HALDIRAM CHARITABLE SOCIETY,DELHI vs. INCOME TAX OFFICER, EXEMPTION 1(2), DELHI

PDF · subscribers
ITA 2459/DEL/2024Status: DisposedITAT Delhi26 May 20253 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal decided that the impugned disallowance of Rs. 31 lakhs should be deleted. The reasoning was that while the Revenue drew support from the CIT(A)/NFAC's finding that the donation was a corpus donation from the recipient's books, it could hardly dispute the clinching fact that there was neither any specific direction from the assessee/donor to the recipient to this effect, nor any supportive evidence in the department's favor. The Tribunal found this situation peculiar and deemed it appropriate to delete the disallowance/addition. The ratio decidendi is that a donation treated as corpus by the recipient, without a specific direction from the donor and without supporting evidence for the revenue's claim, should not be disallowed as an application of income for exemption under section 11.

What were the facts?

The assessee, Haldiram Charitable Society, for assessment year 2020-21, is in appeal against the order of the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi. The Assessing Officer, in an order dated 24.09.2022 under section 143(3), disallowed a claim of Rs. 31 lakhs donated by the assessee to M/s. Triveni Sewa Mission. The disallowance was based on the reasoning that the donation constituted a corpus donation rather than an application of income, thereby not qualifying for exemption under section 11 of the Income-tax Act, 1961. The CIT(A)/NFAC upheld this disallowance. The present appeal challenges this decision.

What were the issues?

1. Whether the donation of Rs. 31 lakhs made by the assessee to M/s. Triveni Sewa Mission, which was treated as a corpus donation by the Assessing Officer and disallowed for exemption under section 11, is a valid application of income for charitable purposes? Assessee's Contention: The assessee's appeal is allowed, implying their stand was that the donation was a valid application of income. Specific arguments are not detailed in the judgment, but the outcome suggests they argued for the allowability of the donation. Revenue's Contention: The Revenue vehemently reiterates its stand, drawing support from the CIT(A)/NFAC's order. The Revenue argued that the donation was a corpus donation as per the books of account of the recipient, M/s. Triveni Sewa Mission, and thus not eligible for exemption under section 11(1) Explanation 2 read with section 12(1) of the Act. The Revenue also pointed to the lack of specific direction from the donor for application and supportive evidence in the department's favor.

Which sections of the Income-tax Act were involved?

Section 11,Section 11(1),Section 12(1),Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH: “SMC” NEW DELHI

Before: SHRI SATBEER SINGH GODARA

For Appellant: Adv. Ms. Ragini Handa, Adv, CA Sh. Harsh Raghav, Adv
Hearing: 26.05.2025Pronounced: 26.05.2025

ORDER This assessee’s appeal for assessment year 2020-21, arises against the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre [in short, the “CIT(A)/NFAC”], Delhi’s DIN and order no. ITBA/NFAC/S/250/2023-24/1062998263(1), dated 20.03.2024 involving proceedings under section 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’). 2. Heard both the parties. Case file perused.

3.

It emerges during the course of hearing with the able assistance coming from both the parties that the learned CIT(A)/NFAC has rejected the assessee’s claim of Rs.31 lakhs donated to M/s. Triveni Sewa Mission which was disallowed by the Assessing Officer in his order dated 24.09.2022 since representing a mere corpus donation than application of income, for the purpose of claiming section 11 exemption.

4.

Both the parties vehemently reiterate their respective stands. The Revenue draws strong support from the CIT(A)/NFAC’s detailed discussion holding the assessee’s impugned claim as not allowable since found to be a corpus donation from the books of account of the recipient M/s. Triveni Sewa Mission. It could hardly dispute the clinching fact that neither there is any specific direction from the assessee/donor to the said recipient to this clinching effect going by section 11(1) Explanation 2 r.w.s. 12(1) of the Act nor any supportive evidence in the department’s favour. It is therefore deemed appropriate in these peculiar facts to delete the impugned disallowance/addition in very terms.

5.

This assessee’s appeal is allowed. Order pronounced in the open court on 26th May, 2025

More judgments on Section 11

All 7,190 judgments and leading authorities on Section 11 →

Recent GST High Court judgments

Search GST case law →