Income Tax Appellate Tribunal - Delhi
Maharaja Agrasen Hospital Charitable ... vs Assessee on 7 February, 2012
IN THE INCOME TAX APPELLATE TRIBUNAL
(DELHI BENCH "E" NEW DELHI)
BEFORE SHRI RAJPAL YADAV AND SHRI K.G. BANSAL
ITA Nos. 3555 & 3556/Del/2011
Assessment Years: 2003-04 & 2004-05
Income-tax Officer, Vs. Maharaja Agrasen Hospital
Trust Ward-IV, Charitable Trust, Road No.35,
New Delhi. Rohtak Road, Punjabi Bagh(W)
New Delhi
(PAN: AAATM1408N)
(Appellant) (Respondent)
( Cross Obj. Nos. 310 & 311/Del/2011 )
ITA Nos. 3555 & 3556/Del/2011
Assessment Years: 2003-04 & 2004-05
Maharaja Agrasen Hospital Trust Vs. Income-tax Officer,
Charitable Trust, Road Trust Ward-IV,
Rohtak Road, Punjabi Bagh(W) New Delhi.
New Delhi
(PAN: AAATM1408N)
(Appellant) (Respondent)
Appellant by: Shri RS Negi, Sr.DR
Respondent by: S/Shri Amod Sinha & Anshum Jain,
Advocates
Date of hearing : 07.02.2012
Date of pronouncement : 29.02.2012
ORDER
PER BENCH:
The revenue is in appeals before us against the separate orders of even date i.e. 10.05.2011 passed by the Learned CIT(Appeals) for assessment years 2003-04 and 2004-05. The grievance of the revenue is that Learned CIT(Appeals) has erred in deleting addition of Rs.75,81,000 and 2 Rs.116,02,000 in assessment years 2003-04 and 2004-05 respectively. On receipt of notice in the revenue's appeals, assessee has filed cross objections bearing Nos. 310 & 311/Del/2011. In the cross-objections, assessee has pleaded that tax effect involved in the appeals of revenue is less than Rs. 3 lacs and therefore, they are not maintainable. However, learned counsel for the assessee at the time of hearing did not press the cross objections, they are rejected.
2. The brief facts of the case are that assessee is a society registered under the Societies Act vide Registration No. S-11107 dated 11.8.1980. It is running and maintaining hospital in the name of Maharaja Agrasen Hospital. The main aims and objects of the society is to give free medical aid to every deserving human being irrespective of caste, creed and sex, to work and propagate for promoting better health amongst the public, and to work for the upliftment of society. To set up, manage and organize hospitals, dispensaries, charitable institutions, to provide training programs for the doctors, nurses and paramedical workers etc. The assessee was also granted registration under sec. 12A(a) of the Act w.e.f. 16.12.1980. It is also enjoying registration under sec. 80-G of the Income-tax Act, 1961. It has filed its return of income for assessment year 2003-04 on 31.10.2003 and for 3 assessment year 2004-04 on 12.10.2004. It has declared nil income in both the assessment years. The case of the assessee was selected for scrutiny assessment and a notice under sec. 143(2) was duly issued and served upon the assessee. It came to the notice of the learned Assessing Officer that assessee has credited its accounts by a sum of Rs.91,33,042 under the head "fresh corpus donation" in assessment year 2003-04. Assessing Officer has further observed that out of this amount, a sum of Rs.15,52,042 was received by cheque. The rest of the amounts was received with the help of hundi coupons and assessee failed to give details of donors. Similarly, in assessment year 2004-05, Assessing Officer has observed that a sum of Rs.137,79,668 has been credited towards corpus funds out of that a sum of Rs.116,02,000 was received through hundies. Assessing Officer has observed that assessee was unable to give separate details/confirmations/identity of the person in respect of corpus donation received through hundies as required under sec. 11(1)(d) and hence he treated these donations as income of the assessee and made the addition.
