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Facts
The appellant trust filed an appeal after the CIT(A) dismissed their appeal due to non-compliance with notices and failure to provide requested details regarding registration and corpus donations. The CPC had previously denied exemption under Section 11, treating corpus donations as income.
Held
The Tribunal, taking a lenient view, remanded the matter back to the CIT(A) to provide the appellant with one more effective opportunity to present their case and submit all necessary details, considering the peculiar circumstances.
Key Issues
Whether the CIT(A) was justified in dismissing the appeal for non-prosecution due to non-submission of details, and whether an opportunity should be granted for the appellant to present their case on merits regarding corpus donations.
Sections Cited
143(1), 11, 12A, 12AA
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Income Tax Appellate Tribunal, Mumbai “SMC” Bench, Mumbai.
Before: Smt. Beena Pillai (JM) & Shri Omkareshwar Chidara (AM)
On facts & circumstances of the case & in law the main issue is of non-compliance to various notices. The Appellant Trust prays that opportunity be given for proper representation & compliance based on principles of natural justice.
2. On facts & circumstances of the case & in law the CIT(A) grossly erred in coming to the conclusion that because of non-compliance the "Appellant appeal to be treated as not maintainable". This proposition is unsustainable in law.
On facts & circumstances of the case & in law the Appellant Trust states that the records being old were kept at the godown and the retrieval of documents took time. Also, due to Faceless Assessment all documents had to be scanned like Corpus Donation Letters, Purchase Agreement and other relevant documents which also contributed for delay in submission of details. 4. On facts & circumstances of the case & in law the CIT(A) grossly erred in over looking the fact that Corpus Donation given for specific purpose is a capital receipt not liable to be taxed at all.
2 Versova Kokni Sunni Jamat Trust
5. On facts & circumstances of the case & in law the CIT(A) grossly erred on the basic issue that Corpus Donation are not taxable irrespective of the fact whether the religious trust is registered or not u/s 12A/12AA of the Income Tax Act, 1961.
On facts & circumstances of the case & in law the CIT(A) ought to have appreciated that Corpus Donation which are in the nature of capital receipts are not taxable & to that extent the appellant produces compilation of all the details to put it on record which will be submitted during hearing of the matter.
In this case, the appellant trust had received an intimation under section 143(1) dated 27.3.2017 for assessment year 2015-16 with a demand of Rs. 16,88,080/-. The CPC while processing the return of income has denied the exemption claimed under section 11 of the I.T.Act to the Appellant Trust as there was no evidence of Registration of Trust under section 12A/12AA of the I.T. Act . The expenditure claimed by the Trust was disallowed and the corpus of Trust was treated as income. Thus, as against the income returned of Rs. 2,82,290/- the CPC determined the income of Trust at Rs. 42,35,930/-.
3. Aggrieved by the denial of exemption u/s. 11 of the Act, the appellant Trust filed an appeal before the Ld. CIT(A) and this first appellate authority has requested the appellant to furnish the details of status of registration of Trust under section 12A of the Act, details, of voluntary corpus donations, details of donors with their address, bank account etc., copy of bank statement highlighting the donation amounts, copy of Memorandum of Association etc. The notices requesting to provide details were sent to 5 mail ids as mentioned in the e-filing profile of the appellant trust. The Ld. CIT(A) has noted in his appeal order that no details were furnished till 9.9.2024. Since the details were not furnished by the appellant trust, the Ld. CIT(A) has dismissed the appeal by stating that the appellant is not interested in prosecuting the appeal. It was also held by Ld. CIT(A) each ground of appeal was dismissed as the appellant has not filed required details.
3 Versova Kokni Sunni Jamat Trust
Aggrieved by the order of Ld. CIT(A), the appellant trust filed an appeal before the ITAT. During the hearing proceedings, the Ld. AR of the appellant has filed a legal paper book containing 6 decisions of various Tribunals Viz. ITO Vs. “Serum Institute of India Research Foundation (ITA No. 621/Pun/2016); Chandraprabhu Swetamber Jain Vs. ACIT (ITA No. 230/Mum/2016); Civil Services Institute Vs. DCIT (ITA No. 4485/Del/2018) and ITO(E) Vs. Smt. Basanti Devi & Shri Chakhan lal Garg Education Trust (ITA No. 5882/Del/2010) and others and relied on them for the proposition that corpus donations are not taxable even if there is no registration of trust under section 12A /12AA of the I.T. Act. It was pleaded that due to some unavoidable circumstances, the details could not be furnished before Ld. CIT(A). He argued that on merits, the appellant trust has got a very good case and an opportunity may be provided to submit all the details before Ld. CIT(A).
Ld. DR opposed the arguments of Ld. AR stating that despite sufficient opportunities were provided, the appellant trust has not submitted the details and hence the appeal of the appellant should be dismissed.
6. After rival submissions are heard, the Bench has observed that it is an undisputed fact that no details were furnished before Ld. CIT(A) despite the hearing notices were sent to 5 email ids mentioned in the return of income. The cases-law relied upon the appellant are not applicable to the facts of this case because in those cases, the appellant has submitted all the details and decisions were taken accordingly. In the impugned case, there was no compliance to the questionnaire issued by Ld. CIT(A) and hence an adverse inference was taken by him while adjudicating the appeal. Anyhow, taking a lenient view, the Bench decided to give one more opportunity to the appellant trust, as requested by Ld. AR of the appellant to submit all the details before Ld. CIT(A). The Bench has observed that only one opportunity
4 Versova Kokni Sunni Jamat Trust was given by Ld. CIT(A) and then the appeal was dismissed for non- prosecution. In view of this facts and peculiar circumstances, the matter is remanded to the file of Ld. CIT(A) with a direction to given the appellant an effective opportunity and dispose of the appeal. The appellant is also directed to cooperate with the Department and furnish all relevant particulars and help them in expediting the appeal.
The appeal of appellant is allowed for statistical purposes.
Order pronounced in the open Court on 03/03/2025.