RAMKRISHNA BAJAJ CHARITABLE TRUST,MUMBAI vs. DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE 26(1), MUMBAI, MUMBAI

1.5. It is submitted that various case laws relied upon by the learned Assessing Officer and the learned CIT(Appeals) are clearly not applicable and can be distinguished on facts.

The appellant prays that the learned Assessing Officer be directed to grant exemption under Section 10(34) of the Act for a sum of Rs. 2,99,17,200/-in respect of Dividend Income as the denial thereof is unwarranted, unjustified and unreasonable.

II. DENIAL OF DEDUCTION UNDER SECTION 80-GGA READ WITH SECTION 35AC OF THE ACT: RS, 35,67,302/-

2.1 On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in denying deduction under Section 80 GGA read with Section 35AC of the Act for a sum of Rs. 35,67,302/-in respect of the donations paid/granted by the appellant to eligible trusts/ institutions.

2.2. The learned CIT(A) failed to appreciate the information/explanation given and submissions made by the appellant in support of its claim for deduction under Section 80-GGA read with Section 35AC of the Act for donations paid/granted.

2.3. It is submitted that the considering the non-compliance with the provisions of Section 11(5) read with Section 13(1)(d) of the Act, the Appellant did not claim the benefits of Section 11&12 of the Act. Accordingly, the Appellant is fully justified and is entitled to deduction under Section 80-G/80-GGA of the Act in respect of the donations paid to eligible institutions.

The appellant prays that the learned CIT(A) be directed to grant deduction under Section 80-GGA read with Section 35AC of the Act for a sum of Rs.35,67,302/-and reduce the total income of the appellant accordingly.

III. RATE OF TAX:

3.1. Without prejudice to the above grounds of appeal, it is submitted that on the facts and in the circumstances of the case and in law, the learned CIT(Appeals) erred in confirming the Tax levied by the learned Assessing Officer at flat rate of 30% in respect of dividend income claimed to be exempt by the Appellant.

3.2. The learned CIT(A) failed to appreciate that the Appellant is an Association of Persons (AOP), a charitable trust not availing benefits of Section 11 of the Act and is liable to pay tax at the slab rates applicable in the case of an Individual, etc.

The Appellant prays that the learned Assessing Officer may kindly be directed to re-compute the tax by applying the normal slab rates and reduce the tax levied accordingly.”

The AO held that the dividend income earned by way of investment not prescribed under section 11(5) r.w.s. 13(1)(d) of the Act out of the property held i.e. the shares under the trust, thus the Trust had violated the tax statutes and for that reason it had to be penalized by way of charging the relevant portion of income under section 164(2) of the IT Act, holding that such violation won’t invalidate its status of trust. Accordingly, the assessment was completed on 28.03.2016 by making the aforesaid additions, thereby determining the total income of assessee at Rs. 2,99,17,200/- as the AO had disallowed the exemption under section10(34) of the IT Act claimed in respect of dividend income by the assessee. 4

Accordingly, the addition under section 164(2) of the Act for Rs. 2,99,17,200/- was sustained, the assessee’s contention to allow the exemption claimed under section 10(34) was denied, however the interest income of the assessee to the tune of Rs. 35,67,302/- was allowed as exempt under section 11(1)(a) of the Act. While deciding the aforesaid issues the summarized observations and conclusions of ld. CIT(A) are as under:

“7. Summarization of conclusions: -

7.1. With respect to decision of considering the appellant in the status of Trust, it is presented that following the judicial precedent set by the Jurisdictional ITAT Bench in the case of Navajbai Ratan Tata Trust, the status of the appellant would be held as trust since the application for withdrawal of registration u/s 12A had been filed before the competent authority on 30.03.2016 which succeeds the period under assessment i.e. FY 2012-13.

