Sri Sampath Vinayagar Temple Trust,, ... vs The Ito, (Exemptions),, Visakhapatnam on 29 November, 2017

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Income Tax Appellate Tribunal - Panji

Sri Sampath Vinayagar Temple Trust,, ... vs The Ito, (Exemptions),, Visakhapatnam on 29 November, 2017

आयकर अपीलीय अधिकरण, धिशाखापटणम पीठ, धिशाखापटणम

IN THE INCOME TAX APPELLATE TRIBUNAL,
VISAKHAPATNAM BENCH, VISAKHAPATNAM

श्री िी. दुगाा राि,न्याधयक सदस्य एिं
श्री धड.एस. सुन्दर ससह, लेखा सदस्य के समक्ष

BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER&
SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER
आयकर अपील सं./I.T.A.No.96-98/Viz/2015
(धििाारण िर्ा/A.Ys:2008-09, 2010-11& 2011-12 respectively)

Sri SampathVinayagar The ITO, Ward-3(2)
Temple Trust Visakhapatnam
D.No.10-1-33, CBM Compound
Visakhapatnam
[PAN : AABTS1377B]

(अपीलार्थी/ Appellant) (प्रत्यर्थी/ Respondent)

आयकर अपील सं./I.T.A.No.510, 511/Viz/2016
(धििाारण िर्ा/A.Ys:2009-10 & 2012-13 respectively)

Sri SampathVinayagar The ITO (Exemptions)
Temple Trust Visakhapatnam
D.No.10-1-33, CBM Compound
Visakhapatnam
[PAN : AABTS1377B]

(अपीलार्थी/ Appellant) (प्रत्यर्थी/ Respondent)

धििााररती कीओर से/ Assessee by : Shri C.V.S.Murthy, AR
राजस्व की ओर से / Revenue by : Smt. Madhuvani, DR,
Shri M.N.Murthy Naik, DR

सुििाई की तारीख / Date of Hearing : 22.11.2017
घोषणा की तारीख/Date of Pronouncement : .11.2017
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आदेश /O R D E R
Per Bench

1. These appeals are filed by the assessee against the orders of the

Commissioner of Income Tax (Appeals-1) [CIT(A)], Visakhapatnam for the

A.Ys 2008-09, 2010-11 & 2011-12 dated 28.01.2015 and for the A.Ys 2009-

10, 2012-13 dated 21.10.2016. Since the identical issues are involved, all

the appeals are clubbed, heard together and disposed in common order for

the sake of convenience.

2. All the grounds of appeal are related to the denial of exemption

u/s 11, 12 and 10(23BBA) of I.T.Act.

3. The facts of the case are that the assessee trust was registered on

19.09.1975 vide registered deed No.4633/1975. The assessment for the

assessment year 2010-11 was completed u/s.143(3) on 15.03.2013 in the

status of AOP denying exemption claimed u/s.11 and 12 of the Act, 1961, on

the ground that the assessee trust was unable to produce the copy of

Registration u/s.12AA granted by the Commissioner of Income-tax. For the

assessment year 2011-12, the assessee filed return of income on 29.09.2011

declaring nil income after claiming exemption u/s.11 of the Income-tax Act.
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When the assessing officer (AO) noticed that there was no registration

granted u/s 12AA and the exemption u/s 11 is not available the assessee

claimed the exemption u/s 10(23BBA) of the Income-tax Act. The AO after

examining the details rejected assessee's claim for exemption u/s.11 and

section 10(23BBA) and determined the total income at Rs.73,60,758/-.

