*_ITO (Exemptions) Vs Serum Institute of India Research Foundation (ITAT Pune)_*

Corpus donations received by the Trusts, which is not registered u/s.12A/12AA of the Act, are not taxable as they assume the nature of ‘Capital receipt’ the moment the donations are given to the “Corpus of the Trust”.

Provisions of section (24)(iia)/12(1)/11(1)(d)/35/56(2) are relevant for deciding the current issue. It is a settled legal proposition, in case of a registered Trust under the Income-Tax Act, the corpus specific Voluntary Contributions are outside the scope of income as defined in section 2(24)(iia) of the Act due to their “Capital nature”. But it is a case of un-registered Trust. Despite the detailed deliberations made by the Ld. DR, we find the principles relating to judicial discipline assume significance and the priority. It is also decided issue that there is need for upholding the favourable view if there exists divergent views on the issue. As discussed in the preceding paragraphs above, there are multiple decisions in favour of the assessee.

Accordingly, the Corpus-specific-voluntary contributions are outside the taxations in case of an unregistered Trust u/s.12/12A/12AAA of the Act too.

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