PORWAL CHARITABLE TRUST,THANE vs. THE INCOME TAX OFFICER, EXEMPTION WARD 2(2), MUMBAI

ITA 7604/MUM/2025Status: DisposedITAT Mumbai23 September 2026AY 2018-198 pages
AI SummaryPartly Allowed

What were the facts?

The assessee, Porwal Charitable Trust, engaged in advancing education, filed its return for AY 2018-19 declaring Nil income. It claimed donations totaling Rs. 2,77,00,000/- as application of income to various entities: Sanjiwan Socio Medical Foundation (Rs. 2,00,000/-), Jain International Organisation (Rs. 5,00,000/-), Porwal Jain Foundation (Rs. 1,08,00,000/-), Punyam Education Trust (Rs. 1,57,00,000/-), and Bharatiya Janata Party (Rs. 5,00,000/-). The Assessing Officer, under section 143(3) read with section 144B, rejected these claims, assessing total income at Rs. 2,77,00,000/-. The CIT(A) confirmed the disallowances. The assessee appealed to the ITAT, with the appeal being delayed by 481 days, which the Tribunal condoned.

What did the Tribunal hold?

The Tribunal condoned the 481-day delay in filing the appeal, finding the assessee's explanation bona fide and supported by affidavit, citing Supreme Court judgments in Collector, Land Acquisition v. Mst. Katiji and N. Balakrishnan v. M. Krishnamurthy. Regarding the merits: 1. Sanjiwan Socio Medical Foundation (Rs. 2,00,000/-): The disallowance was deleted. Although initially described as corpus, the donee confirmed it as non-corpus via section 133(6) inquiry, and no specific corpus direction was identified. The amount was treated as application of income. 2. Jain International Organisation (Rs. 5,00,000/-): The disallowance was deleted. The CIT(A)'s rejection based on the absence of a non-corpus recital was found insufficient. No specific corpus direction was identified, nor was the payment found fictitious. The amount was treated as application of income. 3. Porwal Jain Foundation (Rs. 1,08,00,000/-): The issue was restored to the CIT(A) for fresh adjudication. The CIT(A)'s finding based on contemporaneous correspondence was set aside. The CIT(A) must examine receipts, correspondence, ledger entries, and other evidence to determine if a specific corpus direction was issued, considering the initial description alongside underlying evidence. 4. Punyam Education Trust (Rs. 1,57,00,000/-): The issue was restored to the CIT(A) for fresh adjudication. The CIT(A)'s finding was set aside, and the CIT(A) must examine the trust deed, registration order (effective from AY 2019-20), correspondence, banking trail, and utilization evidence to determine the claim under the law applicable to AY 2018-19. 5. Bharatiya Janata Party (Rs. 5,00,000/-): The addition was set aside and restored to the CIT(A) for deletion upon examination. The CIT(A) must ascertain the earmarking and application of the donation for the stated educational purpose by examining receipts, correspondence, and event-related evidence, in the context of Sections 2(15), 11, and 12. For the restored issues, the CIT(A) is to consider relevant evidence, admit further evidence if necessary, obtain AO's comments or remand report, and provide a hearing. The relief granted for Sanjiwan Socio Medical Foundation and Jain International Organisation is not to be reopened. The appeal was partly allowed for statistical purposes.

What were the issues?

1. Whether the disallowance of Rs. 2,00,000/- to Sanjiwan Socio Medical Foundation as corpus donation is justified, considering the assessee's initial description versus the donee's confirmation? (Question of law and fact, concerning Section 11(1)(a) and Explanation 2). 2. Whether the disallowance of Rs. 5,00,000/- to Jain International Organisation is justified, given the assessee's explanation of inadvertent omission of documents and the CIT(A)'s reasoning based on the absence of a non-corpus recital? (Question of law and fact, concerning Section 11(1)(a) and Explanation 2). 3. Whether the disallowance of Rs. 1,08,00,000/- to Porwal Jain Foundation is justified, where the assessee claims the initial corpus description was inadvertent and the payments were revenue donations? (Question of law and fact, concerning Section 11(1)(a) and Explanation 2). 4. Whether the disallowance of Rs. 1,57,00,000/- to Punyam Education Trust is justified, given the donee's registration under section 12AA being effective from AY 2019-20, and the assessee's claim of non-corpus donation for operational expenses? (Question of law and fact, concerning Section 11(1)(a) and Explanation 2). 5. Whether the disallowance of Rs. 5,00,000/- to Bharatiya Janata Party is justified, where the assessee claims the payment was for free distribution of textbooks and notebooks, not for party funds? (Question of law and fact, concerning Sections 2(15), 11 and 12). Assessee's Contentions: The donations were for charitable purposes, and initial descriptions as corpus were inadvertent. Relied on correspondence, receipts, section 133(6) confirmations, and donee's activity/financial material. For Sanjiwan Socio Medical Foundation, the donee confirmed non-corpus donation. For Jain International Organisation, the receipt was inadvertently not uploaded. For Porwal Jain Foundation, the corpus description was inadvertent. For Punyam Education Trust, the donation was non-corpus for operational expenses. For BJP, the payment was for educational purposes. Revenue's Contentions: Supported orders below, citing initial corpus descriptions, deficiencies in evidence, Punyam Education Trust's registration date, and lack of corroboration for BJP donation's educational purpose. Opposed condonation of delay due to inadequate explanation.

Which sections of the Income-tax Act were involved?

Section 250,Section 11(1)(a),Section 12AA,Section 133(6),Section 143(3),Section 144B,Section 2(15),Section 11,Section 12

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “C” BENCH MUMBAI

Before: SHRI NARENDER KUMAR CHOUDHRY & SHRI ARUN KODPIA

For Appellant: Ms. Vinita Shah, CA
For Respondent: Shri Ajay Soneji, Sr. DR
Hearing: 25.06.2026Pronounced: 23.09.2026

PER NARENDER KUMAR CHOUDHRY, JM: This appeal has been preferred by the ASSESSEE against the order dated 29.05.2024, impugned herein, passed by the learned Commissioner of Income-tax (Appeals), National Faceless Appeal Centre, Delhi [in short, “the ld. Commissioner”], under section 250 of the Income- tax Act, 1961 [in short, “the Act”], for the A.Y. 2018-19. 2 Porwal Charitable Trust.

2.

The appeal is delayed by 481 days. In its application, supported by an affidavit, the Assessee explained that it was unaware of the impugned order and learnt of the same only upon receipt of the penalty notice. The Ld. DR opposed condonation, su

The order continues below.

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