3.1. The issue of claim for exemption u/s.11 was examined in detail for

assessment year 2010-11. The AO has discussed the background of the

assessee trust in the impugned order for assessment year 2010-11 as

under :

One T.S. Selva Ganesan, S/o Sri Shanumuga Mudaliar and

Sri T.S.Rajeswaran, S/o Shri Shanumuga Mudaliar, have executed a private

trust deed vide Registered Deed No.4633/1975 on 19.09.1975, with a desire

of endowing the family temple of 'Sampath Vinayagar' for the purposes of

maintaining and conducting the daily puja according to Hindu Savita Agama,

of deity Sampath Vinayagar as a Private Family Temple. For this purpose the

founder trustees have devolved 39 sq.yds of land in T.S.No1035 in Block

No.46 WaItair Ward, Visakhapatnam together with temple, which is a part of

the Building bearing Door No.10-1-12. The objects of the trust are :

(i) to conduct daily puja;
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(ii) to permit worship to be carried out in the temple by the family

members of the founder trustees, their relatives and

descendants and

(iii) to conduct festivals on Vinayaka Chathurthl and auspicious

days and to do all other things necessary and conductive for

attainment of the above objects.

3.2. As per the proceedings of the Commissioner of Endowments,

Hyderabad in D.DIS.No:G4/67740/95, dtd.28.12.1995, an Executive

Officer was appointed to Sri Sarnpath Vinyagar Temple in the interest

of public service and for better management of the institution with a

direction to take complete charge of records accounts, movable and

immovable properties from the executive authorities and in turn the

Endowments department is collecting Audit fee only from this trust.

The founder trustee has challenged the proceedings of Endowment

department for appointing trustee u/s.15 of Andhra Pradesh

Charitable and Hindu Religious Institutes and Entitlement Act, 1987

before Andhra Pradesh High Court. A supplementary deed was

executed on 16.03.1996 (i.e., after the management was taken over by

the Endowments Department) by the founder members of the trust vide

Registered Document No.46/1996, wherein it was stated that
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considerable funds have accumulated to the trust by contributions and

the expansion of the temple structure has to be made by using the

funds within the limited precincts of the temple which is not very

large, hence they are reviewed the availability and utility of funds and

have decided to expand and extend the objects of the family trust in

addition to the original objects as under.

Clause 3. In view of demise of Sri S.G.Sambandan, who was appointed as

Trustee of the trust by the deed of trust dated 19.09.1975, the founders

shall be the trustees of the said trust and they may co-opt any other

person/s as trustee/s in addition to themselves.

(4) The funds of the trust shall also be utilized for putting of

schools or Educating the poor and needy and also to put up any other

construction for prayer, meditation hall, lecture hall on spiritual, or

religious and social matters, community centers and for the purpose

to collect donations from any individuals, trusts, societies, firms,

companies etc..

(5) The trust shall do any other public and charitable

undertaking such as

(a) make donations to poor students for payment of fees,

purchase of Books, note books, uniforms, etc., and for educating the
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poor and needy for their upliftment and also to offer donations to

such public charitable Trusts, temples, etc., for poor feeding and also

to offer donations to such Public charitable trusts with similar

objects.

(b) To arrange for poor feeding and for making donations to any

other trusts, temples, etc., for poor feeding and also to offer

donations to such public charitable trusts with similar objects.

and also invalid and in capacitated persons and to build orphanage

and also to take care of old age people and for the purpose also to

provide shelter, build nursing homes, hospitals, etc, to cater the

needy and also to offer donations to such public charitable trusts

with similar objects.

(6) The funds of the trust whether received as donations from the

public or which may be accumulated from year to year after supplying the

funds for purpose of the trust shall be invested strictly in accordance with

the provisions of section 11(5) r.w. section 13(1)(d) of the Income-tax Act,

1961;
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(7) There shall be no discrimination based on caste, creed, sex or

colour and all people shall be entitled to participate in and benefit from

the activities of the Trust

(8) The trust shall not carry on any activity with the intention of

making profit.

(9) The trust shall not carry on any activity outside India.

(10) The trustees shall not be entitled to any benefit by way of

profit, interest, dividend etc., except by reimbursement of the actual

expenses incurred by them in connection with the activities of the trust

(11) No alterations, amendments, deletions of additions to the

memorandum of association or Rules shall be made without prior

approval of the Commissioner of Income-tax.

(12) In the event of dissolution, the assets remaining shall be

transferred to any other institution with similar objects and aims and

which have been recognized by the income-tax Authorities as Registered

u/s.12AA of the Income-tax Act, 1961.