7.2. With respect to the applicability of section 11(5) and 13(1)(d) of IT Act, it is delivered that since the appellant trust had invested in modes of investment which were not authorized by tax statute as per section 11(5) and 13(1)(d) of the IT Act i.e. in the shares of Bajaj Group of companies, dividend income derived out of such unprescribed modes of investment as per 11(5) and 13(1)(d) of the IT Act, is liable to be penalized u/s 164(2) of the IT Act to the extent such quantum of violation had been made, following the judicial rulings pronounced in the cases of DIT (Exemptions) v. Sheth Mafatlal Gagalbhai Foundation Trust [2001] 249 ITR 533/114 Taxman 19 (Bom.), DIT v. Working Women's Forum [2015] 235 Taxman 516/63 taxmann.com 324 (SC) and CIT v. Fr. Mullers Charitable Institutions [2014] 227 Таxman 369/51 taxmann.com 378 (SC) and hence the dividend income of Rs.2,99,17,200/- has to be charged u/s 164(2) of the IT Act and hence no intervention is necessitated in this context and AO's addition is sustained.

Ramkrishna Bajaj Charitable Trust 7.3. With respect to decision of disallowing the exemption claimed u/s 10(34) of the IT Act, as described earlier, since the appellant is held in the status of the trust and itself had filed its return of income in Form ITR-7, the governing provisions which deal with its income are section 11,12 and 13 and not the section 10. Section 10 had no role to play in the income derived from the property held under trust. Once the trust income had been penalized u/s 164(2) for the violation it made, it couldn't claim the exemption for the same in the disguise of section 10(34) to avoid taxation: Moreover, the case law quoted by the appellant in its favour by Jurisdictional ITAT Bench i.e. Jasubhai Foundation, is comparing like apples and oranges and hence the same couldn't be taken as the judicial precedent in favour of the appellant and hence the grounds with respect to allowing the exemption u/s 10(34) is hereby dismissed.

7.4. With respect to the decision INCOME of allowing TA the QERNRETIMENA interest income of Rs. 35,67,302/- u/s 11 of the IT Act, it is brought into notice that the interest income had been derived out of valid investments as per 11(5)(iii) of the IT Act and hence the same has to be construed as valid receipts and the same has to be applied in its charitable objects as mandated by the section 11(1)(a) of the IT Act. Even though the AO had allowed the exemption/deduction claimed by the appellant to the tune of Rs. 35,67,302/- u/s 35AC r.w.s 80GGA of the IT Act, it hadn't substantiated why the same by allowed u/s 35AC r.w.s 80GGA of the IT Act. CIT(A) who vests with the powers enumerated via section 251 of the IT Act, has taken the issue into consideration and the same has been adjudicated. Since the status of the appellant is held as trust, the governing provisions are section 11,12 & 13 and not any other section. Holding the status of the appellant as trust, it is deduced that of the total application of Rs. 1,33,50,000/, the quantum of Rs. 1,21,00,000/- had been applied in the trust which has similar objects as of the appellant. Such application of Rs. 1,21,00,000/- was restricted to its valid receipts of Rs.35,67,302/- and the same is considered as the application of income u/s 11(1)(a) of the IT Act. In conclusion, the quantum of Rs. 35,67,302/- had been allowed as exemption u/s 11(1)(a) of the IT Act and not u/s 35AC r.w.s 80GGA of the IT Act since the status of the appellant is held as trust.”

Ramkrishna Bajaj Charitable Trust 5. At the outset, the ld. Counsel representing the assessee submitted that the denial of exemption in respect of dividend income by the AO and further upholding such denial by the ld. CIT(A) was not in accordance with the mandate of law. It is submitted that this issue is no more res integra and has fairly settled in favour of the assessee, as decided by the Co-ordinate Benches of ITAT, Mumbai in the following cases: i. Shishir Bajaj Charitable Trust for Assessment Year 2013-2 ii. Shekhar Bajaj Charitable Trust for Assessment Year 2014-2015, iii. Madhur Bajaj Charitable Trust for Assessment Year 2013-14 ITA No.: 7100/MUM/2019 iv. Mahakalp Arogya Pratisthan for the Assessment Year 2013-14, v. Bhoopati Shikshan Pratisthan for the Assessment Year 2013-14 ITA No.: 4606/MUM/2019

The relevant observation of the ITAT, reads as under:

