The bench dismissed the Income-tax appeal filed by the revenue. Upholding the Tribunal's finding that the educational institution collects donations voluntarily, the court held the trust is not taxable on corpus fund donations where no evidence compulsion was proved.
Tax Case Appeal stands dismissed against the Department.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
TCA No. 77 of 2015
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 25-03-2026
CORAM
THE HON'BLE DR JUSTICE G. JAYACHANDRAN AND
THE HON'BLE MR.JUSTICE SHAMIM AHMED
Tax Case Appeal No. 77 of 2015
Commissioner of Income Tax Central Circle, Chennai
..Appellant
Vs
M/s Vellore Institute of Tehnology No.54 Thenamaran Street, Vellore 632 014.
..Respondent
PRAYER: Tax Case (Appeal) is filed under Section 260A of the Income-Tax Act, 1961, against the order of the Income Tax Appellate Tribunal, Chennai “D” Bench, dated 09.06.2011 in ITA No.1332/Mds/2010 for the Assessment Year 2001-02.
For Appellant: M/s.V.Pushpa Senior Standing Counsel For Respondent: Mr. R.V. Easwaran Senior Standing Counsel For M/s. Suhrith Parthasarathy
JUDGMENT
(Judgment of the Court was delivered by Dr.G.Jayachandran J.)
The Tax Case Appeal has been filed by the Revenue against the order
passed by the Tribunal holding that the assessee, which is a trust not conducting
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TCA No. 77 of 2015
business for profit, cannot be mulcted with tax on the donations collected toward its corpus fund.
2. The short point involved is whether the respondent's educational institution, run by the trust found collecting money from the student under the guise of donation towards the corpus fund. The Revenue contended that the said donations were not voluntary, but were collected under compulsion, leaving students at the mercy of the institution. The Tribunal, after going through the records and the evidence collected, found that no student had made any statement to substantiate the claim of the Department that the donations were given under compulsion and not voluntarily.
3. While so, the donations received by the trust has to be considered
at face value. Regarding voluntariness of a donation, the best person to speak is the donor themselves, not the Income Tax officials scrutinising the case. This Court has considered the records and has held against the Revenue in the case of CIT vs. M/s.Savitha Institute of Medical Technical Sciences (TCA Nos. 111, 112 & 113 of 2015) .
4. In the absence of any evidence to substantiate the plea that the
donations were received under compulsion and not voluntarily, the finding of the Tribunal has to be upheld, since the issue is purely a question of fact. The
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TCA No. 77 of 2015
statements of the persons who manage the affairs of the trust carry only limited
probative value and must be properly corroborated by the donars also.
5. In the absence of such proof, we find the substantial questions of
law against the Department. Accordingly, Tax Case Appeal stands dismissed.
No costs.
(G.J.,J.) (S.S.A.,J.) 25-03-2026
Index: Yes/No Speaking/Non-speaking order Neutral Citation: Yes/No
rpl
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TCA No. 77 of 2015
DR.G.JAYACHANDRAN J. and SHAMIM AHMED J.
rpl
TCA No. 77 of 2015
25-03-2026
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2 issues framed by the court
Whether the findings that donations collected from students for the corpus fund were voluntary are maintainable in tax appeal.
Whether substantial questions of law arise against the Department regarding the nature of donations.
Colour shows how this judgement treated each authority
CIT vs. M/s. Savitha Institute of Medical Technical SciencesReferred¶25
CIT vs. M/s.Savitha Institute of Medical Technical Sciences (TCA Nos. 111, 112 & 113 of 2015)
1 provisions across 1 enactments
Commissioner of Income Tax Central Circle, Chennai
M/s Vellore Institute of Technology
G. Jayachandran
Shamim Ahmed
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