2.2. During the scrutiny proceedings, the assessee had

explained that the Commissioner of Income -tax had granted
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registration u/s 12AA vide proceedings in Hqrs.No.111/34/95-

96, dtd.23.08.95 and such Recognition was not cancelled by

the CIT. It was also pleaded before the AO that the temple's

income is exempt u/s.10(23BBA) of the Income-tax Act as the

trust is registered and the temple is being managed by the

A.P.Endowments Department. The assessee also relied on the

decision in the case of Sri Jagannath Temple Managing Committee vs.

CIT reported in 299 ITR. The AO called upon the assessees to produce the

copy of registration granted by the CIT, Visakhapatnam u/s.12AA. In spite

of several opportunities, the assessee failed to produce the registration

certificate u/s.12AA. The proceeding referred by the assessee in

Hqrs.No.111/34/95-96 dated 23.08.95 was the letter seeking clarification

on application made by the assessee trust for Registration u/s 12AA but not

the Registration granted by the CIT. Therefore in the absence of

Registration, the AO rejected the claim for exemption of income u/s 11 of

the Act .With regard to claim of exemption u/s 10(23BBA) it was observed

that the assessee trust has not made such claim in any of the earlier years,

from the time the management was taken over by the Endowments

Department. The AO also observed that the provisions of section

10(23BBA) are not applicable to the assessee's case as it is not a body or
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authority established under any Act, and that the impugned assessment

related to the income of the trust which is not exempt. The AO also noted

that the Executive Officer appointed by the Endowments Department is

only acting in the capacity of representative of Endowments Department

and the founder trustee has challenged the proceedings of the Endowments

Department before Honourable Andhra Pradesh High Court which was said

to be pending. The AO considered the CBDT Circular No.258

dtd.14.06.1970 and also the decision in the case of M/s Jagannath Temple

Managing Committee vs. CIT (299 ITR 56) and held that it is distinguishable

on facts and not applicable to the facts of the assessee's case. After

considering the CBDT circular and the decision relied upon by the assessee,

the AO rejected the claim of exemption u/s. 11 and 10(23B8A). The AO

after verifying the account of Receipts & Payments account determined the

total income as follows for the A.Ys.2008-09 to 2012-13 as under:

Assessment Year 2008-09:
Total receipts as per Receipts Rs l,17,14,097/-
And payments account
Less Payments Rs. 70,68,459/-
-----------------
Total taxable income Rs. 46,45,638 or
Rs . 46,45,640/-
Assessment Year 2009-10:
Total receipts as per Receipts Rs l,48,68,469/-
And payments account
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Less Payments Rs. 1,10,07,895/-
-----------------
Total taxable income Rs. 38,60,574 or
Rs . 38,60,570

Tax thereon Rs. 11,58,171/-

Education cess @ 3% Rs. 34,745/-

----------------------

Rs.11,92,916/-

Add : Interest u/s 234 B for 72m Rs.8,58,888/-

---------------------

Total tax payable Rs.20,51,804 or

Rs.20,51,800

Assessment Year 2010-11
Total receipts as per Receipts and payments
account other than agrl. Income Rs.1,42,49,223/-
Expenditure including Depreciation Rs.1,02,81,343/-
Taxable income Rs.39,67,880/-
Agriculture Income Rs. 19,500/-

-------------------------

Assessment year 2011-12
Total receipts as per receipts and payments
Account excluding agrl.income Rs.2,07,26,908/-
Less : Payments Rs.1,33,66,150/-
-------------------------
Taxable Income Rs.73,60,758/- or
Rs.73,60,760/-
Agriculture Income Rs.7,000/-
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Assessment Year 2012-13:
Total receipts as per Receipts Rs 2,21,43,407/-
And payments account excluding agrl. income
Less Payments Rs. 85,74,862/-
Less :Disallowance of expenditure
Under sanitation Rs. 6,08,462/- Rs.79,66,400/-

Total taxable income Rs.1,41,77,007/-
Or Rs .1,41,77,010/-
Agricultural Income Rs. 21,300/-

Total taxable income Rs.1,41,77,290/-
Agricultural Income Rs. 21,300/-

Tax thereon Rs.43,80,783/-

Less : TDS Rs. 2,28,051/-

Payable Rs.41,52,732/-

Add : Interest u/s 234 B Rs.14,94,972/-

------------------

Total demand payable Rs.56,47,704/-
Or

Rs.56,47,700/-
The AO denied the exemption u/s 11, 12 and 10(23BBA) for all the

A.Ys.2008-09 to 2012-13 and recomputed the income as above.

