ITO, (Exemptions)-1, Hyderabad, Hyderabad V. BCM International (India), Hyderabad, Hyderabad

ITA 150/HYD/2015

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 1814 (ITAT-HYDERABAD)
• Duration Of Justice: 6 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-08-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 17-08-2015
• Assessment Year: misc
• Appeal Filed On: 13-02-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJAT MITRA
• Assessee Lawyers: D V ANJANEYULU; PRAVALLIKA
• Keywords: Charitable institution
• Section: 12AA; 11

Judgement Text

ITA NO.150 OF 2015 BCM INTERNATIONAL INDIA HYDERABA D PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD B BENCH, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA NO150/HYD/2015 (ASSESSMENT YEAR: 2011-12) INCOME TAX OFFICER (EXEMPTIONS)-1 HYDERABAD VS M/S. BCM INTERNATIONAL (INDIA) HYDERABAD (APPELLANT) (RESPONDENT) C.O. NO.15/HYD/2015 (ARISING OUT OF ITA NO.150/HYD/2015) (A.Y. 2011-12) M/S. BCM INTERNATIONAL (INDIA) HYDERABAD VS INCOME TAX OFFICER (EXEMPTIONS)-1 HYDERABAD (APPELLANT) (RESPON DENT) FOR REVENUE : SHRI RAJAT MITRA , DR FOR ASSESSEE : SHRI D.V. ANJANEYULU & MS. PRAVALLIKA, AR DATE OF HEARING : 17 .08.2015 DATE OF PRONOUNCEMENT : 21 .08.2015 O R D E R PER SMT.P. MADHAVI DEVI, J.M. THIS IS REVENUES APPEAL FOR A.Y 2011-12, AGAINST THE ORDER OF THE CIT(A)-IV HYDERABAD, DATED 7.11.2014. AT TH E OUTSET, IT IS SEEN THAT THE APPEAL OF THE REVENUE IS BARRED BY LI MITATION BY FIVE DAYS. THE REVENUE HAS FILED AN APPLICATION ALO NGWITH AN AFFIDAVIT SEEKING CONDONATION OF DELAY. THE REASON FOR DELAY IN FILING THE APPEAL WAS STATED TO BE DUE TO UNAVOIDAB LE ITA NO.150 OF 2015 BCM INTERNATIONAL INDIA HYDERABA D PAGE 2 OF 4 CIRCUMSTANCES IN VIEW OF WORK PRESSURE. THE LD COUN SEL FOR THE ASSESSEE ALSO DID NOT OBJECT TO THE CONDONATION OF THE DELAY. THEREFORE, THE DELAY OF FIVE DAYS IN FILING THE APP EAL BEFORE THE TRIBUNAL IS CONDONED. 2. AS REGARDS THE MERITS OF THE APPEAL, BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE SOCIETY FILED ITS RETURN OF I NCOME FOR THE RELEVANT A.Y ON 1.11.2011 DECLARING NIL INCOME, A FTER CLAIMING EXEMPTION U/S 11 OF THE I.T. ACT. ASSESSEE WAS REGI STERED U/S 12AA OF THE ACT. WHILE CONSIDERING THE ASSESSEES C LAIM OF EXEMPTION U/S 11 OF THE I.T. ACT, AO OBSERVED THAT THE ASSESSEE HAD PAID SUPPORT MONEY TO PASTORS FROM MYANMAR AND NEPAL. HOLDING THAT THE WORKING OF THE CHARITABLE INSTITUT ION OUTSIDE THE COUNTRY IS IN CONTRAVENTION TO THE PROVISIONS OF TH E ACT, HE DENIED EXEMPTION U/S 11 OF THE ACT AND BROUGHT ITS ENTIRE INCOME TO TAX. 3. