M/s Janiyyathul Mustharshideen Charitable Trust, Malappuram V. ITO Ward 1, Tirur

ITA 980/COCH/2022

AI Insights

The case involves Janiyyathul Mustharshideen Charitable Trust, which appealed against the in limine dismissal of its appeal by the Commissioner of Income Tax (Appeals). The Trust, registered under section 12AA of the Income Tax Act, 1961, claimed exemption under section 11 on voluntary contributions received, which was denied by the Assessing Officer due to amendments in the Trust's object clause post-registration. The Tribunal found that the CIT(A) erred in dismissing the appeal without a reasoned order and restored the matter to the assessing officer for a fresh examination of the Trust's eligibility for exemption under sections 11 and 12 of the Act.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 115481 (ITAT-COCHIN)
• Duration Of Justice: 9 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-09-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 30-11-2022
• Other Referred Cases: CIT vs. B.N. Bhattachargee [1997] 118 ITR 461 (SC), CIT vs. Multiplan India Pvt. Ltd. [1991] 38 ITD 320 (Del)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SHAMEEM AHMED
• Keywords: Charitable institution; Assessment record
• Section: 12; 11; 143(3); 12AA; 192

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN Before Shri Sanjay Arora, AccountantMemberand Shri Manomohan Das, JudicialMember ITA No. 980/Coch/2022 (Assessment Year: 2010-11) Janiyyathul Mustharshideen Charitable Trust Edayoor Post Malappuram 676554 [PAN:AAATJ6491Q] Vs. The Income Tax Officer Ward -1, Tirur (Appellant) (Respondent) Assessee by: Shri Shameem Ahmed, Advocate Revenue by: Smt. J.M. Jamuna Devi, Sr. D.R. Date of Hearing: 11.09.2023 Date of Pronouncement: 11.09.2023 O R D E R PerSanjay Arora, AM This Appeal by the Assessee agitating the in limine dismissal of it’s appeal vide order dated 31.10.2022 by the Commissioner of Income Tax (Appeals), Income Tax Department [CIT(A)], contesting it’s assessment under section 143(3) of the Income Tax Act, 1961 (‘the Act’) dated 28.03.2013 for Assessment Year (AY) 2010-11. 2. Brief facts of the case leading to the instant appeal are that the assessee, a public charitable trust constituted under the Trust Deed dated 28.06.1999 and registered u/s.12AA of the Act w.e.f. 20.10.2005, returned it’s income for the relevant year (on 29.06.2010) at nil income, claiming exemption u/s.11 of the Act on the voluntary contributions received during the year, i.e., Rs.12.18 lakhs. The same was denied by the Assessing Officer (AO) as the assessee had, subsequent to its registration under section 12AA of the Act on 20.10.2005, i.e., on 21/10/2005, totally amended it’s object clause, which rather was required to be ratified by the Hon'ble ITANo. 980/Coch/2022 (AY: 2010-11) Janiyyathul Mustharshideen Charitable Trust vs. ITO Page 2 jurisdictional High Court. Registration by itself would not lead to exemption u/s. 11 of the Act. The assessee’s appeal was dismissed by the first appellate authority for want of prosecution, following the decisions in CIT vs. B.N. Bhattachargee [1997] 118 ITR 461 (SC) and CIT vs. Multiplan India Pvt. Ltd. [1991] 38 ITD 320 (Del). 3. We have considered the rival contentions and perused the material of record. 3.1 The first thing that strikes one is that the impugned order does not satisfy the test of an order under section 250(6) of the Act, which reads as under: - Procedure in appeal. 250. (1) The Commissioner (Appeals) shall fix a day and place for the hearing of the appeal, and shall give notice of the same to the appellant and to the Assessing Officer against whose order the appeal is preferred. (2) ...(5) (6) The order of the Commissioner (Appeals) disposing of the appeal shall be in writing and shall state the points for determination, the decision thereon and the reason for the decision. 3.2 Granting that the assessee did not respond to the notices of hearing, listed at para 3.1 of its order, spanning over a period of 1½ years, fairly admitted before us by Shri Ahmed, the learned counsel for the assessee, it did not entitle the ld. CIT(A) to dismiss the appeal before him in limine. It is obliged to determine the issue arising and pass a reasoned order, appealable under the Act, only where-upon could it’s adjudication be reviewed in further appeal. The assessment order is internally inconsistent. True, registration by itself does not lead to exemption u/s. 11 of the Act, but, then, there is no finding by the AO as to the non-satisfaction of the conditions of sections 11 & 12 of the Act. As regards the registration being not valid, the same can surely be a ground where the object clause is, fully or partly, not charitable in nature, qua which again there is no finding. In fact, Grounds 3 & 4 of the first appeal specifically state that there was no amendment in the object clause of the trust deed and it was only on the procedural aspects, viz. audit; investment of funds; area of operation, etc., and to which therefore section 192 of the CPC, 1908, relating to cy press doctrine and requiring approval by the designated court, is not applicable. The amended trust deed, to which we were taken through by Shri Ahmed during hearing, ITANo. 980/Coch/2022 (AY: 2010-11) Janiyyathul Mustharshideen Charitable Trust vs. ITO Page 3 a part of the assessment record, ought to have been called for by the ld. CIT(A), and examined to ascertain the correct facts, issuing findings thereon, one way or the other. 4. In view of the foregoing, we only consider it proper, under the given facts and circumstances, to, setting aside the impugned order, as indeed the assessment, restore the matter back to the file of the assessing authority for fresh determination and adjudication in accordance with law after affording reasonable opportunity of hearing to the assessee, who is also directed to update it’s email address/s on the portal of the Revenue. In doing so, we have also taken into account the fact of there being no examination of the satisfaction by the assessee of sections 11 & 12 of the Act for the relevant year, the matter would in any case require being remanded to the AO for the purpose. Wemake it clear that we may not be construed as having issued any finding on the merits of the case, and is only to the effect that the impugned order is not maintainable in law, and the issue/s arising needs to be decided on merits, issuing clear and definite findings of fact and in law. We decide accordingly. 5. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on the conclusion of the hearing. Sd/- Sd/- ((Manomohan Das) (Sanjay Arora) Judicial Member Accountant Member Cochin, Dated: September 11, 2023 Copy to: 1. The Appellant 2. The Respondent 3. The Pr. CIT concerned 4. The Sr. DR, ITAT, Cochin 5. Guard File By Order Assistant Registrar ITAT, Cochin n.p.