Trust judiciary-2

Section 10(23C) application Can’t be Rejected merely for Surplus generation

The Indian Institute of Banking & Finance Vs CIT (Exemp.) (ITAT Mumbai)

whether rejection of approval u/s 10(23C) on the allegation of institution existing not solely for the purpose of education but for the purpose of profit is justified in law?...

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New trust entitled for Section 12AA registration despite no activity: SC

Anand Social and Educational Trust Vs CIT & Anr. (Supreme Court)

Anand Social and Educational Trust Vs CIT & Anr. (Supreme Court) Whether a newly formed trust is entitled for registration under Section 12AA of the Income Tax Act, 1961 even if any activity has not been undertaken as yet? In brief, section 12AA of the Act empowers the Principal Commissioner or the Commissioner of the […]...

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Exemption u/s 10(23)(iiiad) cannot be denied for mere surplus 

New Amazing Shiksha Society Vs. ITO (Exemption (Ward) (ITAT Delhi)

New Amazing Shiksha Society Vs. ITO (Exemption (Ward) (ITAT Delhi) Exemption u/s 10(23)(iiiad) of the Income Tax Act, 1961 should not be denied to the assessee as selling of books and uniform to the students of assessee is part of educational activity only. Moreover, the impugned addition was made merely on the basis that surplus [&hellip...

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Transport facility by School is incidental to main object of education

Delhi Public School Ghaziabad Vs ACIT (ITAT Delhi)

Challenging the order dated 02.03.2015 in Appeal No 98/13-14/GZN/63 for the assessment year 2010-11 passed by the learned Commissioner of Income-tax (Appeals), Muzaffarnagar (for short hereinafter called as the learned CIT(A)), the assessee preferred this appeal....

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Registration U/s. 12AA cannot be cancelled merely because collection exceeds threshold limit provided u/s 2(15)

Telangana State Seed Certification Agency Vs. Commissioner of Income Tax (Exemptions) (ITAT Hyderabad)

CBDT has also clarified that in view of this position, it shall not be mandatory, for the registration granted u/s 12AA of the Act to a charitable institution, to be cancelled merely on the ground that the cut off specified in the proviso to section 2(15) of the Act is exceeded in a particular year without there being any change in the na...

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Medical college collection Huge Capitation Fee as Anonymous Donations – HC disallows Tax exemption

M/s Navodaya Education Trust Vs Sri. Sunki Rajender Reddy (Karnataka High Court)

M/s Navodaya Education Trust Vs Sri. Sunki Rajender Reddy (Karnataka High Court) The petitioner – Trust in question having the cloak of an Educational Trust, to enjoy the exemption from Income Tax obtained the approval under Section 10(23-C) of the Act, was thoroughly misused and abused by the Trustees who appear to be Members of [&...

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Depreciation on assets allowable to trust despite treatment of same as Income Application : SC

Commissioner of Income tax Vs Rajasthan and Gujarat Charitable Foundation Poona (Supreme Court of India)

Assessing Officer view in disallowing the depreciation which was claimed under Section 32 of the Act was that once the capital expenditure is treated as application of income for charitable purposes, the assessees had virtually enjoyed a 100 per cent write off of the cost of assets and, therefore, the grant of depreciation would amount to...

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Section 13(3) : ITAT upheld exemption to trust who received grant from ABN AMRO Foundation & RBS Bank India

ADIT (E)-II(1) Vs. M/s. RBS Foundation India (ITAT Mumbai)

ADIT Vs. M/s. RBS Foundation India (ITAT Mumbai) Assessee is a limited share registered company under section 25 of the Act and is a separate and independent legal entity wherein RBS Bank India or ABN AMRO Foundation, Netherlands are neither the shareholders nor the promoters of the assessee. The assessee company has been formed with [&he...

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Registration under FCRA cannot be denied to society on mere bald report on use of Foreign Contribution

DR R N Gupta Technical Education Society Vs Union of India (Delhi High Court)

The petitioner - a Society registered under the Societies Registration Act, 1860 - has filed the present petition impugning communications dated 01.08.2014 and 07.12.2015 (hereafter referred to as the impugned communications)...

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Sec. 11 Interest on donation exempt if same forms part of corpus on donor instruction

Commissioner of Income Tax Vs M/s Mata Amrithandamayi Mata (Kerala High Court)

CIT Vs M/s Mata Amrithandamayi Mata (Kerala High Court) A reading of Section 11 shows that subject to the provisions of Sections 62 and 63, the incomes enumerated therein shall not be included in the total income of the previous year of the person in receipt of the income. The person in receipt of the […]...

