The Income TAx Officer (Exemption) Ward-1 , Mangalore V. M/s Ursuline Franciscan Congregation , Mangalore

ITA 1086/BANG/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 1083 (ITAT-BANGALORE)
• Duration Of Justice: 11 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-03-2019
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 03-04-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R N SIDDAPPAJI CIT HEARD ON PR
• Assessee Lawyers: V K GURUNATHAN
• Keywords: Opportunity of being heard; Set aside
• Section: 11

Judgement Text

ITA.1086/BANG/2018 PAGE - 1 IN THE INCOME TAX APPELLATE TRIBUNAL BENGALURU BENCH 'B', BENGALURU BEFORE SHRI. A. K. GARODIA, ACCOUNTANT MEMBER AND SHRI. LALIET KUMAR, JUDICIAL MEMBER I.T.A NO.1086/BANG/2018 (ASSESSMENT YEAR : 2014-15) INCOME-TAX OFFICER (EXEMPTIONS), WARD -1. MANGALURU .. APPELLANT V. M/S. URSULINE TRANCISCAN CONGREGATION GENERALATE, SOMARPANN, DERALAKATTE, MANGALURU 575 018 .. RESPONDENT PAN : AAATU0491M ASSESSEE BY : SHRI. V. K. GURUNATHAN, ADVOCATE REVENUE BY : SHRI. R. N. SIDDAPPAJI, ADDL. CIT HEARD ON : 12.03.2019 PRONOUNCED ON : 15.03.2019 O R D E R PER LALIET KUMAR, JUDICIAL MEMBER : THE PRESENT APPEAL IS FILED BY THE REVENUE AGAINST THE ORDER OF THE CIT (A), MANGALURU, DT.30.01.2018, FOR THE A SSESSMENT YEAR 2014-15, ON THE FOLLOWING GROUNDS : ITA.1086/BANG/2018 PAGE - 2 02. IT WAS THE CASE OF THE REVENUE THAT THE CIT(A) WITHOUT RECORDING PROPER REASONS HAD DECIDED THE ISSUE IN F AVOUR OF THE ASSESSEE BY FOLLOWING THE ORDER PASSED BY THE CIT ( A) FOR THE EARLIER ASSESSMENT YEAR, NAMELY, A. Y. 2012-13 AND THE FIND ING OF THE CIT (A) AS GIVEN IN PARA 6.3, READ AS UNDER : 6.3 IDENTICAL ISSUE WAS DISCUSSED IN DETAIL AND DEC IDED BY ME IN THE CASE OF THE APPELLANT ITSELF FOR AY 2012- 13 IN ITA NO.56/MNG/CIT(A)MNG/15-16 VIDE ORDER DATED.28.02.20 17. IDENTICAL ISSUES ARE INVOLVED IN THIS APPEAL FOR AY 2014-15 ALSO. FOR THE DETAILED REASONS RECORDED IN THAT OR DER, I HEREBY DIRECT THE AO TO DELETE THE RECEIPTS AND PAYMENTS I N RESPECT OF FOREIGN CONTRIBUTIONS FOR THE PURPOSE OF COMPUTING INCOME OF THE APPELLANT UNDER SECTION 11 OF THE ACT. THE GRO UNDS ON THE ISSUE ARE ALLOWED. ITA.1086/BANG/2018 PAGE - 3 03. IT WAS SUBMITTED BY THE LD. DR THAT THE FINDI NG RECORDED BY THE CIT (A) IS REQUIRED TO BE BASED ON THE MATERIAL AND NO DOCUMENT WAS FILED BY THE ASSESSEE BEFORE AO , NOTHING WAS D ISCUSSED BY THE AUTHORITIES , THE DOCUMENTS ARE NOW FILED AT PAGES 54 TO 61 OF THE PAPER BOOK BEFORE TRIBUNAL , WHICH WERE REQUIRED T O BE EXAMINED FROM THE PROSPECTIVE OF VIOLATION UNDER SECTION 11 AND 13 OF ACT WHETHER THE FOREIGN CONTRIBUTION RECEIVED BY THE AS SESSEE WERE TOWARDS THE CORPUS OR ON ACCOUNT OF VOLUNTARY CONTR IBUTION. THE LD. DR HAD ALSO RELIED UPON THE SMC DECISION OF THE TRIBUNAL IN ITA.1027/BANG/2017, DT.04.08.2017, WHEREIN AT PARA 3 & 4, IT WAS HELD AS UNDER : 3. I HAVE CONSIDERED THE RIVAL SUBMISSIONS . I FIND THAT THE REVENUE HAS RAISED AS MANY AS 8 GROUNDS BUT THE ONLY GRIEVA NCE OF THE REVENUE IS THAT THE LEARNED CIT (A) HAS ERRED IN AC CEPTING THE CLAIM OF THE ASSESSEE THAT THE AMOUNT OF FOREIGN CONTRIBUTION RECEIVED BY THE ASSESSEE OF RS. 176,54,741/- AND INTEREST LEVIED OF RS. 40,70,332/- ON DEPOSIT MADE FROM SUCH FOREIGN CONTRIBUTION FUNDS IS NOT FORMING PART OF I NCOME OF THE ASSESSEE. I FIND THAT AFTER ADDING BACK, THESE TWO AMOUNTS