"The short issue that we are required to adjudicate in this appeal is whether the assessee is entitle to exemption u/s. 10(34) even if the assessee is registered charitable institution u/s. 12A and it does not fulfil the requirements of exemption of related income as a charitable institution. This question is no longer res integra, and learned representatives do not dispute that position. As learned representatives fairly agree, Hon'ble jurisdictional High Court in the case DIT (E) vs. M/s. Jasubhai Foundation (2015) 374 ITR 315 has answered this question in favour of the assessee and observed as follows:-

There is nothing in the language of section 10 and/ or section 11 which what is provided by section 10 or there with is not to be taken into consideration or omitted from the purview of section 11. If the except the government of Mr. Malhotra and the Revenue, the same would amount to reading into the provisions Ramkrishna Bajaj Charitable Trust something which is expressly not there. In such circumstances, the tribunal was right in its conclusion that income in this case the assessee-trust is not included by virtue of section 10, then that not be considered under section 11.

It is thus clear that so far as relevant assessment year is concerned whether or not an assessee is registered as charitable institution and whether or not the assessee in such situation fulfils the requirements for exemption of income u/s. 11, the exemption u/s. 10 (34) will nonetheless be available.”

6. To support the aforesaid contention, ld. AR of the assessee placed before us the decision of ITAT, Mumbai Benches in the case of Tata Education Trust and M/s Rogay Charities, wherein the exemption under section 10(34) of the Act has been granted / uphold by following the judgment of Hon’ble Mumbai High Court in the case of M/s Jasubhai Foundation [2015] 374 ITR 315 (Bom.) the relevant findings of the Tribunal in the case of Tata Education Trust are as under:

“8. We have considered rival submissions and perused the materials on record. The short issue arising for consideration is whether in case of a Charitable Trust registered u/s. 12A of the Act and eligible for claiming exemption u/s. 11 of the Act no exemption u/s. 10(34) and 10(35) of the Act is admissible. We find identical issue arose in assessee’s case in AY 2012-13 and while deciding the issue in the order referred to above, the Coordinate Bench has held as under:-

“4. We note from perusal of the aforesaid grounds that the revenue is aggrieved by the action of the Ld. CIT(A) deleting the action of the AO denying exemption claimed by the assessee u/s 10(34) of the Income Tax Act, 1961(hereinafter “the Act”) on the dividend income received by the assessee trust.

“(i) On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in allowing exemption u/s.10(34) of the Income tax Act to the tune of Rs.115,47,80,338/- on the dividend received on shares without appreciating the fact that the income derived by the assessee trust is from the properties held under the trust and claimed exemption u/s. 11 of the I.T. Act.

(ii) On the facts and circumstances of the case and in law, the Ld CIT(A) erred in allowing exemption u/s.10(34) of the Income tax Act to the tune of Rs. 115,47,80,338/- on the dividend received on shares without appreciating the fact that the income derived by the assessee trust is from the properties held under the trust and claimed exemption u/ S. 11 of the I T Act which is denied by the AO due to violation of provisions of section 13(l)(d) and 13(2)(h) of the Act. The violation of section 13 has not changed the status of the Trust i.e, from being Trust to private person. The violation of section 13 has changed the nature of the income i.e. from being the income derived from the property held under Trust to Private Income. The assessee claimed alternative exemption u/s. 10(34) which was not allowed by the AO because section 10(34) does not deal with income derived from property held under trust.

(iii) On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in allowing exemption u/s.10(34) of the Income tax Act to the tune of Rs.115,47,80,338/- on the dividend received on shares without appreciating the fact that the income derived by the assessee trust is from the properties held under the trust and claimed exemption u/s. 11 of the I T Act. Section 11 starts with the words "income derived from property held under Trust" which means that section which exclusively deals with income derived from property held under trust is section 11 and not any other section. The assessee trust cannot claim alternative exemption under section 10(34) because section 10(34) does not deal with income derived from property held under trust.

(iv) On the facts and circumstances of the case and in law, the Ld CIT(A) erred in allowing depreciation without appreciating the fact that the assessee has claimed the deduction twice. The assessee trust claimed depreciation and also capital expenditure viz addition to fixed assets in the computation of income which amounted to double deduction.

