Case Law Details
Boyakonda Gangamma Vs ITO (ITAT Hyderabad)
The clinching fact that has come to our notice during the course of hearing is that this assessee is governed by the provisions of Andhra Pradesh Charitable and Hindu Religious Institutions and Endowments Act, 1987. This ‘Act’ received the assent of the President on 15-05-1987. Chapter-VIII Section 65 Explanation (1)(g) thereof stipulates that ‘donations in cash or kind by the donors as contributions to capital’ shall not be deemed to be income of the concerned institution. A perusal of the assessment order dt.09-02-2016 makes it clear that even the Assessing Officer was also fair enough in not disputing assessee’s hundis during the course of scrutiny.
In this case none of the lower authorities have disbelieved or rebutted the assessee’s plea that the impugned sums are in the nature of a ‘hundi receipts’ being donors’ donations in cash or kind only; as per the state endowment law. There can be no dispute in principle that in case of a general vis-à-vis specific provisions, the latter prevails over the former as per maxim ‘Generalis Specialibus Non Derogent’. We, however, do not find the facts of the case attracting ‘repugnancy’ qua the above state law vis-à-vis tax law as per Article 251 of the Constitution of India. The foregoing legal maxim also does not apply here. The clinching fact that emerges here is that assessee’s ‘hundi’ receipts in cash from donors are not revenue items but capital receipts only. The relevant provisions of the ‘Endowment Act’ duly makes it clear that they are corpus donations which nowhere go against the provisions of tax law. We therefore see no reason to sustain the learned lower authorities’ action treating the assessee’s hundi receipts embedded with specific purpose of corpus donation u/s.11(1)(d) of the Act are not entitled for exemption being revenue receipts. We thus direct the Assessing Officer to delete the impugned addition.
FULL TEXT OF THE ORDER OF ITAT HYDERABAD
This assessee’s appeal for AY.2013-14 arises from the CIT(A)-Tirupati’s order dated 02-08-2018 passed in case No.420/2016-17/CIT(A)/TPT, in proceedings u/s.143(3) of the Income Tax Act, 1961 [in short, ‘the Act’].
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