St.Teresa Shrine, V. DCIt, Kannur

ITA 516/COCH/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 65002 (ITAT-COCHIN)
• Duration Of Justice: 1 year(s) 5 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-12-2012
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 24-06-2011
• Court: TRIBUNAL
• Department Lawyers: SUSAN GEORGE VARGHESE
• Section: 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE S/SHRI N.R.S.GANESAN, JM AND B.R.BASKAR AN, AM I.T.A. NOS. 516 & 517/COCH/2011 ASSESSMENT YEARS : 2006-07 & 2007-08 ST. TERESA SHRINE, MAHE-673 310. [PAN: AAAAR 0698C] VS. THE DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE-1(1), KANNUR. (ASSESSEE -APPELLANT) (REVENUE-R ESPONDENT) ASSESSEE BY SHRI MATHEW JOSEPH, CA REVENUE BY SMT. SUSAN GEORGE VARGHESE, SR. DR DATE OF HEARING 17/10/2012 DATE OF PRONOUNCEMENT 07/12/2012 O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: THE APPEALS OF THE ASSESSEE ARE DIRECTED AGAIN ST THE SEPARATE ORDERS DATED 29-03- 2011 PASSED BY THE LD. CIT(A)-II, CALICUT AND THEY RELATE TO THE ASSESSMENT YEARS 2006-07 AND 2007-08. SINCE THE SOLITARY ISSUE URGE D IN THESE APPEALS IS IDENTICAL IN NATURE, THEY WERE HEARD TOGETHER AND ARE BEING DISP OSED OF BY THIS COMMON ORDER. 2. THE GRIEVANCE OF THE ASSESSEE IS THAT THE LD. CI T(A) ERRED IN CONFIRMING THE ASSESSMENTS MADE BY THE ASSESSING OFFICER FOR THE T WO YEARS UNDER CONSIDERATION, WITHOUT APPRECIATING THE FACT THAT THE INCOME SO AS SESSED WAS ALREADY INCLUDED IN THE INCOME OF ITS PARENT ORGANISATION. THUS, ACCORDING TO THE ASSESSEE, THE PRESENT ASSESSMENTS HAVE RESULTED IN DOUBLE ASSESSMENT OF S AME INCOME. 3. THE FACTS RELATING TO THE SAID ISSUE ARE STATED IN BRIEF. THE ASSESSEE IS RUNNING A CHURCH AND ALSO A SCHOOL. ACCORDING TO THE ASSESSE E, THE CHURCH NAMED ST. THERESAS SHRINE WAS ESTABLISHED IN THE YEAR 1736 AND IS UND ER THE DIRECT CONTROL AND JURISDICTION OF ROMAN CATHOLIC DIOCESE OF CALICUT, THE MAIN BO DY. HENCE, UP TO THE YEAR ENDING I.T.A. NOS. 516 &517/COCH/2011 2 31-03-2006, THE INCOME OF THE ASSESSEE WAS TRANSFER RED TO ROMAN CATHOLIC DIOCESE OF CALICUT AND THE SAID MAIN BODY DULY OFFERED THE SA ME AS ITS INCOME FOR INCOME TAX PURPOSES. FOR SOME ADMINISTRATIVE REASONS, IT APPEA RS THAT THE MANAGEMENT HAS DECIDED TO MAKE ST. TERESAS SHRINE AS A SEPARATE ORGANISATION. ACCORDINGLY, ST. THERESAS SHRINE FILED AN APPLICATION IN PRESCRIBE D FORM 10A BEFORE LD CIT ON 30-05- 2007, KANNUR SEEKING REGISTRATION U/S. 12AA OF THE ACT. HOWEVER THE LD. CIT SEEMS TO HAVE REJECTED THE SAID APPLICATION ON THE GROUND TH AT THE ASSESSEE IS NOT A PURELY RELIGIOUS TRUST, BUT IT WAS CARRYING ON OTHER ACTIV ITIES ALSO. 4. ACCORDING TO THE ASSESSEE, ST. THERESAS SH RINE THEREAFTER CONTINUED TO FUNCTION AS A PART OF ROMAN CATHOLIC DIOCESE OF CALICUT AND ACCORDINGLY THE INCOME FOR THE YEAR ENDING 31.3.2007 WAS CONTINUED TO BE INCLUDED IN TH E ACCOUNTS OF ROMAN CATHOLIC DIOCESE OF CALICUT. WE NOTICE THAT THE ASSESSEE H EREIN VIZ., ST. THERESAS SHRINE IS HAVING A PERMANENT ACCOUNT NO. AACAS9408B. THE P ERMANENT ACCOUNT NO. OF ROMAN CATHOLIC DIOCESE OF CALICUT IS AAAAR0698C . 