COMMISSIONER OF INCOME TAX vs. SHRI JAIN SHWETAMBER NAKODA PARSHWANTH TIRTH

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ITA/2/2022HC RajasthanRJHC01079039202101 February 2022Author: AKIL KURESHI,MADAN GOPAL VYAS3 pages
AI SummaryDismissed

What did the High Court hold?

The Tribunal held that there was no infirmity in the order passed by the CIT(A). The assessee maintained separate receipts for corpus donations, and these receipts indicated specific directions from the donors for the use of the funds towards corpus donations, often containing the donor's signatures. The Tribunal found that these corpus donations could not be treated as revenue receipts in light of Section 11(1)(d) of the Act. The High Court agreed with the CIT(A) and the Tribunal, finding no error in their views. The Court noted that the CIT(A) and the Tribunal had concluded that the assessee maintained separate receipts for corpus donations, which showed donor directions for specific purposes and included donor signatures. Therefore, such donations could not be seen as lacking specific directions towards corpus funds and were correctly not treated as revenue receipts. The High Court found no question of law arising and dismissed the appeal.

What were the facts?

The Revenue filed an appeal against the Income-tax Appellate Tribunal's (ITAT) decision concerning the respondent assessee, Shri Jain Shwetamber Nakoda Parshwanth Tirth, Balotra. For the assessment year 2016-2017, the Assessing Officer (AO) disallowed the assessee's claim for exemption of Rs. 18.72 Crore, treating these donations as not being corpus donations. The AO's disallowance was based on the premise that the donations lacked specific directions from the donors to form part of the trust's corpus fund as required by Section 11(1)(d) of the Income Tax Act, 1961. The assessee appealed to the Commissioner of Income-tax (Appeals) [CIT(A)], who found that donations were received for specific purposes like 'Jeev Daya', 'Shree Gyan Khata', 'Education Medical Corpus', etc., and concluded that specific directions for corpus donations were not mandatory if the intention was for the trust to hold the money and utilize its income for specific activities. The ITAT upheld the CIT(A)'s decision.

What were the issues?

1. Whether, on the facts and in the circumstances of the case and law, the learned ITAT was justified in treating Rs. 18.73 crores as Corpus donations even though no specific directions were made by the donors that it shall form part of the corpus fund of the trust as required under Section 11(1)(d) of the Act, 1961? Assessee's Contention: The assessee argued that the donations were received with specifications for specific purposes such as 'Jeev Daya', 'Shree Gyan Khata', 'Education Medical Corpus', 'Bhojanshala, Ayambal donations', and 'Sadhu-Sadhvi Vaiyavach'. The CIT(A) and ITAT were of the view that for claiming exemption under Section 11(1)(d), it is not necessary that voluntary contributions should be made with specific directions for their use in a particular manner to be treated as corpus donations. If the intention of the donor is to give money to a trust which the trust will keep in its account and the income from it is to be utilized for carrying out a particular activity of the trust, it should be counted as corpus donations. Revenue's Contention: The Revenue contended that the donations were not received to the corpus of the trust and therefore the claim for exemption under Section 11(1)(d) was not valid, as there were no specific directions from the donors to form part of the corpus fund.

Which sections of the Income-tax Act were involved?

Section 11(1)(d)

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR D.B. Income Tax Appeal No. 2/2022 Commissioner Of Income Tax, District Jaipur ----Appellant Versus Shri Jain Shwetamber Nakoda Parshwanth Tirth, Balotra, District Barmer ----Respondent For Appellant(s) through V.C. : Mr. Kamal Kishore Bissa, AGC For Respondent(s) : --- HON'BLE THE CHIEF JUSTICE MR. AKIL KURESHI HON'BLE MR. JUSTICE MADAN GOPAL VYAS

Order 01/02/2022 This appeal is filed by the Revenue to challenge the judgment of the Income-tax Appellate Tribunal. Following question is presented for consideration:- ”Whether on the facts and the circumstances of the case & law, the ld. ITAT is justified in treating Rs. 18.73 crores as Corpus donations even though no specific directions were made by the donors that it shall form part of the corpus fund of the trust as requires U/s 11(1)(d) of the Act, 1961?” The respondent assessee is a trust and is engaged in the activity of facilitating Pooja, Seva etc at a famous pilgrimage place situated in Rajasthan. For the assessment year 2016-2017, the assessing officer disallowed the claim of the trust for exemption of a sum of Rs. 18.72 Crore (rounded off) on the ground that the donations were not received to its corpus. Thus, treating these

(2 of 3) [ITA-2/2022] donations as not corpus donations, the claim of the trust for exemption under Section 11(1)(d), was denied. The assessee carried the matter in appeal. C.I.T (Appeals) examined the issues at length and came to the conclusion that the donations were received with specifications such as given towards ‘Jeev Daya’, ’Shree Gyan Khata’, ‘Education Medical Corpus’, ‘Bhojanshala, Ayambal donations’, ‘Sadhu-Sadhvi Vaiyavach’ and so on. The Commissioner was of the opinion that for claiming exemption under Section 11(1)(d) of the Act, it is not necessary that voluntarily contributions should be made to the specific direction to be used in a particular manner in order to treat the donations as corpus donations. If the intention of the donor is to give money to a trust which the trust will keep in the trust account and the income from the same is to be utilized for carrying out a particular activity of the trust, it was to be counted for corpus donations. The view of the Commissioner Appeals was confirmed by the Tribunal by making following observations:- “4. After considering the rival submissions and the order of the AO as well as the order of CIT (A), we find no infirmity in the order passed by CIT(A). The assessee had been maintaining separate receipts for the corpus donations. The temple is very popular in the western Rajasthan and the donations are received for general purposes and for specific purposes also. For Corpus Donations, the assessee is maintaining separate receipts books, in which according to the direction of the donor, specific donation given towards corpus donations given is market, and the same also contains signatures of the donor. In these circumstances it cannot be said that there is no specific direction of the donor towards the Corpus donations. In view of the provisions of Section 11(1)(d) of the Act, these corpus donations

therefore cannot be treated as revenue receipts, and in our considered opinion the order of the CIT(A) on this issue is justified and therefore we are inclined to accept the ground raised by the revenue and the same is hereby dismissed.

(3 of 3) [ITA-2/2022]

5.

In the result, the appeal of the Revenue is dismissed.” It can thus be seen that the Commissioner (Appeals) and the Tribunal after detailed examinations had come to the conclusion that the assessee was maintaining separate receipts for corpus donations and for the donations received for general purposes. The receipts maintained for corpus donations show the directions issued by the donor for the use of the fund for specific purposes. Such receipts also contain signatures of the donors. It was therefore concluded that such donations cannot be seen as having used specific directions of the donor towards corpus funds and accordingly such corpus donations cannot be treated as revenue receipts. In view of such facts, we find no error in the views of CIT (Appeals) and Tribunal. No question of law arises.

The appeal is dismissed. (MADAN GOPAL VYAS),J (AKIL KURESHI),CJ 14-jayesh/-

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