The DCIT(Exemptions), Cochin V. M/s. Chinmaya Mission Educational & Charitable Trust, Cochin

ITA 330/COCH/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 5508 (ITAT-COCHIN)
• Duration Of Justice: 1 year(s) 2 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-10-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 07-06-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 28-07-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A DHANARAJ
• Assessee Lawyers: P M VEERAMANI
• Keywords: Charitable institution; Earning of tax free income; Wrong claim
• Section: 143(3); 12A

Judgement Text

ITA NO 33 0/COCH/201 6 1 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH KOCHI BEFORE S/ SHRI P K BANSAL, VICE PRESIDENT & GEORGE GEORGE K, JM ITA NO 33 0 /C OCH/201 6 (A SST YEAR 20 11 - 12) THE DEPUTY COMMISSIONER OF INCOME TAX(EXEMPTIONS), KOCHI. VS CHINMAYA MISSION EDUCATIONA L & CHARITABLE TRUST, GREATER COCHIN, NETTIPADAM ROAD, ERNAKULAM. ( APPELLANT) (RESPONDENT) PAN NO. AAATC 4449H REVENUE BY SHRI A. DHANARAJ, SR. DR ASSESSEE BY SH P.M. VEERAMANI, CA DATE OF HEARING 04/ 10/2017 DATE OF PRONOUNCEME NT 05 TH / 1 0/ 201 7 ORDER PER GEORGE GEORGE K,JM: THIS APPEAL, AT THE INSTAN CE OF THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE CIT - III , KOCHI DATED 10.05.2016 . THE RELEVANT ASSESSMENT YEAR IS 20 11 - 12. 2 THE EFFECTIVE GROUNDS RAISED READS AS UNDER: 2) THE LD. CIT(A) - III KOCHI ERRED IN DELETING THE ADDITION OF RS.52,66,500/ - ON ACCOUNT OF DONATIONS RECEIVED DURING A.Y. 2011 - 12 TOWARDS BUILDING FUND SINCE THE ASSESSEE HAS NOT SATISFIED BOTH THE CONDITIONS IN ORDER TO CLAIM THE BUILDING FUND AS EXEMPTED UNDER SECTION 11(1)(D) OF THE I.T. ACT, 1961. 3) THE DECISION OF THE LD. CIT(A) IS NOT ACCEPTABLE AS THE ASSESSING OFFICER HAS RIGHTLY POINTED OUT THAT THE ASSESSEE, HAS NOT PROVED THAT SPECIFIC DONATIONS WERE GIVEN BY THE DONORS THAT TH E VOLUNTARY DONATIONS GIVEN BY THEM SHALL FORM PART OF THE CORPUS. ITA NO 33 0/COCH/201 6 2 3. BRIEFLY STATED THE FACTS OF THE CASE ARE AS FOLLOWS: THE ASSESSEE IS A TRUST REGISTERED UNDER SECTION 12A OF THE I.T. ACT. THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2011 - 12 WAS FILED ON 29/09/2011 DECLARING NIL INCOME . THE ASSESSMENT WAS TAKEN UP FOR SCRUTINY BY ISSUANCE OF NOTICE UNDER SECTION 143(2) OF THE ACT. THE ASSESSMENT WAS COMPLETED U/S. 143(3) VIDE ORDER DATED 26/03/2014. IN THE ASSESSMENT COMPLETED, THE ASSESSING OFFICER HAD DISALLOWED A SUM OF RS.2,53,18,335/ - CLAIMED BY THE ASSESSEE AS EXEMPT INCOME UNDER SECTION 11((1)(D) OF THE ACT, BEING CONTRIBUT ION TO THE BUILDING DEVELOPMENT FUND. THE RELEVANT OBSERVATION OF THE ASSESSING OFFICER IN DISALLOWING THE CLAIM OF THE ASSESSEE