5. THE ASSESSING OFFICER NOTICED THAT THE FACT OF R EJECTION OF THE APPLICATION FILED BY THE ASSESSEE SEEKING REGISTRATION U/S 12AA OF THE A CT. SINCE THE ASSESSEE DID NOT FILE ITS RETURNS OF INCOME, HE ISSUED NOTICES U/S. 148 O F THE ACT FOR THE TWO YEARS UNDER CONSIDERATION. THE ASSESSEE FILED RETURNS OF INCOME IN RESPONSE TO THE NOTICES OF RE- OPENING, BUT SUBMITTED THE FACT THAT ITS INCOME HAS ALREADY BEEN INCLUDED IN THE ACCOUNTS OF THE MAIN BODY, VIZ., ROMAN CATHOLIC DI OCESE OF CALICUT. THE ASSESSING OFFICER NOTICED THAT IT HAS NOT PRODUCED ANY PROOF TO SHOW THAT THE INCOME OF THE ASSESSEE IS ASSESSABLE IN THE HANDS OF DIOCESE. SIN CE THE ASSESSEE DID NOT HAVE REGISTRATION U/S 12AA OF THE ACT, THE AO DETERMINED THE INCOME OF ASSESSEE AT RS. 51,66,970/- FOR THE ASSESSMENT YEAR 2006-07 AND RS. 27,39,930/- FOR THE ASSESSMENT YEAR 2007-08. 6. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A), BUT THE FIRST APPELLATE AUTHORITY CONFIRMED THE VIEW OF THE ASSES SING OFFICER, AS THE ASSESSEE FAILED TO SUBSTANTIATE ITS CLAIM THAT ITS INCOME WAS INCLU DED IN THE HANDS OF ROMAN CATHOLIC I.T.A. NOS. 516 &517/COCH/2011 3 DIOCESE OF CALICUT. HOWEVER, THE LD CIT(A) NOTICED THAT THE AO HAD COMMITTED A MISTAKE WHILE COMPUTING THE INCOME FOR THE ASSESSME NT YEAR 2007-08 AND ACCORDINGLY DIRECTED TO CORRECT THE SAID MISTAKE. AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US FOR BOTH THE YEARS. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE LD COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE INCOME OF ST. THER ESAS SHRINE HAS ALREADY BEEN INCLUDED AND ASSESSED IN THE HANDS OF ROMAN CATHOL IC DIOCESE OF CALICUT AND ACCORDINGLY CONTENDED THAT THE TAX AUTHORITIES HAVE COMMITTED AN ERROR IN ASSESSING THE VERY SAME INCOME AGAIN IN THE HANDS OF THE ASSESSEE . BEFORE US, THE LD COUNSEL SUBMITTED COPIES OF THE BALANCE SHEET AND THE INCOM E EXPENDITURE ACCOUNT FOR THE YEARS ENDING 31.3.2006 AND 31.3.2007 PERTAINING TO ROMAN CATHOLIC DIOCESE OF CALICUT AND ALSO ST. THERESAS SHRINE TO PROVE T HAT THE INCOME OF ST. THERESAS SHRINE HAS BEEN TRANSFERRED TO ROMAN CATHOLIC DIO CESE OF CALICUT. HOWEVER, THE LD COUNSEL FAILED TO FURNISH THE ASSESSMENT DETAILS OF ROMAN CATHOLIC DIOCESE OF CALICUT. THE COPIES OF RETURNS OF INCOME FILED BY THE ASSESS EE IN RESPONSE TO NOTICES ISSUED U/S 148 ARE ALSO NOT AVAILABLE ON RECORD. 8. ON THE CONTRARY, THE LD D.R POINTED OUT THE FACT THAT THE ASSESSEE HAS FAILED TO SUBSTANTIATE ITS CLAIM BEFORE THE TAX AUTHORITIES. SHE SUBMITTED THAT THE ASSESSEE IS FURNISHING THE DETAILS FOR THE FIRST TIME BEFORE TH E TRIBUNAL. 