The ITO (exemption), Alappuzha V. M/s, Kripa Samithy, Pathanamthitta

ITA 140/COCH/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 7723 (ITAT-COCHIN)
• Duration Of Justice: 4 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-08-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 25-08-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 30-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHANOM BOSE
• Assessee Lawyers: IYPE JOHN
• Keywords: Charitable institution
• Section: 143(3); 80G; 12A; 12AA

Judgement Text

ITA NO 140 TO 143/COCH/2016 & CO S 15 TO 18/COCH/2016 1 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH KOCHI BEFORE S/ SHRI B P JAIN , AM & GEORGE GEORGE K, JM ITA NO 140 TO 143/COCH/2016 & CROSS OBJECTIONS 15 TO 18/COCH/2016 (A SST YEAR S 2006 - 07 TO 2009 - 10 ) THE INCOME TAX OFFICER(EXEMPTION) ALAPPUZHA VS M/S KRIPA SAMITHY THOMAS MAR ATHANASIUS MEMORIAL MARTHOMA CENTRE MANDIRAM RANNY PATHANAMTHITTA 689 674 ( APPELLANT /RESPONDENT ) (RESPONDENT /CROSS OBJECTOR ) PAN NO. AABTK6521D ASSESSEE BY SH IYPE JOHN REVENUE BY SH SHANOM BOSE, CIT - DR DATE OF HEAR ING 17 TH AUG 2016 DATE OF PRONOUNCEMENT 18 TH AUG 2016 ORDER PER BENCH ; THESE APPEALS, AT THE INSTANCE OF THE REVENUE AND THE CROSS OBJECTIONS PREFERRED BY THE ASSESSEE , ARE DIRECTED AGAINST THE CONSOLIDATED ORDER OF THE CIT(A) DATED 11.1.2016. THE R ELEVANT ASSESSMENT YEARS ARE 2006 - 07 TO 2009 - 10. 2 SINCE COMMON ISSUES ARE RAISED IN THESE APPEALS AND THE CROSS OBJECTIONS, THEY WERE HEARD TOGETHER AND DISPOSED OFF BY THIS CONSOLIDATED ORDER. ITA NO 140 TO 143/COCH/2016 & CO S 15 TO 18/COCH/2016 2 3 WE SHALL FIRST TAKE UP FOR ADJUDICATION THE REVENUES APPEA LS IN ITA NO.140 TO 143/COCH/2016. ITA NO.140 TO 143/COCH/2016. 4 BRIEFLY STATED THE FACTS IN RELATION TO THE REVENUES APPEAL S ARE AS FOLLOWS: THE ASSESSEE IS A CHARITABLE INSTITUTION UNDER THE RANNI - NILACKAL DIOCESE OF THE MAR THOMA SYRIAN CHURCH OF MA LABAR. THE ASSESSMENTS FOR THE ASSESSMENT YEARS 2006 - 07 TO 2009 - 10 WERE COMPLETED U/S 143(3) R.W.S 147 OF THE I T ACT. IN THE SAID ASSESSMENTS, THE AO HAD TAKEN THE TOTAL RECEIPTS SUCH AS DONATIONS, BANK INTEREST ETC., AS INCOME FROM OTHER SOURCES AND ALLO WED ON ADHOC BASIS EXPENDITURE ON MONTHLY BASIS AND TREATED THE BALANCE RECEIPTS AS THE TOTAL INCOME OF THE ASSESSEE INSTITUTION . IN DOING SO, THE AO HAD NOTED THAT THE ASSESSEE TRUST WAS NOT HAVING REGISTRATION U/S 12A OF THE I T ACT AND TREATED THE ST ATUS OF THE ASSESSEE AS AOP . T HE INCOME WAS ASSESSED AS PER SECTION 167B OF THE INCOME TAX I T ACT 1961 . 5 AGGRIEVED BY THE ASSESSMENT ORDERS, THE ASSESSEE PREFERRED APPEALS TO THE FIRST APPELLATE AUTHORITY. BEFORE THE FIRST APPELLATE AUTHORITY, THE ASSES SEE HAS OBJECTED TO THE REOPENING OF THE ASSESSMENTS. THE ASSESSEE HAS ALSO CHALLENGED THE DISALLOWANCE /ALLOWANCE OF EXPENDITURE ON ADHOC BASIS. THE CIT(A) DECIDED THE ISSUE ON MERIT AND HELD THAT THE AO IS NOT JUSTIFIED IN NOT ITA NO 140 TO 143/COCH/2016 & CO S 15 TO 18/COCH/2016 3 ALLOWING THE BONAFIDE EXPEND ITURE CLAIMED BY THE ASSESSEE TRUST. THE C IT (A) DID NOT ADJUDICATE THE ISSUE OF REOPENING OF THE ASSESSMENT. 