4. Aggrieved by the order of the AO, the assessee went on appeal before

the CIT(A) and the Ld.CIT(A) dismissed the appeal of the assessee
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upholding the status of the assessee as AOP determined by the AO and the

denial of exemption u/s 11 and 12 was confirmed.

5. Aggrieved by the order of the CIT(A), the assessee filed appeal before

this Tribunal. During the appeal hearing, the Ld.AR argued that the

assessee has filed the necessary documents/papers for granting the

registration u/s 12AA and furnished all the details required by the CIT,

thereafter, there was no communication from the CIT, hence it was

understood that the assessee was granted registration u/s 12AA of the Act.

There was no rejection letter or communication from the office of the

Ld.CIT regarding Registration thus the Ld.AR argued that once the

application is submitted and the clarifications are given, it is deemed that

the registration is granted to the Trust and there is no reason to deny the

exemption u/s 11 and 12 of I.T.Act. The Ld.AR further argued that the

assessee has satisfied all the conditions for grant of Registration u/s 12A,

hence requested to grant the Registration and allow exemption u/s 11 and

12 of the I.T.Act.

5.1. The second proposition submitted by the assessee is that the

Trust is taken over by the endowments department and requested
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exemption u/s 10(23BBA) of the Act.

5.2. The third proposition made by the Ld.AR is that even if the status of

the assessee Trust is determined as AOP, the corpus collections of the Trust

cannot be treated as income. In this case, the assessee submitted that there

was separate Hundi for collections of the corpus of the Trust and the

collections are received for the corpus. The collections specifically meant

for corpus of the Trust cannot become part of the assessee's income. The

Ld.AR further submitted that specific display of Hundi represent the

corpus collections of the assesses Trust and resolution to that effect was

passed as early as in 1995 and the corpus is to be excluded even if the

assessee trust is required to be assessed as AOP for not granting

registration.

5.3. The Ld.AR submitted a paper book and taken our attention to the

page Nos. 9 to 13 of the paper book and argued that for the assessment

year 2006-07, the AO allowed exemption claimed u/s 11 thus, following

the order of the AO for the assessment yea2006-07 the assessee is

required to be assessed as Trust entitled for exemption u/s 11 and 12.

6. On the other hand, Ld.DR argued with regard to first proposition of
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deemed registration that the assessee's application for grant of registration

was pending with CIT for want of clarification and it is evident from the

paper book page Nos. 10 and 11, that the Ld.CIT(A) has sought for

clarifications, which was not submitted by the assessee. Though assessee

referred page No.12 of paper book which is dated 03.10.1996, addressed

to the ACIT, Circle-2, Visakhapatnam, it was with regard to dropping the

proceedings initiated by the AO to treat the Trust as private religious Trust,

but there was no evidence to establish that the said letter was submitted

before the Income Tax Authorities. Thereafter there was no follow up from

the assessee, thus the assessee stopped pursuing the Registration. The

assessee failed to produce the proof of granting the registration though

claimed to have been granted registration u/s 12AA of the Act. In the

absence of assessee's failure to establish that the clarification sought by the

department was furnished, it is inferred that registration was not granted

for want of information. The assessment order for the assessment year

2006-07 is made available in the paper book does not show any indication

of the assessee having granted the exemption u/s 11 or granting

registration u/s 12AA of the I.T.Act. It is also obligation on the part of the

assessee to furnish the information and to make the follow up with the

authorities concerned to ascertain the status of the application made for
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registration u/s 12AA of I.T.Act. In this case, the assessee has neither

produced the proof of having registration nor furnished any evidence to

show that the assessee has complied with the clarifications sought by the

department for granting of registration. Therefore, the Ld.DR argued that

the assessee trust was not granted the registration for its failure to submit

the details and the AO has rightly denied the exemption claimed by the

assessee u/s 11 and 12 of I.T.Act.

