M/s. Benny Hinn Ministries, Bangalore V. Assistant Director of Income Tax, Bangalore

ITA 1736/BANG/2016

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 2687 (ITAT-BANGALORE)
• Duration Of Justice: 3 year(s) 5 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-03-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 06-01-2020
• Assessment Year: 2009-2010
• Appeal Filed On: 05-10-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Charitable institution; Set aside
• Section: 12; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI. A. K. GARODIA, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL MEMBER ITA 1736/BANG/2016 ASSESSMENT YEAR : 2009 10 M/S. BENNY HINN MINISTRIES, NO. 2, PRESTIGE SIGMA, F 3, VITTAL MALLYA ROAD, BENGALURU 560 001. PRESENTLY AT : TULIP, NEW MINAAL RESIDENCY, J.K ROAD, GOVINDPURA, BHOPAL-462 023 [M.P] PAN NO : AAATB 8988 J VS. ASST. DIRECTOR OF INCOME TAX, (EXEMPTIONS), CIRCLE 17 (1), BENGALURU. APPELLANT RESPONDENT APPELLANT BY : SMT. SHEETAL BORKAR, ADVOCATE RESPONDENT BY : MS. NISHI PADMA, JCIT DR DATE OF HEARING : 10-01-2020 DATE OF PRONOUNCEMENT : 12-03-2020 ORDER PER BEENA PILLAI, JUDICIAL MEMBER PRESENT APPEAL HAS BEEN FILED BY ASSESSEE AGAINST O RDER DATED 28/05/2016 PASSED BY LD. CIT(A)-14, BANGALORE FOR ASSESSMENT YEARS 2009-10 ON FOLLOWING GROUNDS OF AP PEAL: PAGE 2 OF 6 ITA 1736/BANG/2016 A. Y : 2009 10 1. THE IMPUGNED ORDER OF CIT(A) IS BAD AND UNSUSTAINAB LE IN THE EYE OF LAW AS THE SAME IS PASSED WITHOUT PROPER APPLICA TION OF MIND TO THE FACTS URGED. 2. THE CIT(A) SERIOUSLY FELL IN ERROR IN NOT APPRECIAT ING THAT THE PAYMENTS MADE, IN INDIAN CURRENCY, TO AN INDIAN ENT ITY WAS TOWARDS APPLICATION AND HENCE THERE WAS NO VIOLATION OF PRO VISIONS OF S.11. 3. CIT(A) ERRED NOT APPLYING HIS MIND TO THE FACT THAT THE PROGRAMME TELECAST OVER THE TELEVISION FOR WHICH EXPENDITURE WAS INCURRED, WAS NOTHING BUT PREACHING WHICH WAS ALSO ONE OF THE OBJ ECTS OF THE APPELLANT TRUST AND THAT ITSELF WAS A CHARITABLE AC TIVITY AND THEREFORE, THE DISALLOWANCE AS MADE BY THE AO WAS B AD. 4. THE CIT(A) ERRED IN NOT DELETING INTEREST UNDER S.2 34B OF THE ACT. 5. FOR THESE AND SUCH OTHER GROUNDS THAT ARE URGED DUR ING THE HEARING, THE APPELLANT PAYS THAT THE APPEAL BE ALLO WED AND THE DISALLOWANCE MAY BE DELETED. 2. BRIEF FACTS OF THE CASE ARE AS UNDER: ASSESSEE IS A WHOLLY RELIGIOUS TRUST REGISTERED UND ER SECTION 12 A (A) OF THE ACT, VIDE NO. TRUST/718/10 A/VOL.I/ B- 660/2000-2001/CIT-II DATED 02/11/2000 W.E.F. 29/09/ 2000. FOR YEAR UNDER CONSIDERATION ASSESSEE FILED ITS RET URN OF INCOME ON 16/09/2009 DECLARING NIL INCOME. THE RETURN W AS PROCESSED UNDER SECTION 143 (1) AND WAS SELECTED FO R SCRUTINY. STATUTORY NOTICES WERE ISSUED IN RESPONSE TO WHICH REPRESENTATIVE OF ASSESSEE APPEARED AND PRODUCED ALL DOCUMENTS AS CALLED FOR. 3. LD. AO OBSERVED THAT, ASSESSEE DEBITED AIRTIME EXP ENSES AMOUNTING TO RS.1,74,00,459/- AND VIDEO DUPLICATION EXPENSES AMOUNTING TO RS. 58,14,509/-. ON PERUSAL OF DETAI LS CALLED FOR, LD. AO OBSERVED THAT, THE CONCERN BEING, MIRACLENET BROADCASTED PROGRAMMES AGAINST WHICH PAYMENTS WERE MADE FOR SHO