The Nilackal St.Thomas Church and Ecumenical Centre trust, Kottayam V. CIT, Kottayam

ITA 325/COCH/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 73816 (ITAT-COCHIN)
• Duration Of Justice: 7 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-01-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 28-11-2013
• Assessment Year: misc
• Appeal Filed On: 22-05-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: LATHA V KUMAR
• Assessee Lawyers: K I JOHN
• Keywords: Depreciation; Charitable institution
• Section: 80G; 12A; 12AA; 2; 11

Judgement Text

1 ITA NO.325/COCH/2013 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI N.R.S. GANESAN (JM) AND SHRI B.R. BASKA RAN(AM) I.T.A NO. 325/COCH/2013 THE NILACKAL ST. THOMAS CHURCH VS C.I.T., KOTTAYAM & ECUMENICAL CENTRE TRUST KOTTAYAM PAN : AAATN2375F (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI K.I. JOHN RESPONDENT BY : SMT. LATHA V KUMAR DATE OF HEARING : 28-11-2013 DATE OF PRONOUNCEMENT : 10-01-2014 O R D E R PER N.R.S. GANESAN (JM) THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE ADMINISTRATIVE COMMISSIONER DATED 29-04-2013 REJECT ING THE APPLICATION OF THE ASSESSEE FOR APPROVAL U/S 80G OF THE ACT. 2. SHRI K.I. JOHN, THE LD.REPRESENTATIVE FOR THE AS SESSEE SUBMITTED THAT THE TRUST WAS GRANTED REGISTRATION U/S 12AA OF THE ACT ON 03-07-2007. THE ASSESSEE FILED AN APPLICATION FOR APPROVAL U/S 80G ON 11-03-2008. ACCORDING TO THE LD.REPRESENTATIVE, THE COMMISSIONE R REJECTED APPROVAL U/S 2 ITA NO.325/COCH/2013 80G BY AN ORDER DATED 30-09-2008. BEING AGGRIEVED BY THE ORDER OF THE COMMISSIONER THE ASSESSEE FILED APPEAL BEFORE THIS TRIBUNAL. THIS TRIBUNAL BY AN ORDER DATED 25-02-2010 DIRECTED THE COMMISSIONER TO GRANT APPROVAL U/S 80G OF THE ACT. THE DEPARTMENT CARRIE D THE MATTER BEFORE THE HIGH COURT. THE HIGH COURT, BY JUDGMENT DATED 08-0 3-2012 SET ASIDE THE ORDER OF THE TRIBUNAL AND RESTORED THE MATTER TO TH E FILE OF THE COMMISSIONER WITH A DIRECTION TO VERIFY WHETHER THE ASSESSEE UTILIZED 95% OF THE INCOME FOR CHARITABLE PURPOSE FOR THE YEAR U NDER CONSIDERATION OR NOT. 3. AS PER THE DIRECTION OF THE HIGH COURT, ACCORDIN G TO THE LD.REPRESENTATIVE, THE COMMISSIONER VERIFIED THE BO OKS OF ACCOUNT AND FOUND THAT 95% OF THE DONATIONS RECEIVED BY THE ASS ESSEE WAS USED FOR CHARITABLE ACTIVITIES, THEREFORE, HE OBSERVED THAT APPROVAL CAN BE GRANTED U/S 80G(5)(VI) AFTER VERIFICATION OF THE OBJECTS OF THE TRUST. ONCE THE BOOKS OF ACCOUNT ARE VERIFIED AND IT WAS FOUND THAT THE A SSESSEE UTILIZED THE INCOME FOR CHARITABLE ACTIVITIES, ACCORDING TO THE