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Merely charging of fees does not make an educational institute non charitable

Jaycees Public School Vs. ITO (ITAT Delhi)

Jaycees Public School Vs. ITO (ITAT Delhi) We do not find that assessee is not engaged in the educational activities as merely charging of the fees does not make it existing for the purposes of the profit. ...

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No S. 12AA Registration cancellation for non-start of charitable or religious activity

CIT vs. Shreedhar Sewa Trust (Allahabad High Court)

Registration U/s. 12AA cannot be cancelled on the ground that trust has not yet commenced charitable or religious activity- CIT vs. Shreedhar Sewa Trust (Allahabad High Court)...

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Tax Exemption cannot be denied to Trust not meant for one particular religious community

CIT (Exemptions) Vs. M/s. Indian Society Of The Church Of Jesus Christ Of Latter Day Saints (Delhi High Court)

It has been found that the activities of the Assessee Society, though both religious and charitable, were not exclusively meant for one particular religious community. It was, therefore, rightly not denied exemption under Section 11 of the Act....

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Exemption U/s. 11 cannot be denied for delayed-filing of audit report alongwith return due to seizure of accounts

DIT(E) Vs. Vishwa Hindu Parishad (Delhi High Court)

Conclusion: Where assessee trust could not file audit report as its accounts having been seized were released for quite a shorter time period before filing of return, however, the audit report had been filed along with revised return filed by assessee even before last date prescribed for completion of assessment, AO was not justified in d...

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No exemption U/s. 11 on acquisition of assets from borrowed funds

Deputy Commissioner of Income-tax (E) Vs M/s. Peoples Education Society (ITAT Bangalore)

In M/s. Peoples Education Society Vs. DCIT(E), the ITAT, Bengaluru held that the assessee- society is not entitled to exemption in respect of investment in fixed asset using loan amount under section 11 of the Income Tax Act....

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Exemption to State Cricket Association cannot be denied for providing stadium to conduct matches

DCIT (Exemptions) Vs M/s Tamil Nadu Cricket Association, (ITAT Chennai)

Whether the activity of conducting one-day matches'T-20 matches and Indian Premier League matches by Tamil Nadu Cricket Association would amount to doing business or trade? ...

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

Divine Educational Institute and Social Development Society Vs. ITO (ITAT Delhi)

Corpus fund which is meant for specific purpose to meet out capital expenditure could not be part of annual receipts of educational institution, even if no registration u/s 12AA have been granted....

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Exemption cannot be denied to a Trust merely for Profits from Publishing / Selling of School Books

Delhi Bureau Of Text Books Vs Director of Income Tax (E) (Delhi High Court)

The textbooks are provided by the Assessee to the students at subsidised rates. Even the textbooks books, reading materials and school bags are being distributed free to deserving students. The essential activity of the Assessee is connected with 'education' and nothing else....

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Burden of proving Genuineness of Anonymous Donation is on Trust

Madhavi Raksha Sankalp Nirmal Niketan Vs The Dy. Director of Income Tax (ITAT Mumbai)

Assessee to prove that it is covered by exceptions to chargeability to tax as is provided by provisions of Section 1 15BBC of 1961 Act, namely that the assessee maintained a record of the identity indicating the name and address of the person making such contribution and such other particulars as may be prescribed or else it is a religiou...

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Misappropriation of fund cannot be ground for cancellation of Trust registration

Vignana Jyothi Vs Director of Income Tax (ITAT Hyderabad)

The Hyderabad bench of Income Tax Appellate Tribunal (ITAT) held that Collection of donation by Educational Institution/ Society is not ‘Capitation Fee. ...

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In absence of trust deed CIT cannot consider Trust Registration Application

Shri Swaminarayan Mandir Vs Director of Income-tax (Exemption) (ITAT Ahemdabad)

In the present case, the assessee was not having any trust deed. So it is quite difficult for the ld. Commissioner to arrive at a firm conclusion about the objects of the trust. In case the trust deed is being written after application for grant of registration, then that deed can never be seen through by the ld. Commissioner for satisfyi...

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Scholarship paid for pursuing studies abroad is Charitable Expense

Seth Anandram Jaipuria Edu. Society Cantonment Vs CIT (Allahabad High Court)

Payment of Scholarship by Charitable Trust for pursuing Engineering course from University of California, Los Angeles, USA in accordance with its objects is ‘Charitable Expenditure...

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Pre-School falls in the term 'education' as envisaged u/s 2(15)

Green Acres Educational Trust Vs. DCIT (ITAT Mumbai)

The education has got different meaning, purpose or object for each person depending upon its position and background. We have education of various types e.g. Pre-schooling, schooling, higher education, professional education, vocational training, professions training etc etc....

