Law:

Section:

Section 2(15) of the Income-tax Act, 1961 - Charitable/religious purpose - Assessment year 2001-02 - Merely because assessee was an institution which was running professional courses, it could not be presumed that the amounts which were received as donations were attributable to the allotment of seats; though assessee was not able to give names and addresses of the donors as well as mode of payments, etc., if said amount was utilized or spent for charitable purpose, then said amount would be eligible for exemption under section 11(1)(d) [In favour of assessee] The Assessing Officer found that the assessee running charitable institution and offering professional courses had not maintained proper books of account and that the assessee was receiving cash from unknown sources which was not explained properly and, consequently, held that the trust was not being administered in accordance with law and, consequently, denied the exemption under section 11. He held that a sum of Rs. 28,30,094 collected towards donations from students were contrary to law and that the trust was acting as opposed to public policy and had failed to comply with the pre-requisite of a charitable organization. Held that the assessee was a social, cultural and educational trust, running educational institutions and having various professional courses. Merely because the assessee was an institution which was running professional courses, it could not be presumed that the amounts which were received as donations were attributable to the allotment of seats. The contention of the revenue that the donations received during the said period were in violation of the Prohibition of Capitation Fee Act, 1984, and, therefore, the trust had acted as opposed to public policy, and consequently, was not entitled to be treated as a charitable organisation had no merit. Though the assessee was not able to give the names and addresses of the donors as well as the mode of payments, etc. that such amount has been received by the trust was not in dispute. The Tribunal, in fact, had not accepted the contention of the assessee that the said donation had to be treated as corpus donation. On the other hand, the…

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