Understanding the Scope of Income under Section 11 of the Income-tax Act

Table of Contents

1. Summary
2. Introduction
3. Section 11 will not apply where Sections 60 to 63 are applicable
4. Real income in commercial sense or total income under Section 2(45)
5. Income is computed in commercial sense and not as per the five heads of income under Section 14
6. Term wholly pertains to the objects and not to the Property [Section 11(1)(a)]
7. Section 11(1)(a) does not distinguish between private and public religious trust
8. Income from capital gains
9. Voluntary contributions are part of income for the purpose of section 11(1)

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1. Summary

(a) For section 11, the term ‘income’ assumes significance for the purposes of determining the income subject to application and exemptions.

(b) The word ‘income’ in section 11(1)(a) must be understood in a commercial sense. [Cir. No. 5-P(LXX-6) Dated 19th June, 1968] and five heads of income as per section 14 are not applicable.

(c) The applicability of sections 60 to 63 is summarised as under:

(i) The income belonging to a charitable organisation would be included in the total income of the transferor if such income is subject to the provisions of sections 60 to 63.

(ii) Under section 60, if any person transfers income without transferring the ownership of the asset, then such income will be considered as a part of the taxable income of the transferor.

(iii) Section 61 provides that income arising to any person by a revocable transfer of assets shall be chargeable to income tax as the income of the transferor and shall be included in his total income.

(d) Voluntary contributions

(i) Voluntary contributions have been considered as a part of the income of charitable organisations. section 12(1) provides that voluntary contributions should be considered as income for the purposes of section 11(1).

(ii) Voluntary contribution being receipt without consideration is more like a legal obligation without any condition rather than income. But by virtue of section 12(1), it is a deemed income for charitable organisations.

(iii) Voluntary contributions have to be made solely for charitable or religious purposes and if a portion is for other purposes, then such contributions will not be exempt. It may be noted that the taxability of voluntary contribution under section 12(1) does not imply forfeiture of income under various provisions of section 13.

(iv) It has been held that the membership fees/subscriptions paid by members of organisations cannot be considered as payments without consideration and, therefore, they should not be considered as voluntary contributions for the purposes of section 12.

(v) Grant-in-aid received from a donor agency or the government is a voluntary contribution unless it is with specific restrictions and in the shape of legal obligation.

(vi) Section 12(1) uses the word ‘received’ as against the word ‘derived’ in section 11(1)(a). Therefore, voluntary contributions should always be treated as income on receipt basis only, irrespective of the method of accounting employed by the organisation.

(vii) Income under section 11(1) means the income which is actually available for application without computing the income under five heads of income.

(viii) Voluntary Contributions received for the renovation and repair of temples, mosques, gurudwaras, churches etc notified under section 80G(2)(b) may, at its option, be treated by such trust or institution as forming part of the corpus of the trust or the institution subject to certain conditions.

(e) Advertisements and Subscriptions are generally treated as voluntary contribution. In CIT v. Trustees of Visha Nima Charity Trust [1982] 10 Taxman 10/138 ITR 564 (Bom.), the organisation sold tickets for a charity show and advertisement was also solicited for the souvenirs to be published for this occasion. The court observed that it was unlikely that an advertisement given in such souvenirs could have any business purpose. Such advertisements were more like charity and voluntary contributions. The same was true for the person purchasing tickets for the charity show, therefore, all such receipts were to be treated as voluntary contributions. However, in the contemporary scenario, the donor may also have business interest and in such circumstances, the income could be treated as a part of fund-raising activities is generally is not considered as business activity. For instance, the High Court of Gujarat in the case of CIT (Exemptions) v. United Way of Baroda [ITA No. 95 of 2020, dated 25-2-2020] held that the activities like organizing the event of Garba including the sale of tickets and issue of passes etc. cannot be termed as business.

(f) Exempt income 11(7): The NGOs & Trusts which are registered under section 11 cannot claim tax exemption under the provisions of section 10 i.e., except section 10(1)/10(23C)/10(23EC)/10(46)/10(46A), which implies that exempted income such as interest on notified saving certificates, interest from tax-free bonds etc. cannot be claimed as exempt under section 10 but it shall form part of income subject to application.

