Case Law Details
T.R. Gupta Public Charitable Trust Vs CIT (Exemptions) (ITAT Amritsar)
ITAT held that Corpus donations received by Trusts, which is not registered u/s.12A/12AA of Income Tax Act, are not taxable as they assume the nature of ‘Capital receipt’ the moment the donations are given to ‘Corpus of the Trust’. We find the provisions of section 2(24)(iia)/12(1)/11(1)(d)/35/56(2) are relevant for deciding the current issue. It is a settled legal proposition, in case of a registered Trust under the Income-Tax Act, the corpus specific Voluntary Contributions are outside the scope of income as defined in section 2(24)(iia) of the Act due to their “Capital nature”. But it is a case of un-registered Trust. Despite the detailed deliberations made by the Ld. DR, we find the principles relating to judicial discipline assume significance and the priority. It is also decided issue that there is need for upholding the favourable view if there exist divergent views on the issue. As discussed in the preceding paragraphs above, there are multiple decisions in favour of the assessee. The two issues must be settled during registration U/s 12AA which are genuinity of trust & activities are related to main object of trust. The two limbs must be considered during registration.
FULL TEXT OF THE ORDER OF ITAT AMRITSAR
The instant appeal of the assessee is directed against the order of the ld. Commissioner of Income Tax (Exemptions), Chandigarh, [in brevity the ld. CIT(E)] bearing appeal no. DIN & Order No. ITBA/EXM/S/EXM1/2020-21/1028017799(1),date of order 21.09.2020, the order passed u/s 12AA(1)(b)(ii) of the Income Tax Act 1961, [in brevity the Act] for A.Y. 2020-21.
2. The assessee has taken the following grounds which reads as under:
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