Future Hope India, Kolkata v. I.T.O(Exemption)-Ward-1(2), Kolkata

ITA 540/KOL/2019 | 2012-2013
Pronouncement Date: 28-02-2020 | Result: Partly Allowed

Appeal Details

RSA Number 54023514 RSA 2019
Assessee PAN AAATF0832H
Bench Kolkata
Appeal Number ITA 540/KOL/2019
Duration Of Justice 11 month(s) 11 day(s)
Appellant Future Hope India, Kolkata
Respondent I.T.O(Exemption)-Ward-1(2), Kolkata
Appeal Type Income Tax Appeal
Pronouncement Date 28-02-2020
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted SMC
Tribunal Order Date 28-02-2020
Date Of Final Hearing 09-10-2019
Next Hearing Date 09-10-2019
Last Hearing Date 02-12-2019
First Hearing Date 09-09-2019
Assessment Year 2012-2013
Appeal Filed On 18-03-2019
Judgment Text
1 ITA NO. 540/KOL/2019 FUTURE HOPE INDIA AY- 2012-13 B(SMC) IN THE INCOME TAX APPELLATE TRIBUNAL B(SMC) BENCH : KOLKATA ( ) . . ) [BEFORE SHRI A. T. VARKEY JM] ITA NO.540/KOL/2019 ASSESSMENT YEAR: 2012-13 FUTURE HOPE INDIA (PAN: AAATF0832H) VS. INCOME TAX OFFICER (EXEMPTION) WD- 1(2) KOLKATA APPELLANT RESPONDENT DATE OF HEARING 19.12.2019 DATE OF PRONOUNCEMENT 28.02.2020 FOR THE APPELLANT SHRI RAHUL SHAH FCA FOR THE RESPONDENT SHRI JAYANTA KHANRA JCIT SR. D R ORDER THIS IS AN APPEAL PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT(A)-25 KOLKATA DATED 31-12-2018 FOR THE ASSESSMENT YEAR 2012-13. 2. GROUND NOS. 1 AND 6 ARE GENERAL IN NATURE SO DO NOT REQUIRE ANY ADJUDICATION. 3. GROUND NO. 2 AND 3 OF THE ASSESSEE ARE AGAINST T HE ACTION OF LD. CIT(A) IN CONFIRMING THE DISALLOWANCE OF THE EXCLUSION OF COR PUS DONATION OF RS.67 36 518/- FROM THE TOTAL INCOME AND IN CONFIRMING THE DISALLOWANCE OF THE EXCLUSION OF INTEREST EARNED OF THE AMOUNT OF RS.6 79 329/- ON INVESTMENT OF THE CORPUS DONATION FROM THE TOTAL INCOME. BRIEFLY STATED FACTS ARE THAT DURING THE PREVIOUS Y EAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION THE ASSESSEE HAS RECEIVED FOREIGN D ONATIONS AGGREGATING TO RS. 67 36 518/- WITH A SPECIFIC DIRECTION THAT THE SAME SHALL FORM PART OF CORPUS OF THE ASSESSEE. OUT OF THE SAID AMOUNT RS. 23 75 340/- WAS RECEIVED TOWARDS KA TIE BADDELEY FUND FOR ARTS AND RS.43 61 178/-WAS RECEIVED TOWARDS CORPUS FROM FRAN CE (ST. GOBAIN). IN THE RETURN OF INCOME APPLYING THE PROVISION OF SECTION 11(1)(D) OF THE INCOME-TAX ACT 1961 (HEREINAFTER REFERRED TO AS THE ACT) THE ASSESSEE CLAIMED THE SAME AS NON-TAXABLE RECEIPT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE WAS ASKED TO FILE THE DETAILS OF CORPUS DONATION WHICH HAD BEEN CLAIMED AS TAX-EXEMPT IN TH E RETURN OF INCOME. THE ASSESSEE SUBMITTED COPIES OF LETTERS AND DOCUMENTS EVIDENCIN G THAT THE DONATIONS WERE RECEIVED WITH SPECIFIC DIRECTIONS THAT THEY SHALL