(g) Business held as trust section (11(4)): For the purposes of section 11, “property held under trust” includes a business undertaking so held, and where a claim is made that the income of any such undertaking shall not be included in the total income of the persons in receipt thereof, the Assessing Officer shall have power to determine the income of such undertaking in accordance with the provisions of this Act relating to assessment.

(h) Business income from incidental business activity under section 11(4A) will be subject to exemption only if the business is incidental to the attainment of the objects of the trust and separate books of account are maintained with regard to such business. Such business income will be treated as income from property of the trust under section 11(1)(a).

(i) Anonymous donations:

(i) Anonymous donations to the extent of 5% of total donations or ` 1 lakh, whichever is higher, are exempt and are therefore not subject to 30% tax. However, the exempted portion shall form part of income subject to an application under section 11.

(ii) Taxable portion of the anonymous donation is subject to tax @ 30%. Exemptions available under section 11 are not available to taxable portion of anonymous donations and they are to be taxed as per the provisions of section 115BBC. [section 13(7)]

(j) Section 11(1)(a) specifies that income exempted from tax refers to the words ‘income derived from property held under trust’, which raises a doubt whether it distinguishes between income from organisation and income from property. Why this section adds the term ‘property’ with exempted income? Does it mean that the source of income has to be from some assets or properties held by the trust? Courts have held at various occasions that all income of a trust arising from its own sources, from external sources and from properties movable as well as immovable would be entitled to exemption and shall be considered as income from property of trust.

2. Introduction

Sections 11 to 13 deals with the scheme of taxation of the trust registered under section 12AA/12AB. section 11(1) begins with the following words,

“subject to the provisions of sections 60 to 63, the following income shall not be included in the total income of the previous year of the person in receipt of the income”.

Hence, it is important to understand the implications of sections 60 to 63 on the scope of income subject to section 11, the relevance of the word total income used in section 11 and the income subject to section shall be computed.

Sub-clauses (a), (b) & (c) to section 11(1) refer to the term income from trust property while allowing the exemption. Hence, exemption benefit under section 11 shall be available only to income from trust property. Therefore, it is important to understand the meaning of income from trust property.

According to section 12(1), any voluntary contributions received by a trust created wholly for charitable or religious purposes or by an institution established wholly for such purposes shall, for the purposes of section 11, be deemed to be income derived from property held under trust wholly for charitable or religious purposes. However, contributions received with a specific direction that it shall form part of the corpus of the trust or institution shall not be included in income for the purposes of section 11. In other words, voluntary contributions other than those towards corpus specific direction are deemed as income from trust property.

Section 11(4) provides that for the purpose of section 11, property held under trust shall include a business undertaking so held and section 11(4A) provides that profits and gains from incidental business activities shall be subject to exemption on satisfying the conditions specified in section 11(4A). Hence, scope of income under section 11 includes business income both from business held as a property of trust or profit from incidental business activities.

Section 11(7) provides the status of exempt income under section 10 and the applicability of exemption under section 11 on such income.

3. Section 11 will not apply where Sections 60 to 63 are applicable

At the outset, section 11 excludes the income falling within the purview of sections 60 to 63. section 11(1) begins with the following words,

“subject to the provisions of sections 60 to 63, the following income shall not be included in the total income of the previous year of the person in receipt of the income”.

sections 60 to 63 deal with the income of other persons includible in the income of the assessee. In other words, income belonging to a charitable organisation would be included in the total income of the transferor if such income is subject to the provisions of sections 60 to 63.

3.1 Transfer of income without transfer of asset [Section 60]

Under this section, if any person transfers income without transferring the ownership of the asset, then such income will be considered as a part of the taxable income of the transferor. For the purposes of this section, it does not matter whether the transfer is revocable or irrevocable or was affected before or after the commencement of the Act. section 11 speaks of “income derived from property held under trust”; therefore, the trust should be the lawful owner of the property from which the income is derived. If the property belongs to the settler and only the income from such property is assigned for charitable purposes then exemptions under section 11 would not be available on such income in terms of section 60.

In CIT v. Maharajadhiraj Sir Kameshwar Singh [1953] 23 ITR 190 (Patna), interest from securities was allocated for charitable purposes. In other words, the ownership of the securities remained with the settler and only the interest portion was set aside for charitable purposes. It was held that the interest income was not exempt as it amounted to transfer of income without transfer of the asset.

