs. 4,75,980 declared by the assessee. Under intimation issued under section 143(1) of the Act, the Assessing Officer, inter-alia, disallowed the entire amount of voluntary contribution of Rs. 13,84,207/- received by the assessee out of which Rs. 8,99,811/- was received specifically towards corpus donation of the assessee trust for the purpose of purchase of immovable property/Masjid/Dargah.
In appeal before the CIT(A), assessee submitted that the assessee trust is not registered under section 12A of the Act. However, the consultant being ignorant of the provisions for applicability of section 11 and 12 of the Act filed return of income claiming exemption under section 11 of the Act. While filing the return of income for relevant assessment year, an amount of Rs. 8,99,811 collected as corpus donation for purchase of Masjid/Dargah was also offered as income. Accordingly, the assessee submitted that the corpus donation of Rs. 8,99,811 is in the nature of „capital receipt‟ and thus not taxable in the hands of the assessee trust irrespective of not being registered under section 12A of the Act.
During the appellate proceedings before the CIT(A), the assessee filed various documents in support of its submission that corpus donations were received by the assessee for the purpose of purchase of property/Dargah and therefore is in nature of „capital receipt‟. The assessee also furnished the details of donors along with their PAN card, on sample basis. The assessee also filed copy of deed of conveyance in respect of purchase of property/Dragah in financial year 2018–19. However, neither these documents were examined by the CIT(A) nor any report was sought from the Assessing Officer, and merely by erroneous understanding of order passed by the Co-ordinate Bench of Tribunal in Bank of India Retired Employees Medical Assistance Scheme (supra), fresh plea of the assessee was rejected by the CIT(A). As no scrutiny proceedings were initiated by the Revenue and return filed by the assessee was processed vide intimation under section 143 (1) of the Act, these documents also could not be verified by the Assessing Officer. In view of the above, we deem it appropriate to set aside the order passed by the CIT(A) and remand this issue to the file of CIT(A) for de novo adjudication after necessary verification of all the details / documents in respect of claim of the assessee. We further direct that if it is found that donations were received with respect to corpus of the trust for the purpose of purchase of property/Dargah then to that extent the same be not taxed being in the nature of „capital receipt‟. Needless to mention that no order shall be passed without affording reasonable opportunity of hearing to the assessee. Accordingly, ground No. 1 in assessee’s appeal is allowed for statistical purpose.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
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Sir the heading of this article says …….”not taxable even if Trust is not unregistered. Is it…..if the Trust is not registered?
thanks
with regards,