Kalinga Institute of Social Scinces(KISS), Patia V. CIT (Exemption)- Hyderabad, Hyderabad

ITA 47/CTK/2022

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The case involves the Kalinga Institute of Social Sciences (KISS), a trust registered under sections 12A and 80G of the Income Tax Act, which received corpus donations from M/s Kalinga Institute of Industrial Technology (KIIT) and Container Corporation of India (CCI). The CIT(Exemption) issued a show cause notice questioning the assessment order regarding these donations, leading to an order under section 263, which was contested by KISS. The Tribunal examined the proceedings and found that the CIT(Exemption) had not adequately addressed the explanations and evidence provided by KISS, leading to the quashing of the CIT(Exemption)'s order.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 127063 (ITAT-CUTTACK)
• Duration Of Justice: 9 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-01-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 18-01-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 12-04-2022
• Other Referred Cases: Orissa State Police Housing & Welfare Corporation Ltd. vs. [2022] 139 taxmann.com 207 (Orissa)
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside
• Section: 80G; 207

Judgement Text

आयकर अऩीऱीय अधधकरण, कटक न्यायऩीठ,कटक IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH CUTTACK श्री जाजज माथन, न्याययक सदस्य एवं श्री अरुण खोड़पऩया ऱेखा सदस्य के समक्ष । BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI ARUN KHODPIA, ACCOUNTANT MEMBER आयकर अऩीऱ सं/ITA No.47/C TK/2022 (ननधाारण वषा / Asses s m ent Year :2017-2018) Kalinga Institute of Social Sciences (KISS), Plot No.582/1540, KIIT Campus-10 Patia, Bhubaneswar-751024 Vs CIT(Exemption), Hyderabad at Bhubaneswar PAN No. :AAAAK 7721 R (अऩीऱाथी /Appellant) .. (प्रत्यथी / Respondent) ननधााररती की ओर से /Assessee by : Shri S.K.Agrawalla & S.K.Hota, ARs राजस्व की ओर से /Revenue by : Shri M.K.Gautam, CIT-DR स ु नवाई की तारीख / Date of Hearing : 19/01/2023 घोषणा की तारीख/Date of Pronouncement : 19/01/2023 आदेश / O R D E R Per Bench : This is an appeal filed by the assessee against the order of the ld.CIT(E), Hyderabad at Bhubaneswar, dated 14.03.2022, passed in DIN & Order No.ITBA/REV/F/REV5/2021-22/1040706357(1) for the assessment year 2017-2018. 2. It was submitted by the ld. AR that the assessee is a trust, who is enjoying the benefit of registration u/s.12A & 80G of the Act. It was submitted that the assessee had received corpus donations from M/s Kalinga Institute of Industrial Technology (KIIT) in the form of incurrence of capital expenditure of Rs.21,65,00,000/- and an amount of Rs.25,00,000/- from Container Corporation of India (CCI). It was submitted that as per the MOU between the assessee and Container Corporation of India, the Container Corporation of India has provided ITA No.47/CTK/2022 2 Rs.25 lakhs corpus donation to the assessee for the purpose of setting up of tailoring unit for teaching tailoring to backward tribal girls in Orissa. The assessment in the case of the assessee had been completed and the AO had examined the issue of the corpus donations received from the Container Corporation of India and also from M/s KIIT. It was the submission that corpus donations of M/s KIIT was in the form of the construction of an educational building and the purchase of electronic equipments. It was the submission that the ld. CIT(E) issued the show cause notice on 18.01.2022 on the ground that the AO has not done proper verification of the said corpus donations received by the assessee. It was the submission that the assessee had replied to the ld. CIT(E) and had also provided the copy of the MOU between the assessee and the Container Corporation of India along with the details of the building constructed by M/s KIIT for the assessee. It was also submitted by the ld. AR that the assessee submitted before the ld. CIT(E) that even if the two corpus donations are treated as the income of the assessee, still the taxable income would be a negative figure and, therefore, there could be no prejudice to the interest of revenue. It was the submission that the ld. CIT(E) without considering the explanation of the assessee had invoked his powers u/s.263 of the Act and set aside the assessment order passed u/s.143(3) of the Act on the issue of the verification of the corpus donations. It was further submitted that in page 6 of the order of the ld. CIT(E) passed u/s.263 of the Act, the ld.CIT(E) has held that the AO has wrongly charged interest u/s.244A of the Act and has directed the AO to ITA No.47/CTK/2022 3 verify the issue and pass suitable orders. It was the submission that the issue was not there in the assessee’s case. It was also the submission that no show cause notice on this issue has been issued to the assessee. 3. In reply, ld. CIT-DR vehemently supported the order of the ld. CIT(E). It was the submission that the assessment order passed by the AO has been done without proper verification. It was the submission that the details of the corpus donations should have been examined. It was further submitted that just because there is loss in the relevant assessment year does not mean that there is no prejudice to the interest of the revenue. It was the submission that it is the principle that has to be considered. 4. We have considered the rival submissions. A perusal of the notice issued u/s.143(2) of the Act on 11.09.2019 by the AO, copy of which is filed at page Nos.42 to 44 of the paper book, wherein the question No.15 is relating to the corpus donations. The assessee replied to this notice through online on 24.10.2019, which is found in the pages 35 & 36 of the paper book. The issue of the corpus donations has been discussed in details during the course of assessment proceedings. Even otherwise in the reply to the show cause notice issued by the ld.CIT(E) passed u/s.263 of the Act, the assessee has given the detailed reply. It has also produced the MOU and other evidence to substantiate its claim of the corpus donations. After getting this information there is no action by the ld. CIT(E) to even verify these details. This being so, the facts of the case are squarely covered by the decision of the Hon’ble Jurisdictional High Court ITA No.47/CTK/2022 4 in the case of Orissa State Police Housing & Welfare Corporation Ltd., reported in [2022] 139 taxmann.com 207 (Orissa). This being so, respectfully following the principles laid down by the Hon’ble Jurisdictional High Court in the Orissa State Police Housing & Welfare Corporation Ltd.(supra), the order of the ld. CIT(E) passed u/s.263 of the Act stands quashed. 5. In the result, appeal of the assessee stands allowed. Order dictated and pronounced in the open court on 19/01/2023. Sd/- (अरुण खोड़पऩया) (ARUN KHODPIA) Sd/- (जाजज माथन) (GEORGE MATHAN) ऱेखा सदस्य/ ACCOUNTANT MEMBER न्यानयक सदस्य / JUDICIAL MEMBER कटक Cuttack; ददनाांक Dated 19/01/2023 Prakash Kumar Mishra, Sr.P.S. आदेश की प्रनतलऱपऩ अग्रेपषत/Copy of the Order forwarded to : आदेशान ु सार/ BY ORDER, (Assistant Registrar) आयकर अऩीऱीय अधधकरण, कटक/ITAT, Cuttack 1. अऩीऱाथी / The Appellant- 2. प्रत्यथी / The Respondent- 3. आयकर आय ु क्त(अऩीऱ) / The CIT(A), 4. आयकर आय ु क्त / CIT 5. पवभागीय प्रयतयनधध, आयकर अऩीऱीय अधधकरण, कटक / DR, ITAT, Cuttack 6. गार्ज पाईऱ / Guard file. सत्यापऩत प्रयत //True Copy//