3.1a Intent to transfer property is not enough – In CIT v. Chhadami Lal Jain Trust [1977] 106 ITR 179 (All.), it was held that even if there was an intention to transfer the properties, if the trust deed did not create a valid transfer of properties then the trust would not be eligible for exemptions. In other words, the transfer of properties should be complete and definite.

In light of the above, if a charitable organisation has any income, which becomes a part of its total income by virtue of section 60, then such income will not be considered for the purposes of section 11.

3.2 Revocable transfer under section 61

Section 61 provides that income arising to any person by virtue of a revocable transfer of assets shall be chargeable to income-tax as the income of the transferor and shall be included in his total income. Under this section, income arising from asset will be deemed to be the income of the transferor, if:

(a) the transfer is revocable

(b) the transfer document provides for re-transfer of the whole or any part of the income or assets to the transferor, directly or indirectly

(c) the transferor has a right to re-assume power over whole or any part of the income or asset directly or indirectly.

In CIT v. G.D. Naidu Industrial Educational Trust [1942] 10 ITR 358 (Mad.), it was held that if any clauses of the trust deed empowered the author to revoke the properties vested in the trust then the income from such properties would be taxable at the hands of transferor. In this case, two clauses of the trust deed empowered the settler to revoke the trust if the purposes were not properly effectuated. Further, the properties would also revert back to the settler. This case clearly attracted section 61 and, therefore, the income from properties was not considered as a part of the trust income.

3.3 Transfers which are deemed revocable/irrevocable under section 62

Under the provisions of section 62, certain revocable transfers do not attract the provisions of section 61. The provisions of section 62 are summarised as under:

The provision of section 61 shall not apply to any income arising to any person by virtue of:

(a) a transfer, which is not revocable during the lifetime of the beneficiaries/transferee

(b) transfer made before 1st April, 1961, which is not revocable for a period exceeding 6 years:

Provided that the transferor derives no direct or indirect benefits from such income in either of the above cases. Further, as and when the transfer becomes revocable or the power to exercise revocation arises, the income shall be included in the total income of the transferor.

Clause (i) of section 62(1) does not apply to the public charitable or religious organisation as beneficiaries are public or a section thereof and, therefore, their lifetime is not definite. The question of making a trust deed in the context of the lifetime of the beneficiary is improbable.

Clause (ii) of section 62(1) applies only to the trusts created before 1-4-1961. The proviso to sub-section (1), which provides that the transferor should not derive any direct or indirect benefit from such income in any case applicable to charitable organisations by virtue of section 13(1)(c).

3.4 Definition of the term ‘Transfer’ and ‘Revocable Transfer’ under Section 63

Section 63 defines the term ‘transfer’ and ‘revocable transfer’ for the purposes of sections 60, 61 and 62. According to this provision, the terms are defined as follows:

(a) transfer shall be deemed to be revocable if:

(i) it contains any provision for the re-transfer directly or indirectly of the whole or any part of the income or assets to the transferor, or

(ii) it, in any way, gives the transferor a right to re-assume power directly or indirectly over the whole or any part of the income or asset;

(b) ‘transfer’ includes any settlement, trust, covenant, agreement or arrangement.

This section defines the term ‘transfer’ and a ‘revocable transfer’. The purpose of this section is to determine whether a transfer would be deemed to be revocable and, consequently, the income would be includible at the hands of the transferor. It may be noted that in this section, the purview is over both income and assets. Any clause in the deed which, in effect, re-transfers or reassumes power either in respect of income or asset then the whole of transfer would be considered as revocable. At this juncture, it is reiterated that the use of income or asset for the benefit of a settler or an interested person is subject to forfeiture under section 13(1)(c).

The Supreme Court in CIT v. Jayantilal Amratlal [1968] 67 ITR 1, laid down certain principles based on which a trust deed could be treated as revocable or irrevocable. Some of the issues which came up, in this case, are discussed as under:

(a) The term ‘reassume power directly or indirectly’ in section 63 implies that there should be something in the trust deed which allows resumption of the pre-trust powers. The settler should in some way get back the powers he had prior to the creation of trust deed.

(b) A provision enabling the settler to give directions to trustees to employ the assets or funds of the trust in a particular manner or for a particular charitable object contemplated by the trust cannot be said to confer a right to reassume power within the first proviso, otherwise, a settler could never name himself as a sole trustee. It seems that the latter part of the proviso contemplates a provision which would enable the settler to take the income or assets outside the provisions of the trust deed.