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND CAREFULL Y PERUSED THE RECORD. ACCORDING TO THE LD A.R, THE ASSESSEE HEREIN WAS FUNCTIONING AS A PART OF ROMAN CATHOLIC DIOCESE OF CALICUT AND ITS INCOME UPTO THE YEAR EN DING 31.3.2006 WAS INCLUDED IN THAT INSTITUTION. THEREAFTER, THE MANAGEMENT APPEARS TO HAVE DECIDED TO MAKE ST. THERESAS SHRINE AS AN INDEPENDENT BODY AND ACCORD INGLY APPLIED BEFORE LD CIT, KANNUR, SEEKING REGISTRATION U/S 12AA OF THE ACT. HOWEVER, THE LD CIT APPEARS TO HAVE REJECTED THE SAID APPLICATION FOR VARIOUS REASONS. THE COPY OF ORDER PASSED BY LD CIT WAS NOT PRODUCED BEFORE US AND HENCE, WE ARE NOT IN A POSITION TO APPRECIATE THE VIEWS TAKEN BY LD CIT. I.T.A. NOS. 516 &517/COCH/2011 4 10. BEFORE LD CIT(A), IT WAS SUBMITTED THAT THE LD CIT REJECTED THE APPLICATION, INTER ALIA, FOR THE REASON THAT THE ASSESSEE COULD NOT PR ODUCE ANY DOCUMENT EVIDENCING ITS CREATION. IN THE WRITTEN SUBMISSIONS, THOUGH IT IS STATED THAT THE CHURCH WAS ESTABLISHED IN THE YEAR 1736, YET THE DETAILS REGAR DING THE ESTABLISHMENT OF SCHOOL ARE NOT AVAILABLE ON RECORD. THUS, IT APPEARS THAT THE NATURE OF ITS STATUS IS NOT CLEAR EVEN TO THE ASSESSEE HEREIN. 11. THERE CANNOT BE ANY DISPUTE THAT THE ASSESS MENT IS CARRIED ON A PERSON. THE HONBLE SUPREME COURT IN THE CASE OF ITO VS. CH. AT CHIAH (218 ITR 239) HAS CLEARLY HELD THAT THE TAX COULD BE LEVIED ONLY ON RIGHT PE RSON. THE FOLLOWING OBSERVATIONS MADE BY HONBLE SUPREME COURT ARE RELEVANT HERE. WE ARE OF THE OPINION THAT UNDER THE PRESENT ACT, THE INCOME TAX OFFICER HAS NO OPTION LIKE THE ONE HE HAD UNDER THE 1922 ACT. HE CAN, AND HE MUST, TAX THE RIGHT PERSON AND THE RIGHT PERSON ALONE. BY RIGHT PERSON, WE MEAN THE PERSON WHO IS LIABLE TO BE TAXED, ACCORDING TO LAW, WITH R ESPECT TO A PARTICULAR INCOME. THE EXPRESSION WRONG PERSON IS OBVIOUSLY USED AS THE OPPOSITE OF THE EXPRESSION RIGHT PERSON. MERELY BECAUSE A WRONG PERSON IS TAXED WITH RESPECT TO A PARTICULAR INCOME, THE ASSESSING OFFICER IS NO T PRECLUDED FROM TAXING THE RIGHT PERSON WITH RESPECT TO THAT INCOME. THIS IS SO IRRESPECTIVE OF THE FACT WHICH COURSE IS MORE BENEFICIAL TO THE REVENUE. IN OUR O PINION, THE LANGUAGE OF THE RELEVANT PROVISIONS OF THE PRESENT ACT IS QUITE CLE AR AND UNAMBIGUOUS. SECTION 183 SHOWS THAT WHERE PARLIAMENT INTENDED TO PROVIDE AN OPTION, IT PROVIDED SO EXPRESSLY. WHERE A PERSON IS TAXED WRONGFULLY, HE IS NO DOUBT ENTITLED TO BE RELIEVED OF IT IN ACCORDANCE WITH LAW, BUT THAT IS A DIFFERENT MATTER ALTOGETHER. THE PERSON LAWFULLY LIABLE TO BE TAXED CAN CLAIM NO IMMUNITY BECAUSE THE ASSESSING OFFICER (INCOME TAX OFFICER) HAS TAXED TH E SAID INCOME IN THE HANDS OF ANOTHER PERSON CONTRARY TO LAW. THE ABOVE SAID OBSERVATIONS CLEARLY SHOW THAT THE A O IS NOT PRECLUDED FROM ASSESSING THE INCOME ON A RIGHT PERSON, EVEN IF THE SAID IN COME HAD ALREADY BEEN ASSESSED IN THE HANDS OF ANOTHER PERSON, WHO MAY NOT BE THE PER SON TO BE ASSESSED IN RESPECT OF THAT INCOME. 