Kund Kund Kahan Digamber Jain Versus Mumokshu Ashram Bajaj Palace Vs ITO (ITAT Jaipur)
Where the exemption claimed under section 11 and 12 has been denied by the Assessing officer, what can be brought to tax is the net income in the hands of the assessee trust and not the gross receipts. In all these years, we find that while denying the exemption under section 11 and 12 for want of registration under section 12AA, the Assessing officer has brought gross receipts to tax which is against the basic tenets of law where only the real income which is determined after deducting expenses from gross receipts can be brought to tax. We therefore agree with the alternate contention so advanced by the ld AR and without going into merit of the other contention which is left open, the matter is set-aside to the file of the Assessing officer to examine the claim of the expenditure so claimed by the assessee trust against the gross receipts for each of the relevant years and where the Assessing officer determines the net receipts as not exceeding the maximum amount not chargeable to tax, allow the necessary relief to the assessee trust.
FULL TEXT OF THE ITAT JUDGEMENT
These are four appeals filed by the assessee trust against the separate orders of ld. CIT(A), Kota dated 10.12.2018 for Assessment Years 2013-14 – 2016-17 upholding the action of AO/CPC in denying exemption u/s 11 of the IT Act by holding that assessee’s case is not covered by the proviso to section 12AA(2) as the objects of the trust were not same in the year in which exemption was claimed and the year in which exemption u/s 12AA was given ignoring the fact that amendment in trust deed was made to make the objects of the trust more clear and the amendment was made in the original trust deed to be effective from the date of creation of trust, thereby assessing the following receipts as income:-
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