(c) A discretion to the settler to choose the charitable activities would not vitiate the concept of an absolute transfer for charitable purposes.

(d) Veto power of the settler in the management and administration of the trust in a particular manner cannot be construed as a provision for re-transfer or revocation of property. The same would be true for any special power with regard to investment of funds in any particular manner.

4. Real income in commercial sense or total income under Section 2(45)

Defining ‘Income’ for tax purposes has remained a complicated proposition. Lord Wilberforce observed in Lord Chetwode v. TRG [1977] All. ER 638, that

“it is notorious that there is not and never has been any definition of income in the UK Tax Code”.

The same position holds good in India because income chargeable to tax is determined according to the statutory provision of the Income-tax Act, 1961 (hereafter referred to as ‘the Act’) under a very elastic concept of income. The definition of ‘total income’ under section 2(45) is also inclusive in nature. Thus, the idea is to include various categories of receipts based on a legal presumption.

Section 11(1) begins with the following words,

“subject to the provisions of sections 60 to 63, the following income shall not be included in the total income of the previous year of the person in receipt of the income”.

It may be noted that it uses the expression ‘total income’; therefore, it raises the question of whether it implies ‘total income’ as defined in section 2(45).

Though the expression ‘total income’ has been used at the beginning of the section, sub-section (1)(a) refers to income and not the total income as defined in section 2(45). Therefore, for the purposes of section 11(1), the term ‘income’ has to be imparted a more relevant and realistic connotation.

The definition of ‘total income’ is not relevant – “Total income” means the total amount of income referred to in section 5, computed in the manner laid down in this Act. For the purposes of section 11(1)(a), which deals with the income from property held under trust, the term ‘income’ should not be assigned the meaning of the term ‘total income’. The intention of the law is to treat the income in a more commercial, general and popular sense rather than giving it a technical meaning.

4.1 CBDT Circular No. 5-P (LXX-6), dated 19-6-1968

This circular provides the scope and concept of income under section 11(1); the circular is provided as under:

“Application of income to charitable purposes and restriction of accumulation of trust income in terms of sub-sections (1) and (2) as they stood between 1-4-1962 to 31-3-1971 (prior to the amendments made by the Finance Act, 1970)

1. In Board’s Circular No. 2-P(LXX-5), dated 15-5-1963, it was explained that a religious or charitable trust, claiming exemption under section 11(1), must spend at least 75 per cent of its total income for religious or charitable purposes. In other words, it was not permitted to accumulate more than 25 per cent of its total income. The question has been reconsidered by the Board and the correct legal position is explained below.

2. Section 11(1) provides that subject to the provisions of sections 60 to 63, “the following income shall not be included in the total income of the previous year….” The reference in clause (a) is invariably to “Income” and not to “total income”. The expression “total income” has been specifically defined in section 2(45) as “the total amount of income computed in the manner laid down in this Act”. It would, accordingly, be incorrect to assign to the word “income”, used in section 11(1)(a), the same meaning as has been specifically assigned to the expression “total income” videsection 2(45).

3. In the case of a business undertaking, held under trust, its “income” will be the income as shown in the accounts of the undertaking. Under section 11(4), any income of the business undertaking determined by the ITO, in accordance with the provisions of the Act, which is in excess of the income as shown in its accounts, is to be deemed to have been applied to purposes other than charitable or religious, and hence it will be charged to tax under sub-section (3). As only the income disclosed in the account will be eligible for exemption under section 11(1), the permitted accumulation of 25 per cent will also be calculated with reference to this income.

4. Where the trust derives income from house property interest on securities, capital gains, or other sources, the word “income” should be understood in its commercial sense, i.e., book income, after adding back any appropriations or applications thereof towards the purposes of the trust or otherwise, and also after adding back any debits made for capital expenditure incurred for the purposes of the trust or otherwise. It should be noted, in this connection, that the amounts so added back will become chargeable to tax under section 11(3) to the extent that they represent outgoings for purposes other than those of the trust. The amounts spent or applied for the purposes of the trust from out of the income, computed in the aforesaid manner, should be not less than 75 per cent of the latter, if the trust is to get the full benefit of the exemption under section 11(1).