6.1. With regard to the second proposition of granting exemption u/s

10(23BBA), the Ld. DR argued that exemption u/s 10(23BBA) is allowed to

the body or local authority established, constituted, appointed under

Central / State Provincial Act. The assessee Trust is not established by any

Central / State Provincial Act, therefore, the assessee is not entitled for the

exemption u/s 10(23BBA), which is rightly denied by the AO and

confirmed by the Ld.CIT(A) and there was no error.

6.2. With regard to the third proposition of corpus hundi collections, the

Ld.DR submitted that all the voluntary collections including the corpus

donations are taxable u/s 2(24)(iia) of the I.T.Act if the assessee does not

enjoy the Registration u/s 12AA. Only tied up grants for specific purpose,

donations do not come under the purview of the taxable income as per the
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judicial precedents. In the case of the assessee, the hundi collections are

voluntary contributions, it is meant for corpus fund as per the resolution

passed by the assessee as observed by the Ld.CIT(A) in his order, the

assessee has accounted in the revenue account in the income and

expenditure and hence, the same cannot be excluded from the taxable

income.

7. We have heard the rival submissions and perused the material placed

on record. The Ld. CIT(A) has discussed all the three issues raised by the

assessee in his order in detail in para no.4.1 to 8.2 which is extracted as

under :

"4.1. I have considered the submissions and details filed. It is quite
evident that the assessee has not obtained necessary registration
u/s.12A of the Act for the purpose of claiming exemption of Its
income u/s.11 of the Income-tax Act. The plea that It has furnished
all the clarifications requested by the CIT in regard to its application
for registration and as thereafter no further information was sought
it was under bona fide belief that it had obtained registration
u/s.12A and has quoted such reference number as the sanction for
registration is untenable. ,such plea was not supported by any
documentation. The further contention thatthe assesse trust-shall
be deemed to have been granted registration is also unacceptable,
as it is incomprehensible as to how the assessee-could assume that
it has been granted registration and quote the reference number
as the Registration Number merely because no query had been
raised by the Department. Besides, merely because the department
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had accepted the assessee's claim of registration in the earlier
years based on its representation and without verification does
not of itself vest the assessee, of the status of a charitable trust.
The case laws relied on by the assessee are distinguishable on facts
and law, Therefore, I am of the view that the AO is justified in
denying exemption u/s 11& 12 of the Income-tax Act for the
subject years for want of registration v/s.12A of the Act,

4.2. From the perusal Of the submissions made It is evident that
the assessee is a private charitable trust, whose affairs are partly
managed by the Andhra Pradesh Endowment Department.The
assessee could not furnish any information as to its status in regard
to the management of the affairs by the Endowments Department,
nor could clarify about the outcome of Its challenge before the
Honourable Andhra Pradesh High Court. In this factual matrix, I
find that the assessee has not satisfied any of the conditions
prescribed in section 10(23BBA) of the Act and therefore, it is held
that the AO is justified in denying claim for exemption of income
u/s.10(2388A) of the Act and in assessing the assessee-trust in the
status of AQP.

4.3. The authorized representative also contended that the Hundi
collection represent corpus donations and therefore it should be
excluded while determining the taxable Income, If any; and that
with reference to the balance receipts the expenditure may be
allowed. In this regard, the authorized representative flied a copy of
the resolution of the trust dtdi2.01.1976 and as per which the Hundi
collections shall not be utilized for day to day management of the
trust and shall be utilized for development purpose and shall form
part of corpus of the trust and the income arising out of the corpus
only shall be utilized for temple maintenance/management.