FORM PART OF TH E CORPUS AND THIS WAS DULY NOTED DURING THE 2 ITA NO. 540/KOL/2019 FUTURE HOPE INDIA AY- 2012-13 COURSE OF HEARING. HOWEVER IN THE ASSESSMENT ORDER THE AO CONSIDERED SUCH AMOUNT OF RS.67 36 5187- (BEING CORPUS DONATIONS) AS PART OF THE TOTAL INCOME AND MADE THE ADDITIONS. AGGRIEVED THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A) WHO HELD AS UNDER: PERUSAL OF SUBMISSION SHOWS THAT THE APPELLANT HAS NOT BEEN ABLE TO SPECIFY THE PURPOSE OF THE CONTRIBUTION. I HAVE GONE THROUGH THE CONFIRMAT ION OR SO CALLED DECLARATION SUBMITTED BY THE APPELLANT FROM THE DONORS. IT IS SEEN THAT NO S PECIFIC DIRECTION IS GIVEN. SPECIFIC DIRECTION MEANS TO UTILISE THE FUND FOR THE PURPOSES AND THE PURPOSES ARE ALSO MENTIONED IN THE DIRECTIONS. THE CONFIRMATION SIMPLY SAYS THAT 'IT I S CORPUS DONATION'. SIMPLY SAYING THAT IT IS FOR 'CORPUS DONATION' DOES NOT QUALIFY AS A SPECIFI C DIRECTION THEREFORE IT WILL FORM PART OF ITS TOTAL INCOME. SUBSEQUENT ASSESSMENT ORDER RELIED BY THE APPELLANT WILL NOT HELP MUCH AS THE ISSUE HAS NOT COME TO THE TEST OF APPEAL AND EVERY ASSESSMENT YEAR HAS DIFFERENT FACTS THEREFORE THE ACTION TAKEN BY THE AO TOWARDS DONATIONS THAT I T NOT SPECIFIC THE ACTION IS UPHELD. THE GROUND OF APPEAL IS DISMISSED. AGGRIEVED ASSESSEE IS BEFORE US. 4. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. THE ASSESSEE IS A CHARITABLE ORGANIZATION EN JOYING SECTION 12A OF THE ACT REGISTRATION FROM YEAR 1993 AND IS ENGAGED IN MANY PHILANTHROPIC ACTIVITIES. THE MAIN GRIEVANCE OF THE ASSESSEE IS THAT THE AO DID NOT APPLY THE PROVISION S OF SECTION 11(1)(D) OF THE ACT WHICH SPECIFICALLY EXCLUDES VOLUNTARY CONTRIBUTIONS WHIC H HAVE BEEN MADE WITH A SPECIFIC DIRECTION THAT THE CONTRIBUTION/DONATION SHALL FORM PART OF THE CORPUS OF THE TRUST OR INSTITUTION FROM THE AMBIT OF TAXABLE INCOME TREAT ING IT AS AN EXEMPT RECEIPT. ACCORDING TO LD. AR THE CORPUS FUNDS ARE GENERALLY CREATED OUT OF CORPUS DONATIONS. AND DONATION NEED TO BE TREATED AS A CORPUS DONATION WHEN IT IS ACCOMPANIED BY A SPECIFIC WRITTEN DIRECTION OF THE DONOR. ACCORDING TO LD. AR IN TH E ABSENCE OF ANY WRITTEN DIRECTION OF THE DONOR THE CONTRIBUTION OR GRANT CANNOT BE TRANSFER RED TO THE CORPUS FUND. IT WAS POINTED OUT BY THE LD. AR THAT WHEN DONATION IS RECEIVED THROUG H CHARITY BOXES IT WILL NOT BE CONSIDERED AS CORPUS DONATION EVEN IF THE DONATION BOX IS MARKED WITH THE WORD CORPUS. THIS ACCORDING TO LD. AR IS BECAUSE THERE IS NO S PECIFIC DIRECTION FROM THE DONOR IN WRITING IN ORDER TO CONSTITUTE A CORPUS DONATION. SO ACCORDING TO LD. AR IN THE INSTANT CASE THERE WAS IN FACT A WRITTEN INSTRUMENT BY THE DONOR THAT DONATION IS FOR CORPUS OF THE ASSESSEE. I NOTE