(v)The appellant prays that the order of the A.O. should be restored and order of the CIT(A) should be set aside."

“11. The first issue to be decided in Revenue‟s appeal is with regard to the claim of exemption under section 10(34) of the Act on dividend income received on shares by the assessee.

11.1 The brief facts of the case pertaining to this issue as emanating from record are: During the year under consideration, the assessee trust had received dividend income of Rs. 115,47,80,338 which was claimed as exempted under section 10(34) of the Act.

11.2 The AO vide order dated 18.03.2014 held that the assessee trust is not entitled to claim exemption under section 10(34) as assessee‟s entire income derived from the property held under trust is governed by the provision of section 11 of the Act. The AO further held that once there is violation under section 13 and as a result of same, exemption under section 11 is denied, assessee cannot claim alternative exemption under section 10(34) because section 10(34) of the Act does not deal with income derived from property held under trust.

11.3 In appeal against the aforesaid disallowance, the CIT(A) vide order dated 18.12.2017 following the decision of Hon‟ble Jurisdictional High Court in the case of DIT (Exemption) v. Jasubhai Foundation: 374 ITR 315, interalia, allowed the appeal of the assessee and directed the AO to grant benefit of provision of section 10(34) of the Act in respect of dividend income of Rs. 115,47,80,338.

Ramkrishna Bajaj Charitable Trust 11.4 Being aggrieved by aforesaid findings of the CIT(A), Revenue is in appeal before us. It is pertinent to note that section 10 and section 11 of the Act fall under the Chapter III which deals with “Incomes which do not form part of Total Income”. Section 10 deals with incomes not included in total income whereas section 11 deals with income from property held for charitable or religious purpose. Accordingly, where income is already required to be excluded by virtue of section 10 (in case of dividend), the same cannot be brought within the ambit of section 11 of the Act. In respect of similar issue, Hon’ble Jurisdictional High Court in the case of Jasubhai Foundation (supra), observed as under:- “…..We have not found anything in the language of the two provisions nor was Mr. Malhotra able to point out as to how when certain income is not to be included in computing total income of a previous year of any person, then, that which is excluded from section 10 could be included in the total income of the previous year of the person/assessee. That may be a person who receives or derives income from property held under trust wholly for charitable or religious purposes.”

11.5 It is pertinent to note that vide Finance (No.2) Act, 2014, subsection (7) was inserted in section 11 of the Act whereby it has been provided that benefits of exemption provided in section 10 shall not be available to any Trust/Institution registered and claiming the benefit of section 11 of the Act. This amendment was brought w.e.f. 1st April, 2015 and therefore, is only applicable to assessment year 2015-16 and onwards. Thus, respectfully following the aforesaid decision of Hon‟ble Jurisdictional High Court, order passed by the CIT(A), interalia, granting benefit of exemption under section 10(34) of the Act in respect of dividend income received by assessee is upheld. Accordingly, ground nos. (i) to (iii) raised in Revenue‟s appeal are dismissed.

7. Respectfully following the ratio of the decision of this Tribunal in Group Trust case i.e. M/s. Navajbhai Ratan Trust (supra), we are inclined to follow it since the department could not point out any change in facts or law. So on the same reasoning mutandis mutandis, we concur with the action of the Ld. CIT(A) allowing the claim of exemption u/s 10(34) of the Act and dismiss the ground nos. 1, 2 & 4 of the revenue appeal.”

Ramkrishna Bajaj Charitable Trust 7. The ld. AR also placed before us the decision of ITAT, Mumbai in the case of M/s Rogay Charities No. 1 vs. ITO in dated 03.08.2022, wherein the findings of Tribunal are as under:

“8. Considered the rival submissions and material placed on record, and we observe that similar issue was already considered by Hon'ble Jurisdictional High Court in the case of DIT (Exemptions) v. M/s. Jasubhai Foundation [2015] 374 ITR 315 (BOM)], wherein it is held as under: -