READS AS FOLLOWS: CONTRIBUTION TO BUILDING FUND WHICH ASSESSEE CONSIDERED AS EXEMPT INCOME UNDER SECTION 11(10(D) IS A WRONG CLAIM AS LONG A THE SPECIFIC DIRECTION DESCRIBED IN ACT DOES NOT COME, THEY ARE JUST VOLUNTARY CONTRIBUTION PNLY. SO THE SUM IS ADDED BACK IN TOTAL INCOME + RS.2,53,18,335/ - 4. AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESSEE PREFERRED AN APPEAL T O THE FIRST APPELLATE AUTHORITY. BEFORE THE FIRST APPELLATE AUTHORITY, IT WAS CONTENDED THAT THESE DONATIONS ARE CORPUS FUND, RECEIVED SPECIFICALLY FOR BUILDING DEVELOPMENT FUND . IT WAS SUBMITTED THAT T HE SAME IS CLEARLY MENTIONED IN THE DONATION RECEIPT ISS UED BY THE ASSESSEE . IT WAS FURTHER SUBMITTED BY THE ASSESSEE THAT THE ACTUAL CONTRIBUTION RECEIVED DURING THE RELEVANT ASSESSMENT YEAR IS ONLY RS.52,66,500/ - AND THE SUM OF RS.2,53,18,335/ - WAS THE AGGREGATE CONTRIBUTION RECEIVED OVER SEVERAL YEARS. THE ASSESSEE PLACED REL IANCE ON THE FOLLOWING JUDICIAL PRONOUNCEMENTS FOR THE PROPOSITION ITA NO 33 0/COCH/201 6 3 THAT THE AMOUNT RECEIVED FROM THE DONORS FOR BUILDING FUND IS EXEMPT UNDER SECTION 11(1 ) (D) OF THE ACT. 5. ON APPEAL, T HE CIT(A) ALLOWED TH E PLEA OF THE A SSESSEE. THE RELEVANT FINDING OF THE CIT(A) READS AS FOLLOWS: 7.3 I HAVE CONSIDERED THIS ISSUE. THE APPELLANT IS A CHARITABLE TRUST RUNNING AN EDUCATIONAL INSTITUTION AND ALSO REGISTERED U/S. 12A OF THE IT ACT. IT IS OBSERVED FROM THE COPIES OF BALANCE S HEET FURNISHED BY THE APPELLANT THAT THE SUM OF RS.2,53,18,335/ - REPRESENT THE AGGREGATE CONTRIBUTION RECEIVED DURING THE FY 2010 - 11 WAS ONLY RS. 52,66,500/ - 7.4 IT IS ALSO OBSERVED FROM THE COPIES OF RECEIPTS FURNISHED BY THE APPELLANT THAT THE ABOVE SUM OF RS.2,00,51,815/ - BELONG TO EARLIER FINANCIAL YEARS, IT CANNOT BE CONSIDERED FOR FY 2010 - 11. IN THE ABOVE CIRCUMSTANCES, I AM OF THE OPINION THAT THE APPELLANT IS ENTITLED FOR EXEMPTION UNDER SECTION 11(1)(D) OF THE INCOME TAX ACT FOR THE SUM OF RS.52,6 6,500/ - RECEIVED DURING THE FY 2010 - 11 TOWARDS BUILDING FUND. HENCE I DIRECT THE ASSESSING OFFICER TO DELETE THE ADDITION OF RS.2,53,18,335/ - . 6. THE REVENUE, BEING AGGRIEVED , HAS FILED THE PRESENT APPEAL BEFORE THE TRIBUNAL. THE LD. DR SUBMITTED THA T THE ASSESSEE COULD NOT PROVE THAT THE DONORS HAD GIVEN DONATIONS TO THE CORPUS FUND . IT WAS STATED THAT S INCE THE ASSESSEE WAS NOT MAINTAINING A SEPARATE ACCOUNT FOR THIS PURPOSE, THE ASSESSING OFFICER WAS JUSTIFIED IN DENYING THE CLAIM MADE UNDER SECT ION 11(1) ( D) OF THE ACT . 