THAT THE ASSESSEE HAS RECEIVED FO REIGN DONATIONS AGGREGATING TO RS. 67 36 518/- WITH A SPECIFIC DIRECTION THAT THE SAME SHALL FORM PART OF CORPUS OF THE ASSESSEE. OUT OF THE SAID AMOUNT RS. 23 75 340/- WAS RECEIVED TOWARDS KATIE BADDELEY FUND FOR ARTS AND RS.43 61 178/-WAS RECEIVED TOWARDS CORPUS FROM FRANCE (ST. GOBAIN). IN THE RETURN OF INCOME APPLYING THE PROVISION OF SECTION 11(1)(D) OF THE INCOME-TAX ACT 1961 (HEREINAFTER REFERRED TO AS THE ACT) THE ASSESSEE CLAIMED THE SAME AS NON-TAXABLE RECEIPT. DURING THE 3 ITA NO. 540/KOL/2019 FUTURE HOPE INDIA AY- 2012-13 COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE HAS SUBMITTED COPIES OF LETTERS AND DOCUMENTS EVIDENCING THAT THE DONATIONS WERE RECEIV ED WITH SPECIFIC DIRECTIONS THAT THEY SHALL FORM PART OF THE CORPUS. HOWEVER IN THE ASSE SSMENT ORDER THE AO CONSIDERED SUCH AMOUNT OF RS.67 36 5187- AS PART OF THE TOTAL INCOM E AND MADE THE ADDITIONS. WE NOTE THAT THE DONATION IN QUESTION WHERE IN FACT GIVEN BY THE RESPECTIVE DONORS WITH A SPECIFIC DIRECTION TO BE USED AS THE CORPUS OF THE ASSESSEE. THE ASSESSEE IS A CHARITABLE ORGANIZATION AND IS ADMITTEDLY DOING PHILANTHROPIC ACTIVITIES A ND ITS OBJECTS ARE CHARITABLE IN NATURE. SO WHEN THE DONOR OF DONATION GIVES IT WITH A DIRECTIO N TO USE IT FOR THE CORPUS OF THE ASSESSEE MEANS THAT IT IS FOR THE OBJECTS ENSHRINED FOR WHIC H ASSESSEE WAS FORMED. SO THE QUESTION OF TREATING THE DONATION AS NOT CORPUS DOES NOT ARISE AND I DIRECT THE AO TO TREAT THE DONATION OF RS.67 36 518/- AS CORPUS DONATION. 5. GROUND NO. 3 OF ASSESSEE IS AS UNDER:- 3. ON THE FACTS OF THE CASE AND IN LAW THE LD. LD . CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE OF THE EXCLUSION OF INTEREST EARNED OF THE AMOUNT OF RS.6 79 329/- ON INVESTMENT OF THE CORPUS DONATION FROM THE TOTAL INCOME 6. COMING TO THE INTEREST EARNED ON THE FIXED DEPOS IT FROM RS. 67 36 518/- WHICH IS RS. 6 79 329/- IS CONCERNED I AM OF THE OPINION THAT I NTEREST WILL BE PART OF THE CURRENT YEAR INCOME OF THE ASSESSEE AND THE AO IS DIRECTED TO RE -COMPUTE THE INCOME AS PER SECTION 11 OF THE ACT. 7. GROUND NOS. 4 & 5 ARE CONSEQUENTIAL AND DOES NOT REQUIRE ANY ADJUDICATION. 8. IN THE RESULT THE ASSESSEES APPEAL IS PARTLY A LLOWED. ORDER IS PRONOUNCED ON 28TH FEBRUARY 2020. SD/- (ABY. T. VARKEY) JUDICIAL MEMBER DATED :28TH FEBRUARY 2020 JD.(SR.P.S.) 4 ITA NO. 540/KOL/2019 FUTURE HOPE INDIA AY- 2012-13 COPY OF THE ORDER FORWARDED TO: 1. APPELLANT M/S. FUTURE HOPE INDIA 1/8 ROWLAND ROAD KOLKATA-700 020. 2 RESPONDENT ITO(EXEMPTION) WARD-1(2) KOLKATA. 3. 4. 5. CIT(A)-25 KOLKATA. (SENT THROUGH E-MAIL) CIT- KOLKATA. DR ITAT KOLKATA. (SENT THROUGH E-MAIL) BY ORDER / TRUE COPY ASSISTANT REGISTRAR