TOTAL RS. 217,25,914/-, THE A.O. ALLOWED DEDUCTION ON ACCOUNT OF UTILIZATION OF FOREIGN CONTRIBUTION TO T HE EXTENT OF RS. 139,94,030/-, GENERAL EXPENSES RS. 7,495/- A ND ACCUMULATION TO THE EXTENT OF RS.32,58,887/- (15% O F RS. 217,25,914/-) AND ASSESSED THE INCOME OF THE ASSESS EE AT RS. 44,65,502/-. BUT NEITHER BEFORE THE A.O., NOR BEFOR E CIT (A) AND NOR BEFORE THE TRIBUNAL, ANY EVIDENCE HAS BEEN FILED ABOUT THE STATED DIRECTIONS OF THE DONORS. HENCE, UNDER T HESE FACTS AND IN THE INTEREST OF JUSTICE, I FEEL IT PRO PER THAT THE MATTER SHOULD GO BACK TO CIT (A) FOR A FRESH DECISI ON. HENCE, I SET ASIDE THE ORDER OF CIT (A) AND RESTORE THE MA TTER BACK TO HIS FILE FOR A FRESH DECISION WITH THE DIRECTION THAT THE ASSESSEE SHOULD, PRODUCE THE STATED DIRECTIONS RECEIVED FROM THE DONORS AS BEING CLAIMED AND THEREAFTER, TH E CIT (A) MAY OBTAIN REMAND REPORT FROM THE A.O. AND THEREAFT ER, THE MATTER SHOULD BE DECIDED BY CIT (A) BY WAY OF A SPE AKING AND ITA.1086/BANG/2018 PAGE - 4 REASONED ORDER IN THE LIGHT OF THE PROVISIONS OF SE CTION 11(1) (D) AND THE JUDGMENT OF HON'BLE KARNATAKA HIGH COUR T RENDERED IN THE CASE OF CIT VS. CANARA ORGANIZATION . FOR DEVELOPMENT AND PEACE (SUPRA) AFTER PROVIDING ADEQU ATE OPPORTUNITY OF BEING HEARD TO BOTH SIDES. 4. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLO WED FOR STATISTICAL PURPOSES. THE LD. DR SUBMITTED THAT THE MATTER IS REQUIRED TO BE REMANDED BACK TO THE FILE OF CIT (A) TO EXAMINE AFRESH IN TH E LIGHT OF THE OBSERVATION OF THE TRIBUNAL (SUPRA). 04. PER CONTRA THE LD. AR FOR THE ASSESSEE HAS SUBM ITTED THAT THE CONTRIBUTION RECEIVED BY THE ASSESSEE FROM FOREIGN COUNTRIES WAS FOR THE CORPUS AND SUFFICIENT EVIDENCE WAS FILED BEFORE THE CIT (A) AT PAGES 54 TO 61 OF THE PAPER BOOK, WHICH GOES TO SHO W THE NATURE OF CONTRIBUTION RECEIVED BY THE ASSESSEE. IT WAS SUBM ITTED THAT DOCUMENTS WERE FILLED BEFORE CIT(A) BUT HE HAD NOT CONSIDERED DOCUMENTS HAD GRANTED RELIEF TO THE ASSESSEE WITHOU T CONSIDERING THE DOCUMENTS. HENCE MATTER CAN BE RESTORED BACK FO R EXAMINING THIS ASPECT. 05. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. AS THE PARTIES BEFORE US HAD AGREED THAT THE MATTER MAY BE REMANDED TO THE FILE OF CIT (A) BY ISSUING SIMILAR DIRECTIONS AS ISSUED IN ITA.1027/BANG/2017 (SUPRA). HENCE FOLLO WING THE EARLIER SMC DECISION OF THE TRIBUNAL IN ITA.1027/BA NG/2017 (SUPRA), WE RESTORE THE MATTER TO THE FILE OF THE C IT (A) FOR FRESH DECISION, AFTER EXAMINING THE DOCUMENTS FILED BEFOR E US / CIT(A) AT PAGES 54 TO 61 AND ANY OTHER DOCUMENT AS MAY BE FIL ED BY THE ITA.1086/BANG/2018 PAGE - 5 ASSESSEE. THEREAFTER THE CIT (A) MAY OBTAIN A REMA ND REPORT FROM THE AO AND THEREAFTER PASS A REASONED AND SPEAKING ORDER BY FOLLOWING THE LAW LAID DOWN BY THE HONBLE HIGH COU RT OF KARNATAKA IN THE MATTER OF CIT V. CANARA ORGANISATI ON FOR DEVELOPMENT & PEACE[ITRC NO.221/1982, DT.28.06.1988 ] AND ANY OTHER JUDGMENT OF HIGH COURT AS APPLICABLE . 05. IN THE RESULT, APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 15 TH DAY OF MARCH, 2019. SD/- SD/- (A. K. GARODIA) (LALIET KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER BENGALURU DATED : 15.03.2019 MCN* COPY TO: 1. THE ASSESSEE 2. THE ASSESSING OFFICER 3. THE COMMISSIONER OF INCOME-TAX 4. COMMISSIONER OF INCOME-TAX(A) 5. DR 6. GF, ITAT, BANGALORE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.