LD.REPRESENTATIVE, THE ASSESSEE IS ENTITLED FOR APPROVAL U/S 80G OF THE AC T. IN SPITE OF THE COMMISSIONERS OBSERVATION THAT 95% OF THE DONATION S WERE USED FOR CHARITABLE ACTIVITIES, THE COMMISSIONER REJECTED TH E APPROVAL BY THE IMPUGNED ORDER DATED 29-04-2013. ON A QUERY FROM T HE BENCH, WHETHER THE COMMISSIONER WHO OBSERVED THAT 95% OF THE DONAT IONS WERE USED FOR 3 ITA NO.325/COCH/2013 CHARITABLE PURPOSE IS THE VERY SAME OFFICER WHO PAS SED THE IMPUGNED ORDER, THE LD.REPRESENTATIVE FOR THE ASSESSEE SUBMI TTED THAT THE OBSERVATIONS MADE BY THE COMMISSIONER ON 17-10-2012 REGARDING UTILIZATION OF 95% OF THE DONATIONS FOR CHARITABLE WAS HOLDING ADDITIONAL CHARGE AT THAT POINT OF TIME, HOWEVER, THE IMPUGNED ORDER WAS PASSED BY THE COMMISSIONER, WHO WAS HOLDING REGULAR CHARGE. THEREFORE, THE LD.REPRESENTATIVE CLARIFIED THAT THERE ARE TWO DIFF ERENT OFFICERS. 4. REFERRING TO THE BALANCE-SHEET AND INCOME & EXPE NDITURE ACCOUNT, THE LD.REPRESENTATIVE SUBMITTED THAT DURING THE YEA R UNDER CONSIDERATION, THE ASSESSEE HAS RECEIVED DONATION OF RS.95,202. T HE ASSESSEE HAS ALSO RECEIVED INTEREST ON DEPOSIT, RENT, ETC. REFERRING TO THE EXPENDITURE, THE LD.REPRESENTTIVE SUBMITTED THAT THE TOTAL EXPENDITU RE WAS RS.14,15,031. ACCORDING TO THE LD.REPRESENTATIVE, THE EXCESS EXPE NDITURE OVER INCOME WAS RS.11,87,076. THEREFORE, ACCORDING TO THE LD.R EPRESENTTIVE, 95% OF THE INCOME WAS SPENT FOR CHARITABLE PURPOSE AND THE ASSESSEE IS ENTITLED FOR APPROVAL U/S 80G OF THE ACT. 5. REFERRING TO RULE 11AA OF THE INCOME-TAX RULES, THE LD.REPRESENTATIVE SUBMITTED THAT THE COMMISSIONER S HALL PASS AN ORDER EITHER REJECTING OR APPROVING THE APPLICATION WITHI N SIX MONTHS FROM THE DATE OF THE APPLICATION. REFERRING TO THE JUDGMENT OF T HE DELHI BENCH OF THIS 4 ITA NO.325/COCH/2013 TRIBUNAL IN BHAGWAD SWARUP SHRI SHRI DEVRAHA BABA M EMORIAL SHRI HARI PARMARTH DHAM TRUST VS CIT (2008) 111 ITD 175 (DEL) (SB), THE LD.REPRESENTATIVE SUBMITTED THAT IF THE ORDER WAS N OT PASSED WITHIN SIX MONTHS FROM THE DATE OF THE APPLICATION, THE REGIST RATION SHALL BE DEEMED TO HAVE BEEN GRANTED. THE LD.REPRESENTATIVE HAS ALSO PLACED RELIANCE ON THE JUDGMENT OF THE APEX COURT IN CIT VS ANJUM M.H. GHA SWALA (2001) 251 ITR 1 (SC). REFERRING TO THE JUDGMENT OF THE PUNJA B & HARYANA HIGH COURT IN SONEPAT HINDU EDUCATIONAL & CHARITABLE SOCIETY V S CIT (2005) 278 ITR 262 (P&H), THE LD.REPRESENTATIVE SUBMITTED THAT FOR THE PURPOSE OF APPROVAL U/S 80G OF THE ACT, IT HAS TO BE FOUND OUT THE REAL PURPOSE OF ESTABLISHING THE TRUST RATHER THAN RELYING ON THE OBJECT, MEMORA NDUM AND