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE THE CIT (A), WHO UPHELD THE FINDING OF THE AO THAT THE SUM PAID TO P ASTORS IN MYANMAR AND NEPAL IS NOT APPLICATION OF MONEY WITHI N INDIA. HOWEVER, HE HELD THAT THE DISALLOWANCE HAS TO BE RE STRICTED ONLY TO SUCH INCOME WHICH IS NOT IN INDIA AND EXEMPTION U/S 11 CANNOT BE DENIED IN TOTO. AGAINST THE RELIEF GIVEN BY THE CIT (A), REVENUE IS IN APPEAL BEFORE US. 4. WHILE THE LD DR SUPPORTED THE ORDERS OF THE AO, THE LD COUNSEL FOR THE ASSESSEE SUPPORTED THE ORDERS OF TH E CIT (A). ITA NO.150 OF 2015 BCM INTERNATIONAL INDIA HYDERABA D PAGE 3 OF 4 5. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE M ATERIAL ON RECORD, WE FIND THAT, UNDISPUTEDLY THE ASSESSEE HAS MADE PAYMENTS TO PASTORS OUTSIDE INDIA AND THEREFORE, SU CH INCOME CANNOT BE TREATED AS APPLICATION OF INCOME FOR CHAR ITABLE PURPOSES IN INDIA. SECTION 11 OF THE I.T. ACT SPECI FIES THAT THE INCOME WHICH HAS BEEN DERIVED FROM PROPERTY HELD UN DER THE TRUST AND APPLIED FOR CHARITABLE OR RELIGIOUS PURPO SE IS EXEMPT FROM TAX TO THE EXTENT SUCH INCOME IS APPLIED TO SU CH PURPOSE IN INDIA AND WHERE ANY SUCH INCOME IS ACCUMULATED OR S ET APART FOR APPLICATION OF SUCH INCOME IN INDIA, TO THE EXTENT TO WHICH THE INCOME SO ACCUMULATED OR SET APART IS NOT IN EXCESS OF FIFTEEN PER CENT OF THE INCOME FROM SUCH PROPERTY. FROM A L ITERAL READING OF THE SAID PROVISIONS, IT IS CLEAR THAT THE INCOME OF THE ASSESSEE IS ELIGIBLE FOR EXEMPTION ONLY TO THE EXTENT TO WHI CH THE INCOME IS APPLIED FOR CHARITABLE PURPOSES IN INDIA. IT IS NOT IN DISPUTE THAT THE ASSESSEE IS CARRYING ON CHARITABLE ACTIVITIES I N INDIA. THEREFORE, THE INCOME WHICH IS APPLIED TO CHARITABL E PURPOSES IN INDIA, MAY NOT BE DENIED EXEMPTION U/S 11 OF THE AC T. THEREFORE, WE ARE IN AGREEMENT WITH THE FINDINGS OF THE LD CIT (A) THAT THE SUM PAID TO PASTORS IN MYANMAR AND NEPAL ONLY CANNO T BE ALLOWED AS APPLICATION OF INCOME IN INDIA AND THE A SSESSEE IS ELIGIBLE FOR EXEMPTION U/S 11 OF THE ACT, TO THE OT HER MONEY APPLIED FOR CHARITABLE PURPOSES IN INDIA. THEREFORE , WE SEE NO REASON TO INTERFERE WITH THE ORDER OF THE CIT (A) A ND THE REVENUES APPEAL IS ACCORDINGLY DISMISSED. 6. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DI SMISSED. ITA NO.150 OF 2015 BCM INTERNATIONAL INDIA HYDERABA D PAGE 4 OF 4 7. THE CROSS OBJECTION IS FILED BY THE ASSESSEE IN SUPPORT OF THE ORDER OF THE CIT(A) AND THEREFORE IS NOT MAINTA INABLE. IT IS ACCORDINGLY DISMISSED. 8. IN THE RESULT, THE APPEAL OF THE REVENUE AS WELL AS THE CROSS OBJECTION OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST AUGUST, 2015. S D/ - S D/ - (B. RAMAKOTAIAH) (P. MADHAVI DEVI) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED 21 ST AUGUST, 2015. VNODAN/SPS COPY TO: 1. INCOME TAX OFFICER WARD (1) EXEMPTIONS, AAYAKAR BHA VAN, 3 RD FLOOR, BASHEERBAGH, HYDERABAD 2. M/S. BCM INTERNATIONAL (INDIA), 1-1-385/25 P & T CO LONY, NEW BAKARAM, HYDERABAD 500080 3. CIT(A)-IV HYDERABAD 4. DIRECTOR OF INCOME TAX (EXEMPTIONS) HYDERABAD 5. THE DR, ITAT, HYDERABAD 6. GUARD FILE BY ORDER