We have no 12A registration. Is a corpus donation given for buying property taxable in our hands?
No. A voluntary contribution made with a specific direction that it form part of the corpus is a capital receipt, and that character does not depend on the trust holding registration under s.12A or s.12AA. The addition of Rs 8,99,811 was deleted.
Decided by the ITAT (ITAT Mumbai Bench; Sandeep Singh Karhail (Judicial Member) and Gagan Goyal (Accountant Member)) on 2022-04-05, reported as 2022 TAXSCAN (ITAT) 349. It bears on section 11, section 12, section 12A, section 12AA of the Income Tax Act 1961, in Charitable Trusts & Exemption matters.
Unregistered trusts, including those registered only with a State Wakf Board or similar body, are routinely assessed on corpus donations on the sole ground that there is no s.12A registration. This gives a direct answer to that reasoning, following a coordinate bench view. It is a Tribunal decision and the Tribunal stressed that documentation of the donations and verification of donors matter, so the point is winnable only on a clean record.
Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere.
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A religious trust registered with the Maharashtra State Wakf Board filed returns claiming exemption under s.11. It had received Rs 8,99,811 as corpus donations earmarked for the purchase of an immovable property. The Assessing Officer disallowed the amount and the Commissioner (Appeals) upheld the denial on the ground that the trust held no registration under s.12A.
Corpus donations received for a specific purpose by a trust which is not registered under s.12A/12AA are in the nature of a capital receipt and are not taxable, so the addition of Rs 8,99,811 could not stand. The separate issue of the trust's rental income was restored for fresh adjudication.
A voluntary contribution made with a specific direction that it shall form part of the corpus is a capital receipt in the hands of the trust, and its character as a capital receipt does not depend on the trust holding registration under s.12A or s.12AA. The Tribunal followed the coordinate bench decision in ITO v. Serum Institute of India Research Foundation (2018), which had established that corpus donations to a non-registered trust qualify as capital receipts, while emphasising that proper documentation of the donations and verification of the donors are essential. The rental income question was remitted for de novo consideration.
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Handle my notice → Ask a CA on WhatsAppNo. A voluntary contribution made with a specific direction that it form part of the corpus is a capital receipt, and that character does not depend on the trust holding registration under s.12A or s.12AA. The addition of Rs 8,99,811 was deleted. This was decided by the ITAT (ITAT Mumbai Bench; Sandeep Singh Karhail (Judicial Member) and Gagan Goyal (Accountant Member)) and bears on section 11, section 12, section 12A, section 12AA of the Income Tax Act 1961. It is reported as 2022 TAXSCAN (ITAT) 349. Unregistered trusts, including those registered only with a State Wakf Board or similar body, are routinely assessed on corpus donations on the sole ground that there is no s.12A registration. This gives a direct answer to that reasoning, following a coordinate bench view. It is a Tribunal decision and the Tribunal stressed that documentation of the donations and verification of donors matter, so the point is winnable only on a clean record. If it applies to you, the first step is this: Produce the donor's written direction that the contribution is towards corpus for the specified purpose; without it the receipt is not shown to be capital.
A religious trust registered with the Maharashtra State Wakf Board filed returns claiming exemption under s.11. It had received Rs 8,99,811 as corpus donations earmarked for the purchase of an immovable property. The Assessing Officer disallowed the amount and the Commissioner (Appeals) upheld the denial on the ground that the trust held no registration under s.12A. The matter was decided on 2022-04-05 by the ITAT (ITAT Mumbai Bench; Sandeep Singh Karhail (Judicial Member) and Gagan Goyal (Accountant Member)). On those facts the ITAT held as follows. Corpus donations received for a specific purpose by a trust which is not registered under s.12A/12AA are in the nature of a capital receipt and are not taxable, so the addition of Rs 8,99,811 could not stand. The separate issue of the trust's rental income was restored for fresh adjudication.