ARTICLES OF THE TRUST DEED. IF THE COMMISSIONER IS SATISFIED THAT THE OBJECT OF THE TRUST IS CHARITABLE, APPROVAL SHOULD NOT BE DENIED ON MERE T ECHNICALITIES. ACCORDING TO THE LD.REPRESENTATIVE, REGISTRATION OF THE INSTITUTION U/S 12AA OF THE ACT IS SUFFICIENT PROOF THAT THE OBJECT OF THE TRUST WAS FOR CHARITABLE PURPOSE. THEREFORE, ONCE THE REGISTRATION WAS GRAN TED U/S 12AA OF THE ACT, ACCORDING TO THE LD.REPRESENTATIVE, THE ASSESS EE IS ENTITLED FOR APPROVAL U/S 80G OF THE ACT. THE LD.REPRESENTATIVE FURTHER SUBMITTED THAT THE DIRECTION OF THE HIGH COURT WAS SPECIFIC AND UN AMBIGUOUS. THEREFORE, THE COMMISSIONER CANNOT TRAVEL BEYOND THE DIRECTION OF THE HIGH COURT. FOR THIS PROPOSITION, THE LD.REPRESENTATIVE PLACED RELIANCE ON THE JUDGMENT OF THE ORISSA HIGH COURT IN MISS LOPAMUDRA MISRA VS A.C.I.T. & ANR 5 ITA NO.325/COCH/2013 (23011) 337 ITR 92 (ORISSA). THE LD.REPRESENTATIVE SUBMITTED THAT THE ISSUE OF APPROVAL IS COVERED BY THE JUDGMENT OF THE DELHI HIGH COURT IN DIRECTOR OF INCOME-TAX VS NEEL GAGAN CHARITABLE TRU ST (2013) 357 ITR 86 (DEL). 6. ON THE CONTRARY, SMT. LATHA V KUMAR, THE LD.DR S UBMITTED THAT IN THE FIRST ROUND OF LITIGATION, THIS TRIBUNAL, BY AN ORD ER DATED 25-02-2010 FOUND THAT REGISTRATION U/S 12AA OF THE ACT WOULD BE SUFF ICIENT PROOF THAT THE OBJECT OF THE TRUST IS CHARITABLE IN NATURE. ACCOR DINGLY, THIS TRIBUNAL FOUND THAT THE ASSESSEE IS ENTITLED FOR APPROVAL U/S 80G OF THE ACT. THIS WAS CHALLENGED BEFORE THE HIGH COURT SPECIFICALLY ON TH E GROUND THAT 95% OF THE INCOME OF THE TRUST WAS NOT APPLIED FOR CHARITA BLE PURPOSE. THE HIGH COURT, BY JUDGMENT DATED 08-03-2012 FOUND THAT THE TRIBUNAL HAS NOT CONSIDERED THE UTILIZATION OF THE FUNDS. THEREFORE , THE ASSESSEE HAS TO ESTABLISH BEFORE THE COMMISSIONER THAT 95% OF THE I NCOME WAS USED FOR CHARITABLE PURPOSE FOR APPROVAL U/S 80G OF THE ACT. THE HIGH COURT ACCORDINGLY FOUND THAT THE ASSESSEE IS ENTITLED FOR ONE MORE OPPORTUNITY TO ESTABLISH BEFORE THE COMMISSIONER THAT 95% OF THE I NCOME WAS UTILIZED FOR CHARITABLE PURPOSE. THE CASE WAS POSTED BEFORE THE COMMISSIONER ON 16- 10-2012. HOWEVER, ON 17-10-2012, THERE WAS AN ENTR Y PASSED BY THE COMMISSIONER IN THE ORDER SHEET, WHO WAS HOLDING AD DITIONAL CHARGE TO THE EXTENT THAT THE ACCOUNTS WERE PRODUCED AND IT WAS F OUND THAT 95% OF THE 6 ITA NO.325/COCH/2013 DONATION WAS USED FOR CHARITABLE PURPOSE. ACCORDIN G TO THE LD.REPRESENTATIVE, THIS OBSERVATION WAS MADE BY A C OMMISSIONER, WHO WAS HOLDING ADDITIONAL CHARGE. HOWEVER, HE HAS NOT GRA NTED ANY APPROVAL U/S 80G; BUT ONLY MADE AN OBSERVATION