WING PAGE 3 OF 6 ITA 1736/BANG/2016 A. Y : 2009 10 PROGRAMME AND BROADCASTING VIDEOS FOR CONTRIBUTION WHICH WERE AGREED IN DOLLARS. LD. AO OBSERVED THAT, ASSESSEE HAS TO APPLY THE INCOME ONLY FOR CHARITABLE PURPOSES IN INDIA, AND I F ANY INCOME OF TRUST IS APPLIED OUTSIDE INDIA, THEN SUCH INCOME SH ALL BE TAXABLE UNLESS THE ACTIVITY UNDERTAKEN IS WITH THE APPROVAL OF CBDT. SINCE ASSESSEE COULD NOT ESTABLISH BY WAY OF ANY DOCUMENTS/EVIDENCES THAT PAYMENTS MADE OUTSIDE INDI A WAS APPROVED BY CBDT, LD. AO DISALLOWED THE SAME. AGGRIEVED BY ADDITION MADE BY LD. AO, ASSESSEE PREF ERRED APPEAL BEFORE LD. CIT(A). 4. LD. CIT(A) JUSTIFIED ACTION OF LD. AO BY OBSERVING THAT, ASSESSEE NOWHERE CATEGORICALLY PROVED THAT, PAYMENT MADE RESULTED FOR CHARITABLE ACTIVITIES IN INDIA. LD. C IT(A) REJECTED ARGUMENT OF ASSESSEE THAT, PROGRAMS ARE SHOWN THROU GH TELEVISION MEDIA AND VIEWERS ARE INDIAN RESIDENTS. IT IS OBSERVED BY LD. CIT(A), ON EXAMINATION OF CONTENTIONS OF ASS ESSEE AND CATEGORICALLY OPINED THAT MIRACLENET, IN THEIR RECE IPTS CONFIRMS PAYMENT IS MAINLY TO BENNY HINN MINISTRIES IN USA A ND THAT THESE PAYMENTS HAVE GONE ABROAD AND ARE INCURRED OU TSIDE INDIA. LD. CIT (A) THUS CONFIRMED THE ADDITION MADE BY LD. AO. AGGRIEVED BY ORDER OF LD. CIT(A) ASSESSEE IS IN APP EAL BEFORE US NOW. 5. AT THE OUTSET LD. AR SUBMITTED THAT, THERE IS A DEL AY OF 35 DAYS IN FILING PRESENT APPEAL BEFORE THIS TRIBUNAL . IN AFFIDAVIT DATED 03/01/2020 FILED BY ACCOUNTANT OF ASSESSEE SH RI. RAGHUNATH. H, IT HAS BEEN STATED THAT, DUE TO EXTEN SIVE OUTSTATION TRAVEL AUTHORISED REPRESENTATIVE OF APPE AL COULD NOT BE FILED ON TIME WHICH WAS UNINTENTIONAL. PAGE 4 OF 6 ITA 1736/BANG/2016 A. Y : 2009 10 6. LD. DR STRONGLY OPPOSED CONDONATION OF DELAY, AS IT HAS NOT BEEN FILED BY AUTHORISED REPRESENTATIVE OF ASSESSEE AND THAT, THE PERSON WHOSE AFFIDAVIT HAS BEEN PLACED ON RECORD IS AN ACCOUNTANT, WHO DOES NOT CARRY ANY AUTHORITY TO FIL E ANY SUCH AFFIDAVITS. SHE FURTHER SUBMITTED THAT, SUFFICIENT OPPORTUNITY WAS GRANTED TO ASSESSEE TO RECTIFY THE SAME. SHE SUBMI TTED THAT, APPEAL SHOULD BE DISMISSED AT THE THRESHOLD FOR BEI NG DEFECTIVE. WE HAVE PERUSED SUBMISSIONS ADVANCED BY BOTH SIDES IN LIGHT OF RECORDS PLACED BEFORE US. 7. BEFORE US LD.AR FILED LETTER DATED 18/12/2019, WHEREIN IT HAS BEEN SUBMITTED BY THE ACCOUNTANT OF ASSESSEE THAT, COMMUNICATION REGARDING DEFECT MEMO WAS RECEI VED RECENTLY BY ASSESSEE AND THEY WERE UNAWARE ABOUT TH E SAME. IT HAS BEEN SUBMITTED THEREIN THAT, TRUSTEE WAS HANDLI NG THE MATTER FOR TRUST IN BANGALORE OFFICE HAS RESIGNED AND COMM UNICATION ABOUT DEFECTIVE NOTICE MUST HAVE BEEN RECEIVED BY T HE SAID TRUSTEE. IT WAS IN ACCORDANCE TO THAT THE ACCOUNTAN T FILED AN AFFIDAVIT EXPLAINING THE DELAY IN FILING THE APPEAL . 8. WE NOTE THAT THERE IS 35 DAYS DELAY IN FILING PRESE NT APPEAL WHICH CANNOT BE CONSIDERED TO BE UNREASONABL E AS THERE EXISTED GENUINE REASON FOR MET ABLE TO FILE APPEAL ON TIME. ALSO CONSIDERING SUBMISSION IN 18/12/2019, ALONG WITH RE ASON FOR NOT FILING APPEAL ON TIME AS MENTIONED IN AFFIDAVIT, WE ARE OF THE OPINION THAT, DELAY IS CONDONABLE. ACCORDINGLY, WE CONDONED THE DELAY AND PROCEED TO D ECIDE ON MERITS. 