A voluntary contribution made with a specific direction that it shall form part of the corpus is a capital receipt in the hands of the trust, and its character as a capital receipt does not depend on the trust holding registration under s.12A or s.12AA. The Tribunal followed the coordinate bench decision in ITO v. Serum Institute of India Research Foundation (2018), which had established that corpus donations to a non-registered trust qualify as capital receipts, while emphasising that proper documentation of the donations and verification of the donors are essential. The rental income question was remitted for de novo consideration.
It was decided by the ITAT on 2022-04-05 and is reported as 2022 TAXSCAN (ITAT) 349. Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere. A Tribunal decision binds the assessing officer and the Commissioner (Appeals) within that Tribunal's jurisdiction, and is persuasive before other benches. It is not binding on a High Court, and a contrary co-ordinate bench decision will be argued against you, so check whether the point has been taken the other way before you build a reply around it. On section 11, section 12, section 12A, section 12AA, the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It helps the taxpayer. Corpus donations received for a specific purpose by a trust which is not registered under s.12A/12AA are in the nature of a capital receipt and are not taxable, so the addition of Rs 8,99,811 could not stand. The separate issue of the trust's rental income was restored for fresh adjudication. It arises in Charitable Trusts & Exemption matters, on section 11, section 12, section 12A, section 12AA of the Income Tax Act 1961, and was decided by ITAT Mumbai Bench; Sandeep Singh Karhail (Judicial Member) and Gagan Goyal (Accountant Member). Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. Keep donor identity and confirmation on file, since the Tribunal treated documentation and donor verification as essential. Argue the capital receipt character independently of registration, rather than defending the absence of registration. Deal separately with other heads such as rental income, which was remitted for fresh adjudication rather than decided.
The judgment itself could not be reached, so no check was possible. Nothing applying, following or affirming this order has been traced, and the order itself could not be found in a subscription research database (three searches on the trust's name and on its distinctive elements returned nothing). That the Bench is reported to have followed an earlier coordinate-bench decision is treatment of that earlier decision, not of this one, so it cannot support 'good law'. Absence of contrary authority is not good law either. Two limits a reader should carry: the reported reasoning rests on a coordinate-bench view that a corpus donation is a capital receipt independently of registration, a point on which benches have not spoken with one voice; and nothing consulted addresses the conditions attaching to corpus donations introduced by the Finance Act 2021, which govern later years. That finding was checked against a published source, which is linked on this page, on 2026-08-25. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
The order could not be found in a subscription research database. Three searches were run — the full distinctive name, the single distinctive token, and the locality name — and none returned this order or any order of this trust. So the entry rests on press reports of the decision and has not been checked against the signed order: the appeal number, the assessment year and the paragraph structure remain unknown, and the sentence formerly quoted has been removed because it cannot be placed in the Bench's own reasoning. Read the order before relying on it. Note also that nothing consulted discusses the conditions attaching to corpus donations introduced by the Finance Act 2021, so do not carry this into a later year without checking those. The appeal number and assessment year were not stated on either page fetched. A similar Amritsar bench ruling (T.R. Gupta Public Charitable Trust v. CIT (Exemptions), AY 2020-21) was found but its appeal number and date sit behind a paywall. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
Corpus donations received for a specific purpose by a trust which is not registered under s.12A/12AA are in the nature of a capital receipt and are not taxable, so the addition of Rs 8,99,811 could not stand. The separate issue of the trust's rental income was restored for fresh adjudication.
TaxSphere, “Versova Kokni Sunni Jamat Trust v CPC”, https://taxnotice.vittsphere.com/caselaw/case/versova-kokni-sunni-jamat-trust-v-cpc/ (validity last checked 2026-08-25)
The judgment itself is a government work and may be quoted freely. The summary, the validity note and the reasoning on this page are this library's own writing: quote them with attribution, and please do not present either as the words of the court — this page keeps the two apart and so should a quotation of it.
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