Shri Jain Medical & Education Trust Vs. ACIT

Parties Involved

Facts Summary

The assessee, Shri Jain Medical & Educational Trust, is a charitable trust registered under section 12A of the Income-tax Act, 1961, and approved under section 80G of the Act. The trust is engaged in imparting education and running various educational institutions. The assessee filed its return of income for the year under consideration on 13.11.2018, declaring total income at Rs. Nil after claiming exemption under section 11 of the Act. The case was selected for scrutiny, and a notice under section 143(2) of the Act was issued on 11.08.2018. The Assessing Officer issued a show cause notice proposing to disallow the accumulation of 15% under section 11(1)(a) of the Act on the amount of Government grants of Rs.1,88,41,271/- received by the assessee for specific purposes. The Assessing Officer held that such Government grants were not in the nature of voluntary contributions and therefore, not eligible for the benefit of accumulation under section 11(1)(a) of the Act. Accordingly, the Assessing Officer reworked the allowable accumulation and made an addition of Rs.28,00,479/- to the total income of the assessee. The assessee filed an appeal before the Ld. CIT(A), which was dismissed. The assessee is now in appeal before the Tribunal.…

Legal Issues

• 1. Whether the assessment order u/s.143(3) of the Act is bad in law.
• 2. Whether the learned Assessing Officer has erred in law as well as on facts in assessing the total income of the appellant at Rs.28,00,479/- as against the returned income of Rs. Nil declared by the appellant.
• 3. Whether the learned Assessing Officer has erred in law as well as on facts in not considering the government grant as voluntary contribution and thereby, withdrawing the exemption u/s.11(1)(a) of the Act to this extent.
• 4. Whether the learned Assessing Officer has erred in law as well as on facts in making the addition of Rs.28,00,479/- by denying the benefit of exemption u/s.11(1)(a) of the Act on the government grants.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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