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4.The assessee filed their return of income for the assessment years 1998-99 and 1999-2000 wherein, it had been mentioned that the assessee is incorporated under Section 25 of the Companies Act, 1956. The return for the assessment year 1998-99 was processed and the Assessing Officer issued a notice dated 09.08.2000 under Section 142(1) of the Act, and called for details, of which, what would be relevant for the purposes of this case is the ledger copy of the corpus. The assessee produces the relevant copy of the ledger and also letters given by Pentafour Software and Exports Ltd., dated 01.04.1997, 31.03.1998 and 31,03.1998; and copies of the ledger account. The letters given by Pentafour Software and Exports Ltd., stated that the contribution made by them is towards a corpus fund of the assessee which is to be invested in shares and securities and only the income from such investments is to be spent for achieving the objects of the http://www.judis.nic.in  T.C.A.Nos.582 to 584 of 2009 foundation. The assessment for the year 1998-99 was completed under Section 143(3) of the Act, on 09.03.2001 and for the assessment year 1999-2000, it was completed under Section 143(3) of the Act, on 21.08.2001.

http://www.judis.nic.in  T.C.A.Nos.582 to 584 of 2009

9.The Assessing Officer passed the re-assessment orders on 30.09.2005 holding that any corpus fund is exempted from the charge of tax only under Section 11(1)(d) of the Act, and in order to claim exemption under the said provision, the assessee has to comply with the provisions of Section 12A of the Act and should have got itself registered under Section 12A of the Act. Thus, the Assessing Officer concluded that the assessee has not fulfilled the conditions required to claim exemption on the corpus fund under Section 11(1)(d) of the Act.

10.It was further pointed out that merely because the assessee company was registered under Section 25 of the Companies Act, 1956, the same will not automatically entitle the assessee for exemption from payment of income tax on the corpus fund received. Furthermore, it is pointed out that the onus is on the assessee to prove that the corpus fund is a capital receipt and the assessee has failed to establish the same and such contention raised by the assessee requires to be rejected.

26.The assessee's case was that, it received voluntary contribution from three companies towards the corpus fund of the assessee company with a condition that, it should be invested in shares and securities and only the income from such investment is to be spent for achieving the objects of the assessee. The copies of the letters given by the companies, which extended the voluntary http://www.judis.nic.in  T.C.A.Nos.582 to 584 of 2009 contributions were enclosed. The copy of the ledger account for the corpus fund was enclosed for the entire period along with all the details. After the receipt of the documents, notice under Section 143(2) of the Act was issued to the assessee, the assessee's authorized representative attended the hearing before the Assessing Officer and the assessment was completed under Section 143(3) on 09.03.2001.