5. Thus the issue to be resolved is whether the donations claimed
to be corpus donations should be excluded for the purpose of
taxation. From the perusal of the financial statements it is evident
that the assessee has been collecting substantial hundi collections
every year. For the year ended31.03.2008 it was Rs.79,48,904/- for
the year ended 31.03.2010 it was Rs.1,01,97,521/- and for the year
ended 31.03.2011 it was Rs.1,20,60,486/-. These amounts were
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shown in the Receipt & Payment account as Hundi income.The
authorized representative's contention is that these represent
corpus donation in view of the resolution passed by the trust and it
was also represented that these amounts are directly shown in the
Balance Sheet and not reflected in Income & Expenditure Account.
In this regard the authorized representative relied on the decision
of the Honourable ITAT Chandigarh Bench In the case of
Srimahadevi Tirath Sarada Ma Seva Sangam Vs. ITO 133 TT] 57.

6. At the outset, I find that the assessee has not adduced any
evidence to show that the impugned hundi collections are made
with a specific direction by the donors that it was contributed for a
specific purpose or towards the corpus of the trust. The authorized
representative has relied on the resolution passed by the trust
referred above in support of such contention. A resolution passed by
a trust is a decision taken by the trust management as to how they
propose to apply and utilize the contributions/donations or Income
received by the trust, and in what manner the objectives of the trust
are sought to be achieved. A. trust resolution cannot in any manner
alter or change the characteristics of a receipt or contribution. The
above referred resolution said to be passed by the trust cannot
change the characteristics of the impugned receipts which are
merely voluntary contributions made by the public at large without
any direction whatsoever. To constitute corpus donation, the
direction of the donor that the contribution was made by him
towards corpus is an important pre-requisite, which was not
fulfilled in the assessee's case. The intention of the donee or the
treatment accorded to the contribution by the recipient is of no
relevance, As the pre-requisite condition is not fulfilled in the
assessee's case, the impugned hundi collections would not take the
character of 'corpus donation'. Therefore the contention of the
authorized representative that these receipts by way of hundi
collection represent corpus donation has no merit.

7. The authorized representative also relied on the decision of
Honurable ITAT, Chandigarh Bench in the case of Srimahadevi
Tirath Sarada Ma Seva Sarigam vs. ITO 133 U] (CbdB) U.O. Page 57,
in that case the facts are very much different, wherein the trust has
kept separate boxes for collection of donations meant of
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'construction of building' and other general purposes. In such
factual scenario, the Honourable Tribunal held that the assessee's
contention that amount collected as donation with specific direction
for spending on building construction cannot be rejected. The
Honourable Tribunal observed that there is no method or mode
prescribed by law for giving such directions and hence the same
may be gathered from the facts and circumstances of the case.
Besides, in that case, the trust had valid registration u/s.12A of the
Act. But in the assessee's case the factual situation is totally
different. There is no material on record, nor any evidence adduced
by the assessee to show that the impugned hundi contribution
were made with a specific direction. Hence the claim of the
assessee is liable to be rejected.

8. Besides it is relevant to note that sec.2(24)(iia) was inserted
by the Finance Act, 1972 w.e.f. 01,04.1973, which read as under

(24)(iia) voluntary contributions received by a trust created
wholly or partly for charitable or religious purposes or by
an institution established wholly or partly for such purposes,
not being contributions made with a specific direction that
they shall form part of the corpus of the trust or institution"

Explanation :For the purposes of this sub-clause, trust"
Includes any otherlegal obligation.
Thus, in 1972, the definition of 'Income" in section 2(24) of the
Income-tax Act has been amended to specifically provide that
voluntary contributions received by a charitable or religious trust
or Institution, regardless of whether such trust or institution has
been created or established wholly or partly for charitable
religious purposes, will be regarded as income for purposes of the
Income-tax Act. Contributions received with a specific direction
that they will form part of the corpus of the trust or institution,
will, however, not be treated as income. For this purpose, the term
"trust" will include any other legal obligation.