“8. Upon a perusal of the order of the Assessing Officer and that of the Commissioner upholding it, we are of the view that the Tribunal was correct in setting aside these concurrent orders. The language of the two sections is plain and clear. The provisions, namely, sections 10 and 11 fall under a Chapter which is titled “Incomes Which Do Not Form Part of Total Expenditure” (Chapter III). Section 10 deals with incomes not included in total income whereas section 11 deals with income from property held for charitable or religious purposes. We have not found anything in the language of the two provisions nor was Mr. Malhotra able to point out as to how when certain income is not to be included in computing total income of a previous year of any person, then, that which is excluded from section 10 could be included in the total income of the previous year of the person / assessee. That may be a person who receives or derives income from property held under trust wholly for charitable or religious purposes. Thus, the income which is not to be included in computation of the total income is a matter dealt with by section 10 and by section 11 the case of an assessee who has received income derived from property held under trust only for charitable or religious purposes to the extent to which such income is applied to such property in India and that any such income is accumulated or set apart for application for such purposes in India to the extent of which the income so accumulated or set apart in computing 15% of the income of such property, is dealt with. Therefore, it is a particular assessee and who is in receipt of such income as is falling under clause (a) of sub-section (1) of section 11 who would be claiming the exemption or benefit. That is a income derived by a person from property. It is that which is dealt with and if the property is held in trust for the specified purpose, the income derived therefrom is exempt and to the extent indicated in section 11(1)(a) of the Income Tax Act, 1961. There is nothing in the language of sections 10 or 11 which says that what is provided by section 10 or dealt with is not to be taken into consideration or omitted from the purview of section 11. If we accept the argument of Mr. Malhotra and the Revenue, the same would Ramkrishna Bajaj Charitable Trust amount to reading into the provisions something which is expressly not there. In such circumstances, the Tribunal was right in its conclusion that the income which in this case the assessee trust has not included by virtue of section 10, then, that cannot be considered under section 11.”

9. Further, similar view was held in the case of Jamsetji Tata Trust v. JDIT (Exemption) in dated 26.03.2014 as under: -

“9.6 We have considered the rival submissions as well as relevant provisions of law. The exemption u/s 10 is income specific irrespective of the status/class of person. Whereas the exemption under section 11 is person specific though on the income derived from the property held under the trust. Further the exemption u/s 11 is subject to the application of income and modes or form of deposit and investment. The Hon’ble High Court in the case of CIT Vs. Divine Light Mission (supra) while dealing with an identical issue has held in para 9 as under “So far as question No.4 of paragraph No. 3 with regard to agricultural income is concerned, section 10(5) of the Act specifically points out that agricultural income shall not be included in computing the total income of a previous year and hence the question is required to be answered in favour of the assessee and against the Revenue. This income is not required to be considered at all even for the purpose of section 11 of the Act.”

9.7 While deciding the question that the agricultural income was income from the property held under the trust can be denied exemption u/s 11 of the Income Tax Act. the Hon’ble High Court has held that the agricultural income shall not be included in the computation of total income of previous year in view of section 10(5) of the Act. Therefore, this income is not required to be considered for the purpose of section 11 of the Act. In the case of his holiness Silasari Kasivasi Muthukumaraswami Thambiran AVL & Ors. Vs. Agricultural Income Tax Officer & Ors. (113 ITR 889) the Hon’ble High Court of Madras has held that the agricultural income derived by charitable or religious trust is exempt u/s 10 could not be said to be brought to tax u/s 11 to 13. Similar view has been taken in the series of decisions as relied upon by the Ld. Senior Counsel when the question involved was the allowability of exemption u/s 10, (22), (23) Vs. section 11 and 13. In our view the exemption u/s 11 is available on the income of the public charitable /religious trust or institution which is otherwise taxable in the hands of other persons. Thus the income which is exempt u/s 10 cannot be brought to tax by virtue of section 11 and 13 of the Act because no such pre condition is provided either u/s 10 or 11 to 13 of Income Tax Act.

Ramkrishna Bajaj Charitable Trust Therefore, section 11 to 13 would not operate as overriding affect to the section 10 of the Act. The language of these provisions does not suggest that either section 10 is subjected to the provisions of section 11 to 13 or section 11 to 13 has any overriding affect over section 10. Therefore, the benefit of section 10 cannot be denied by invoking the provisions of section 11 to 13 of the Act. Once the conditions of section 10 are satisfied then no other condition can be fastened for denying the claim under section 10 of the Act.