5. To sum up the business income of the trust, as disclosed by the accounts plus its other income computed as above, will be the “income” of the trust for the purposes of section 11(1). Further, the trust must spend at least 75 per cent of this income and not accumulate more than 25 per cent thereof. The excess accumulation, if any, will become taxable under section 11(1).”

The above circular clarified that for the purposes of section 11(1), the income should be the real income at the disposal of the organisation.

5. Income is computed in commercial sense and not as per the five heads of income under Section 14

The income of a trust cannot be determined artificially under section 2(45). It is necessary to account for all the expenditures and payments even if such outflow would have been otherwise disallowed while computing income under section 2(45). Therefore, various provisions of allowance and disallowance of expenditures and deductions as per section 14 will not have direct applicability in the computation of income of a trust. Section 14 provides heads of income under which all income for the purposes of charge of income-tax and computation of total income is required to be done.

A trust may have income from all of the abovementioned sources except the head ‘Salaries’. The issue here is, whether the income of a charitable organisation is required to be computed under the different heads as specified under section 14. The income is required to be arrived at in normal commercial manner and, therefore, complying with the provisions of section 14 does not seem to have been envisaged for charitable organisations. In DIT (Exemption) v. Girdharilal Shewnarain Tantia Trust [1993] 71 Taxman 150/199 ITR 215 (Cal.), it was observed that application of section 14 to charitable organisations was not possible. Such income cannot be equated with the income computed under the general provisions of the Act. For instance, with regard to capital gains, from a combined reading of section 11(1)(a), 11(1)(b) and section 11(1A), it is clear that the income of trust including capital gains is treated on a separate footing and the assessee-trust has to fulfil the conditions laid therein for the purpose of availing of exemptions from taxation. The income from property held for charitable or religious purposes cannot, therefore, be equated with the income which is computed under the general provisions of the Act in respect of the other assessees who are not entitled to the benefit of the aforesaid provisions.

It was further observed that the chargeability of income to tax arises only when the trust is not able to apply 75 per cent (now 85 per cent) of its income for charitable purposes or it losses exemption for some other non-compliance of the provisions. In such circumstances, income cannot be classified under various heads unless the entire income comes from one specific head and, therefore, it would not be correct to apply section 14 to charitable organisations.

In CIT v. Estate of V. L. Ethiraj [1982] 136 ITR 12 (Mad.), it was held that income from properties would have to be arrived at in the normal commercial manner without reference to the provisions which were attracted by section 14. In this case, the Court observed that the language of section 11(1)(a) makes it clear that the income derived from the property held under trust wholly for charitable and religious purposes, to the extent to which such income is applied to such purposes in India, is excluded. When once the income from the property, as such, is excluded, there is no question of computing the income from the property by applying the provisions of section 14.

In this case, the Madras High Court referred to the decision of the Supreme Court in CIT v. Bipinchandra Maganlal & Co. Ltd. [1961] 41 ITR 290 and stated (See p. 492 of 135 ITR), where the Apex Court observed that income cannot be understood in the sense of what is arrived at for the purpose of income-tax by the application of some artificial provisions either giving or denying deduction. For instance, section 10(1) exempts agricultural income. It is not necessary to find out, what the agricultural income is. It is enough if the agricultural income as a category is excluded.

In CIT v. Estate of V. L. Ethiraj [1982] 136 ITR 12 (Mad.) the Court further observed that the language of section 11(1)(a) made it clear that the income derived from the property held under trust wholly for charitable and religious purposes, to the extent to which such income is applied to such purposes in India, is excluded. When once the income from the property, as such, is excluded, there is no question of computing the income from the property by applying the provisions of section 14 of the Act. Therefore, it was clear that the Tribunal had committed an error in holding that as a first step the ITO has to determine the different heads of income, with reference to the statutory deductions provided for in the relevant sections and, thereafter, should arrive at the total income.

6. Term wholly pertains to the objects and not to the Property [Section 11(1)(a)]

Section 11(1)(a) begins with the words ‘income derived from property held under trust wholly for charitable or religious purposes……..’. The word ‘wholly’ refers to the object and not to the property held under trust. The trust should be wholly for charitable or religious purposes but it is not necessary that the property should be wholly with the trust. For example, if a portion of a property is provided to a trust, the trust can function validly with respect to the part of property in its possession.

