Trust Corpus Fund cannot be taxed despite non registration u/s 12AA

Full Text of the ITAT Order is as follows:-

This appeal by the assesse has been directed against the order of Ld. CIT(A) Ghaziabad dated 3^rd December 2015 for assessment. Year 2012- 13 on the following grounds :-

“1. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in making addition of Rs.22,76,539/- on account of corpus donation and has further erred in treating the same as part of total receipts and that too by recording incorrect facts and findings and without observing the principles of natural justice.

2. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in taking the figure of donation at Rs. 22,76,539/- instead of Rs. 22,00,000/-.

3. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in not reversing the action of Ld. AO in holding that assessee society is not eligible for exemption u/s 10(23C)(iiiad) of the Act.”

2. Briefly the facts of the case are that the assessee trust is registered with the Registrar of Society, Uttar Pradesh, the assessee has claimed exemption u/s 10(23C)(iiiad) of the Act. The assessee presently is running an educational institution under the name and stile “Divine Public School” at Sikandrabad, Distt. Bulandshahr. The assesses filed return of income declaring NIL income by claiming exemption u/s 10(23C)(iiiad) of the Act. On perusal of the audited accounts it was revealed that assessee has received Rs. 22,76,539/- on account of corpus fund and revenue receipts of Rs. 96,36,555/-. The Assessing Officer therefore noted that assessee has gross receipts of Rs. 1,19,13,094/- which is more than Rs. 1 crore. Therefore provision of section 10(23C)(iiiad) would not apply because assessee has not been granted registration u/s 12AA nor registered u/s 10(23C)(vi) of I.T. Act. The claim of assessee of deduction u/s 10(23C) (iiiad) was disallowed and surplus of Rs. 22,76,539/- was taxed and added to the income of the assessee.