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Congress not eligible to claim exemption u/s 13A

Commissioner Of Income Tax Vs Indian National Congress (I)/All India Congress Committee (Delhi High Court)

Delhi HC helkd that, All India Congress Committee (AICC) and Indian National Congres (INC) Delhi are not eligible to claim exemption u/s 13A of Income Tax Act for AY 1994-95 & 1995-96. The Court further holds that voluntary contributions received by political parties cannot be equated with corpus donation or capital receipts....

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No exemption u/s 10(23C) if institution exists apparently for philanthropic purpose and in reality for profits

M/s Yash Society Vs Chief Commissioner of Income Tax (Bombay High Court)

The contention of the revenue was that the intention of the Legislature is to benefit those institutions which cater to variety of illness and suffering as a service to the society and solely for philanthropic purpose and not for the purpose of profit. ...

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Charitable activities cannot be held as business merely due to charge of fee for rendering services

Institute for Development and Research in Banking Technology (IDRBT) Vs ACIT (ITAT Hyderabad)

The object and activities of the assessee were entrusted to it by RBI as a part of its supervisory role over the bank in India. Revenue doubted that assessee is engaged in commercial activities and hence proviso of section 2 (15) was applicable to the case of assessee and hence not eligible for exemption u/s 11. ...

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Testing and Consultancy Services provided for a fees without profit motive not falls within the ambit of Section 2(15)

Association of State Road Transport Vs CIT (ITAT Delhi)

Assessee association was established with the main object of improving public transport system in the country and its objects as per memorandum of association clearly reveals that the objects of the assessee association are dedicated towards improving road safety standards ...

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Deeming fiction created by virtue of sec. 50C cannot be extended to sec. 11(1A)

Asstt. CIT Vs M/s The Upper India Chamber of Commerce (ITAT Lucknow)

Assessee is a charitable society and is registered under section 12A of the Act. The question of applicability of provisions of section 50C of the Act on transfer of capital asset in the case of a charitable society was examined by the Tribunal in the case of ACIT vs. Shri. Dwarikadhish Temple Trust, Kanpur in I.T.A. No. 256 & 257/LKW/201...

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Mere Presence of other objects does not mean that Institution was not existing Solely for Educational Purpose

Allahabad Young Mens Christian Association Vs CCIT (Allahabad High Court)

In the instant case, it is not disputed that the petitioner society is running an educational institution. Merely because there are other objects of the society does not mean that the educational institution is not existing solely for educational purpose. ...

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Reasonable remuneration paid to secretary of trust, who is also a trustee is allowable

PNR Society for Relief & Rehabilitation of the Disabled Trust Vs DDIT (ITAT Ahmedabad)

In the instant case, the assessee is a charitable trust registered u/s. 12AA of the Act. The assessee trust paid remuneration of Rs 4,80,000/- to Shri Anantbhai K. Shah who is a full time secretary and trustee of the assessee trust....

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Imparting of yoga training by Baba Ramdev Trust is charitable educational object

Divya Yog Mandir Trust Vs. JCIT (ITAT Delhi)

Imparting of yoga training through well structured yoga shivirs/ camps also falls under the category of imparting education, one of the charitable objects defined under section 2(15) of the Act. ...

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Selling some product at a profit ipso facto hit proviso to section 2(15)

Sabarmati Ashram Gaushala Trust Vs ADIT (Exemption) (ITAT Ahmedabad)

The objective of the proviso to section 2(15) is to deny exemption to such assessee who are engaged in business activities in the garb of charitable purpose. Mere selling some product at a profit will not ipso facto hit the assessee by applying the proviso to section 2(15) and deny the exemption available u/s 11. ...

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Section 10(23C) cannot be interpreted regressively to deny exemptions

Tolani Education Society Vs Deputy Director of Income-tax (Exemptions) - I(2), Mumbai (Bombay High Court)

In the present case, the sole and dominant nature of the activity is education and the Petitioner exists solely for the purposes of imparting education. An incidental surplus which is generated, and which has resulted in additions to the fixed assets is utilized as the balance-sheet would indicate towards upgrading the facilities of the c...

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Anonymous donations not to be taxed in case of wholly religious trusts

Shri Girraj Educational and Welfare Society Vs Income-tax Officer 3(4) (ITAT Agra)

With a view to prevent channelisation of unaccounted money to these institutions by way of anonymous donations, a new section 115BBC has been inserted to provide that any income of a wholly charitable trust or institution by way of any anonymous donation shall be included in its total income and taxed at the rate of 30 per cent. ...

