Sri Boyakonda Gangamma Devasthanam , Chittoor V. Income Tax Officer, Exemptions, Tirupati

ITA 1983/Hyd/2018

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 6628 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 3 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-01-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-B
• Next Hearing Date: 13-01-2021
• Assessment Year: 2013-2014
• Appeal Filed On: 01-10-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Y V S T SAI
• Assessee Lawyers: E PHALGUNA KUMAR
• Keywords: Capital receipt
• Section: 274; 251

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B : HYDERABAD (THROUGH VIDEO CONFERENCE) BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER I.T.A. NO.1983/HYD/2018 ASSESSMENT YEAR: 2013-14 SRI BOYAKONDA GANGAMMA DEVASTHANAM, DIGUVAPALLE VILLAGE, CHOWDEPALLE [PAN: AADAS3482L] VS INCOME TAX OFFICER, (EXEMPTIONS), TIRUPATI (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI E.PHALGUNA KUMAR, AR FOR REVENUE : SHRI Y.V.S.T.SAI, CIT-DR DATE OF HEARING : 13-01-2021 DATE OF PRONOUNCEMENT : 29-01-2021 O R D E R PER BENCH : THIS ASSESSEES APPEAL FOR AY.2013-14 ARISES FROM TH E CIT(A)-TIRUPATIS ORDER DATED 02-08-2018 PASSED IN C ASE NO.420/2016-17/CIT(A)/TPT, IN PROCEEDINGS U/S.143(3 ) OF THE INCOME TAX ACT, 1961 [IN SHORT, THE ACT]. HEARD BOTH THE PARTIES. CASE FILE PERUSED. 2. THE ASSESSEE HAS RAISED THE FOLLOWING SUBSTANTIVE GROUNDS IN THE INSTANT APPEAL: ITA NO. 1983/HYD/2018 :- 2 -: 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS), TIRUPATI, IS ERRONEOUS AND IS NOT BASED ON FACTS AN D CIRCUMSTANCES OF THE CASE. 2. THE LD.COMMISSIONER OF INCOME TAX (APPEALS), TIR UPATI ERRED IN UPHOLDING THE STATEMENT OF THE LD. AO THAT CORPUS F UND DONATIONS WERE UTILISED FOR DAY-TO-DAY EXPENSES. THE LD. CIT( APPEALS) ERRED IN NOT EXAMINING THE FINANCIAL PICTURE PUT OUT BY THE INCOME AND EXPENDITURE STATEMENT AND BALANCE SHEET OF THE APPE LLANT FOR THE ASSESSMENT YEAR UNDER APPEAL. 3. THE LD.COMMISSIONER OF INCOME TAX (APPEALS), TIR UPATI ERRED IN UPHOLDING THE STAND OF THE LD. AO THAT THE TREATMEN T OF CORPUS DONATIONS UNDER THE AP CHARITABLE AND HINDU RELIGIO US INSTITUTIONS AND ENDOWMENTS ACT 1987 HAS A BEARING ON THE TAXABI LITY OF CORPUS DONATIONS UNDER THE INCOME TAX ACT 1961. THE LD.CIT (APPEALS) AND THE LD.AO ERRED IN UNDERSTANDING THAT THE NATURE AN D TAXABILITY OF CORPUS DONATIONS IS DETERMINED BY THE INCOME TAX AC T 1961 AND NOT BY OTHER STATUTES. 4. THE LD.COMMISSIONER OF INCOME TAX (APPEALS), TIR UPATI ERRED IN NOT ALLOWING THE PLEA OF THE APPELLANT TO FILE THE FORM 10 FOR ACCUMULATION AT THE APPELLATE STAGE. THE LD.CLT(APPEALS) ERRED I N NOT CONSIDERING THE VARIOUS JUDICIAL PRECEDENTS LAID IN THIS BEHALF . 5. ANY OTHER GROUND MAY BE URGED WITH THE KIND PERM ISSION OF THE HON'BLE TRIBUNAL AT THE TIME OF HEARING. 