THAT THE APPROVAL CAN BE GRANTED U/S 80G AFTER VERIFICATION OF THE OBJECT OF THE TRUST. THEREFORE, THE PROCEEDINGS WERE NOT FINALIZED FOR GRANT OF APPROVAL. WHEN THE REGULAR INCUMBENT TOOK OVER, AN OPPORTUNITY WAS GIVEN TO PRODUCE THE BOOKS OF ACCOUNT AS DIRECTED BY THE HIGH COURT. ON 29-04-2013, SHRI K. I. JOHN, THE LD.CHARTERED ACCOUNTANT APPEARED BEFORE THE COMMISS IONER AND MADE HIS SUBMISSIONS. ON THE BASIS OF THE SUBMISSIONS, THE COMMISSIONER PASSED THE IMPUGNED ORDER REJECTING THE APPLICATION FOR AP PROVAL U/S 80G OF THE ACT. SINCE THE PROCEEDINGS WERE NOT COMPLETED ON 1 7-10-2012, THE OBSERVATIONS MADE BY THE COMMISSIONER, WHO WAS HOLD ING ADDITIONAL CHARGE ARE NOT THE FINAL OBSERVATION; IT WAS SUBJEC T TO FURTHER PROCEEDINGS. 7. REFERRING TO THE INCOME AND EXPENDITURE ACCOUNT FILED BY THE ASSESSEE, THE LD.DR POINTED OUT THAT NO AMOUNT WAS SPENT FOR CHARITABLE PURPOSE. ALL EXPLANATIONS WERE RELATING TO CHARITY ACTIVITIES, WHICH ARE RELIGIOUS IN NATURE. THEREFORE, THE CONTENTION OF THE ASSESSEE THAT 95% OF THE INCOME WAS USED FOR CHARITABLE PURPOSE IS NOT S UPPORTED BY ANY MATERIAL AVAILABLE ON RECORD. ACCORDING TO THE LD. DR, THE OBSERVATIONS MADE BY THE COMMISSIONER, WHO WAS HOLDING ADDITIONA L CHARGE WITH 7 ITA NO.325/COCH/2013 REGARD TO UTILIZATION OF INCOME ARE CONTRARY TO THE MATERIALS AVAILABLE ON RECORD. THEREFORE, ACCORDING TO THE LD.DR, THE ASS ESSEE HAS NOT COMPLIED WITH THE CONDITIONS PRESCRIBED U/S 80G(5B) OF THE A CT. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. IN THE F IRST ROUND OF LITIGATION, THE ASSESSEE SUCCEEDED BEFORE THIS TRIBUNAL. THE APPRO VAL WAS DIRECTED TO BE GRANTED ON THE GROUND THAT REGISTRATION U/S 12A WAS GRANTED TO THE ASSESSEE. HOWEVER, ON APPEAL BY THE REVENUE, THE H IGH COURT FOUND THAT THE UTILIZATION OF THE INCOME WAS NOT EXAMINED EITH ER OF THE AUTHORITIES BELOW INCLUDING THE TRIBUNAL AND TO GIVE ONE MORE O PPORTUNITY TO THE ASSESSEE, THE MATTER WAS REMANDED BACK TO THE FILE OF THE COMMISSIONER TO EXAMINE THE BOOKS OF ACCOUNT. IN FACT, THE HIGH COURT OBSERVED AS FOLLOWS ON PAGE 3 OF THE JUDGMENT: AFTER HEARING BOTH SIDES, WE ARE SATISFIED THAT T HE ASSESSEE IS ENTITLED TO ONE MORE OPPORTUNITY TO PRO DUCE THE ACCOUNTS BEFORE THE COMMISSIONER TO ESTABLISH THAT 95% OF THE INCOME IS UTILIZED FOR CHARITABLE PURPOSES DURI NG THE YEAR FOR WHICH REGISTRATION IS SOUGHT. WE THEREFORE ALL OW THE APPEAL BY VACATING THE ORDERS OF THE TRIBUNAL AND THAT OF THE COMMISSIONER AND RESTORE THE MATTER TO THE COMMISSI ONER FOR RECONSIDERATION BASED ON ACCOUNTS AND EVIDENCE WHIC H WILL BE PRODUCED BY THE ASSESSEE. WE MAKE IT CLEAR THAT TH E 8 ITA NO.325/COCH/2013 COMMISSIONER IS BOUND TO ISSUE AN ORDER EITHER UNDE R RULE 11AA(4) OR (5) EITHER BY GRANTING OR BY REJECTING T HE APPLICATION WITH REASONS IN SUPPORT THEREOF. THE ASSESSEE SHOU LD BE HEARD BEFORE PASSING ANY ADVERSE ORDERS AGAINST THE ASSESSEE. 