9.8 In view of the above discussion and following the various decisions (supra) we hold that the dividend income on shares and mutual funds and long term capital gain on sale of shares an exempt u/s 10(34) 10(35) and 10(38) respectively and cannot be brought to tax by applying section 11 and 13 of the Act.”

10. Respectfully following the above said decisions, we are in agreement that the income earned by the assessee u/s. 10 of the Act are income based whereas the section 11 to 13 are application based. Therefore, the dividend income earned by the assessee has to be excluded from the total income earned by the Trust. We observe that the total income earned by the assessee are more or less applied for the purpose of Trust and even Assessing Officer has assessed the taxable income as NIL. However, as a principle assessee can apply his income based on the income earned by them and in line with the juridical precedents. Therefore, respectfully following the decisions of the Hon'ble Jurisdictional High Court and Coordinate Bench, we are inclined to allow the ground raised by the assessee.”

“5) The fact that the law has been amended by the Finance (No.2) Act, 2014, by introduction of Section 11(7) of the Act itself supports/strengthens the case of the Appellant. It is to be noted that the said amendment has been made effective from 1 April, 2015 and will be applicable from Assessment Year 2015 2016 onwards. Similar amendment, simultaneously introduced through Section 11(6) of the Act by the Finance (No.2) Act, 2014, in respect of the deduction for depreciation in the case of charitable trusts, has been held by the Hon'ble Supreme Court in the case of CIT v. Rajasthan & Gujarati Foundation (2018) 161 DTR (SC) 33, to be prospective and not retrospective. Hence, the same cannot be considered or applied prior to assessment year 2015-2016 This issue has been discussed in the decision of the ITAT, Mumbai in the case of Tata Education Trust (supra) (Para Ramkrishna Bajaj Charitable Trust 8, inner Para 11.5, Page 8 of the decision). Even otherwise, since the Appellant has not claimed exemption under Section 11 of the Act, there is no question of violation of the provisions of Section 13 of the Act.”

9. Per contra, the ld. CIT-DR vehemently supported the orders of revenue authorities and requested to sustain the same.

01.04.2014, whereas the AY before us is 2013-14, we agree with the contention of Ld. Counsel of the assessee that a similar amendment, simultaneously introduced through Section 11(6) of the Act by the Finance (No.2) Act, 2014, in respect of the deduction for depreciation in the case of charitable trusts for which the Hon'ble Supreme Court in the case of CIT v. Rajasthan & Gujarati Foundation (2018) 161 DTR (SC) 33 has held that the shall be prospective and not retrospective, following the same analogy the amended section 11(7) would also be prospective and not retrospective. We, therefore respectfully following the aforesaid decisions, de-hors any contrary decision brought to our notice by the Department are of the considered view that assessee’s claim under section Ramkrishna Bajaj Charitable Trust 10(34) would be allowed in the present matter and the income earned as dividend would be treated as exempt under section 10(34) of the Act.

DENIAL OF DEDUCTION UNDER SECTION 35AC RWS 80-G/80-GGA OF THE ACT: RS. The learned Assessing Officer had allowed deduction under Section 35AC rws 80-G/80-GGA of the Act for donations paid to eligible institutions. However, The learned CIT(Appeals) held that the Appellant trust continues to be a trust registered under Section 12A of the Act and hence it cannot claim deduction under Section 35AC rws 80-G/80-GGA of the Act for donations paid to eligible institutions. He analysed the objects of the Donee trusts and granted deduction under Section 11 of the Act. However, the deduction so granted is restricted to Interest Income of the Appellant and no addition results from the said action. This issue has also been discussed in Para-40-46 in the decision of the Tata Education Trust (supra).”

“41. In Ground Nos. 5 and 6, the assessee has contested the denial of deduction claimed u/s. 80G and 80GGA of the Act.