8.1. The Direct Tax Laws (Amendment) Act, 1987, w.e.f. April 1,
1989 Inserted clause (d) in sub-section (1) of section 11 to provide
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I.T.A.Nos.96-98/Viz/2015, ITA Nos. 510, 511/Viz/2016
Sri Sampath Vinayagar Temple Trust, Visakhapatnam

that the Income in the form of voluntary contributions made with
a specific direction that they form a part of the corpus of the trust
or the institution shall be excluded from the total income of the
trust or the institution, The expression "not being contributions
made with a specific direction that they shall form part of the
corpus of the trust or institution" was deleted from the definition
of income with effect from 01.04.1989 by the Direct tax Laws
(Amendment) Act, 1987. The effect of these amendments is that
any voluntary contribution received by a trust would form part of
its income, even ifit is contribution made towards corpus with
effect from 01.04.1989. However, donation made with a specific
direction to the corpus will be exempt from tax in view of
provisions contained in Sec.11(1)(d) and Sec.12 and when the
conditions stipulated therein are satisfied. However, in those
cases where the trusts or the institutions lose the
exemption under section 11,either by not complying
with the conditions laid down in section 12A or by
falling within the mischief of section 13, the corpus
donations will be included in their income and taxed. Thus
every voluntary Contribution received by a trust,
including corpus donation would constitute 'income' as per the
definition of income u/s.2(24)(i a) of the Act.

8.2 In view of the above factual and legal position, I do not find
merit in the authorized representative's argument and
accordingly the pleas raised in this regard are rejected. The total
income of the assessee determined by the AO for the subject
assessment years in the status of AOP is upheld."

7.1. From the perusal of the order of the Ld.CIT(A) and the paper book

filed by the assessee it is evident that the assessee was asked some

clarifications vide letter HQRS.No.111/34/95-96 dated 23.08.1995 and

directed the assessee to contact the ACIT, Circle-2, and furnish the

necessary information. Though the assessee stated to have furnished the
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I.T.A.Nos.96-98/Viz/2015, ITA Nos. 510, 511/Viz/2016
Sri Sampath Vinayagar Temple Trust, Visakhapatnam

details as per enclosed letter in the paper book dated 03.10.1996, there is

no evidence placed on record having furnished the cited letter along with

clarifications sought by the Ld.CIT(A) for grant of registration. The

correspondence pertained to 03.10.1996 and subsequently there was no

follow up or correspondence with the office of the CIT for grant of

registration. The assessee has slept over the issue without making any

follow up. Once the application is filed for grant of registration, it is

obligatory on the part of the assessee to furnish the information called for

and peruse the case for granting the registration. Though the assesse is

filing the return of income year after year it has never verified whether the

registration was granted or not. At the time of making the assessment for

allowing exemption u/s 11 and 12, the assessee should furnish the proof of

certificate of registration being granted by the Ld.CIT. In the absence of

furnishing details sought by the CIT and thereafter no correspondence

with the income tax authorities demonstrates that the assessee has not

shown any interest in pursuing the registration further, hence, we are

inclined to believe that the assessee has not submitted the clarifications

and did not prosecute the assessee's case for granting registration u/s

12AA of I.T.Act. The assessee failed to establish that the Registration was

granted in its case or complied with the requirement for granting the
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I.T.A.Nos.96-98/Viz/2015, ITA Nos. 510, 511/Viz/2016
Sri Sampath Vinayagar Temple Trust, Visakhapatnam

Registration. The Ld.AR referred the assessment order for the assessment

year 2006-07 wherein the AO has allowed the exemption without verifying

the status of registration and committed an error and we do not incline to

continue the same mistake. Accordingly we uphold the order of the

Ld.CIT(A) and dismiss the appeal of the assessee on this ground.

7.2. The next issue is with regard to the granting of exemption u/s

10(23BBA) of I.T.Act. The assessee stated that the temple trust was taken

over by the endowments department and requested for granting

exemption u/s 10(23BBA), but the assessee did not place any evidence to

show that the temple trust was constituted by any of the central /state

provincial act as required under section 10(23BBA) of the act. Therefore

we do not find any infirmity in the order of the Ld.CIT(A) and the same is

upheld.