9. IN PURSUANCE OF THE ABOVE DIRECTION OF THE HIGH COURT, THE COMMISSIONER, WHO WAS HOLDING ADDITIONAL CHARGE, PO STED THE CASE ON 16- 10-2012 BY AN ORDER SHEET ENTRY DATED 09-10-2012. IT IS NOT KNOWN WHAT HAPPENED TO THE PROCEEDINGS ON 16-10-2012. ABSOLUT ELY, THERE IS NO ENTRY WITH REGARD TO THE PROCEEDINGS, WHICH TOOK PLACE ON 16-10-2012 IN THE ORDER SHEET. HOWEVER, THERE IS AN ENTRY ON 17-10- 2012 IN HANDWRITING WHICH READS AS FOLLOWS: MR. K.I. JOHN, CA AND IYPE JOHN, CA REPRESENTED TH E ASSESSEE PRODUCED ACCOUNTS AND FOUND THAT MORE TH AN 95% OF THE DONATIONS ARE USED FOR CHARITABLE ACTIVITIES . APPROVAL CAN BE GRANTED U/S 80G(5)(VI) AFTER VERIFICATION OF THE OBJECT OF THE TRUST. SD/- 17-12-2012. 10. THEREAFTER THERE IS NO ENTRY WITH REGARD TO POS TING OF THE MATTER IN THE ORDER SHEET. HOWEVER, ON 04-04-2013, THERE IS A NOTING FOR POSTING THE CASE FOR HEARING ON 12-04-2013. AS PER THE ORDER S HEET ENTRY, NOBODY APPEARED ON 12-04-2013 AND THE CASE WAS FINALLY POS TED TO 29-04-2013. ON 29-04-2013 THE FOLLOWING ORDER SHEET ENTRY IS MA DE: 9 ITA NO.325/COCH/2013 SHRI JOHN, C.A. ATTENDED OFFICE AND EXPLAINED THE FACTS. HE ALSO MADE A WRITTEN SUBMISSION WHICH IS FILED. CAS E DISCUSSED. 11. ANOTHER ORDER SHEET ENTRY DATED 29-04-2013 READ S AS FOLLOWS: APPLICATION U/S 80G REJECTED. ORDERS ISSUED. 12. FROM THE READING OF THE ABOVE ORDER SHEET ENTRI ES FILED BY THE ASSESSEE WHICH WERE SAID TO BE OBTAINED UNDER R.T.I . ACT SHOWS THAT THE CASE WAS POSTED ON 16-10-2010 AND NO ENTRY WAS MADE . HAD THE ASSESSEE PRODUCED THE BOOKS OF ACCOUNT AS PER THE P OSTING OF THE CASE, THE ENTRY SHOULD HAVE BEEN MADE ON 16-10-2012. OTH ERWISE, THE CASE SHOULD HAVE BEEN ADJOURNED TO 17-10-2012. HOWEVER, THERE IS NO ENTRY FOR ADJOURNING THE CASE TO 17-10-2012. THE ENTRY AS EX TRACTED ABOVE WAS MADE ON 17-10-2012 WITHOUT ANY REFERENCE TO THE POS TING OF THE CASE. THEREFORE, IT CREATES A DOUBT WHETHER THE COMMISSIO NER HAD REALLY EXAMINED THE BOOKS OF ACCOUNT AND MADE THE ENTRY. IF THE COMMISSIONER IS SATISFIED ABOUT THE UTILIZATION OF THE INCOME / DONATION TOWARDS THE CHARITABLE PURPOSE, HE WOULD HAVE GRANTED THE REGIS TRATION ON 17-10-2012 ITSELF AND THERE WAS NO QUESTION OF MAKING OBSERVA TIONS THAT APPROVAL CAN BE GRANTED U/S 80G AFTER VERIFICATION OF THE OBJECT . THEREFORE, EVEN IF THE BOOKS OF ACCOUNT ARE VERIFIED BY THE COMMISSIONER, HE HAS NOT SATISFIED 10 ITA NO.325/COCH/2013 ABOUT THE GRANT OF APPROVAL U/S 80G ON 17-10-2012. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE ASSE SSEE CANNOT PLACE MUCH RELIANCE ON THE ENTRIES SAID TO BE MADE BY THE COMM ISSIONER HOLDING ADDITIONAL CHARGE ON 17-10-2012. 13. AS RIGHTLY SUBMITTED BY THE LD.REPRESENTATIVE F OR THE ASSESSEE, THE COMMISSIONER CANNOT GO BEYOND THE DIRECTION OF THE HIGH COURT. THE DIRECTION OF THE HIGH COURT IS ONLY TO EXAMINE THE UTILISATION OF THE FUNDS FOR CHARITABLE PURPOSE. THEREFORE, GOING TO THE MERIT OF THE CASE MAY NOT BE JUSTIFIED AT ALL. HOWEVER, THAT ALONE WILL NOT GIV E ANY RIGHT TO THE ASSESSEE TO CLAIM APPROVAL U/S 80G OF THE ACT. IT IS FOR TH E ASSESSEE TO ESTABLISH THAT 95% OF THE INCOME WAS USED FOR CHARITABLE PURPOSE. 14. WE HAVE CAREFULLY GONE THROUGH THE PROVISIONS O F SECTION 80G(5B) OF THE ACT WHICH READS AS FOLLOWS: (5B) NOTWITHSTANDING ANYTHING CONTAINED IN CLAUSE (II) OF SUB- SECTION (5) AND EXPLANATION 3, AN INSTITUTION OR FU ND WHICH INCURS EXPENDITURE, DURING ANY PREVIOUS YEAR, WHICH IS OF A RELIGIOUS NATURE FOR AN AMOUNT NOT EXCEEDING FIVE P ERCENT OF ITS TOTAL INCOME IN THAT PREVIOUS YEAR SHALL BE DEEMED TO BE AN INSTITUTION OR FUND TO WHICH THE PROVISIONS OF THIS SECTION APPLY. 11 ITA NO.325/COCH/2013 15. IN VIEW OF THE ABOVE PROVISION IT IS FOR THE AS SESSEE TO ESTABLISH THAT THE TRUST INCURS EXPENDITURE FOR AN AMOUNT NOT EXCE EDING 5% OF ITS TOTAL INCOME FOR THE RELIGIOUS PURPOSE. IN OTHER WORDS, 95% OF THE INCOME WAS USED FOR CHARITABLE ACTIVITY. THE INCOME & EXPENDI TURE ACCOUNT PRODUCED BY THE ASSESSEE FOR ASSESSMENT YEAR 2005-06 SHOWS T HE FOLLOWING DETAILS: TO OPENING STOCK OF BOOKS (303+13550) 13,853.00 TO PRINTING AND STATIONERY 12,725.00 TO TRAVELLING EXPENSES 4,047.00 TO SALARY AND ALLOWANCES 36,000.00 TO WAGES TO WATCHERS 41,000.00 TO REPAIRS AND MAINTENANCE 29,610.10 TO BANK CHARGES 2,459.20 TO NILACKAL COMMITTEE MEETING EXPENSES -- TO CHURCH MAINTENANCE EXPENSES 14,850.00 TO NILACKAL RETREAT CENTRE MAINTENANCE EXPENSES 452 5.00 TO FOOD & REFRESHMENT EXPENSES 23,500.00 TO SUNDRY EXPENSES 21,315.00 TO TELEPHONE CHARGES 10,475.00 TO ST. THOMAS DAY CELEBRATION EXPENSES 3,830.00 TO VEHICLE RUNNING EXPENSES 39,616.48 TO INTEREST PAID 18,701.00 TO POSTAGE 2,451.00 TO DEPRECIATION 10,19,558.31 12,98,516.09 12 ITA NO.325/COCH/2013 16. FOR THE ASSESSMENT YEAR 2006-07, THE ASSESSEE H AS INCURRED THE FOLLOWING EXPENDITURE: TO OPENING STOCK OF BOOKS 