3. Dissatisfied with the order of the Assessing Officer, assessee carried the matter in appeal before the Learned First Appellate Authority. Learned First Appellate Authority has decided both the appeals by separate orders but 4 his findings are verbatim same except variation in the quantum. The assessee contended before the Learned CIT(Appeals) that its case is squarely covered by the order of the ITAT passed in the case of Shree Mahadevi Tirath Sarda Ma Seva Sangh Vs. ITO reported in 133 TTJ 57. According to the assessee, in the hundi coupons, it was specifically mentioned that this donation is being received for consideration of building and the donor was fully aware about the aspect. The assessee has submitted the details of all those hundies before the Assessing Officer. Learned First Appellate Authority on an analysis of the details arrived at a conclusion that donation was collected for a specific purpose i.e. to construct the building and, therefore, it cannot be treated as income of the assessee. Learned DR relied upon the order of the Assessing Officer. He pointed out that assessee failed to give the details of the donors and, therefore, Assessing Officer has rightly made the addition. On the other hand, learned counsel for the assessee submitted that as per section 12 read with section 11(1)(d) of the Act, corpus donations received by the assessee with a specific direction at the end of the donors, the same will not be treated as income of the assessee. He pointed out that in the case of Shree Mahadevi Tirath Sharda Ma Seva Singh, ITAT has considered a similar aspect. He placed on record copy of the ITAT's order and submitted that in that case a donation box was put at the entrance of the temple. A 5 resolution was passed to raise the fund for construction of the building by collecting such donations and accordingly whatever came in that donation box put for a specific purpose was applied by the trust towards construction of the building. The ITAT on an analysis of the facts and circumstances held that donation was received for a specific purpose. The donors have donated the amounts with a specific directions that it will be used for construction of the building. It was a corpus donations and cannot be treated as income for the purpose of section 11 of the Act.
4. We have duly considered the rival contentions and gone through the record carefully. Section 12 sub-section (1) and section 11(1)(d) are relevant provisions for adjudicating the controversy in hand. They read as under:
"12. Income of trusts or institutions from contributions.-(1) Any voluntary contributions received by a trust created wholly for charitable or religious purposes or by an institution established wholly for such purposes (not being contributions made with a specific direction that they shall form part of the corpus of the trust or institution) shall for the purpose of s.11 be deemed to be income derived from property held under trust wholly for charitable or religious purposes and the provisions of that section and s. 13 shall apply accordingly".
x x x x x x x x 6 "11.(1) Subject to the provisions of sections 60 to 63, the following income shall not be included in the total income of the previous year of the persons in receipt of the income-
x x x x x x x x x
(d) income in the form of voluntary contributions made with a specific direction that they shall form part of the corpus of the trust or institution".
5. A bare perusal of the above clauses would reveal that if voluntary contribution has been received by the assessee with specific directions that they shall form part of the corpus of the trust or institution then such contribution would not fall within the ambit of income for the purpose of section 11 of the Act. The case of the Assessing Officer is that assessee society fail to substantiate its claim of donation received towards the corpus fund. In other words, according to the A.O., it has not established on the record that donations were received with a specific directions that these are towards corpus. The basis for arriving at this conclusion assigned by the Assessing Officer is that assessee could not give complete name/address, identity of the donors and thus genuineness of the donation exhibiting that they are for corpus remained unexplained. To our mind, learned Assessing Officer failed to appreciate the true aspects. According to the assessee, it has 7 been specified in the hundi coupons that donations would be for construction of building, thus, it suggests that when donation was collected from the donors, he was appraised the object for which such amount was being donated by him. If the donor was not willing to give the donation for construction of the building, he may refuse to give that amount. Learned CIT(Appeals) has further observed that section 115(BBC) has been brought on the statute book w.e.f. 01.04.2007. This section deals with taxation of anonymous donation. But this provision has been brought on the statute book w.e.f. assessment year 2007-08. It is not applicable in these two assessment years. Learned First Appellate Authority has considered the judgement of Hon'ble Gujarat High Court in the case of Sthanakvasi Vardhman Vanik Jain sangh [2003] 131 Taxman 270 (Guj.). Taking into consideration the order of the Learned CIT(Appeals), we do not find any error in it. Accordingly, the appeals of revenue as well as cross-objections of the assessee are dismissed.
Decision pronounced in the open court on 29.02.2012 Sd/- Sd/-
( K.G. BANSAL ) ( RAJPAL YADAV )
ACCOUNTANT MEMBER JUDICIAL MEMBER
Dated: 29/02/2012
Mohan Lal
8
Copy forwarded to:
1) Appellant
2) Respondent
3) CIT
4) CIT(Appeals)
5) DR:ITAT
ASSISTANT REGISTRAR