12. NOW, THE REAL QUESTION THAT ARISES IN THE I NSTANT CASE IS WHETHER ST. THERESAS SHRINE CAN BE CONSIDERED AS A PERSON FOR THE PUR POSES OF ASSESSING ITS INCOME I.T.A. NOS. 516 &517/COCH/2011 5 INDEPENDENTLY IN ITS HAND. FROM THE ASSESSMENT ORD ER, WHICH WAS CONFIRMED BY LD CIT(A), WE NOTICE THAT THE ASSESSING OFFICER HAS CO NSIDERED ST. THERESAS SHRINE AS A SEPARATE PERSON, SINCE IT APPLIED BEFORE LD CIT, KANNUR SEEKING REGISTRATION U/S 12AA OF THE ACT BY CLAIMING TO BE A SEPARATE INSTITUTION . AS ALREADY NOTICED, IT HAS OBTAINED A SEPARATE PERMANENT ACCOUNT NUMBER BY CLAIMING T O BE A SEPARATE PERSON. 13. BEFORE US, AS WELL AS, BEFORE THE TAX AUTHORIT IES, THE ASSESSEE HAS CLAIMED THE REASONS FOR CLAIMING ITSELF TO BE A SEPARATE INSTIT UTION AND ALSO THE REASONS FOR WITHDRAWING ITS CLAIM. THE VALIDITY OF THE SAID E XPLANATION HAS NOT BEEN EXAMINED BY THE TAX AUTHORITIES. IT IS A WELL SETTLED PRINCIPL E OF LAW THAT THERE IS NO ESTOPPEL AGAINST THE LAW. FOR EXAMPLE, THE AO IS NOT EMPOWERED TO T AX AN EXEMPTED INCOME, SIMPLY BECAUSE THE ASSESSEE AGREED TO IT. HENCE, WHAT IS REQUIRED TO BE EXAMINED HERE IS WHETHER THE EXPLANATION GIVEN BY THE ASSESSEE IS VA LID IN ACCORDANCE WITH LAW OR NOT. 14. IF THE CLAIM OF THE ST. THERESAS SHRINE THAT IT WAS A SEPARATE INSTITUTION CANNOT BE TREATED AS A VALID CLAIM, THEN PRESENT ASSESSMEN TS SHALL FAIL. HENCE, IT IS NECESSARY TO EXAMINE THE RELEVANT DOCUMENTS SUPPORTING THE CL AIM OF SEPARATE INSTITUTION AND THE DOCUMENTS EVIDENCING WITHDRAWAL OF SUCH A CLAIM AND THE LEGAL EFFECT THEREOF. ACCORDINGLY, THIS ISSUE REQUIRES FRESH EXAMINATION AT THE END OF THE AO, SINCE THE VALIDITY OF PRESENT ASSESSMENTS, IN OUR VIEW, WOULD DEPEND UPON THE VALIDITY OF THE EXPLANATIONS GIVEN BY THE ASSESSEE. 15. ACCORDINGLY, WE SET ASIDE BOTH THE ORDERS O F LD CIT(A) AND RESTORE ALL THE MATTERS TO THE FILE OF THE AO WITH THE DIRECTION TO EXAMINE THE ISSUES DISCUSSED SUPRA AND THEN DECIDE ABOUT THE ASSESSMENTS IN ACCORDANCE WITH LAW. I.T.A. NOS. 516 &517/COCH/2011 6 16. IN THE RESULT, THE APPEALS FILED BY THE ASSESSE E ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED ACCORDINGLY ON 07-12-2 012. SD/- SD/- (N.R.S.GANESAN) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: KOCHI DATED: 07TH DECEMBER, 2012 GJ COPY TO: 1. ST. TERESA SHRINE, MAHE-673 310. 2. THE DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE-1( 1), KANNUR. 3. THE COMMISSIONER OF INCOME-TAX(APPEALS)-II, CALI CUT. 4. THE COMMISSIONER OF INCOME-TAX, CALICUT. 5. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 6. GUARD FILE. BY ORDER (ASSISTANT REGISTRAR) I.T.A.T, COCHIN