Are donations towards corpus funds treated as normal donations by 12A registered NGOs?

IN THE INCOME TAX APPELLATE TRIBUNAL
“A’’ BENCH: BANGALORE

BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER
AND
SMT. BEENA PILLAI, JUDICIAL MEMBER

 ITA No.586/Bang/2020
 Assessment Year: 2013-14

Bharathi Education Trust,
No.1435, 7th B Main,
RPC Layout, Vijayanagar,
Bengaluru-560 040
PAN NO : AABTB 7102 P
APPELLANT 

Vs.

The Dy. Commissioner of
Income-tax,
(Exemptions)
Circle-1
Bangalore.
RESPONDENT

Appellant by : Shri R.E Balasubramanyam, C.A
Respondent by : Shri Kannan Narayanan, Addl. CIT (DR)

Date of Hearing : 17.06.2021
Date of Pronouncement : 02.07.2021

O R D E R

PER BEENA PILLAI, JUDICIAL MEMBER:

 Present penalty appeal has been filed by assessee against order dated 29/06/2018 passed by the Ld.CIT(A)-3, Bangalore for assessment year 2013-14 on following revised grounds of appeal filed by assessee on 24/03/2021:

“1. That the impugned order is opposed to facts and law in so far as it is pre-judicial to the interests of the Appellant.  General Ground  

2. The Ld. CIT(A) erred in confirming the order of penalty passed by the Assessing officer and in doing so,  Rs.1,76,46,858

a. He failed to appreciate that the notice u/s 274 was issued by an officer other than the one who recorded satisfaction for levying penalty.

b. Without prejudice to Ground No 2 (a) above and assuming without admitting that the proceedings were properly initiated and continued by the succeeding incumbent in office, the impugned penalty order is untenable and bad in law inasmuch as no intimation of change of incumbent was given to the Appellant and the penalty was levied for reasons other than what is recorded in the Assessment Order.

c. Without prejudice to above and assuming without admitting that the succeeding incumbent in office can initiate penalty proceedings for the first time, the impugned penalty order is untenable and bad in law as the notice u/s 274 is a nullity at law in view of the decision of the Honorable High Court of Karnataka in the case of Manjunatha Cotton & Ginning Factory (359 ITR 565) inasmuch as the notice does not specify clearly whether the penalty is proposed for concealment of income or for furnishing inaccurate particulars.

3. Without prejudice to above grounds, and assuming without admitting that the initiation and procedural Same as above requirements of penalty are held to be valid, no penalty is warranted when the returned income and assessed income are both the same and the penalty to be levied on the alleged amount of tax sought to be evaded as contemplated under explanation 4 to section 271 of the Act is also NIL. Rs.1,76,46,858

4. Without prejudice to above grounds, the penalty so Same as above confirmed by the Ld CIT(A) is bad-in-law and deserves to be cancelled inasmuch as the approval for the same was granted by the Ld Joint Commissioner of Income Tax without affording an opportunity to the Assessee to present its case before him in violation of the principles of natural justice.

The appellant prays for leave to add, delete, modify and/or adduce additional ground at any time before the appeal is disposed off. For these and such other grounds that may be adduced or removed in time to time, it is requested that the Hon'ble ITAT may be pleased to examine the case in the light of justice and grant the relief sought for.”

To know more in details find the attachment file