7.3. The third proposition of the assessee was that the corpus funds

required to be excluded even if the assessee trust is treated as AOP from

the purview of the income. This issue has been discussed in detail by the

Ld.CIT(A) in his order. The assessee has not placed any evidence to show

that the Hundi collections were meant for corpus trust and are tied up

grants which were received for the specific purpose. Mere resolution of the
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I.T.A.Nos.96-98/Viz/2015, ITA Nos. 510, 511/Viz/2016
Sri Sampath Vinayagar Temple Trust, Visakhapatnam

trust and placing Hundi is not sufficient to hold that the donations are

received for the corpus. There must be an evidence from the donor to

establish that the donations are received for specific capital purpose. The

assessee has not placed any evidence of directions of the donors for it's

utilisation. The resolution passed by the trust is for application of it's

receipts in the manner in which the collection required to be utilized but

not the mandate of donors as rightly observed by the Ld.CIT(A). Further the

hundi collections are voluntary contributions which cannot be excluded

from the definition of income u/s 2(24)(iia) of the Act. The specific

purpose donations are excluded by the amendment made in the Finance

Act, 1987 w.e.f. 1.4.1989. Therefore, all the voluntary contributions

received by the assessee are taxable within the meaning of section

2(24)(iia) of the I.T.Act if the registration u/s 12A is not available to the

assesse. The courts have held that the specific purpose or tied up grants are

excludible but the assessee has not placed any evidence to show that the

hundi collections are received for specific purpose. In addition to the above

as held by CIT(A), the hundi collections are also included in the receipts and

payments account. The assessee has not produced the balance sheet and

demonstrated that the corpus funds are tied up grants and received for

capital purpose. Therefore, we do not find any infirmity in the order of the
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I.T.A.Nos.96-98/Viz/2015, ITA Nos. 510, 511/Viz/2016
Sri Sampath Vinayagar Temple Trust, Visakhapatnam

Ld. CIT(A) and the same is upheld.

8. Ground No. six is related to charging interest u/s 234A, 234B and

234C which is mandatory, The Ld.AR also did not make any argument.

Hence, this ground is dismissed.

9. In the result, appeal of the assessee for the A.Ys 2008-09 to 2012-13

in ITA Nos.96 to 98, 510 and 511 are dismissed.

The above order was pronounced in the open court on 29th Nov 2017.

Sd/- Sd/-
(धड.एस. सुन्दर ससह) (िी.दुगाा राि)
(D.S. SUNDER SINGH) (V. DURGA RAO)
लेखा सदस्य/ACCOUNTANT MEMBER न्याधयक सदस्य/JUDICIAL MEMBER
धिशाखापटणम /Visakhapatnam
ददिांक /Dated : 29.11.2017

L. Rama, SPS
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I.T.A.Nos.96-98/Viz/2015, ITA Nos. 510, 511/Viz/2016
Sri Sampath Vinayagar Temple Trust, Visakhapatnam

आदेश की प्रधतधलधप अग्रेधर्त/Copy of the order forwarded to:-

1. The Assessee- Sri SampathVinayagar, Temple Trust, D.No.10-1-33, CBM
Compound, Visakhapatnam
2. The Revenue - The ITO, Ward-3(2), Visakhapatnam and The ITO
(Exemptions), Visakhapatnam
3. The Commissioner of Income Tax-1, Visakhapatnam
4. The Commissioner of Income Tax-1,2(i/c), Visakhapatnam & Rajahmundry
5. धिभागीयप्रधतधिधि, आयकरअपीलीयअधिकरण, धिशाखापटणम /DR, ITAT, Visakhapatnam
6. गाडाफ़ाईल / Guard file

आदेशािुसार / BY ORDER

// True Copy // Sr. Private Secretary ITAT, VISAKHAPATNAM

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Income Tax Appellate Tribunal - Panji

Sri Sampath Vinayagar Temple Trust,, ... vs The Ito, (Exemptions),, Visakhapatnam on 29 November, 2017