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Trust not entitled to exemption if carrying only incidental objects which are not charitable

M. Visvesvaraya Industrial Research & Development Centre Vs Commissioner of Income-tax (Bombay High Court)

An assessee that engages itself only or predominantly in activities relating to its ancillary or incidental objects which do not relate to any charitable purpose and does not carry on any activity relating to its main object which pertains to a charitable purpose is not entitled to an exemption under Section 11. A view to the contrary wou...

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Exemption to Charitable institution cannot be denied on the basis of a hypothetical assumption of an event that will happen in future

Additional Commissioner of Income-tax Vs N.L. Education Society (ITAT Agra)

The whole case revolves upon the lease deed dated 24.12.2004 executed between the lessor, Smt. Sudha Saraswat and the assessee-society through which the land measuring 5150.48 sq. meter was let out to assessee society for 30 years. Copy of the lease deed is appended with the assessment order. The assessee paid Rs. 10,000/- as premium and ...

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Providing sports facilities to general public without restriction to any caste, creed, religion or profession eligible for exemption U/S. 11

Director of Income-tax (Exemption) Vs Goregaon Sports Club (Bombay High Court)

This Court had the occasion to consider similar issues in a Judgment delivered in the case of DIT (Exemption) v. Chembur Gymkhana [Income Tax Appeal No. 5568 of 2010, dated 13-2-2012]. This Court, following the law laid down by the Supreme Court, has held that the fact that the membership of the club is open to a section of the community ...

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No need to Pay Cess – SC Order for Trust in Maharashtra

State of Maharashtra & Ors Vs. The Salvation Army, Western India Territory (Supreme Court of India)

According to a Supreme Court order as given below, there is no need for the Charitable & Religious Trusts Registered in Maharashtra to pay the 2% Annual Cess / Levy / Fees Tax Contribution to the Charity Commissioner's Office, of their total income, which is used to run the Charity Commissioner's office....

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Holding of classes not mandatory to qualify as educational institution

Council for The Indian School Certificate Examinations Vs Director General of Income Tax (Delhi High Court)

Assessee has filed writ petition against order passed by the Director General of Income Tax (Exemptions), for denying them exemption under Section 10(23C)(vi) of the Income Tax Act, 196, on the ground that the aforesaid institute was not directly imparting education and had not employed teachers who were teaching or giving lectures to the...

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Interpretation of the words "manufacture or production" for the purpose of deduction U/s. 10B

ITO Vs E-Infochips Ltd. (ITAT Ahmedabad)

In view of the foregoing, we are in agreement with the findings of Id. CIT(A) that activities undertaken by the taxpayer were in respect of production and export of computer software within the meaning of provisions of section 10B of the Act, especially when the AO himself concluded so for the purpose of section 80HHE of the Act. We are a...

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Concessional ticket to travel Agents cannot be termed as commission

CIT Vs. Singapore Airlines Ltd. (Delhi High Court)

12. In order to come to a definite conclusion whether section 194H of the Act would be applicable to the assessee-airline in respect of transaction, in issue, we propose to first look at the scope and ambit of section 194H of the Act and then analyse the transaction as to whether it falls within the purview of the said Section. In this co...

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ICAI Disciplinary Committee decision in breach of natural justice is invalid

Partha Ghosh vs. ICAI (Bombay High Court)

In October 2007, Disciplinary proceedings were initiated against two partners of M/s Pricewaterhouse (PWC) for alleged professional and other misconduct in conducting the statutory audit of Global Trust Bank. The proceedings were based on the findings in the Special Audit report and the Annual Financial Inspection of the RBI. Though sever...

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Prerequisite of section 12AA of IT Act for rejection of registration of a trust

Memorial Medical Association Vs CIT (ITAT Mumbai)

7. Under section 12AA1(a) of the Act, the CIT is empowered to call for information to satisfy himself about the genuineness of activities of trust /institution. The Commissioner may make such enquiries as he thinks fit for the purpose. Under section 12AA1(b) of the Act, after having satisfied about the objects of Trust/institution and gen...

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Provision for a liability allowable if it can be estimated & if there is reasonable certainty

CIT Vs Insilco Limited (Delhi High Court)

5. Having heard the learned counsel for the Revenue as well as the assessee, we are of the view that no fault can be found with the reasoning of both the CIT(A) as well as the Tribunal. In our view, the issue raised by the Revenue before us that the liability under the "long service award" scheme of the assessee is contingent as the payme...

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Allowability of exemption under section 11(1)(a) of IT Act claimed by a society having both charitable as well as religious objectives

Calicut Islamic Cultural Society Vs. ACIT (ITAT Cochin)

When the legislature has categorically defined the purposes like religious and charitable and if the assessee-society is engaged as per their objects in mixed activities, which are partly charitable and partly religious, it cannot be said that section 11(1)(a) does not contemplate such situation....

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December 2020