9. THE ONLY ISSUE ALLEGED BY ASSESSEE IS FOR NOT GRANT ING EXEMPTION UNDER SECTION 11 ON EXPENDITURE INCURRED TOWARDS PAGE 5 OF 6 ITA 1736/BANG/2016 A. Y : 2009 10 AIRTIME EXPENSES AND VIDEO DUPLICATION EXPENSES, FO R THE REASON THAT PAYMENTS HAVE BEEN MADE OUTSIDE INDIA. LD.AR SUBMITTED THAT, EXPENSES HAVE BEEN INCURRED IN INDIAN CURRENC Y AND PAYMENTS HAVE BEEN MADE THROUGH INDIAN BANK ACCOUNT S MAINTAINED IN INDIA TO THE BROADCASTING COMPANY. S HE SUBMITTED THAT, COPY OF PAYMENT INSTRUCTION LETTERS ISSUED BY BANKERS FOR PURPOSES HAVE BEEN SUBMITTED IN EVIDENCE OF PAYMENT IN INDIAN RUPEES, WHICH HAS NOT BEEN VERIFIED BY AUTHORITIES BELOW. SHE FURTHER SUBMITTED THAT, THESE PAYMENTS HAVE BEEN MA DE TO MIRACLENET FOR TELECASTING PROGRAMS IN INDIA IN VAR IOUS LANGUAGES. 10. ON THE CONTRARY, LD. DR SUBMITTED THAT, AGREEMENTS ARE ENTERED FOR MAKING PAYMENTS IN U.S. DOLLARS, AS HAS BEEN OBSERVED BY LD. CIT(A). FURTHER, SHE SUBMITTED THA T, CHARGES PAID BY ASSESSEE TO M/S. MIRACLENET, CANNOT BE CONC LUDED AS APPLIED IN INDIA, AS THERE IS NO PERMISSION/APPROVA L, OBTAINED BY ASSESSEE FROM CBDT. WE HAVE PERUSED SUBMISSIONS ADVANCED BY BOTH SIDES IN LIGHT OF RECORDS PLACED BEFORE US. 11. LD. CIT(A) PROCEEDED ON THE FOOTING THAT SHOWS TELECASTED THROUGH TELEVISION IS NOT FOR EXCLUSIVE VIEWERS IN INDIA, AND THAT PAYMENT WAS ROUTED TO FOREIGN CONCERN ABRO AD, AFTER CONVERTING THE SAME IN INDIAN RUPEES. IT IS ALSO O BSERVED THAT, LD. CIT(A) RECORDS A FINDING THAT PAYMENT ULTIMATEL Y REACHES BENNY HINN MINISTRIES, USA CANNOT BE CONSIDERED AS APPLICATION OF TRUST FUNDS. THESE ARE RECEIPTS ISSUED BY MIRAC LENET, (PLACED AT PAGE 17-30 OF PAPER BOOK) TO ASSESSEE IN INDIA A ND ALSO A COPY TO ASSESSEE IN USA. IT IS OBSERVED THAT, LD. CIT(A ) HAS NOT CONSIDERED CERTAIN EVIDENCES FILED BY ASSESSEE REGA RDING PAGE 6 OF 6 ITA 1736/BANG/2016 A. Y : 2009 10 PAYMENTS MADE TO M/S. MIRACLENET. IN OUR VIEW THIS ISSUE NEEDS TO BE REVISITED BY LD. CIT(A) HAVING REGARDS TO ALL DOCUMENTS FILED BY ASSESSEE IN ACCORDANCE WITH LAW. NECESSARY VERI FICATION CAN BE CARRIED OUT TO ASCERTAIN THE APPLICATION OF FUND S IS IN ACCORDANCE WITH THE OBJECTS OF THE TRUST. IN THE E VENT THE EXPENDITURE INCURRED BY ASSESSEE TOWARDS AIRTIME CH ARGES AND VIDEO DUPLICATION CHARGES ARE APPLICATION OF TRUST, FUND, DEDUCTION CLAIMED BY ASSESSEE U/S. 11 MAY BE GRANTE D. WE THEREFORE SET ASIDE THIS ISSUE BACK TO LD. CIT(A ) TO DECIDE CLAIM U/S. 11 IN LIGHT OF EVIDENCES FILED. NEEDLES S TO SAY, THAT PROPER OPPORTUNITY OF BEING REPRESENTED SHALL BE PR OVIDED TO ASSESSEE IN ACCORDANCE WITH LAW. ACCORDINGLY, THE GROUNDS RAISED BY ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. IN THE RESULT APPEAL FILED BY ASSESSEE STANDS ALLOW ED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 12 TH MARCH, 2020. SD/- SD/- (A. K. GARODIA) (BEENA PILLAI) ACCOUNTANT MEMBER JUDICIAL ME MBER BANGALORE, DATED, THE 12 TH MARCH, 2020. /MK/ COPY TO: 1. APPELLANT 4. CIT(A) 2. RESPONDENT 5. DR, ITAT, BANGALORE 3. CIT 6. GUARD FILE BY ORDER ASSISTANT RE GISTRAR, ITAT, BANGALORE