3. BOTH THE LEARNED REPRESENTATIVES HAVE TAKEN US TO THE CIT(A)S LOWER APPELLATE DISCUSSION UPHOLDING THE AS SESSING OFFICERS IMPUGNED ACTION AS FOLLOWS: 6. I HAVE CONSIDERED THE SUBMISSIONS MADE BY THE A PPELLANT AND ALSO FINDINGS GIVEN BY THE AO CAREFULLY. THE AO TRE ATED THE ENTIRE HUNDI RECEIPTS AND DONATIONS AS REGULAR INCOME ON S EVERAL COUNTS. THE AR OF THE APPELLANT MAKES A SPECIFIC PLEA THAT APPELLANT IS MAINTAINING A PUBLIC HUNDI, WHEREIN INSCRIPTION ON THE HUNDI STATED AS 'DONATIONS RECEIVED THROUGH THIS HUNDI ARE TOWAR DS THE CORPUS OF THE TEMPLE TRUST'. DURING THE COURSE OF APPELLATE P ROCEEDINGS, THE AR OF APPELLANT SHOWED THE PHOTOGRAPHS OF HUNDI WITH I NSCRIPTION AS DESCRIBED ABOVE. IT WAS STATED THAT DEVOTEES PUT TH E MONEY IN HUNDI AND THESE RECEIPTS WERE NOT OFFERED AS INCOME, INST EAD THEY ARE TAKEN DIRECTLY TO THE BALANCE SHEET WHICH ARE ADDED TO TH E CORPUS FUND. HOWEVER, THE AO GAVE A SPECIFIC FINDING THAT THE CO RPUS FUND WAS NOT UTILISED FOR A SPECIFIC PURPOSE, AND ENTIRE MONEY W AS UTILISED FOR DAY TO DAY EXPENSES OF THE ASSESSEE-DEVASTHANAM. THE AR OF THE ITA NO. 1983/HYD/2018 :- 3 -: APPELLANT DID NOT DISPUTE WITH ANY EVIDENCE AS TO W HAT WAS THE PURPOSE FOR CORPUS FUND AND ALSO HOW THE MONEY WAS UTILISED. THE AR OF THE APPELLANT DID NOT DISPUTE THE FINDINGS OF THE AO THAT THE CORPUS FUND WAS UTILISED FOR MEETING DAY TO DAY EXP ENSES OF THE ASSESSEE. THE AR OF THE APPELLANT ALSO DID NOT GIVE DETAILS AS TO HOW MANY TYPES OF HUNDIES WERE MAINTAINED, I.E. THE HUN DIES FOR CORPUS AND ALSO HUNDIES FOR GENERAL PURPOSE. SINCE THE MON EY DEPOSITED IN HUNDIES MEANT FOR CORPUS FUND WAS UTILISED FOR DAY TO DAY EXPENSES OF THE ASSESSEE, IT CANNOT BE TREATED THAT DONATION S RECEIVED IN HUNDIES WERE MEANT FOR A SPECIFIC PURPOSE WITH A SP ECIFIC DIRECTION. THE CONTENTION OF THE APPELLANT THAT SIMILAR PRACTI CE WAS DONE IN THE PAST AND THE SAME WAS ACCEPTED CANNOT BE A GROUND F OR ALLOWING THIS CLAIM IN THIS YEAR. THE EACH YEAR IS DIFFERENT. THE ASSESSMENT PROCEEDINGS IN EACH YEAR ARE INDEPENDENT. THEREFORE , THE CONTENTION OF APPELLANT IS REJECTED. THE RATIO OF THE DECISION OF THE HON'BLE TRIBUNAL REPORTED IN 133 TTJ 57, CITED BY AR OF THE APPELLANT IS NOT APPLICABLE TO THE FACTS OF THE CASE. IN THE CASE CI TED BY THE AR OF THE APPELLANT, IT WAS NOTED THAT THE CONCERNED ASSESSEE MAINTAINED SEPARATE HUNDIES FOR CONSTRUCTION OF THE BUILDING A ND ALSO FOR GENERAL PURPOSES. NO SUCH FACTS EXISTED IN THE CASE. THE AR OF THE APPELLANT DID NOT BRING OUT ANY FACTS ABOUT EXISTENCE OF GENE RAL HUNDI, I.E. FOR MEETING GENERAL EXPENDITURE, APART FROM HUNDI FOR C ORPUS FUND, MOREOVER, THE APPELLANT INCLUDED SUCH RECEIPTS IN T HE ASSESSABLE INCOME FOR CALCULATION OF THE FEES PAYABLE TO THE E NDOWMENT DEPARTMENT. THE APPELLANT'S PLEA TO ACCEPT FORM NO. 10 AT THE APPELLATE STAGE IS ALSO NOT ACCEPTABLE. SUCH FORM E VEN THOUGH BELATED ONE, NEEDED TO BE FILED BEFORE PR.COMMISSIONER OF I NCOME TAX, NOT BEFORE CIT(APPEALS). THEREFORE, THE RELIANCE PLACED BY THE APPELLANT ON THE DECISION OF THE GURAJARAT HIGH COURT, REPORT ED IN 274 ITR 562 IS ALSO NOT TENABLE. LOOKING TO THE FACTS AND CIRCU MSTANCES OF THE CASE, AND LEGAL POSITION ON THE ISSUE, I CONFIRM TH E ACTION OF THE AO IN TREATING THE HUNDI RECEIPTS AND DONATIONS AS REGULA R INCOME. 