The use of word ‘wholly’ relates to the purposes and not to the property of the trust. The word ‘wholly’ cannot be treated as equivalent to the word ‘mainly’. It should rather be treated as closely akin to the term ‘solely’. In other words, there is no scope for the purposes being partially public or religious in nature. It would not be sufficient if some of the objects are charitable or religious in nature. In Dwarkadas Bhimji v. CIT [1948] 16 ITR 160 (Bom.), some of the objects of the trust were not wholly for charitable purposes, consequently were ineligible for exemptions. The Supreme Court in East India Industries (Madras) (P.) Ltd. v. CIT [1967] 65 ITR 611 held that:

“Where a trust is created for charitable and non-charitable objects and gives an unfettered discretion to the trustees to utilise the whole of the income of the trust for objects which are non-charitable, the property in respect of which the trust is created cannot be deemed to be held in trust wholly for charitable or religious purposes.”

7. Section 11(1)(a) does not distinguish between private and public religious trust

It may be noted that section 11(1)(a) uses the words

“income derived from property held under trust wholly for charitable or religious purposes……”.

This section does not distinguish between a private and public religious trust; therefore, as far as section 11 is concerned, there is no difference between a public and private religious trust. But the bar on exemptions for a private religious trust comes under section 13(1)(a), which specifically provides that the income of private religious trust is not eligible for exemption under section 11 except to the extent it ensures for the benefit of the public.

8. Income from capital gains

In general, capital gains are gains which are realized when a capital asset is sold at a price which is higher than the cost resulting in gains for an investor. Under normal provisions of the Income-tax Act, income is computed under the five heads of income and income from capital gains is one of them. Part E of Chapter IV of  Income-tax Act, 1961 contains provisions for computation of income from capital gains.

‘Income’, as defined under section 2(24), includes capital gains, therefore, for the purposes of section 11(1)(a), capital gains are also considered as a part of the income. However, there are special provisions for computation of capital gains under section 11(1A) of Income-tax Act.

Section 11(1A), which deals with treatment of capital gains, was not there during the inception of the Act. In the absence of any provision related to capital gains, all charitable or religious organisations were required to apply the capital gains for charitable purposes under the provisions of section 11(1)(a). The requirement of utilising capital gains on fulfilment of the objects of the organisation resulted in depletion of the corpus. section 11(1A) allowed an option to charitable and religious organisations whereby they could re-invest the sale proceeds from capital assets in new capital assets so that in the long run the corpus would remain intact.

The Finance (No.2) Act, 1971, inserted sub-section (1A) in section 11 regarding the treatment of capital gains. This sub-section was inserted retrospectively from 01.04.1961. It provided that the capital gains would be deemed to have been utilised for the purposes of section 11(1)(a), if the net consideration received was re-invested in another capital asset. This amendment was made to provide an additional option to the assessee to protect itself from erosion of capital.

9. Voluntary contributions are part of income for the purpose of section 11(1)

It should be noted that section 11(1) discusses the exemptions available to charitable organisations and, therefore, when we discuss income under section 11(1), we discuss the incomes which are eligible for exemption subject to the provisions of sections 11, 12 and 13. section 11(1)(d) excludes voluntary contributions received towards corpus from the scope of income under section 11(1). The exclusion of only voluntary contributions towards corpus creates an implicit openness towards other voluntary contributions, though section 11 does not talk about voluntary contributions other than towards corpus. It is section 12(1), which provides that voluntary contributions would be deemed to be income derived from property for the purposes of section 11. Voluntary contributions, by their inherent nature, do not fall in the category of ‘income’, unlike other incomes. Therefore, they have been deemed as income by virtue of section 12(1).

9.1 Voluntary contribution is treated as income

According to section 12(1), any voluntary contributions received by a trust created wholly for charitable or religious purposes or by an institution established wholly for such purposes shall, for the purposes of section 11, be deemed to be income derived from property held under trust wholly for charitable or religious purposes. However, contribution received with a specific direction that they shall form part of the corpus of the trust or institution shall not be included in income for the purposes of section 11. In other words, voluntary contributions other than those towards corpus specific direction are deemed as income.

Voluntary contributions normally would not have been considered as income. Therefore, from the assessment year 1972-73, section 2(24)(iia) along with section 12(1) were inserted, thus, bringing it within the ambit of income. The CBDT had simultaneously issued an Explanatory Circular No. 108, dated 20-3-1973, clarifying that all voluntary contributions except contributions towards corpus would be considered as income.