7. THE LD. AR ON THE OTHER HAND RELIED ON THE SUBMISSIONS MADE BEFORE THE INCOME TAX AUTHORITIES AND RELIED ON THE CONCLUSIONS OF THE CIT(A). ITA NO 33 0/COCH/201 6 4 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. TH E ASSESSEE HAS FILED A PAPER BOOK COMPRISING OF 58 PAGES . IN THE PAPER BOOK, THE AUDITED ACCOUNTS FOR THE YEAR ENDING 31/03/2011, PARTYWISE DETAILS OF CONTRIBUT IONS TO THE BUILDING FUND ETC. ARE ENCLOSED. ON EXAMINING THE DETAILS OF THE CONTRIBUTIONS TOWA RDS BUILDING DEVELOPMENT FUND, WE NOTICE THAT THE RECEIPTS ARE ISSUED BY THE ASSESSEE STATING THAT THE CONTRIBUTIONS MADE BY THE DONORS ARE FOR SPECIFIC PURPOSE OF PUTTING UP INFRASTRUCTURE, NAMELY BUILDING. FOR THE RELEVANT ASSESSMENT YEAR, THE TOTAL CON TRIBUTION RECEIVED TOWARDS BUILDING FUND IS TO THE TUNE OF RS.52,66,500/ - . THE REMAINING SUM OF RS.2,00,51,815/ - ARE CONTRIBUTIONS RECEIVED IN THE EARLIER ASSESSMENT YEARS . THE CONTRIBUTION RECEIVED FOR BUILDING FUND HAS NOT BEEN DENIED THE BENEFIT OF SECT ION 11(1)(D) FOR THE EARLIER ASSESSMENT YEARS. THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF DIT(EXEMPTION) VS. SRI RAMAKRISHNA SEVA ASHRAMA (357 ITR 731) HAD HELD THAT IF THE INTENTION OF THE DONOR IS TO GIVE MONEY TO A TRUST AND TO UTILIZE THE SAME FO R CARRYING OUT A PARTICULAR ACTIVITY, IT SATISFIES THE DEFINITION OF THE WORD CORPUS FUND. IT WAS CONCLUDED BY THE HONBLE KARNATAKA HIGH COURT THAT TH E ASSESSEE WOULD THUS BE ENTITLED TO THE BENEFIT OF SECTION 11(1)(D) OF THE ACT. A SIMILAR VIEW HAS BEEN TAKEN BY THE FOLLOWING JUDICIAL PRONOUNCEMENTS: 1. DIT (EXEMPTIONS) VS. JAIPUR GOLDEN CHARITABLE CLINICAL LABORATORY TRUST (311 ITR 365 (DEL). 2. DIT(EXEMPTIONS) VS. N.H. KAPADIA EDUCATION TRUST (136 ITD 111)(AHD) 3. INDIAN SOCIETY FOR ANESTHESIOLO GISTS VS. ITO (32 ITR TRIB. 152) (CHENNAI) ITA NO 33 0/COCH/201 6 5 8.1 AS MENTIONED EARLIER IN THE INSTANT CASE, THERE IS A CATEGORIC FINDING BY THE CIT(A) THAT THE AMOUNT OF RS.52,66,500/ - WAS RECEIVED TOWARDS BUILDING FUND ONLY. THEREFORE, IN VIEW OF THE JUDICIAL PRONOUNCE MENTS CITED SUPRA, WE ARE OF THE VIEW THAT THE ASSESSEE IS ENTITLED TO EXEMPTION UNDER SECTION 11(1)(D) OF THE I.T. ACT OF AMOUNT OF RS.52,66,500/ - RECEIVED DURING THE CONCERNED ASSESSMENT YEAR, I.E., 2011 - 12. THEREFORE, WE SEE NO REASON TO INTERFERE WITH THE ORDER OF THE CIT(A) AND WE UPHOLD THE SAME AS CORRECT AND IN ACCORDANCE WITH LAW. IT IS ORDERED ACCORDINGLY. 9 . IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 05 TH / 1 0/ 2017. SD/ - SD/ - ( P K BANSAL ) ( GEORGE GEORGE K ) VICE PRESIDENT JUDICIAL MEMBER COCHIN: DATE D 5 TH / 10 / 201 7 GJ COPY TO: 1. CHINMAYA MISSION EDUCATIONAL & CHARITABLE TRUST, GREATER COCHIN, NETTIPADAM ROAD, ERNAKULAM, KOCHI - 682 016. 2. THE DEPUTY COMMISSIONER OF INCOME - TAX (EXEMPTIONS), KOCHI. 3 . CIT (A) - III , KOCHI. 4 . CIT (EXEMPTION S ) , KOCHI 5 . DR 6 . GUARD FILE BY ORDER ASSISTANT REGISTRAR ITAT, COCHIN