15.737.90 TO PRINTING AND STATIONERY 3,766.00 TO TRAVELLING EXPENSES 80,684.00 TO SALARY AND ALLOWANCES 38,500.00 TO WAGES TO WATCHERS 41,000.00 TO REPAIRS AND MAINTENANCE 30,652.17 TO BANK CHARGES 406.00 TO NILACKAL COMMITTEE MEETING EXPENSES 1,823.00 TO CHURCH MAINTENANCE EXPENSES 1,972.00 TO NILACKAL RETREAT CENTRE MAINTENANCE EXPENSES 310 .00 TO FOOD & REFRESHMENT EXPENSES 24,000.00 TO SUNDRY EXPENSES 1,621.00 TO TELEPHONE CHARGES 11,129.00 TO ST. THOMAS DAY CELEBRATION EXPENSES 2,300.00 TO INSURANCE PREMIUM 11,485.00 TO VEHICLE RUNNING EXPENSES 36,515.44 TO INTEREST PAID -- TO POSTAGE 2,158.00 TO NILACKAL ECUMENICAL DAY EXPENSES 200.00 TO DEPRECIATION 9,24,704.79 12,28,964.30 17. FROM THE ABOVE DETAILS, IT IS OBVIOUS THAT THE ASSESSEE HAS NOT SPENT ANY MONEY FOR CHARITABLE ACTIVITY. EVEN OTHERWISE, THE ASSESSEE HAS SPENT 13 ITA NO.325/COCH/2013 MORE THAN 5% OF THE INCOME FOR RELIGIOUS PURPOSE. THEREFORE, THE OBSERVATION / NOTE SAID TO BE MADE BY THE COMMISSIO NER WHO WAS HOLDING ADDITIONAL CHARGE ON 17-10-2012 IS CONTRARY TO THE MATERIALS AVAILABLE ON RECORD. HENCE, THE ASSESSEE IS NOT ENTITLED FOR AP PROVAL U/S 80G(5)(VI) OF THE ACT. 18. NOW COMING TO RULE 11AA OF THE ACT, THIS TRIBUN AL IS OF THE CONSIDERED OPINION THAT THE HIGH COURT DIRECTED THE COMMISSIONER TO PASS ORDER EITHER BY GRANTING OR REJECTING APPROVAL UNDE R RULE 11AA(4) OR 11AA(5) OF THE INCOME-TAX RULES, 1962. SINCE IT IS A REMANDED MATTER BY THE HIGH COURT AND DIRECTION TO PASS ORDER AFTER VE RIFYING THE BOOKS OF ACCOUNT, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE LIMITATION PRESCRIBED UNDER RULE 11AA(6) SHALL NOT BE APPLICAB LE. EVEN OTHERWISE, THE CONSEQUENCE OF NOT PASSING THE ORDER WITHIN THE PRE SCRIBED TIME WAS NOT PROVIDED IN THE ACT. HENCE, AS HELD BY THE MADRAS HIGH COURT IN CIT VS SHEELA CHRISTIAN CHARITABLE TRUST (2013) 354 ITR 47 2 (MAD), THE APPROVAL IS NOT DEEMED TO BE GRANTED. 19. IN VIEW OF THE ABOVE, THIS TRIBUNAL IS OF THE C ONSIDERED OPINION THAT THERE IS AN INFIRMITY IN THE ORDER OF THE LOWER AUT HORITY. ACCORDINGLY, THE SAME IS CONFIRMED. 14 ITA NO.325/COCH/2013 20. IN THE RESULT, THE APPEAL OF THE ASSESSEE STAND S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 10 TH JANUARY, 2014. SD/- SD/- (B.R. BASKARAN) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN, DT : 10 TH JANUARY, 2014 PK/- COPY TO: 1. THE NILACKAL ST. THOMAS CHURCH & ECUMENICAL CENT RE TRUST, CATHOLIC ARAMANA, DEVALOKAM, KOTTAYAM-686 038 2. CIT, KOTTAYAM 3. THE DR (TRUE COPY) BY ORDER ASSTT. REGISTRAR, INCOME-TAX APPELLATE TRIBUNAL, COCHIN BENCH