4. BOTH PARTIES REITERATED THEIR RESPECTIVE STANDS AGAINST AND IN SUPPORT OF THE LOWER AUTHORITIES ACTION TREATING THE ASSESSEES FOREGOING SUM(S) AS REGULAR INCOME. THE CLINCHING FACT THAT HAS COME TO OUR NOTICE DURING THE COURSE OF HEA RING IS THAT THIS ASSESSEE IS GOVERNED BY THE PROVISIONS OF AN DHRA PRADESH CHARITABLE AND HINDU RELIGIOUS INSTITUTIONS A ND ENDOWMENTS ACT, 1987. THIS ACT RECEIVED THE ASSENT OF THE PRESIDENT ON 15-05-1987. CHAPTER-VIII SECTION 65 EXPL ANATION ITA NO. 1983/HYD/2018 :- 4 -: (1)(G) THEREOF STIPULATES THAT DONATIONS IN CASH OR KIND BY THE DONORS AS CONTRIBUTIONS TO CAPITAL SHALL NOT BE DEEMED TO BE INCOME OF THE CONCERNED INSTITUTION. A PERUSAL OF THE ASSESSMENT ORDER DT.09-02-2016 MAKES IT CLEAR THAT EVEN THE ASSESSING OFFICER WAS ALSO FAIR ENOUGH IN NOT DISPUT ING ASSESSEES HUNDIS DURING THE COURSE OF SCRUTINY. 5. LEARNED CIT-DR AT THIS STAGE VEHEMENTLY ARGUED THAT TH E PROVISIONS OF THE SAID ENDOWMENTS LAW TEND TO OVERRID E THE PROVISIONS OF THE INCOME TAX ACT DESPITE THE FACT THE L ATTER LAW IS SPECIFIC IN NATURE. MR.SAI FURTHER THREW LIGHT ON L EGISLATIVE RELATIONS BETWEEN THE UNION AND THE STATES AS PER PART-X I OF THE CONSTITUTION OF INDIA THAT THE LATTER STATUTE; ENACTED UN DER UNION LIST, PREVAILS OVER THE STATE ENDOWMENT LAW HEREIN ABOVE. 6. AFTER GIVING OUR THOUGHTFUL CONSIDERATION TO THE FOREG OING RIVAL CONTENTIONS, WE FIND NO MERIT IN THE REVENUES S TAND. WE WISH TO REITERATE HERE THAT NONE OF THE LOWER AUTHORITIES HAVE DISBELIEVED OR REBUTTED THE ASSESSEES PLEA THAT THE IMP UGNED SUMS ARE IN THE NATURE OF A HUNDI RECEIPTS BEING DO NORS DONATIONS IN CASH OR KIND ONLY; AS PER THE STATE ENDOWM ENT LAW. THERE CAN BE NO DISPUTE IN PRINCIPLE THAT IN CAS E OF A GENERAL VIS--VIS SPECIFIC PROVISIONS, THE LATTER PREV AILS OVER THE FORMER AS PER MAXIM GENERALIS SPECIALIBUS NON DERO GENT. WE, HOWEVER, DO NOT FIND THE FACTS OF THE CASE ATTRACTIN G REPUGNANCY QUA THE ABOVE STATE LAW VIS--VIS TAX LAW AS PER ARTICLE 251 OF THE CONSTITUTION OF INDIA. THE FOREGOIN G LEGAL MAXIM ALSO DOES NOT APPLY HERE. THE CLINCHING FACT THA T EMERGES HERE IS THAT ASSESSEES HUNDI RECEIPTS IN C ASH FROM DONORS ARE NOT REVENUE ITEMS BUT CAPITAL RECEIPTS ONLY. THE ITA NO. 1983/HYD/2018 :- 5 -: RELEVANT PROVISIONS OF THE ENDOWMENT ACT DULY MAKES I T CLEAR THAT THEY ARE CORPUS DONATIONS WHICH NOWHERE GO AGAINST THE PROVISIONS OF TAX LAW. WE THEREFORE SEE NO REASON TO S USTAIN THE LEARNED LOWER AUTHORITIES ACTION TREATING THE ASSESSEE S HUNDI RECEIPTS EMBEDDED WITH SPECIFIC PURPOSE OF CORPUS DON ATION U/S.11(1)(D) OF THE ACT ARE NOT ENTITLED FOR EXEMPTION BEING REVENUE RECEIPTS. WE THUS DIRECT THE ASSESSING OFFICER TO DELETE THE IMPUGNED ADDITION. NO OTHER ARGUMENT HAS BEEN RAISED BEFORE US. 7. THIS ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH JANUARY, 2021 SD/- SD/- (LAXMI PRASAD SAHU) (S.S.G ODARA) ACCOUNTANT MEMBER JUDICIAL MEM BER HYDERABAD, DATED: 29-01-2021 TNMM ITA NO. 1983/HYD/2018 :- 6 -: COPY TO : 1.THE EXECUTIVE OFFICER, BOYAKONDA GANGAMMA DEVASTHANAM, DIGUVAPALLE, CHOWDEPALLI MANDAL, CHOWDEPALLI. (AP). 2.THE INCOME TAX OFFICER (EXEMPTIONS), TIRUPATI. 3.CIT(APPEALS)-TIRUPATI. 4.CIT(EXEMPTIONS)-TIRUPATI. 5.D.R. ITAT, HYDERABAD. 6.GUARD FILE.