“5. Insofar as Ground Nos. 2 & 3 are concerned, while scrutinizing the return of income, the AO noticed that the assessee has claimed deduction u/s 80G at Rs. 16,93,07,443/- and u/s 80GGA Rs.29,79,92,156/-. These deductions were claimed in the computation of income by the assessee but in the return of income, the assessee has claimed deduction u/s 80G of the Act only for which the assessee furnished necessary proof. However, as per the provisions of Section 80G(4), the donation made in excess of credits of Ramkrishna Bajaj Charitable Trust sums in respect of deduction has to be allowed u/s 80G of the Act. As mentioned hereinabove, in the computation the assessee claimed deduction u/s 80GGA of the Act but in the return of income, only deduction u/s 80G of the Act was claimed. The AO accordingly rejected the claim of deduction u/s 80GGA of the Act.

6. When the matter was agitated before the ld. CIT(A), the ld. CIT(A) was of the opinion that since there is no column in the return in ITR-V for claiming deduction u/s 80GGA of the Act, therefore such deduction could not be claimed by the assessee due to this technical reason and accordingly directed the AO to allow the claim subject to his satisfaction of other conditions laid down in this regard.

“09. We have carefully considered the rival contentions and perused the orders of the lower authorities. We find that the assessee is a public trust registered under the Bombay Public Trust Act, 1950, originally registered under Section 12A of the Act on 10th December, 1990 but subsequently, it surrendered its registration on 26th February, 2015, as it did not want to claim any benefit under Section 11 of the Act. The assessee has earned interest income of ₹247,23,301/-. Out of this interest income, it claimed deduction of ₹1,42,033/- under 80G of the Act and ₹1,27,02,000/- under Section 80GGA of the Act. It was stated that as no separate column was available in ITR filed for section 80GGA of the Act, the assessee clubbed both this deduction together and accordingly, restricted the taxable income to ₹ nil. In Page | 8 RD Tata Trust; A.Y. 2017-18 the computation of total income file during the course of assessment proceedings, the assessee claimed deduction under Section 80GGA of the Act of ₹1,27,02,000/- and also claimed deduction under Section 80G of the Act of ₹1,42,33,000/-. The deduction under Section 80G of the Act was made by the assessee as it donated ₹1,42,33,000/- to Tata Institute of Social Sciences, Deonar, Bombay which is approved university or educational Institution by prescribed authority as per notification dated 15th December, 1993. Therefore, the deduction under Section 80G of the Act was not restricted to 10% of the gross total income as deduction granted to the specified entities and therefore, 50% of the above amount was allowed. The learned CIT (A) has restored the matter back to the file of the learned Assessing Officer to grant deduction to the assessee under Section 80G of the Act to the entities registered under Section 80G(3)(a)(iiif) of the Act after verification. Thus, according to him on perusal of Section 80G(4) of the Act, it does not Ramkrishna Bajaj Charitable Trust restrict the donation given to such entity by restricting it to the 10% of the total income.

8. Respectfully following the decision of the Co-ordinate Bench (supra), we do not find any error or infirmity in the directions of the ld. CIT(A). Ground Nos. 2 & 3 are accordingly dismissed.”

RATE OF TAX:

The learned Assessing Officer has levied tax on assessed income at the Maximum Marginal Rate of Tax (MMR) Circular: No. 320 [F. No. 131(31)/81-TP (Pt.)], dated 11-1-1982 clarifies the issue and since the Appellant is a charitable trust not claiming benefits of Section 11 of the Act the tax is to be levied at normal slab rates and not MMR. The following decisions do support this proposition.

(i) Dr. Shalmali Khasbardar Foundation Vs. ITO (Exemption) ITA No.: 3811/Mum/2024 (MUM)

(ii) National Association of Interlocking Surgeons v. ΙΤΟ (2025) 172 taxmann.com 9 (Pune)

(iv) Jain Sangh Parabdi Khayu Trustee v. DCIT, CPC, Bangalore 354/AHD/2021

During the course of hearing a copy of the recent decision of the ITAT, New Delhi in the case of Narmada Trust has been furnished where in after referring to the above Circular, the matter is decided in favour of the assessee.”

Order pronounced in the open court on 24-12-2025.