6 AGGRIEVED BY THE ORDER OF THE FIRST APPELLATE AUTHORITY, THE REVENUE IS IN APPEAL BEFORE US FOR AL L THE ASSESSMENT YEARS. IDENTICAL GROUNDS ARE RAISED FOR ALL THE AYS. HOWEVER, THERE IS ONLY ONE EFFECTIVE GROUND, WHICH READ AS FOLLOWS : THE CIT(A) ERRED IN DELETING THE DISALLOWANCE OF EXPENSES FOR THE REASON THAT IN THIS CASE, THE ASSESSEE NEED NOT TO MAKE ANY EXPENSES WHOLLY AND EXCLUSIVELY TO EARN THE INCOME FROM DONATION, INTEREST AND GRANT. AS PER SEC. 57(III) ANY OTHER EXPENDITURE LAID OUT OR EXPENDED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF MAKING OR EARNING SUCH INCOME IS ONLY DEDUCTIBLE. 7 THE LD DR RELIED ON THE GROUND RAISED; W HEREA S THE LD COUNSEL FOR THE ASSESSEE REITERATED THE SUB MISSIONS MADE BEFORE THE CIT(A) AND RELIED ON THE FINDINGS OF HE CIT(A) 8 WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ASSESSEE IS A CHARITABLE INSTITUTION UNDER RANNI - NILA CKAL DIOCESE OF THE MAR THOMA SYRIAN CHURCH OF MALABAR. THE INSTITUTIONS OF MAR THOMA SYRIAN CHURCH OF MALABAR ARE EXEMPT U/S 10(23 C)(V) OF T HE I T ACT. C OPY OF THE NOTIFICATION GRANTING EXEMPTION U/S 10(23C)(V) , IS PLACED ON RECORD , AS ANNEXURE II . IN V IEW OF THE SAID EXEMPTION, INCOME OF THE INSTITUTION IS ALSO EXEMPT. MOREOVER, WITH EFFECT FROM THE ASSESSMENT YEAR 2010 - 11, THE ASSESSEE S INSTITUTION IS ALSO GRANTED REGISTRATION U/S 12AA OF THE ACT. DONATION TO THIS INSTITUTION IS ALSO EXEMPT U/S 80G OF THE I T ACT. COP IES OF REGISTRATION U/S 12AA AND CERTIFICATE OF ITA NO 140 TO 143/COCH/2016 & CO S 15 TO 18/COCH/2016 4 EXEMPTION U/S 80G ARE ALSO PLACED ON RECORD. T HE INCOME AND EXPENDITURE STATEMENT FOR ALL THE RELEVANT ASSESSMENT YEARS ARE ALSO PLACED ON RECORD. ON PERUSAL OF THE INCOME AND EXPENDITURE STATEMENT, WE NOTICE THAT THE EXPENDITURE INCURRED BY THE SOCIETY WAS FOR RUNNING OF HOME FOR THE MENTALLY CHALLENGED, HOME FOR THE DIFFERENTLY ABLED , TREATMENT CENTRE FOR ALCOHOLICS AND DRUG ADDICTS AND HOME FOR SENIOR CITIZENS. THE AO TREATED THE ENTIRE DONATION AS RECEIPTS AND ALLOWED ONLY PORTION OF THE EXPENDITURE ON ADHOC BASIS. THE AO HAD NOT FOUND ANY INFIRMITY IN THE EXPENDITURE CLAIMED NOR HAS HE FOUND THAT EXPENDITURE INCURRED IS NOT BONAFIDE. ON CONTRARY, WE FIND THAT EXPENDITURE CLAIMED IN TH E INCOME AND EXPENDITURE STATEMENT ARE INCURRED FOR GENUINE CHARITABLE ACTIVITIES. THE CIT (A) TAKING NOTE OF THIS FACT HAD HELD THAT THE EXPENDITURE CLAIMED BY THE ASSESSEE OUGHT NOT TO HAVE BEEN DISALLOWED . THIS STAND OF THE CIT(A) IS JUSTIFIED ON FACTS O N RECORD AND NO INTERFERE IS CALL ED FOR. IT IS ORDERED ACCORDINGLY. 9 IN THE RESULT THE APPEALS FILED BY THE REVENUE ARE DISMISSED. CROSS OBJECTIONS NOS. 15 TO 18/COCH/2016 (BY THE ASSESSEE) 10 IN THE CROSS OBJECTIONS, THE ASSESSEE CHALLENGED THE VAL IDITY OF THE REOPENING OF THE ASSESSMENTS. THIS ISSUE, HAS NOT BEEN ADJUDICATED BY THE CIT(A). MOREOVER, SINCE WE HAVE DECIDED THE ISSUE ON MERITS IN FAVOUR OF THE ITA NO 140 TO 143/COCH/2016 & CO S 15 TO 18/COCH/2016 5 ASSESSEE, THE ISSUE IN THE CROSS OBJECTION, WITH REGARD TO REOPENING OF THE ASSESSMENT, IS N OT ADJUDICATED. IT IS ORDERED ACCORDINGLY. 11 TO SUM - UP, THE APPEALS FILED BY THE REVENUE AND THE CROSS OBJECTIONS BY THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 18 TH DAY OF AUG 2016 . SD/ - SD/ - ( B P JAIN ) ( GEORGE GEORGE K ) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN: DATED 18 TH AUG 2016 RAJ* COPY TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT(A) , KOTTAYAM 4 . CIT, ALAPPUZHA 5 . DR 6 . GUARD FILE BY O RDER ASSISTANT REGISTRAR ITAT, COCHIN